Solution Manual for Consumer Behavior 2nd Asia Pacific Edition Wayne D. Hoyer..

Solution Manual for Consumer Behavior 2nd Asia Pacific Edition Wayne D. Hoyer

Solution Manual for Consumer Behavior 2nd Asia Pacific Edition Wayne D. Hoyer

CHAPTER 1

Understanding Consumer Behaviour

CHAPTER SUMMARY The goal of this chapter is to introduce students to the topic of consumer behaviour. The chapter defines what consumer behaviour is, what factors affect it, and why it should be studied. In this chapter, the topics to be discussed include (1) what consumer behaviour is, (2) what factors affect it, (3) who benefits from studying it, and (4) how marketers apply consumer behaviour concepts.

Consumers’ motivation, ability and opportunity (MAO) affect their decisions. These factors influence what consumers are exposed to, what they attend to and what they perceive, how they categorise or interpret information, how they form and change attitudes and how they form and retrieve memories. Each of these aspects of the psychological core has a bearing on consumer decision making. Decision making itself is based on problem recognition and the search for information, involves some judgement and decision-making processes and affects others’ decisions as well as one’s own postdecision satisfaction level. Consumer behaviour thus also includes recycling and disposition behaviours.

Furthermore, consumer decisions are affected by the consumer’s culture, defined as the myriad groups and social systems to which individuals belong, that influence the values and beliefs they hold and the symbols they use to communicate group membership.

Factors associated with both the psychological core and culture can influence outcomes such as symbolic consumer behaviour and the diffusion of new consumer behaviour throughout a market. The study of consumer behaviour also necessitates an understanding of ethics – the situations in which consumers and marketers may act unethically to obtain benefits.

Studying consumer behaviour can provide useful input to marketing strategies like market segmentation, target market selection and positioning. It can also guide marketing tactics like product, pricing, distribution and promotion decisions.

Furthermore, the study of consumer behaviour can be of interest to ethicists and consumer advocacy groups and can be helpful in designing laws and regulations that protect consumers. Finally, it can help consumers to improve their own lives by making the environment more user friendly, safer, cleaner and healthier.

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CHAPTER LEARNING OBJECTIVES After studying this chapter, students will be able to: 1. define consumer behaviour and explain the components that make up the definition 2. identify the four domains of consumer behaviour that affect acquisition, usage and disposition decisions 3. discuss the benefits of studying consumer behaviour 4. explain how companies apply consumer behaviour concepts when making marketing decisions.

CHAPTER OUTLINE I. Defining consumer behaviour A. Consumer behaviour involves goods, services, activities, people and ideas 1. In addition to products, marketing efforts and studies in consumer behaviour also target services, activities, ideas, people and time 2. The term offering encompasses all products, services, activities, experiences or ideas that can be marketed’ 3.

Acquisition is the process by which consumers come to own an offering.

4. Using is the process by which consumers use an offering.

5.

Disposition is the process by which consumers discard an offering.

B. Consumer behaviour can involve many people 1. Many individuals may be involved in the acquisition, use, and disposal of an offering, each person holding one or more consumer roles in the process C. Consumer behaviour involves many decisions 1. Whether to acquire/use/dispose of an offering a) Is this an offering for me?

2. What offering to acquire/use/dispose a) From which category should I choose? Which brand?

3. Why to acquire/use/dispose of an offering a) Is this offering compatible with my needs, values and goals? Will it help me to fit in?

4. Why an offering is not acquired/used/disposed a) What keeps me from purchasing an item?

5. Ways of acquiring an offering––Can I trade for this product? Rent or lease it? Should I give it as a gift? Can I barter for the item?

6.

Ways of using an offering––What are the appropriate uses for an item?

Are there innovative uses of this product? How are consumers educated to use this product?

7. Ways of disposing of an offering––What should I do when I am done with it? Should I find a new use? Get rid of it temporarily? Permanently?

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When to acquire/use/dispose of an offering a) When is it ‘appropriate’ to acquire or use an offering in a given situation? Special occasions? Every day? 24 hours a day?

Solution Manual for Consumer Behavior 2nd Asia Pacific Edition Wayne D. Hoyer

Chapter 1: Understanding Human Behaviour

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Where to acquire/use/dispose of an offering a) In stores, by mail, by phone, or over internet 10. How much, how often and how long to acquire/use/dispose of an offering a) Do I use this all the time? Infrequently?

D. Consumer behaviour involves emotions and coping 1. Emotions, positive and negative, as well as specific emotions, such as hope, fear, regret, guilt, embarrassment and general moods, can affect consumers’ behaviour 2. Consumers may have to cope with stress from consumption situations 3.

There is differing coping behaviour among certain segments, such as low-literacy consumers What affects consumer behaviour?

A. The psychological core: internal consumer processes 1. Motivation, ability and opportunity (MAO) a) Is the consumer motivated to focus on the decision? b) Will the consumer have the opportunity to make an informed choice? c) Does the consumer have the ability to distinguish one offering from another?

2. Exposure, attention, perception and comprehension a) Is the consumer exposed to information related to the choice? b) Is the consumer able to attend to and perceive the information that is available?

3. Memory and knowledge a) Storage and recall in part depends on MAO b) Choice is based on information retrieved, not stored 4. Forming and changing attitudes a) Based on the information the consumer receives, what attitudes are formed? How do these evaluations change in the presence of new information?

B. The process of making decisions 1. Problem recognition and the search for information a) Does the consumer recognise problems and search for necessary information?

2. Making judgements and decisions a) To what extent does the consumer expend time, and mental and emotional energy in making a decision?

3. Making post-decision evaluations a) To what extent does the consumer’s post-decision evaluation provide feelings of satisfaction or dissatisfaction?

C. The consumer’s culture: external processes

II.

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1.

Culture refers to typical or expected behaviours, norms and ideas that characterise a group

2.

Reference groups and other social influences a) What groups does the consumer perceive that he/she is a member of and how do these groups influence the consumer’s behaviour?

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3.

Diversity influences a) Ethnic or religious groups affect consumer decisions; these may be regional or broader b) Diversity affects one’s vacation choices, for example 4 Household and social class influences a) For example, the upper middle class and living with parents affect decisions 5. Values, personality and lifestyles a) To what extent do the consumer’s beliefs, personality, activities, interests and opinions influence the consumer choices he/she makes?

D. Consumer behaviour outcomes and issues 1. Consumer behaviours can symbolise who we are a) How do consumers’ behaviours reflect and project ‘who they are’?

2. Consumer behaviours can diffuse through a market a) How do the behaviours of certain individuals spread to others in the market?

3. Consumer behaviour, ethics and social responsibility a) Sometimes consumers face potentially conflicting priorities b) Consumers and marketers can and do use marketing for constructive purposes III. Who benefits from the study of consumer behaviour?

A. Marketing managers 1. How do marketing managers use consumer behaviour to develop marketing strategies and tactics?

2. How do they adapt to consumers’ different wants and needs?

B. Public policy makers and regulators 1. To what extent is it appropriate to use knowledge of consumer behaviour to influence laws and business rules?

C. Consumers and society 1. To what extent does knowledge of consumer behaviour make people better consumers?

IV. Marketing implications of consumer behaviour A. Understanding consumer behaviour can help develop and implement customer-oriented strategy 1. How is the market segmented?

2. How profitable is each segment?

3. What are the characteristics of consumers in each segment?

4. Are consumers satisfied with existing offerings?

B. Understanding consumer behaviour can help select the target market 1. Which consumer groups are appropriate targets for a firm’s marketing efforts?

C. Understanding consumer behaviour can help develop products 1. What ideas do consumers have for new products?

2. What attributes can be added to or changed in an existing offering?

3. How should the offering be branded?

4. What should the package and logo look like?

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Chapter 1: Understanding Human Behaviour

D.

D.

E.

F.

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Understanding consumer behaviour can help with positioning 1. How are competitive offerings positioned?

2. How should our offerings be positioned?

3. Should our offerings be repositioned?

Understanding consumer behaviour can help promotion and marketing communications decisions 1. What are our advertising objectives?

2. What should our advertising look like?

3. Where should advertising be placed?

4. When should we advertise?

5. Has our advertising been effective?

6. What about sales promotion objectives and tactics?

7. Have our sales promotions been effective?

8. How can salespeople best serve customers?

Understanding consumer behaviour can help pricing decisions 1. What price should be charged?

2. How sensitive are consumers to price and price changes?

3. When should certain pricing tactics be used?

Understanding consumer behaviour can help distribution decisions 1. Where and when are target consumers likely to shop?

2. What do customers want to see in stores?

3. How should stores be designed?

QUESTIONS FOR REVIEW AND DISCUSSION Possible answers are as follows.

1. How is consumer behaviour defined?

Consumer behaviour entails the acquisition of, use of and disposition of goods.

Note that the post-decision stage and disposition behaviours are often forgotten as part of consumer behaviour.

2. What are some of the factors in the psychological core that affect consumer decisions and behaviour?

The psychological core refers to the internal processes that affect consumer behaviour. They include: (1) motivation, ability and opportunity (MAO), (2) exposure, attention, perception and comprehension; (3) memory and knowledge; and (4) forming and changing consumers’ attitudes.

3. What are the main steps involved in making decisions?

Consumers must first recognise a problem or need. They then search for information, make an appropriate decision and then evaluate it.

4. What are aspects of the consumer’s culture that influence decisions and behaviour?

1.

2.

3.

4. ©

Reference groups and other social influences Diversity influences Household and social class influences Values, personality, and lifestyles

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5. What are the major outcomes and issues involving consumer behaviour?

• • •

Consumer behaviour can symbolise their personalities and individualities.

Consumer behaviour can diffuse throughout a market.

Consumer behaviour ethics and social responsibility.

6. How can public policy decision makers, advocacy groups and marketing managers use consumer research?

Consumer research can be used to understand what consumers and clients value and to help develop and understand what appropriate goods and services deem best for consumers. Policy makers use research to set law and policy in government, for instance a texting while driving law may be based on consumer research about safety and phone use while driving. Advocacy groups use research in the same way; yet, they focus on using research to advocate a point or view (e.g., Mothers Against Drunk Driving MADD). Marketing managers can help consumers by understanding consumer use and desires via research.

7. What kinds of marketing questions can companies use consumer behaviour research to answer?

How is the market segmented?

How profitable is each segment?

What are the characteristics of consumers in each segment?

Are customers satisfied with existing offerings?

How are competitive offerings positioned?

How should our offerings be positioned?

What ideas do consumers have for new products?

What attributes can be added to or changed in an existing offering?

What should our offerings be called?

What should our package and logo look like?

What are our advertising objectives?

What should our advertising look like?

Where should our advertising be placed?

When should we advertise?

Has our advertising/sales promotions been effective?

When should sales promotions take place?

When should certain price tactics take place?

8. How can you benefit from studying consumer behaviour?

Consumer behaviour studies can help consumers in the marketplace to understand the market and its role in business practice.

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CONSUMER BEHAVIOUR CASE How Unilever’s brands connect with consumers From soap to soup, Unilever markets a wide range of personal care products, foods and household cleaners under popular brands such as Dove, Bertolli, Lipton, Lux, Axe (Lynx), Sunsilk, Surf and OMO. Two billion consumers buy its products every day, adding up to annual revenue of $62 billion. The Anglo-Dutch company constantly conducts research to learn more about what consumers want and need, identifying even seemingly small changes that can make a big difference in the daily lives of people worldwide.

One of the company’s most memorable marketing initiatives has been Dove’s ‘Campaign for Real Beauty’. Based on extensive consumer research into women’s attitudes and emotions, the campaign uses ads, YouTube videos, special events and other communications to counter beauty stereotypes and make the point that real beauty is more than skin deep. By linking its soap brand to messages reinforcing positive self-esteem for women of all ages, races, sizes and shapes, Dove has won the admiration and loyalty of consumers in many countries.

Unilever’s Ragú food brand has been courting parents with Facebook and YouTube communications that encourage ongoing conversations with marketers and among its brand fans. For example, marketers recently used the brand’s Facebook page (which has more than one million ‘likes’) to start a dialogue about getting children to eat. Its Facebook fans responded with dozens of additional ideas, which Ragú’s ad agency turned into helpful online videos that dish up tips with a sense of humour.

Heavy use of social media is one way that Ragú aims to create an emotional connection with its customers and understand their ever-changing needs and interests.

Campaigns combining Facebook, YouTube, Twitter and special websites have helped Unilever market its food and personal care brands to highly targeted segments such as Latin American families in the United States. Unilever’s http://www.vivemejor.com, the Spanish-language website, and Facebook page provide brand-oriented recipes, coupons, holiday ideas, household hints and other information that Latino families can use. The company also holds Disfruita la Pasión de la Vida events outside supermarkets to attract and engage Latin American consumers. In planning such events, the company turns to its Multicultural Consumer Marketing Insights research team for guidance.

Unilever is looking beyond immediate acquisition behaviour to encourage healthy, environmentally sustainable behaviour all over the world. Through research, it has determined that the first step is to help consumers understand why they should do something (such as wash with soap to prevent the spread of disease). The next step is to show them how easy it is to take action (buy bars of soap and use them). Then, they must make the new behaviour desirable (washing can keep the family safe from germs). Next, it is important to make consumers feel good about doing this action (for themselves, their family and society). Finally, find a way to continue the ©

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Chapter 1: Understanding Human Behaviour

behaviour over time (ask children to wash before every meal). With these five steps, Unilever has convinced millions of consumers in developing countries to adopt the healthy habit of washing their hands – promoting the company’s Lifebuoy soap brand at the same time.

Unilever also sells laundry products in developing nations where water is a scarce resource, yet consumers are accustomed to rinsing clothes several times to get them clean. To address both consumer needs and environmental issues, CEO Paul Polman explains, ‘We’ve put products out in the market – fabric softeners – that only need one rinse’. Even then, ‘consumers were still doing two or three rinses, so we had to be very creative in educating them,’ he says. Clearly, Unilever wants to build strong relationships with its customers by making sure its brands are down-to-earth and ‘real’.

CASE QUESTIONS

1. How is Unilever applying its understanding of internal consumer processes in the psychological core to market its products?

Unilever understands there are many important psychological processes consumers must go through during the acquisition, use and disposal of offerings.

By using market research, the company taps into specific aspects based on the particular product’s target audience. For many products, such as Lifebouy soap, Unilever steps consumers through all of the psychological processes, from awareness to attitude change in order to acquire new customers and retain current users.

2. Which of the four external processes in the consumer’s culture do you think have been the most important to the success of Dove’s Campaign for Real Beauty?

Why? Values, personality and lifestyle: Dove's campaign is based on market research into women's attitudes and emotions, which are closely tied to their values. The campaign highlights the value that ‘real beauty’ is more than skin deep; a sentiment women in their target audience value and believe is reflective of their personalities.

Reference groups and other social influences: Dove uses ‘real’ women versus models with whom their consumers can because they are members of their reference group.

3. Do you agree with Unilever’s decision to link its brands with efforts to encourage healthy and sustainable behaviours? Explain your answer.

Linking brands to healthy and sustainable behaviours helps Unilever create an emotional connection with its customers because they perceive the company cares about more than just profit.

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Chapter 1: Understanding Human Behaviour

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IN CLASS EXERCISE* Analysing consumer generated content Your task is to analyse consumer generated online postings – e.g., blog entries, pictures and videos – for a product category or brand of your choice. The material should be generated by consumers (advertisements are usually created by firms and/or their advertising agencies and are not appropriate). You can, however, show ads to demonstrate how consumer generated material differs from firm generated advertisements.

1. Select some individuals with whom you will be comfortable working.

2. Select (a) a product category (e.g., tennis balls, tomatoes, aftershave); (b) a brand that may encompass several product categories; (c) a specific product category for a specific brand (e.g., Nike basketball shoes) of interest.

3. Find a number of online postings by consumers discussing or portraying their experience with the product or brand. You may want to consider: a. Blog entries (which can be searched through the Google Blog Search feature at http://blogsearch.google.com). b. Consumer product evaluations sites such as productreview.com.au and evaluations on merchant sites such as Amazon.com.au. c. Photos (available from Flickr (http://www.flickr.com/), WebShots (http://www.webshots.com/), Picasa Web (http://www.picasaweb.com), and any other photo share sites. You can also search using the Google Images search feature (http://images.google.com). d. Video recordings (available from YouTube and Google Video Search (http://video.google.com). e. Online social media such as Facebook, Twitter and Reddit.

4. Discuss the possible motives of the consumers generating the material in question (e.g., genuine desire to help others, wanting to look good, desire to promote a favourite brand, desire to present an alternative brand to the market leader, ‘blowing off steam,’ show off creative talents more than dealing with substance per se, desire to entertain).

5. Identify the extent to which different people who create material on similar topics/brands either compete with each other or promote other people’s material.

6. Identify theme or issues identified. Note that photos and videos may be ‘staged’ or sensationalised to some extent. Nevertheless, do these at least suggest certain underlying consumer motivations, emotions, and/or perceptions?

7. Identify implications for the marketing of the product or brand in question – e.g., *

Courtesy of Lars Perner, Ph.D., University of Southern California. ©

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Chapter 1: Understanding Human Behaviour

a. Effective advertising messages (e.g., could a particular photo – with proper permissions – be used as an ad with a suitable caption?) b. Issues for product design and or content (e.g., are there aspects enjoyed or aspects causing frustration apparent?) c. Information that should be available for consumers on manufacturer websites.

8. Prepare a brief report to the rest of the class (up to four minutes in length, including time spent on showing illustrations).

Notes: • You may want to divide up between team members so that different people search different media.

•

If one or more group members speak any foreign languages, you may want to compare apparent differences between cultures.

•

To zero in on specific items, you may want to search using phrases put in quotes – e.g., ‘new cell phone’, ‘contract ran out’, ‘lost my phone’, ‘heel broke’, or ‘pink Android’.

USEFUL WEBLINKS The Decision Lab http://www.thedecisionlab.com A non-profit organisation dedicated to exploring consumer behaviour using the latest knowledge from psychology, economics, sociology and other research fields.

Advertising Research Foundation http://thearf.org/morning-coffee/ Provides links to consumer trends and statistics of interest to advertising executives and other marketers. Also provides a discussion of the advertising industry.

Australian Consumer Lifestyles (EuroMonitor) http://www.euromonitor.com/consumer-lifestyles-in-australia/report Statistics and updates on latest trends and lifestyles among Australians, provided by EuroMonitor, one of the largest international organisations providing knowledge and insights into consumer behaviour worldwide.

Australian Market & Social Research Society https://www.amsrs.com.au/ A national organisation devoted to the study of market and social research in Australia, with a particular emphasis on designing tools to better understand consumers and provides updates on recent consumer trends in the country.

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Google www.google.com.au Google is a search engine for finding useful websites. Google is relevant to this chapter’s content for specific reasons.

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CHAPTER 2

Motivation, Ability and Opportunity

CHAPTER SUMMARY This chapter introduces to students the factors that can motivate and drive consumers to make decisions and purchases in the marketplace. The role of the instructor in this chapter is to help the students understand these concepts, as well as to help place them in a marketing context so that the students can apply what they learn.

Motivation reflects an aroused state that results in goal-relevant behaviours, elaborated information processing and decision making about things that the consumer views as important and self-relevant, and greater involvement between consumers and their actions. When motivation has these effects, consumers often experience considerable affective or cognitive involvement in the activity. In some cases, this involvement may be enduring, lasting for a long period of time. In other cases, it may be situational, lasting only until the goal has been achieved. Consumers can also be involved in many different kinds of objects: product categories, brands, ads, the media, and consumption behaviours.

Many factors affect motivation. First, motivation tends to be greater when the consumer sees something as personally relevant – meaning that it has important consequences for his or her life. Often things are seen as relevant because they relate to our values, goals and needs; because they are seen to entail considerable risk, or because they are moderately inconsistent with our prior attitudes.

Second, consumers may not achieve the goal of their motivation if their ability and/or opportunity to do so are low. If consumers lack the knowledge, experience, intelligence, education, or monetary resources to engage in a behaviour, process information, or make a decision, they cannot achieve a goal. Goal achievement may also be blocked if consumers are attending to information that is incompatible with their processing styles, which are age related, or if the information is presented in too complex a fashion. Finally, highly motivated consumers may also fail to achieve goals if their opportunity to do so is limited. Opportunity may be affected when consumers lack time, are distracted, and are not given sufficient information to learn something, when the information is too complex or infrequently repeated, or when consumers lack control over what information they receive, how long, and in what order, the information is presented.

Solution Manual for Consumer Behavior 2nd Asia Pacific Edition Wayne D. Hoyer

Chapter 2: Motivation, Ability, and Opportunity

CHAPTER LEARNING OBJECTIVES After studying this chapter, students will be able to: 1. discuss the six types of influences that affect the consumer’s motivation to process

information, make a decision or take an action 2. explain how financial, cognitive, emotional, physical, social and cultural resources,

plus age and education, can affect the individual’s ability to engage in consumer behaviours 3. consider how the availability of time, distraction, complexity and control of information can affect consumers’ opportunity to engage in consumer behaviours.

CHAPTER OUTLINE I. Consumer motivation and its effects A. Motivation is an inner state of aroused energy directed toward achieving a goal.

An outcome of motivation is behaviour that takes effort.

B. Consumers can be motivated to engage in behaviours, make decisions, or process information in the context of acquisition, usage or disposition of an offering.

C. Motivation impacts how consumers process information and decide.

II. What Affects Motivation?

A. Personal relevance 1. Consistency with self-concept a) Something may be personally relevant to the extent that it has direct bearing on the self and has potentially significant consequences or implications for one’s life. b) As things become more personally relevant, they are more likely to motivate us to behave, process information, or engage in effortful decision making about these things, and we will experience considerable involvement when buying, using or disposing of them. c) Marketers can increase a consumer’s motivation to process promotional materials by trying to make the information as personally relevant as possible.

2. Consistency with self-construal a) Our view of who we are is based on our relationships with others.

3. International considerations in consumer behaviour a) East Asian consumers are more risk-seeking in financial domains (e.g., stocks) than Western consumers, but more risk-averse in other domains.

B.

Values 1. Something may be personally relevant. a) Your self-concept or your view of yourself and the way you think others see you is important in marketing. b) Consumers are more motivated to attend to and process information when they find it consistent with their values or beliefs that guide what people regard as important or good.

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C.

Needs 1. Need – a state of tension caused by disequilibrium in a consumer’s internal state.

2. Maslow’s hierarchy of needs groups needs into five categories: i) Physiological ii) Safety iii) Social iv) Egoistic v) Self-actualisation 3. Marketing implications i) Marketers can activate different types of needs in communications, such as Godiva activating basic physiological needs for hunger motivating liking for chocolates.

4. Types of needs Social needs – social needs are externally directed and relate to other individuals (e.g., the need for esteem, succor and modeling). b). Non-social needs – those whose achievement is not based on other people (e.g., the need for sleep, novelty, control and understanding). a) Functional needs – those that motivate the search for products that solve consumption-related problems. b) Symbolic needs –those that affect our sense of self, self expression, and social position or role. c) Hedonic needs – reflect sensory pleasure and includes needs for sensory stimulation, cognitive stimulation and novelty (non-social hedonic needs), as well as need for reinforcement, sex and play (social hedonic needs).

2. Characteristics of needs a) Needs are dynamic. b) Needs exist in a hierarchy. c) Needs can be aroused by internal or external cues. d) Needs can conflict. There are three kinds of need conflicts: (1). Approach-avoidance conflict occurs when a given behaviour is seen as both desirable and undesirable because it satisfies some of the consumer’s needs but fails to satisfy others.

(2). Approach-approach conflict occurs when the consumer faces the task of choosing among two or more equally desirable options that fulfil different needs.

(3). Avoidance-avoidance conflict occurs when the consumer faces the task of choosing between equally undesirable options. e) Research considerations in consumer behaviour (1) Projective techniques is one method to identify and research consumers’ needs

Solution Manual for Consumer Behavior 2nd Asia Pacific Edition Wayne D. Hoyer

Chapter 2: Motivation, Ability, and Opportunity

D.

E.

Involvement 2. Although greater felt involvement is one of the effects of motivation, consumers’ underlying involvement can also influence their motivation to think and behave.

3. Consumers engage in motivated reasoning when they process information in a biased way in order to obtain the goals or conclusions that they want.

4. Types of involvement a) Consumers show interest in a marketing offering over an extended period of time; contrast this with involvement that is situational or temporary. b) Consumers can also be interested in thinking and reasoning, or they can rely more on their emotions and feelings in relation to a marketing offering.

Goals 1. A goal is a particular end state or outcome that a person would like to achieve.

2. Goal setting and pursuit a) After we set a goal, we are motivated to form a goal intention; plan to take action; implement and control the action; and evaluate success or failure in attaining the goal.

3. Goal and effort a) Consumers vary in how much effort they will exert to achieve a goal. b) Research suggests that the amount of effort exerted by a consumer may depend on the success of achieving other, potentially unrelated goals. c) The amount of effort also depends on feedback showing progress toward goal achievement.

4. Types of goals a) Goals vary in whether they are concrete or abstract. b) Goals may be described as promotion-focused (achieving positive outcomes) or prevention-focused (avoiding negative outcomes). c) Consumers may have goals to regulate how they feel and/or what they do.

5. The road to goal pursuit d) Consumers can achieve a single goal through various means. e)

Consumers can also use a single means to achieve multiple goals.

f)

Marketing implications (i) Psychological prime is where exposure to certain environmental cues shape consumers’ thoughts and behaviours without them realising it.

6.

Goals and emotions a) Goals are important because the success or failure to achieve a goal can affect how consumers feel. b) According to appraisal theory, emotions are determined by how consumers evaluate (or appraise) a situation. When an outcome is consistent with consumers’ goals, they appraise the situation favorably and feel positive emotions.

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c)

Appraisal theory also posits that other appraisal dimensions, including normative/moral compatibility, certainty and agency, will affect how consumers feel.

7. Marketing implications a) Marketers need an understanding of consumers’ self-concept, needs, goals and self-control processes. b) Consumers’ needs and goals have particular relevance to marketers.

(1). Enhance motivation to process communications.

(2). Product development and positioning.

(3). Encouraging specific behaviours.

F. Self-discrepancy between the actual and ideal self motivates consumers to notice a gap.

G. Digital media considerations in consumer behaviour (1) People follow brands on social media because of incentives, social interaction, they like those brands and information-seeking.

(2) Brands communicate about products often first on social media, allowing followers to be innovators instead of laggards.

III. Consumer ability: resources to act A. Ability is defined as the extent to which consumers have the necessary resources (knowledge, intelligence and money) to make the outcome happen.

B. Financial resources 1. Often managed by a financial planner.

2. The lack of money constrains consumers who might otherwise have the motivation to engage in monetary exchanges with marketers.

C. Cognitive resources 1. Based on experience and knowledge.

D. Emotional resources 1. The consumers’ ability to experience empathy and sympathy.

2. Higher levels of intelligence and education will both enhance the consumer’s ability to process information that is more complex and to make decisions.

E. Physical resources 1. Body power can impact how, when and where consumers make decisions.

F. Social and cultural resources 1. Who consumers know and cultural knowledge impacts consumer behaviour. Freshmen with these resources are more likely to stay in school, for example.

G. Resources are interchangeable, int hat feeling high or low on one resource can lead consumers to think they are high or low on another similar resource.

H.

Marketing Implications 1. Marketers should be sure that their targeted customers have knowledge to process the information.

2. Marketers should be sensitive to differing processing styles.

3. Understand that a lack of money is often a constraint to consumers.

Solution Manual for Consumer Behavior 2nd Asia Pacific Edition Wayne D. Hoyer

Chapter 2: Motivation, Ability, and Opportunity

IV. Consumer Opportunity A. Three key influences: B. Time 1. Time impacts information processing. Time is a pressure and constraint at times. a) Consumers under time pressure will engage in limited information processing. They also tend to put more weight on negative information, and thus quickly reject brands because of negative features.

C. Distraction 1. Distraction refers to any aspect of the processing situation that can divert consumers’ attention from processing a message. a) Direct interference includes talking while a consumer is viewing an ad. b) Background factors in an ad such as music or attractive models could distract consumers from the central message.

D. Complexity, amount, repetition and control of information 1. As information becomes more complex, the consumer’s ability to process it decreases. Information is considered complex if it is technical or quantitative, if messages contain text with no pictures, and if there is a vast amount of it.

2. Consumers remember more when they control the flow of information by determining: a) What information is presented? b) How long it is presented? c) In what order information is presented?

E. Marketing Implications 1. Marketers should repeat marketing communications (up to a point) and make them easy to process.

2. Marketers should reduce time-pressured decision making.

3. Marketers should reduce the amount of time needed to buy, use, and learn about a product.

4. Marketers should offer information when and where consumers choose to access it.

QUESTIONS FOR REVIEW AND DISCUSSION Possible answers are as follows.

1. How is motivation defined?

An inner state of arousal that provides energy for consumers to achieve a goal.

Motivation also affects high-effort information processing and decision making, and consumers’ felt involvement.

2. How do functional, symbolic and hedonic needs motivate consumer behaviours?

Consumers are motivated to act by the three needs. They can be driven by functional needs that prompt them to products that fulfil utilitarian purposes, such as food products to fulfil hunger; by symbolic needs that prompt them to products or other offerings that give them a sense of identity; and by hedonic needs that prompt them to marketing offers to satisfy their desires, fantasies and

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entertainment.

3. What determines the ranking of needs in Maslow’s hierarchy?

Needs have a basic hierarchy as established by higher or lower order needs. People fulfil lower-order needs such as water and food before higher-order needs such as ego-based needs.

4. According to appraisal theory, what do emotions have to do with goals?

Consumer emotions are formed based on how they appraise a situation or outcome, including from other sources and how it pertains to their goals. It is a theory of emotion that proposes that emotions are based on a person’s assessment of a situation or an outcome and its relevance to his or her goals.

5. What five types of resources affect ability to process information and make decisions?

Cognitive resources (knowledge), emotional resources (desire), physical resources (money), social and cultural resources (family in another country) each impact ability to process information and make decisions.

6. Identify some of the elements that contribute to consumer opportunity for processing information and making decisions.

In addition to the five types of resources, time, involvement, distraction, and complexity, amount, repetition and control of information influence one’s opportunity for processing information and making decisions.

CONSUMER BEHAVIOUR CASE Fitbit: the perfect fit for consumer motivation The health and fitness industry is big business. In 2015, Australians alone are estimated to have spent $8.5 billion on gym memberships, sports equipment and the latest fitness trends. In addition, one study has revealed that in 2015 over 6 million Australians had made a New Year's resolution to make fitness top of mind.

Tapping into this growing health and fitness segment are companies specialising in wearable technology devices, and more specifically, fitness and activity trackers. This new generation of smart wristbands help people manage their health and wellness by quantifying their physical movements, with some of the more popular brands being Fitbit, Garmin, Apple, Xiaomi, Misfit, Jawbone and Moov. Allowing consumers to keep track of their activity around the clock, the digital technology behind these wearable fitness trackers uses algorithms, accelerometers and altimeters to track everything from heart rates and active minutes, to calories burned, sleep patterns and stairs climbed. A key question is how are these fitness tracker brands tapping into the influences that affect consumers’ motivation to purchase, use and share data from their fitness tracker?

One of the pack leaders in wearable fitness tracking technology is Californian-born company Fitbit. Having established themselves in 2007, they have now sold well over 20 million of their fitness trackers worldwide via thousands of retail outlets. In 2015,

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Chapter 2: Motivation, Ability, and Opportunity

the company went public on the New York Stock Exchange and has an estimated worth of $4.1 billion. In marketing to the fitness and health segment, Fitbit focus on consumers’ self-concepts, values, needs and goal-setting behaviours. The Fitbit brand position themselves as a family of products fit for anyone. They look to make fitness a lifestyle as opposed to a 30-minute workout, viewing everything from working and looking after the kids, to biking, hiking, rowing and running as all forms of getting ‘fit’.

The Fitbit range of fitness trackers start from simple wristbands with basic functions such as step counting, through to their higher-end models which provide users with more advanced functions including heart rate monitoring and GPS tracking. The Fitbit Blaze connects to your smartphone, allowing the user to map routes, as well as see run stats like pace and duration in real time via the fitness tracker’s hi-res colour touchscreen. This instant gratification through the delivery of instant data does more than inform. Fitbit trackers reinforce, motivate and reward, incorporating elements such as social and gamification in order to keep users engaged. Suddenly, all of the routine things that you do each day, such as vacuuming the floors, picking up the groceries and pushing the lawn mower are cast in a new light. These routine chores are now seen as exercise, and Fitbit seeks to measure these activities and turn them in to a sense of quantified accomplishment.

Fitbit delivers an always-on relationship with consumers, largely thanks to the continuous monitoring characteristic of its product. Fitbit also lets customers personalise their fitness tracker – offering the option to choose from metal, leather and multi-coloured interchangeable bands. On a more functional level, the technology allows users to sync the data collected by their Fitbit device to their smartphone Fitbit app, enabling users to analyse their performance.

The Fitbit app allows users to customise their fitness experience as well as set personal goals and challenges. In addition, Fitbit trackers come with built-in step-based daily and lifetime goals linked to ‘badges’. When a specific badge’s criteria is met, the users Fitbit device will vibrate and the app will record the achievement as a ‘badge’, a form of extrinsic tangible motivation. Motivation is further amplified by allowing users to broadcast their results, completed challenges and ‘badges’ earned via social media and online Fitbit communities, as well as enabling users to create in-app challenges with friends and family.

CASE QUESTIONS 1. Consumer motivation is affected by personal relevance and values. Give an example of how Fitbit has tapped into each of these drivers of consumer motivation.

Fitbit understand that health and fitness have a direct bearing on the self and have personal relevance. When consumers buy a Fitbit they are making a statement about an aspect of who they are – health and fitness conscious. By enabling consumers to measure and share their fitness achievements, as well as personalise the look of their fitness tracker, Fitbit are allowing consumers to build upon theirselfconcept. Fitbit look to align with consumer values of feeling fit and being health conscious, particularly through their positioning of 'fitness as a lifestyle'.

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2. What types of consumer needs does Fitbit look to meet, and how?

Fitbit meet social needs by allowing users to share their fitness achievements via social media platforms and online Fitbit communities. The Fitbit app enables users to create group challenges with family and friends, helping consumers achieve a need for affiliation. Non-social needs Fitbit meets may include a consumers need for control by offering continuous monitoring and performance data, whereas a symbolic need met may include a personal sense of achievement in reaching a goal and achieving a 'badge'.

3. What types of involvement are Fitbit users likely to experience?

Fitbit users are likely to experience enduring involvement, largely due to the characteristics of the product. Fitbit fitness trackers are designed to be worn continuously and to become part of your lifestyle. Fitbit also encourage affective involvement by enabling users to set personal fitness goals and receive fitness rewards in the form of 'badges'.

4. In what way does a Fitbit aid goal setting and pursuit?

On a broad level Fitbit encourage consumers to pursue a goal of making fitness a lifestyle through their marketing efforts. The fitness trackers themselves also aid goal setting and pursuit by allowing users to evaluate success and failure in attaining fitness goals. This is achieved through their Fitbit app which summarises the fitness data collected by the tracker. The Fitbit app then allows users to adapt goals. These goal setting, measuring and adapting functions that Fitbit deliver all affect consumers’ motivation to continue behaviours relevant to the goal.

SUGGESTED EXERCISES AND TEACHER GUIDELINES 1. Randomly select ten ads from a magazine. Develop questions designed to assess a consumer’s involvement in an ad (both cognitive and affective) and motivation to process information from the ad. Select a sample of 20–30 consumers to look at the ads and answer the questions. Which types of ads tend to be higher in involvement?

Which types of ads tend to be lower in involvement? How do these ads tend to differ in terms of (a) recognition of consumers’ needs, (b) structure and content, and (c) assumption of consumer knowledge or expertise?

Refer students to utilise the discussion from the chapter to help them answer this question. Have them focus on involvement.

2. Watch TV and the associated ads for half an hour. At the end of your viewing, write

down ads that you remember. Use the concepts of motivation, ability and opportunity to describe why you processed and remembered these commercials. What was it about the ad, your prior knowledge or use of these products, or the environment in which you viewed the ads that made them memorable?

This exercise is designed to cement the concepts of MAO (motivation, ability and opportunity) in the student’s mind. Pay careful attention to the notion of ‘time.’

Students commonly categorise ‘time’ as a factor of ability instead of opportunity. It is easy for a student to think that if they had more time, they would have a better ability to reach an optimal situation, when in fact ‘time’ should be classified as a factor of opportunity.

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Chapter 2: Motivation, Ability, and Opportunity

3. Select any two products that are quite different from each other – such as a T-shirt and a computer system. Although they are very different products, what similar (if not identical) goals do they both satisfy? That is, consumers can use both of these products to satisfy what similar goal?

The ability to identify how two (or even more) products that, on the surface, appear quite different from each other in their intended purpose can actually serve a similar (if not identical) goal or purpose exemplifies the equifinality of consumer goal pursuit. It also shows students that, while there are thousands (if not millions) of different products in the marketplace, consumers’ goals, values and needs can all be distilled into just several, which is most evident by Maslow’s hierarchy of needs that identify only five broad needs that consumers have.

4. Select a high-involvement product you are interested in buying, such as a new car or a new computer system. Identify the factors that make this product personally relevant to you, such as how it relates to your specific goals or needs. Next, consider how product knowledge or experience, age, and money affect your ability to process marketing information about this product and make a purchase. Finally, analyse how the opportunity factors related to time, distraction, and information affect your behaviour toward making this purchase. What can marketers of this type of product do to enhance your motivation, ability, and opportunity to buy from them?

An interesting in-class use of this exercise is to ask students the same questions with respect to how they chose their current school. Was the student’s application at another school rejected? On the other hand, were they seeking a school that was considered prestigious? It can be informative to understand the reasons behind such a choice, and to illustrate the concepts of motivation, ability and opportunity.

ADDITIONAL DISCUSSION QUESTIONS WITH SAMPLE ANSWERS These discussion questions can be used as in-class activities or as thought questions for students to consider while reading the chapter, or to test their understanding of the material after the reading and lecture are complete.

1. How can consumer needs be classified? Define each term and provide an example of how a vehicle or a piece of jewellery, for example, might meet each type of need.

Consumer needs can be categorised as (a) social or non-social, (b) functional, symbolic or hedonic, or (c) cognition or stimulation needs. (Note: you can use the chart below to lead a discussion of each type of need.)

TYPE OF NEED A. (1) Social needs: externally directed needs that require the presence of others.

A. (2) Non-social needs: needs for which achievement is not based on other people.

EX: VEHICLE

EX: FANCY WATCH

To keep up with the Joneses.

Because a friend said you’ll love it.

Consistency. ‘I always buy this brand of vehicle.’

Because it is a reliable brand.

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B. (1) Functional needs: needs that satisfy a consumption-related problem.

B. (2) Symbolic needs: needs connected to the sense of self (how we are perceived by others).

B. (3) Hedonic needs: needs that fill a desire for sensory pleasure and emotional arousal.

C. (4) Cognition or stimulation needs: need for mental and sensory challenge.

It’s a way to get to the office.

I need to know what time it is.

To appear cool; to fit in with my friends; everybody has one.

The watch lets my clients know I have ‘made it.’

To feel the sensation of speed; to feel the engine’s power.

The watch looks attractive and feels sleek.

It has the latest complex global tracking device, a DVD player, etc.

It can keep track of the time in three different time zones, take messages and act as compass.

2. Explain how motivation influences consumer behaviour.

Motivation is an inner state of arousal or tension that drives consumers to action.

Motivation tends to be greater when consumers see the goal-object as personally relevant, in other words, if it meets their values, goals and needs.

3. Discuss the three factors that determine the amount of effort and involvement consumers put into searching for information, making choices and judging whether an experience is satisfactory.

The three factors are motivation, ability and opportunity. Motivation, the inner state of arousal directed at achieving a goal, is influenced by (a) the personal relevance of the goal, (b) the goal’s consistency with the consumer’s values, goals and needs, and (c) the new information’s level of consistency with the consumer’s prior information and attitudes. Motivation increases when (a) the goal is more relevant and consistent with the consumer’s values, goals and needs, and (b) the new information is somewhat inconsistent with the consumer’s prior information and attitudes.

ADDITIONAL QUESTIONS 1. Describe those factors that might influence consumers’ (a) motivation to process, (b) ability to process, and (c) opportunity to process the information contained in an ad.

2. Describe the key aspects of motivation. Explain how these aspects operated the last time you (or members of your group) (a) went out to eat, (b) bought new clothes, (c) went to a movie.

3. Select one of the following products for discussion in your group: car, CD, pair of shoes or shampoo. Develop a list of needs that might motivate you to buy the product you have selected. Make sure to think about (a) functional vs. symbolic vs. hedonic needs, (b) social vs. non-social needs, (c) prior attitudes, and (d) cognition or stimulation needs.

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Chapter 2: Motivation, Ability, and Opportunity

4. Develop a list of the five levels of Maslow’s hierarchy of needs and provide an example of each level from the behaviours of each member of your group. Note the similarities and differences between the needs that emerge at each level. Explain how understanding these similarities and differences can be important to marketers.

5. Discuss why an understanding of consumer needs is important for marketing strategy.

Explain specific ways that an understanding of needs can be used to influence consumers. Provide an example.

6. Discuss what is meant by the term involvement. Describe the kinds of objects a consumer can be involved with. Explain what determines the level of involvement a consumer may have in a given situation. Show why involvement is an important concept in consumer behaviour.

7. Within your group, define each of the following terms and provide an example of each: (a) enduring involvement, (b) situational involvement, (c) felt involvement, and (d) cognitive vs. affective involvement.

8. Select three products, services, or situations in which consumer involvement would be high, and three in which it would be low. Describe how the decision processes related to each of these examples would proceed for a consumer. Identify how high- and lowinvolvement decision-making processes differ.

9. Explain the need for cognition and how it affects information processing. Describe how knowing about this concept is helpful to marketers in different industries.

10. What techniques have marketers developed to address the approach-avoidance conflict?

EXPERIENTIAL EXERCISES AND CLASSROOM EXAMPLES Students who learn more readily through visual and tactile stimuli will benefit from the introduction of physical examples into the classroom.

1. ‘Penny for your thoughts’ exercise Take a large jar of coins to class. Ask students to estimate the number of coins they’ve seen, touched, saved, or handled in their lifetimes. Write these estimates, which generally are in the thousands, on the board. Tell students to take out a sheet of paper and draw a picture of each side of a coin, including words as well as images. After a few minutes, give each student a coin from the jar to compare to the drawing.

Students typically realise that they failed to include a number of large and small details in their pictures. Use the exercise to demonstrate that even when we have the ability and opportunity to observe and/or learn about something, we will not do so if we lack the motivation or interest.

2. ‘An Enlightening Experience’ Exercise* Take 12 to 15 votive candles (more or less, depending on the size of the room and the number of students) to class and position them around the room. At the start of class, light the candles, and then conduct the session as you normally would. Fifteen minutes before the end of class, talk to students about how the candlelight affected 

These experiential exercises have been contributed by Professor Sheri Bridges of Wake Forest University.

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their MAO. Students usually report a variety of different responses and reactions to having the candles in the classroom. Some say they like it; others find it extremely uncomfortable. Some say it makes them sleepy and unable to concentrate, while others say the experience is so novel that they are more alert and engaged than usual.

Some say it causes them to speak in softer tones, while some report that they felt as if they had to strain to see the instructor and others in the class. Use the experience to discuss the effect of environment on MAO. 3. Consider visiting local malls or auto dealerships to find examples of marketing efforts that relate to consumers’ motivation, ability, or opportunity to acquire a particular product that you can bring to the classroom. Examples of these efforts might include point-of-purchase displays, sample sizes of products, unique packaging, and interactive devices (e.g., sweepstakes). Use these examples to stimulate discussion about how marketers are or are not using principles of consumer behaviour to support their marketing efforts. Here are a few examples you could bring into the discussion during class: a.

Advertisements that have a high amount of copy versus lesser amounts of copy.

Discuss the factors that could affect the use of more or less copy in advertisements, considering the issues of consumer motivation, ability and opportunity.

b.

A marketing communication that is designed to address consumers’ ability to process information. For instance, ads that use slang or languages other than English are targeted toward specific audiences. Discuss how these ads may or may not be more successful.

4. To better understand cognitive style, have students visit https://psychcentral.com/personality-test/start.php. Students can easily determine their cognitive style by responding to a short inventory of choices For further application and insight, visit www.typelogic.com to see which famous people share your same cognitive style.

CLASSROOM GROUP ACTIVITY Understanding consumer motivation, ability and opportunity: 30 Minutes I. Start up A. Purpose of the activity 1. This activity will give students an opportunity to consider the issues of consumer motivation, ability and opportunity in a brief classroom exercise B. What the instructor will do 1. The instructor will divide people into small groups, assign them a product for consideration, and be available to coach and help the groups as needed C. What the participants will do 1. The participants will work in small groups to brainstorm ideas for applying concepts from the chapter to specific brands. After a period of small-group discussion, they will make reports to the large group

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Chapter 2: Motivation, Ability, and Opportunity

D.

Rules for this experience 1. Groups are to work separately from each other. Individuals should rely on their knowledge from the book and may refer to their notes and the book as necessary II. Experience A. Group up 1. Have students form groups of no more than five. This exercise will work in groups of any size; however, room restrictions that do not allow for moving furniture may make group work more difficult B. Assign brands 1. Assign each group a single brand on which to focus. a) Consider using both national and local brands, including both products and services b) Consider using brands that are not the leaders in their categories (i.e., not Coke or McDonald’s) as well as those that are c) Consider bringing samples of the brands to the class for students to study and review in their groups (e.g., a box of crackers, a candy bar, a cola can) C. Specific actions for groups 1. Instruct the groups to discuss consumer motivation, ability and opportunity in relation to the brand they are considering 2. Questions to be answered by small groups a) What factors of motivation, ability and opportunity could affect consumers whom you are trying to attract to your brand? b) How would consumer motivation, ability and opportunity affect your brand compared to others in your category (i.e., competitors)? c) What would you do to address the issues of motivation, ability and opportunity if you were preparing a marketing effort for your brand?

3. Large-group discussions a) First have groups present their ideas about the first question, then proceed to discuss each of the subsequent questions b) If there are many groups, share the discussion among all groups, though not all groups may answer all of the questions III. Debrief and unveil concepts A. Discuss the activity itself 1. The purpose of this discussion is to allow students to express what they felt about the experience itself 2. Ask students to describe their experiences of ‘doing’ the activity a) Likes and dislikes about what just happened b) How they felt during the experience c) What is realistic and unrealistic about the exercise? d) What will be different when they do this for their own brand?

B. Discuss the content of the experience 1. The purpose of this discussion is to ensure that students ‘take away’ important learning points 2. Ask students to describe the important points the experience teaches

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a)

3.

The importance of understanding a consumer’s motivation, ability and opportunity to engage in exchange when developing a marketing effort b) How to study consumers to learn about their motivation, ability and opportunity to process information about your brand Use the chalkboard to record student responses a) Write down their ideas as they are presented b) Concentrate on the principles being discussed rather than the examples c) Help them to see the interrelationships between their responses

IV. Execute A. Apply what has been learned 1. Lead a discussion on how the concepts can be applied in organisations a) What barriers may be faced in applying the concepts from the exercise? b) What can be done to help others understand the concepts when you use them at work?

B. Transfer and use the knowledge 1. Encourage students to make a record in their notes about how they will use the ideas in the workplace 2. Even if they do not have a specific job, how will they remember to use what they have learned?

USEFUL WEBLINKS Total Retail Survey 2016 (PwC) http://www.pwc.com/gx/en/industries/retail-consumer/global-total-retail.html Presents statistics and other insights into the motivations and drivers behind consumer purchase decisions in traditional retail settings.

Tourism Research Australia www.tra.gov.au This federal government agency provides a summary of recent trends in travel, tourism and hospitality in Australia as well as the drivers of travel demand in the country.

Solution Manual for Consumer Behavior 2nd Asia Pacific Edition Wayne D. Hoyer

CHAPTER 3

From Exposure to Comprehension

CHAPTER SUMMARY This chapter considers the topics of exposure, attention and perception. It notes that in order for a marketing stimulus to have an impact, consumers must be exposed to it, allocate some attention to it and perceive it. Effectively, to move consumers from mere exposure to a level of comprehension and understanding, marketers must be able to create and sustain the consumers’ attention. Perception and attention are mutually reinforcing processes. A basic level of attention is needed to perceive a stimulus. Once perceived, further attentionbased resources can be used to process stimuli at higher levels of processing. Key topics are: Exposure • •

Selective exposure Gaining exposure

Attention • •

Focal, non-focal, pre-attentive Habituation

Perception • • •

Sensory processing Perceptual thresholds Perceptual organisation

Comprehension • • •

Source identification Message comprehension Consumer inferences

Exposure occurs when the consumer is presented with a marketing stimulus. Marketers are now attempting a wide variety of tactics to increase stimulus exposure, particularly since consumers’ exposure to marketing stimuli is selective. Part of the reason is that consumers now have the choice of what, when and how they are exposed to just about any form of media. As a result, consumers also have control over when, how or if they will view advertisements. Because of this, marketers need to start their media planning and buying strategies by understanding how viewer attention differs in each medium. For example, in some situations, such as cinema, the audience is relatively captive. It is inconvenient to leave and viewers don’t have the ability to fast forward. In these cases, the message can include a high amount of product-specific information and focus on persuasion. Compare this with at-home TV viewing, where viewers can change channels, visit the kitchen or

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perform some other task. In such instances, advertisements need to be entertaining enough that viewers will choose to watch, rather than skip past.

Attention occurs when the stimulus makes a conscious impression on the consumer or the consumer allocates processing capacity to it. The key aspect of attention is that it is selective, divided and limited. Because it is limited, consumers may be distracted by other stimuli. Moreover, even though it is limited, consumers have some capacity to process information at a pre-attentive level (provided these stimuli are compatible with the principle of contralateral conduction). Given that the marketing environment is so cluttered, it is important for marketers to capture consumers’ attention. Making a stimulus (a) selfrelevant, (b) pleasant, (c) surprising, or (d) easy to process enhances its attention-getting properties. Alternatively, the problem of habituation suggests that familiar stimuli can lose their attention-getting power.

If exposure and attention are sufficient, the stimulus may reach one or more sensory registers and be perceived through one of the five senses. Processing of stimuli depends on the sense being used. Visual stimuli are influenced by the important factors of: (a) size; (b) colour (including hue, saturation and lightness); and (c) brightness and contrast. Hearing is influenced by intensity and music. Taste perceptions are also critical for certain products, yet because tastes may vary across cultures, marketers use taste tests to improve marketing strategy. In addition, the chapter considers how smell and touch may influence the marketing strategy for certain products.

The chapter then discusses the concept of sensory thresholds. The absolute threshold is the lowest point at which an individual can experience a sensation, while the differential threshold is the minimal difference that can be detected between two stimuli (the just noticeable difference). For a marketing stimulus to be perceived, it must be above the absolute threshold. The differential threshold is important when marketers do not want consumers to either notice a difference between two stimuli (e.g., a price increase or a change in product weight) or want consumers to notice the difference (e.g., product improvements). The chapter also considers that consumers do appear to have some abilities to perceive things that are just outside their conscious level of awareness (subliminal perception).

Perceptual organisation occurs when consumers organise a set of stimuli into a coherent perception. Gestalt principles of figure and ground, closure and grouping facilitate this process of organisation.

CHAPTER LEARNING OBJECTIVES After studying this chapter, students will be able to: 1. discuss why marketers are concerned about consumers’ exposure to marketing

stimuli and what tactics they use to enhance exposure 2. explain the characteristics of attention and how marketers can try to attract and

sustain consumers’ attention to products and marketing messages 3. describe how consumers perceive and interpret a stimulus and how marketers can

shape this perception and interpretation

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Chapter 3: From Exposure to Comprehension

4. discuss the process of comprehension and outline how marketing-mix elements can

affect consumer inferences about products and brands.

CHAPTER OUTLINE I. Exposure and consumer behaviour A. Exposure reflects the process by which the consumer comes into physical contact with a stimulus 1. Marketing implications a) Media selection is critical to ensure the target market is exposed to marketing stimuli. This includes broadcast media, print, product placement, internet, and sponsorships, as well as a raft of new options such as those in the out-of-home sector B. Factors influencing exposure 1. Position of an ad within a medium a) Placing an ad within a medium can influence exposure b) Beginning vs. middle of commercial break in television c) Front vs. back or inside magazine covers 2. Distribution and shelf placement a) Where a product can be found in the marketplace b) Shelf placement within the retailer’s store 3. Marketing implications a) Marketers are constantly striving to find unique media to expose consumers to marketing stimuli C. Selective exposure 1. Consumers select their exposure to stimuli a) Software to block ‘pop-up’ ads b) Zipping-consumers fast-forward through programs that have been recorded or downloaded c) Zapping-consumers avoid ads by switching channels d) Registering with national 'Do Not Call' registries in different countries allows consumers to avoid telemarketing e) Laws forbidding spam and unsolicited marketing messages via email, wireless phones and pagers 2. Marketing implications a) Marketers are testing media not saturated by advertising or opting for inprogram product placement to increase product exposure

II.

Attention and consumer behaviour A. Definition of attention 1. Attention refers to the process by which an individual devotes mental activity to a stimulus 2. Attention consists of three key characteristics a) Attention is limited and can be directed to only a few places b) Attention is selective; thus, consumers need to be led to allocate resources to a given stimulus (e.g., a brand) or they may direct their attention elsewhere c) Attention can be divided among multiple stimuli

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B.

C.

Focal and non-focal attention 1. Pre-attentive processing a) Pre-attentive processing is the non-conscious processing of information from peripheral vision b) Because attention is limited, consumers are not aware that preattentive processing is occurring 2. Hemispheric lateralisation a) One’s ability to process pre-attentively depends on where an ad is placed in relation to a subject; pictures (words) are more likely to be processed pre-attentively if they are placed in the left (right) visual field.

Note that the location of the image or word is opposite to the brain region that is responsible for processing the information. That is, words are processed in the left hemisphere, while the right hemisphere processes non-verbal pictorial information 3. Pre-attentive processing, brand name liking and choice a) Research suggests consumers will like a brand name more if they have processed it pre-attentively than if they have not been exposed to it at all b) Marketing collateral or news headlines can have a more significant influence on consumer pre-attentive attention when they involve emotional aspects Marketing implications 1. Personally relevant stimuli are more likely to attract attention because they have potential consequences for our lives. A number of techniques can be employed to increase attention: a) The incorporation of more self-relevant needs, values and goals into a stimulus (marketing communication) increases the likelihood that the stimulus will be perceived b) Appeals that demonstrate individuals similar to the target audience are more likely to garner attention c) Appeals that create a compelling storyline or narrative are more likely to attract attention because they draw the consumer into the action d) Rhetorical questions draw consumers into advertisements and, even though no specific answer is expected, create an opportunity for the consumer to think of a response involving themselves and the product 2. Pleasant stimuli a) Visual attractiveness increases the likelihood of a stimulus (e.g., advertisement) being noticed b) Familiar, pleasant, or nostalgic music can all be used to attract attention. It can create an associative network whereby the consumer recalls past (pleasant) experiences and those emotions are then transferred to the product or brand c) Providing a pleasurable experience through humour can draw consumers into an ad. Humour can be a welcome, unexpected distraction when viewing other media content

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Chapter 3: From Exposure to Comprehension

3.

Surprising stimuli a) Stimuli that are new are more likely to attract attention b) Novel formats and messages can attract attention c) However, consumers do not always like novel presentations d) Placing a message in an unexpected place (e.g., on the ground, in the air) can draw attention e) Puzzles or other exercises that engage the consumer attract attention because they require resolution on the part of the consumer 4. Easy to process stimuli a) Prominent stimuli, such as full-page ads and loud commercials, are easy to process because they stand out from the environment; ease of finding such stimuli increases their chance of being attended to b) Concrete stimuli that are more detailed and specific are easier to understand, thus they are more likely to be processed c) Messages that stand out from competing information draw attention to themselves, making them easier to locate and thus more likely to be processed D. Customer segments defined by attention 1. Consumers can be identified by whether they focus on information that is relevant, pleasant, surprising or easy to process E. Habituation 1. Habituation refers to the fact that once a stimulus becomes familiar it can lose its attention-getting ability 2. Marketing implications a) Habituation can be reduced by altering the stimulus to keep it ‘fresh’ III. Perception and consumer behaviour A. Perception occurs when stimuli are registered by one of the five senses B. Perceiving through vision 1. Size and shape attracts attention a) Consumers tend to buy products in packages that appear taller 2. The size and style of lettering on product packaging or in an ad can attract attention and support brand recognition 3. Where product images are located on a package can influence consumer perceptions and preferences 4. Colour can determine whether we see a stimulus and can be described by three dimensions a) Hue refers to the pigment contained in a colour: Warm colours (e.g., red, orange, yellow) encourage activity and excitement; cool colours (e.g., green, blue, violet) are more soothing and relaxing b) Saturation refers to the richness of a colour c) Lightness (sometimes called ‘value’) refers to the depth of tone in a colour 5. Colour can affect consumers’ psychophysiological responses and moods a) Warm colours encourage activity and excitement b) Cool colours are more soothing and relaxing 6. Colour choices can have a significant influence on consumers’ liking for a product

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C.

D.

E.

F.

G.

H.

Perceiving through hearing 1. Loud music or stark noises can increase the probability that a stimulus will be perceived 2. Speed and pitch of the audio portion of marketing messages can affect attitudes toward the ad and brand Perceiving through taste 1. Taste preferences change over time and vary across cultures 2. In-store tasting is used to expose consumers to a product and increase their familiarity with it Perceiving through smell 1. Sensitivity to smell varies across individuals and groups a) Women are more sensitive to odours than men b) Younger consumers are more sensitive than older ones 2. Smells can affect psychophysiological responses and moods a) Not only do people like pleasant smells that are congruent with the context, they like familiar smells 3. Companies can expose consumers to marketing stimuli through their sense of smell a) Smell can entice consumers to try a product b) Smells are more effective if appropriate to the product category 4. Smells can attract customers to locations when shopping 5. Pleasant smelling environments can have a positive effect on shopping behaviour (e.g., evaluation of a brand) Perceiving through touch 1. Touch can affect psychophysiological responses and moods a) Consumers who are touched by a salesperson are more likely to evaluate both the store and salesperson positively b) Touch can also make people more compliant and willing to purchase 2. Touching a product can increase a consumer’s perceived ownership of the product 3. Some products are liked because of the way they feel, including skin care products, baby products and clothing fabrics Cross-modal perception: a joining of the senses 1. Cross-modal perception is the ability for stimuli received in one sensory modality to influence perception in another sensory modality Marketing implications 1. Vision a) Research has shown vision is the most dominant sense used by people to identify objects. Touch is number two b) Colour is the primary visual stimulus that influences perception in other sensory modalities

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2.

I.

Hearing c) Auditory stimuli can also influence behaviour (e.g., faster music in a restaurant encourages faster eating, allowing greater turnover and higher sales) d) Likeable and familiar music can induce good moods, whereas discordant sounds can induce bad moods 3. Taste a) While taste is important for a range of products, consumers are not always great at discerning tastes or taste differences b) To combat this, marketers will carry out extensive taste testing and offer in-store product trials to familiarise consumers with the product c) In addition, they will use packaging, text and unusual images or symbols to increase the salience of a product's taste qualities 4. Smell e) Some products are liked because of the smell they produce, while others products are liked because they mask unpleasant odours f) While smells are often used to create a positive experience, ambient smells (for example in an enclosed retail environment) may be irritating to some customers g) Consumers’ preference for smells vary across cultures 5. Touch a) Touch has a powerful effect on people, as it can create a feeling of perceived ownership over products that have been handled and promote purchase intentions When do we perceive stimuli?

1. Absolute thresholds are the lowest point at which an individual can detect a difference between ‘something’ and ‘nothing’ a) Marketers must cross the absolute threshold before their communication or product is noticed 2. Differential threshold refers to the minimal difference that can be detected between two stimuli a) It is often called the ‘just noticeable difference’ b) Its properties are outlined by Weber’s law: The greater the initial stimulus, the greater the additional intensity needed for the second stimulus to be perceived as different c) Marketers must present differences that are large enough for consumers to notice (as in comparing new attributes in a product to the old attributes) or keep them small enough to be missed (as with price increases) 3. Marketing implications a) Marketing messages and other stimuli must be above the absolute threshold to be perceived by consumers b) Sometimes marketers do not want consumers to notice differences between two stimuli, such as when the price is increased or the packaging size is decreased c) Sometimes marketers do want consumers to notice the difference between stimuli, such as when a product is new and improved

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4.

Subliminal perception involves the activation of sensory receptors by stimuli presented below the perceptual threshold a) Subliminal stimuli are presented so briefly (or covertly) that they are not consciously noticed, but can influence behaviour b) Subliminal perception is different from pre-attentive processing c) Whether consumers respond to subliminal messages in advertising has been a controversial topic in marketing d) A strong effect influences people against their will e) A weak effect influences people in ways that are consistent with their current goals or motivations f) Research suggests that subliminal perception has limited effects on consumers J. How do consumers perceive a stimulus?

1. Perceptual organisation a) Perceptual organisation is the process by which stimuli are organised into meaningful units b) It considers issues related to how consumers organise and combine the visual stimuli they receive and includes the four basic principles below 2. Figure and ground a) Stimuli are interpreted with respect to their environment b) Key brand information should be the focal point of marketing communications and background should not interfere 3. Closure a) Individuals have a need to organise perceptions into meaningful ‘wholes’ b) Using this principle, marketers create incomplete messages that lead consumers to complete the messages themselves 4. Grouping a) Stimuli are grouped to form meaningful, unified impressions b) Marketers can influence perception of a brand by carefully placing it where it will be grouped with appropriate, complementary stimuli 5. Bias for the whole a) Principle that consumers perceive more value in the whole of something than in the sum of its component parts IVV. Comprehension and consumer behaviour A. Source identification 1. The process of determining what the stimulus that we have detected actually is B. Message comprehension: determine what sense is made from the message 1. Objective and subjective comprehension a) b) Objective communication is the extent to which consumers accurately understand the message a sender intended to communicate b) Subjective communication is what the consumer understands from the message, regardless of whether this understanding is accurate 2. Miscomprehension a) When consumers inaccurately construe the meaning contained in a message, product description or instructions

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3.

C.

Effect of MAO (motivation, ability, opportunity) a) Low motivation and limited opportunity to process it—namely in a long or fleeting message increases miscomprehension 4. Effect of the culture a) Low context cultures generally separate words and meanings from a message. In high context cultures, there is more meaning in visuals 5. Marketing implications a) Marketers can make it easy for consumers to comprehend brand messages by ensuring ‘perceptual fluency’ b) Perceptual fluency involves the ease in perceiving and processing information. This can be achieved by using message repetition, or presenting messages across different media. c) Design a message to be consistent with consumers’ prior knowledge or use analogies to link the product to something more familiar d) The use of product placement has increased as a way to avoid consumers’ selective attention to marketing communication Consumer inferences 1. Brand names and symbols a) Brand names create subjective comprehension and inferences b) Descriptive names create inferences, where the name might suggest some aspect of performance or a benefit 2. Product features and packaging a) Product packaging can be used by consumers to determine various measures including quality, size or cost b) The labelling on packaging also has the potential to influence sensory expectations, such as when nutrition information is included on food products c) The country of origin will also infer quality, price or value 3. Price a) Price is often used as a surrogate indicator of quality 4. Retail atmospherics, displays and distribution a) Store layout and atmospherics inform consumers of the brand, have a range of psychophysiological effects and can influence consumer behaviours b) Context of a product display is important, as consumers will use external cues to inform their understanding of the brand

QUESTIONS FOR REVIEW AND DISCUSSION Possible answers are as follows.

1. What are the factors that affect consumers’ exposure to marketing stimuli?

Exposure to a product or brand can be influenced by a number of factors.

Distribution can have a positive (or negative) influence on exposure. For example, the more stores carrying a brand, the greater the likelihood a consumer will be exposed to a specific product. At the same time, the in-store shelf allocation and positioning is likely to determine how many and what type of shopper is exposed to the product. To manage this, some companies are using in-store technology to

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identify and profile consumers in order to present them with the most appropriate suite of product options. Exposure is also influenced through advertising. For example, positioning of an ad with a given medium (online ads in the top ‘leaderboard’ position, TV ads at the start/finish of ad breaks and magazine ads on the inside front or back cover) can have a major influence on level of exposure. To assist this, companies will use celebrities as a way to maximise the potential for consumers to notice the communications. In addition, the increasingly fragmented media landscape means a brand’s target audience may be spread across a diverse range of media. To combat this, companies are looking to outdoor media and mobile as ways to increase consumers’ exposure to brands.

2. What is attention and what are its three key characteristics?

Attention is the way in which one allocates part of their mental activity to a stimulus.

It is limited in its capacity, it is selective and it can be spread to different activities at the same time. Attention also varies depending on what is going on in the consumers’ life. For instance, if a consumer is looking for a car and has decided on a Toyota Camry he/she will likely notice more Toyota Camry’s on the road than he/she would normally.

3. In what ways do prominence and habituation affect consumer attention?

Prominence and habituation have opposite effects on consumer attention. The more prominent a stimulus is, the greater the likelihood the stimuli will garner attention. A prominent stimulus causes it to stand out relative to its surroundings, therefore generating more attention. Consequently, habituation is when a stimulus loses its attention-getting capacity due to its familiarity.

4. What is perception and what methods do we use to perceive stimuli?

Perception can be thought of as the way in which our different senses are activated by a stimulus. We often perceive stimuli through multiple senses (sight, sound, taste, touch and smell).

5. Differentiate between the absolute threshold and the differential threshold and explain how these concepts relate to Weber’s law.

The absolute threshold is the minimum amount of stimulus necessary to perceive it while the differential threshold is the amount of stimulus needed to perceive a difference. Weber’s law states that the stronger the initial stimulus, the greater the additional intensity needed for the second stimulus to be perceived as different. In short, it is easier to detect a difference between an object weighing 5 kg and one weighing 10 kg (5 kg difference) than it is to detect a difference between an object weighing 50 kg and one weighing 55 kg (still a 5 kg difference).

6. Identify four principles of perceptual organisation and describe why marketers need to know about them.

Perceptual organisation is based primarily on the gestalt principles of figure and ground, closure, grouping and bias for the whole. Figure and ground is a principle that illustrates how people make sense of a situation through environmental cues.

Closure refers to our need to organise perceptions so they form a meaningful whole.

Grouping is a tendency to join stimuli to form a unified impression. Bias for the

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whole refers to consumers valuing the whole of something more than the sum of its component parts. All of these principles are important to marketers who need to understand how consumers perceive marketing stimuli.

7. What are the two components of comprehension and how do MAO and culture affect comprehension?

Comprehension typically involves source identification and message comprehension.

Source identification is the process of determining the nature of the stimulus encountered. Message comprehension involves making sense of the stimulus.

Message comprehension involves both objective and subjective comprehension.

When the message is incorrectly interpreted, miscomprehension occurs. This can often occur when consumer motivation is low or when the consumers’ ability to interpret the information is low. Likewise, different cultures place more or less emphasis on external advertising cues, such as language, and this can impact on the interpretation of marketing messages. To assist comprehension, marketers can keep their messages simple and ensure repetition of the message across the same and other media. Marketers can also design ads to be consistent with consumers’ prior knowledge and can use analogy to increase the perceived familiarity with the brand.

8. What are some ways that companies can use marketing-mix elements such as brand names and symbols to affect consumer inferences?

Companies can use product features, price, retail atmospherics, displays, distribution, colour, logo, and packaging to impact consumer inferences. These specific elements of the marketing-mix impact consumer inference.

CONSUMER BEHAVIOUR CASE How Under Armour gets noticed The Nike swoosh may be one of the most recognised logos in the world of sports, but the Under Armour logo (an interlocking U and A) is increasingly in the spotlight as the company gets noticed on and off the field. Founded in 1996 by Kevin Plank, once a member of the University of Maryland’s football team, Under Armour designs apparel and gear to help athletes feel and do their best in hot or cold weather, in sports arenas or on the track. How can a latecomer to a fast-growing industry dominated by global giants such as Nike get noticed?

A little-known brand name was only one of Under Armour’s early challenges. Another was that many of its first products (such as undershirts that wick away moisture) were not actually visible to onlookers. In contrast, the logos of competing brands were visible and often prominent on athletic shoes, shirts and caps. So the company initially positioned itself as ‘a brand for the next generation of athletes’. Whereas Nike was sponsoring well-known, established athletes, Under Armour’s sponsorships went to upand-comers known for their dedication and athleticism. Its first endorsement deal was with a Dallas Cowboys football player who had been at University of Maryland with Under Armour’s founder. More recently, the company’s performance apparel has been spotted on endorsers such as Heather Mitts (soccer), Cam Newtown (NFL) and Derrick Williams (basketball) and Australian NRL star Jarrad Hayne. British tennis star Andy

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Murray is one such athlete who is sponsored by Under Armour, and has appeared in Under Armour clothing at the Australian Open.

As its sponsored athletes do well and their teams win games and even championships, Under Armour’s brand gains attention and visibility. Although not every rising star becomes a sports legend, the brand still gets exposure as these athletes receive media coverage, become established in their sports and appear in Under Armour ads. Now that the company rings up more than $1 billion in yearly revenue from the sale of clothing, footwear and accessories for men, women and children, it can also afford some highprofile deals, such as being endorsed by Tom Brady of the New England Patriots NFL team.

The Under Armour Australia website features the brand mission – ‘Everything here is built to make you better’ – and puts its ‘Universal guarantee of performance’ in a conspicuous position, offering a full refund if customers are ever dissatisfied with a product for any reason. The diversity of models and athletes on the Under Armour site and in its ads, often shown participating in a sport, invites a broad range of consumers to identify with the brand.

The close ties between Under Armour and the University of Maryland in the United States have led to additional opportunities for brand and product exposure. To grab attention and sell more team merchandise, college and professional football teams are switching to more fashionable uniforms and gear, with flashier colours and styles. As part of this trend, Under Armour has designed 32 different items for football players at the University of Maryland to wear. Fans, competing teams and the media can’t help but notice the eye-catching combinations of shirts, pants and helmets worn by team members on different days – with Under Armour’s now-familiar logo on each item.

What’s ahead for Under Armour? The company is expanding into Europe and beyond, relying on distribution and marketing communications to reach more consumers, both casual and serious athletes. It is using social media such as YouTube, Twitter and Facebook to engage consumers, showcase its sports endorsers and increase brand and product visibility. Just as important, new products are in the pipeline, along with new technology that enhances Under Armour’s differentiation.

CASE QUESTIONS 1. What is Under Armour doing to make its brand personally relevant, surprising and easy to process?

Up-and-coming athletes are easier for an average consumer to relate to than a player making millions of dollars. Regular athletes perceive themselves as more similar to a new and relatively unknown athlete. Using lesser known athletes also adds a surprising aspect to message stimuli; consumers may attend to such messages in order to figure out the identity of the athlete. Providing University of Maryland players with non-traditional eye-catching uniforms is also an attention getting surprise, since the players stand out from their opponents’ uniforms they are easier for viewers to process.

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2. What role do objective and subjective comprehension play in Under Armour’s ability to market its products by sponsoring up-and-coming athletes?

Objective comprehension—up-and-coming athletes embodied the company’s initial position as ‘a brand for the next generation of athletes’.

Subjective comprehension—these athletes are more representative of a ‘normal’ person or athlete, so the target market can interpret the company as meant for all athletes.

3. Why would Under Armour want to be sure that consumers can clearly see different models as well as its mission and guarantee on the brand’s website?

Using different models ensures the brand is perceived as personally relevant to a wide variety of athletes because they see someone similar to themselves. This also emphasises that Under Armour is for all athletes (i.e. ‘normal’ people) and is reinforced by their mission, ‘Make all athletes better.’ Additionally, the guarantee may influence subjective comprehension as consumers assume the products must be of a high quality to warrant such a broad guarantee and defined promise to back-up its claims by offering full refunds for any dissatisfaction.

SUGGESTED EXERCISES AND TEACHER GUIDELINES 1. Select a good or service that would typically be considered high in involvement and one that would be considered low in involvement. Design an ad to encourage attention to, and perception of, each chosen good or service. How are these two situations similar? How are they different? Exchange your work with a classmate, and explain your rationale for each ad. Review your classmate’s work as he or she comments on yours, based on how effectively each ad attracts attention and perception.

Break into small groups. This exercise can be very effective when student groups design an ad on a transparency that is then presented to the class for critique.

Students quickly learn that creating advertisements (slogans, logos, mascots, etc.) is not as simple as they think. Secondly, ask students if they notice that many brand names are one syllable (this makes for an interesting discussion).

2. Browse through a copy of one of your favourite magazines looking for three ads that you think are most effective for generating exposure, attention and perception. Also, find three ads that are ineffective for each process. What makes the good ones effective? What do you think is wrong with the others, and how could they be improved?

Students have a tendency to provide lots of interesting detail. Attempt to get students to categorise this vast amount of information by developing common themes that denote the reasons for successful and unsuccessful ad executions.

3. Watch TV for one hour (recorded if possible). During this period, describe the ads that got your attention. Why were they successful in attracting you? For which ads did you want to engage in zipping or zapping and why?

Again, attempt to get students to categorise this vast amount of information by developing common themes that denote the reasons for successful and unsuccessful ad executions.

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4. Identify as many examples as you can in which marketers want consumers to perceive a just noticeable difference between their product and a competitor’s, or between an old product and a new one. Also, find examples in which marketers do not want consumers to perceive such a difference. Consider not only visual aspects of the product or service, such as how big or small it is, but other perceptual differences as well (how it tastes, feels, smells, sounds).

Here, students should grasp the notion that market leaders may be trying to distance themselves from the competition while market followers/imitators may be trying to remain as close to the leaders as possible. This is a great time to tie in the Perceptual Mapping concept from Chapter 2.

5. Visit a local shopping mall and examine the interiors of three or four stores. Describe the physiological and psychological responses that different stores try to create. How do they achieve these responses through the use of colour, brightness and contrast?

What other sensory stimuli do these stores use to encourage consumer response?

This can be developed into a major individual exercise or as part of a larger group project, depending on the level of detail desired. Students can benefit from a thorough investigation of all of the little design factors, those that are not as apparent upon first glance. Ask students to analyse their place of work, their housing area (e.g., design of the apartments), the student union, and/or library atmospherics.

6. Read about colour trends and future colour predictions in the press releases and reports of the Color Marketing Group (www.colormarketing.org). What colours are expected to be popular in the next few years—and why? Choose a particular product, such as a specific car model, and explain how the colour forecasts you reviewed might affect the marketing of that product.

By way of comparison, it is also interesting to capture information about colours used in older cars. You may ask students to apply this exercise to a variety of products such as fashion (e.g., shoes, shirts) and interior decorating.

7. Examine the home pages of two competing online retailers, such as Amazon.com and Barnesandnoble.com. How does each site use the principles of perceptual organisation to focus consumer attention on specific offerings? How does each make its stimuli pleasant, surprising or easy to process? Which home page appears to be most effective in attracting your attention and perception—and why?

From an initial impression, both sites are similar in structure (e.g., search function is located in the upper left, popular categories are listed with buttons across the top).

However, it is quickly apparent that Amazon.com focuses on other product categories than just books, while Barnes & Noble is much more of a bookstore.

Amazon is currently using brighter colours on its main page.

SUGGESTED INTERNET EXERCISES WITH SAMPLE ANSWERS Victoria’s Secret When it comes to exposure, no one knows better than Victoria’s Secret! Its retail stores have become a fixture in most shopping malls, and its catalogues reach millions of consumers several times per year. The brand name is among the most recognisable in

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the US, thanks to coordinated marketing efforts to maximise its exposure among its target market. Three months before the company launched its website, it posted a ‘splash page’ at its eventual web address, to capture information from web surfers who assumed that the company already was online. The splash page asked interested visitors for their email addresses to notify them when the website was up. With zero advertising expenditure, the company built a database of more than 300,000 potential customers from responses to its splash page. The company received more than one million website hits within an hour after promoting its online fashion show during the 1999 Super Bowl.

Victoria’s Secret has combined traditional marketing techniques and internet technology with its successful e-tailing strategy.

Visit the Victoria’s Secret website at www.victoriassecret.com. How does the company use its home page to provide potential consumers with opportunities for additional exposure to the company and its products? What techniques does the company use to attract and hold consumers’ attention at the website? Which perceptual factors engage the consumer to process the information at Victoria’s Secret website?

Instructor notes From both a marketer’s perspective and a consumer’s perspective, the home page for Victoria’s Secret is quite well designed. The page features photos of the company’s popular products as well as its newest offerings. Convenient links at the top of the page direct visitors to various product categories. Consumers can shop either by clicking on links for various product categories, or by entering a product code from the printed catalogue. To streamline transaction processing, consumers can register at the website.

Also included are links for customer service and international information and an order form to receive a printed catalogue.

Besides exposure to company and brand stimuli at their website, Victoria’s Secret provides visitors with opportunities for non-web exposure with a visit to the home page.

Potential consumers who provide their email addresses can receive notifications of sales and exclusive deals. Those who do not already receive a printed catalogue can request one through the website.

Victoria’s Secret uses a number of successful techniques to capture and hold consumers’ attention at its website. Both photos and copy comprise the pages, assuring that consumers will attend to important stimuli with both brain hemispheres. When the destination links at the top of the home page are within consumers’ range of focal attention, the photos are within range of their peripheral vision, enhancing pre-attentive processing. Certainly the website’s visuals are attractive, although given the nature of the product offering they are hardly novel or unexpected. Victoria’s Secret increases consumers’ ability to process the stimuli at its website with photos of various products that provide both prominent and concrete stimuli. Links to detailed product information appear near the bottom of the page. When consumers scroll down to access these links, the product photos are no longer visible and cannot compete for attention.

As with a printed catalogue, consumers perceive the stimuli at the Victoria’s Secret website only through vision. Therefore the visual stimuli must be carefully designed to

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achieve the company’s marketing objectives. Signature shades of pink predominate, symbolising femininity and conveying familiarity for those who have visited the company’s retail stores. These colours may induce consumers to linger at the website, perhaps purchasing more. Colour symbolism also reinforces the images of various products; the more fashion-forward or overtly sexy the product, the brighter or racier the colour with which it is portrayed. Potential sources of difficulty are the font size and colour used for much of the printed information. Small type in pale shades of grey and pink may be difficult for some consumers to read.

Interestingly, Victoria’s Secret stores are a feast for all of the senses, complete with attractive visuals of all kinds, soft classical background music, ambient aromas from the fragrance products, open displays that invite touch and trial, and convenient dressing rooms for pre-purchase product evaluation.

Additional uses This exercise also relates to concepts in the following chapters: • • •

•

Chapter 2, Motivation, Ability and Opportunity (various needs satisfied by purchasing Victoria’s Secret products) Chapter 3, From Exposure to Comprehension (associations linked with schemas for lingerie, Victoria’s Secret brand personality, scripts for purchasing lingerie) Chapter 4, Memory and Knowledge (imagery and discursive processing of stimuli at Victoria’s Secret website, trace strength of stimuli, spreading of activation of network nodes for the brand, recognition and recall of the brand and/or products) Chapter 11, External and Internal Influences on Consumer Behaviour (likely age of target users of Victoria’s Secret products, differences between lingerie shopping behaviour of female and male consumers and psychographic profiles of Victoria’s Secret users, shoppers, and purchasers).

Discussion idea Online shopping sites provide only visual stimuli for most products. What are the most significant disadvantages of this limitation for e-tailers of clothing and fragrance products? How can marketers overcome these disadvantages? Likely answers include the following: • • •

•

Inability to try products for which touch (fit) or smell (fragrance) are determinant attributes Lack of opportunity to influence consumers through other perceptual processes Marketers can maintain or develop a bricks-and-mortar retail presence, providing opportunity for consumers to evaluate products using touch and/or smell; marketers can institute generous return policies for products ordered through websites Marketers can add auditory stimuli to websites (background music similar to what is used in their stores, or congruent with the websites’ other stimuli)

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Blue Mountain Arts Many web users enjoy sending personalised e-greetings to their fellow netizens thanks to Blue Mountain Arts. A manufacturer of printed greeting cards for over twenty years, Blue Mountain Arts was among the earliest purveyors of free consumer services on the internet. From the company’s home page at www.bluemountain.com, consumers can browse an enormous selection of online greeting cards for all occasions, from birthdays to the Buddhist New Year. The site’s offerings and links comprise unexpectedly diverse stimuli. Create an online greeting at Blue Mountain Arts’ site, and send it to a friend. In what ways does Blue Mountain Arts capture users’ attention through its use of unexpected stimuli?

Instructor notes The range of online greeting card categories at Blue Mountain Arts is surprisingly broad and inclusive. The user can select a greeting in any of nine languages. The company’s home page offers free screen savers, address book functions, and a link to an online florist for conveniently supplementing an online card with a real bouquet.

More surprises await the user in creating and sending an online card. After browsing designs within a greeting category, the user makes a selection. The next screen offers to retrieve an email address from an address book; allows the user to send the same greeting to multiple recipients; provides generous space to supplement the standard message; and includes a preview of the e-greeting for accuracy and effect. For almost all greetings, the Blue Mountain Arts website provides appropriate background music, which the user hears during the preview. With some online greetings, the user has the option to include a discount offer for a purchase at an affiliated e-tailer. All in all, the site comprises many features that provide the user with an unexpected stimulus or benefit, and that encourage the consumer to revisit Blue Mountain Arts for future egreetings.

Additional uses This exercise also relates to concepts in the following chapters: •

Chapter 5, Attitudes and Persuasion (affective versus cognitive involvement)

•

Chapter 7, Judgement and Decision Making (effects of habit and brand loyalty as simplifying strategies for greeting card selection, affect referral, co-branding with etailers, shaping greeting selection process)

•

Chapter 9, Social Influences on Consumer Behaviour (reference group usage of online greetings)

•

Chapter 13, Symbolic Consumer Behaviour (appropriate occasions for e-greetings versus printed greetings)

Discussion idea Which of the unexpected stimuli at the Blue Mountain Arts site might some users find unpleasant, and why? In terms of consumer exposure, attention, and perception, of

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what benefit is this site to the company’s greeting card retail division? Likely answers include the following: • •

Links to affiliated e-tailers may seem obtrusive to some users.

Users may dislike the music that is sent automatically with a particular e-greeting, or with all e-greetings in general.

Inclusion of a discount offer for the recipient may seem offensive to some users.

Although it may cannibalise some retail sales, Blue Mountain Arts’ website builds brand name exposure and recognition, and may positively affect consumers’ perceptions of its company image (blues and yellows) versus the greys and greens used by Barnes & Noble.

• •

ADDITIONAL DISCUSSION QUESTIONS WITH SAMPLE ANSWERS These discussion questions can be used as in-class activities or as thought questions that the students consider while reading the chapter or to test their understanding of the material after the reading and lecture are complete.

1. What role does attention play in advertising strategy?

Attention both affects what we perceive and is used to process something after we have perceived it. Marketers can capture attention by making an ad (a) personally relevant, (b) pleasant, (c) surprising, and (4) easy to process.

A stimulus will be personally relevant if it appeals to consumer needs, values and goals, and if it includes drama, rhetorical questions, or sources that are similar to the audience. A stimulus will be pleasant if it incorporates attractive visuals, music or humour and will be surprising if it incorporates novelty (a stimulus that is new and unique) or unexpectedness (a stimulus that is different from what the consumer expects). Finally, a stimulus will be easy to process if it is prominent, concrete, or in contrast to the surrounding stimuli.

2. What part does just noticeable differences (jnd) play in consumers’ perceptions of a product?

Just noticeable difference (jnd) is the intensity difference needed between two stimuli before they are perceived to be different. Marketers must consider this effect as they position products. If the difference in the focal attribute (price, size, quantity, warranty, etc.) will be interpreted positively by consumers, marketers must ensure that the intensity is great enough for consumers to perceive it . If the difference will be interpreted negatively, marketers must ensure that the intensity is below the i.e. threshold.

3. What strategies have marketers developed for increasing the likelihood that consumers will be exposed to their marketing stimuli?

Marketers know that (a) various marketing communications strategies, (b) careful positioning of an ad in a medium, and (c) calculated product distribution and shelf placement should increase the likelihood that consumers will be exposed to their marketing stimuli. a.

Marketers rely on both traditional and newer marketing communications strategies in order to reach consumers. Traditional techniques include personal

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selling, publicity, magazines, TV, radio, billboards, direct mail, newspapers, advertising specialties, and special-events advertising. Newer types of marketing communications that generate exposure include placing brands or products in movies or other forms of entertainment or in media. Examples include instant coupon machines, infomercials, luggage carousels, shopping carts, and the internet. b.

Marketers also calculate how to position an ad within a medium to increase the likelihood of exposure. For example, exposure to TV commercials is greater when ads are placed at the beginning or end of the commercial break and when run during a program that interests the target audience. Similarly, exposure to magazine ads increases when ads appear on the back cover or next to an article.

c.

Finally, marketers know that exposure is likely to increase for products that are distributed to a greater number of stores because consumers are more likely to come in contact with these products. Likewise, exposure increases when the product is placed on an end-of-aisle display, when located at eye level on the shelf, and as part of a point-of-purchase display.

ADDITIONAL QUESTIONS 1. Explain what is meant by the term exposure and how can exposure be created for marketing-related stimuli.

2. Discuss the concept of selective exposure and explain why it is important to marketers.

Offer some examples of how consumers engage in selective exposure. Describe how these consumer behaviours can be addressed through marketing efforts.

3. Explain why the following are important to the sensory processing of visual stimuli: (a) brightness and contrast, (b) size of the product package, and (c) colour. Provide an example of each in a marketing context (other than those provided in the text).

4. Explain why each of the following types of sensory processing can be important to marketing strategy: (a) hearing, (b) taste, (c) smell, and (d) touch. Provide marketing examples in which these senses are employed (other than those provided in the text).

5. Create your own definition of the absolute threshold and use an example to explain why it is important for marketing strategy.

6. Create a definition for, and use a marketing example to describe, the differential threshold. Identify when marketers would and would not want a difference to be perceived.

7. Suppose from testing that it was determined that 7 cents had to be added to a dollar before consumers would notice the difference. According to Weber’s law, how much would have to be added to 5 dollars before consumers would notice the difference?

8. Explain what is meant by the process of attention. Describe the purpose that it serves and explain why it is important to marketing strategy.

9. Describe how each of the following could be used to capture the consumer’s attention and provide an example of each (other than those provided in the text): (a) appealing to needs, (b) attractive sources, (c) perceptual vigilance, (d) similar sources, (e) dramas, (f) music, (g) humour, (h) rhetorical questions, (i) comparative advertising, and (j) fear

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appeals. Describe a case (if there is one) in which marketers might want to create a distraction from their advertised message.

10. Describe how each of the following can affect attention and provide an example of each (other than those provided in the text): (a) a novel stimulus, (b) a prominent stimulus, (c) an unexpected stimulus, and (d) an attractive visual.

EXPERIENTIAL EXERCISES AND CLASSROOM EXAMPLES Students who learn more readily through visual and tactile stimuli will benefit from the introduction of physical examples into the classroom.

1. ‘Not eggs-actly as perceived’ exercise

Take to class a clear glass measuring cup, a kitchen towel and an egg carton filled with 11 white plastic eggs and one real egg. At the start of class, open the carton and show students the eggs inside, being careful not to let them get close enough to notice that most of the eggs are not real. Put the cup on the towel and crack the real egg into it.

Then, holding on to the edge of the top of the carton, throw the rest of the eggs at the middle of the room. Most of the students will panic and scream; some will jump out of their seats. After they have settled down, talk to them about why they reacted the way they did, what led them to assume that the eggs were real, and the relationship between perception and reality.

2. ‘Your attention please’ exercise* Purchase an air horn from a local sporting goods store. Take it to class in a paper bag and place it on the floor. While introducing the topics of the day, including attention, remove the air horn from the bag and sound it. The unexpected loud noise will cause most students to levitate out of their chairs. Use their reactions to illustrate the importance of gaining attention and to talk about the difficulty of capturing consumers’ attention in a cluttered marketing environment.

3. ‘I read it in the checkout line’ exercise* Purchase one copy of the Sydney Morning Herald, The Age or Daily Telegraph for every student in the class. Give students five to ten minutes to leaf through the newspapers.

At the end of that time, ask students what articles they noticed and why, which ones they read and why, and how their perceptions of the content of the articles were affected by the publication in which they appeared.

4. Consider visiting the local grocery store to find examples of marketing efforts that have an effect on exposure, attention or perception to bring to the classroom. Examples of these efforts might include point-of-purchase displays, in-store advertising, unique packaging, and interactive devices (e.g., sweepstakes, etc.), which are all used to increase consumer exposure, attention, or perception. Use these examples to stimulate discussion about how marketers are or are not using principles of consumer behaviour to support their marketing efforts.



These experiential exercises have been contributed by Professor Sheri Bridges of Wake Forest University.

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Chapter 3: From Exposure to Comprehension

CLASSROOM GROUP ACTIVITY Using exposure, attention and perception in your marketing program: 45 minutes I. Start up A. Purpose of the activity 1. This activity will give students an opportunity to apply the concepts of exposure, attention or perception in a brief classroom exercise B. What the instructor will do 1. The instructor will divide people into small groups, assign them a product for consideration and be available to coach and help the groups as needed C. What the participants will do 1. The participants will work in small groups to brainstorm ideas for applying concepts from the chapter to specific brands. After a period of small-group discussion, they will make reports to the large group D. Rules for this experience 1. Groups are to work separately from each other. Individuals should rely on their knowledge from the book and may refer to their notes and the book as necessary II. Experience A. Group up 1. Have students form groups of no more than five. This exercise will work in groups of any size; however, room restrictions that do not allow for moving furniture may make group work more difficult B. Assign brands 1. Each group should be assigned a single brand on which to focus a) Consider using local brands, including both products and services b) Consider using brands that are not the leaders in their categories (i.e., not Coca-Cola or McDonald’s) c) Consider bringing samples of the brands to the class for students to study and review in their groups (e.g., a box of crackers, a candy bar, a cola can) C. Specify actions for groups 1. The groups are responsible for analysing the brand’s present marketing initiatives (based on the 4Ps) and proposing marketing initiatives that will utilise the concepts discussed in the chapter 2. Questions to be answered by small groups a) What specific actions can/are being used to ensure that consumers are exposed to this brand? b) How can consumer perception of this brand be enhanced? c) What would you propose be done to increase attention paid to this brand?

3. Large-group discussions a) First, have groups present their ideas about the first question, and then proceed to discuss each of the subsequent questions b) If there are many groups, share the discussion among all groups, though not all groups may answer all of the questions.

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III. Debrief and unveil concepts A. Discuss the activity itself 1. The purpose of this discussion is to allow students to express what they felt about the experience itself 2. Ask students to describe their experiences of ‘doing’ the activity a) Likes and dislikes about what just happened b) How they felt during the experience c) What is realistic, unrealistic about the exercise? d) What will be different when they do this for their own brand?

B. Discuss the content of the experience.

1. The purpose of this discussion is to ensure that students ‘take away’ important learning points 2. Ask students to describe the important points the experience teaches a) The role of marketing initiatives in exposing potential users to a brand b) The role of perception in creating marketing initiatives c) The role of attention in creating marketing initiatives 3. Use the chalkboard to record student responses a) Write down their ideas as they are presented b) Concentrate on the principles being discussed rather than the examples being used c) Help them to see the interrelationships between their responses IV. Execute A. Apply what has been learned 1. Lead a discussion on how the concepts can be applied in organisations. a) What barriers may be faced in applying the concepts from the exercise? b) What can be done to help others understand the concepts when you use them at work?

B. Transfer and use the knowledge 1. Encourage students to make a record in their notes about how they will use the ideas in the workplace.

2. Even if they do not have a specific job, how will they remember to use what they have learned?

USEFUL WEBLINKS How Your Eyes Trick Your Mind (BBC) http://www.bbc.com/future/bespoke/story/20150130-how-your-eyes-trick-your-mind/ Visual, or optical, illusions show us that our minds tend to make assumptions about the world. This interactive website by the BBC provides various perceptual tricks to ‘show’ you that what you think you see is often not the truth.

The Science of Sensory Marketing (HBR) https://hbr.org/2015/03/the-science-of-sensory-marketing This article from the Harvard Business Review provides a summary of how marketers use attention and perception techniques to capture consumer interest in their product offerings.

Solution Manual for Consumer Behavior 2nd Asia Pacific Edition Wayne D. Hoyer

CHAPTER 4

Memory and Knowledge

CHAPTER SUMMARY This chapter considers how memory and knowledge influence consumer behaviour. The chapter describes memory and knowledge content (stored knowledge) and knowledge structure (the way information is organised in our minds). Prior knowledge is essential for two levels of consumer understanding: categorisation and comprehension. Categorisation is a process of labelling things that consumers perceive, and relating them to both other objects in the environment and their past experience. Items that are categorised, such as brands, are linked with other items in schemas and scripts. Schemas and scripts are part of the consumers’ knowledge of their world. Understanding how this knowledge is structured can help marketers create new knowledge about existing brands, create new brands, and link either new or existing brands to other knowledge that consumers may have about the world. Key concepts include: Memory • • • •

Sensory Working Long-term Explicit vs. implicit

Knowledge • • •

Schemas and scripts Knowledge categories Knowledge flexibility

Retrieval • •

Failures in retrieval Enhancing retrieval

Memory is discussed as both sensory and working, as well as both short term and long term.

Memory is explicit or implicit. The role of memory is key to understand along with consumer knowledge.

Knowledge is organised into categories in which objects in the same category are similar to one another and are distinct from items in other categories. Within a category, items are graded so that some are more representative or prototypical of that category than others.

In addition, categories may be hierarchically organised so that some items are considered basic as compared to others that are subordinate or superordinate. Understanding the structure of knowledge helps marketers to position, develop and design all elements of the marketing mix.

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While marketers intend to make it easy for consumers to understand their messages accurately (objective comprehension), factors like motivation, ability (age, expertise) and opportunity (repetition) can interfere and lead to misunderstanding. What is more, consumers may have difficulty understanding the explicit messages in marketing communications because they use other cues (words, visuals, price, atmospherics, packaging, product attributes) to form unintended inferences. Thus, what is understood is not always that which was intended. Finally, knowing that this confusion can occur, marketers must take extra precautions in order to not mislead consumers.

CHAPTER LEARNING OBJECTIVES After studying this chapter, students will be able to: 1. distinguish between the different types of memory and explain why marketers must be aware of the differences 2. describe how associative networks, schemata and scripts affect consumers’ knowledge content, and explain how and why the content and structure of knowledge are relevant to marketers 3. discuss the various aspects of memory, including encoding and retrieval, how they work and how they can fail, and how marketers try to affect memory.

CHAPTER OUTLINE I.

Different types of memory

A.

B. C. D.

E.

Memory is the persistence of learning over time, via the storage and retrieval of information, which can occur consciously or unconsciously 1. Knowledge content is the information we already have in memory 2. The set of associations linked to a concept is a schema.

Sensory memory is the ability to temporarily store input from all our five senses Working memory is the portion of memory where we encode incoming information and keep it available for future use Long-term memory (LTM) is that part of memory where information is permanently stored for later use. The two major types of long-term memory are episodic and semantic memory 1. Episodic, or autobiographical, memory represents knowledge about ourselves and what has happened to us in our past, including emotions and sensations tied to past experiencesi 2. These memories tend to be primarily sensory, involving visual images, sounds, smells, tastes and tactile sensations Explicit memory and implicit memory 1. Memory may be explicit or implicit 2. There is explicit memory when consumers are consciously aware that they remember something 3. There is implicit memory when consumers are not consciously aware that they remember something

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Chapter 4: Memory and Knowledge

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II.

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Implicit memory makes it easier to process information that we have encountered before Knowledge content, structure and flexibility A. Knowledge content reflects the information we have already learned and stored in memory about brands, companies, stores, people, how to shop, and so on.

Knowledge structure describes how we organise knowledge in memory B. Schemas and scripts: Knowledge content takes the form of schemas or scripts.

Scripts are a form of procedural knowledge: knowledge about ‘how’ to do things with the objects and people 1. Schemas are the set of associations linked to an object or person a) Types of associations, including attributes, benefits, users, uses, usage situations b) Favourability c) Uniqueness d) Salience or the ease with which they come to mind 2. Long-term memory is structured as a series of associative networks.

Spreading of activation to other parts or the network is important 3. Priming: the increased sensitivity to certain concepts and associations due to prior experience based on implicit memory. It occurs when a concept is activated by a stimulus C. Specific schemas: brand image and personality 1. Brand image: type of schema that captures what a brand stands for a) Example: McDonalds: family-friendly, fast, favourable 2. Brand personality: The way the consumer would describe a brand if it were a person (e.g., rugged) D. Scripts: Knowledge of a sequence of actions involved in performing an activity.

1. A script is a type of schema that represents knowledge of a sequence of events a) Examples include how to order dinner in a restaurant, how to get gas at a gas station and how to place an order with Ticketmaster b) Scripts help consumers make determinations quickly and help marketers understand how consumers buy an offering E. Marketing implications 1. Creating brand images and personalities a) With a new product, the marketer has to create schema, image and or personality b) Important so consumers understand the offering 2. Creating brand extensions: Use of a brand name of a product with a welldeveloped image on a product in a different category a) A transfer of associations takes place from the original brand schema to the new branded product b) This process may reverse

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3.

F.

G.

Maintaining brand images and personalities a) Marketers must maintain and develop the brand image b) The key is to be synergistic with marketing communication 4. Changing brand images and personalities: When a brand becomes stale or irrelevant, the marketer must change the brand to have more positive associations 5. Protecting brand images and personalities: Brand images are threatened during crisis or harm. A company should respond in a responsible manner Knowledge categories 1. Objects are arranged in taxonomic categories: orderly classifications of objects with similar objects in the same category 2. Graded structure and prototypically a) Things within the same taxonomic category share similar features that are different from the features shared by objects in other categories b) Category members vary in how well they represent a category, according to the principle of graded structure c) When an item is the best representative example of others in its category, it is called a prototype d) It shares the most features with others in its category and the fewest with members of different categories e) It is frequently encountered in the environment f) In categories where there is no prototype, a first or ‘pioneer’ brand may serve a similar function 3. Hierarchical structure a) At the superordinate level, objects share some characteristics but differ on others (colas and water) b) At the basic level, objects share more characteristics (teas and coffees) c) At the subordinate level, objects share most characteristics yet still differ (coffee and decaf) 4. Correlated associations a) Objects that have attributes that correlate in similar ways may be grouped together (e.g., size and gas mileage is usually negatively correlated in cars) b) Illusory correlations occur when consumers are confronted with ambiguous information and mistakenly infer that the presence an attribute of a product means that other attributes are also present c) Consumers develop conjunctive probability assessments of two attributes or events occurring simultaneously. Their assessments are influenced by prior expectations 5. Marketing implications a) A brand can develop its identity by being positioned as being either similar to or different from a prototype Knowledge flexibility 1. Goal-derived categories a) Some items serve the same goals and thus are seen as fitting into the same category (diet foods, vacation spots) b) Goal categories can also be graded and hierarchical in structure.

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Chapter 4: Memory and Knowledge

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II.

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Why consumers differ in knowledge content and structure 1. Culture may influence associations not found in other cultures (certain spokespeople with certain products) 2. Relevant category members vary across cultures (what are breakfast foods, for example) 3. Attribute correlations may differ (size of store correlation with quality of product may be different) 4. Prior experience affects consumers’ ability to process information 5. Experts and non-experts may categorise differently 6. Experts may distinguish category membership more finely than non-experts Memory and retrieval A. Retrieval failures: decay, interference and serial-position effects 1. Decay: memory strength deteriorates over time 2. Interference: strength of a memory deteriorates over time because of the presence of other memories that compete against it 3. Serial-position effects: primacy and recency a) Primacy: May remember the first ad because no other ads yet compete in the memory b) Recency: Evidence of being last is less strong, but first or last is better than middle B. Retrieval errors: Memory is not always accurate and is subject to confusion, selection and distortion C. Enhancing retrieval 1. Consumers may recognise something if they see it, but they may not necessarily recall it voluntarily 2. Elaboration involves transferring information into long-term memory storage 3. Characteristics of the stimulus a) Salience: Objects or features that attract attention and elaboration b) Prototypicality: Information items that link well with what consumers already have stored in memory c) Redundancy: Information that ‘go well naturally’ with what consumers already know D. Marketing implications 1. Many of the factors that affect attention also affect memory and, ultimately, recognition and recall 2. Chunking is a way to group items together to enhance recall 3. Rehearsal means that we actively and consciously interact with the material that we are trying to remember, perhaps by silently repeating or actively thinking about the information and its meaning 4. Recirculation explains why repetition affects memory 5. Elaboration involves the transfer information into long-term memory by processed it at deeper levels of meaning

QUESTIONS FOR REVIEW AND DISCUSSION Possible answers are as follows.

1. How are working memory and long-term memory linked?

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Sensory memory is the ability to temporarily store input from all of our five senses.

Working memory is the portion of memory where we encode information and keep it available for future use. Each is a precursor to long term memory, which is the part of memory where information is permanently stored for later use. Two types of LTR are semantic and episodic (or autobiographical) memory. Again, if the information is not encoded, it is difficult for that information to transfer to long term memory.

2. What techniques can enhance the storage of information in long-term memory?

Ways to enhance information storage of LTR include chunking (larger bits of information that chunk smaller bits), rehearsal (jingles, sounds and slogans), recirculation (different ads with the same message) and elaboration strategies (novel stimuli).

3. What is a schema and how is it related to branding and brand personalities?

A schema is basically the set of all associations that we link to a particular concept.

Schemas do not just include information but also behaviours that are linked to that information. Consumers also have schemas for brands by associating brand names and logos with related aspects of the brand. For example, consumers’ schemas for ‘Apple’ might link the logo with the concepts such as ‘creativity’ and ‘music’, so merely seeing the Apple logo can make you think of music and be more creative. Collectively, the information and concepts associated with a particular brand is known as the brand’s personality.

4. Why are some links in a semantic or associative network weak, whereas others are strong?

A semantic network is a set of concepts connected by links; some ties are weak in a network. Strong links are firmly established in memory because they have been chinked, elaborated or rehearsed. Weak links are not as likely to activate each other as strong links are. A strong link for example is that your last football game experience was expensive, which triggers thoughts about waiting in line for a subpar dinner. A weak link example here is you recall a ride you got to the game. The stronger link (the expense) activates other memories more than the weak link (your ride).

5. What are taxonomic categories and how do consumers use them to structure knowledge in memory?

Taxonomic categories are ways in which consumers classify a group of objects in memory in an orderly, often hierarchical, way based on their similarity to one another.

Consumers use them to structure knowledge by first thinking about a basic group—what type of beverage is it? Then, more specifically, is it diet or not? Then, what flavour is it?

What brand is it? This helps us have an orderly classification of objects with similar objects in the same category.

6. What is a category prototype, and what affects prototypicality?

A category prototype is the best example of a product category. Prototypicality is affected by the amount of shared associations with members of its own category and consumers’ collective product category schema.

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7. How does consumers’ knowledge affect knowledge structures in memory?

The way that consumers learn and ‘know’ affects the structure of that knowledge. For example, if a student primarily rides a bicycle to get from home to university, she will associate bicycles primarily within this context. Her decision about which bike to purchase will also shape the features, attributes, and aspects of the prototypical bike that she stores in her memory. This means that, in a different context, her knowledge becomes less relevant and she will have to ‘learn’ new aspects about bicycles that fit more appropriately.

8. Which three elements affect retrieval failures?

Retrieval failures are impacted by: 1. Decay – when memory weakens over time 2. Interference – when other memories distract memory 3. Serial-position effects – being stuck in the middle, it is easier to remember first or last elements in a sequence 9. How can consumers’ ability to retrieve information in memory be enhanced?

By having a relaxing and or positive mood, a consumer can retrieve information easier.

We are more likely to recall information that is consistent with our mood.

Secondly, by having more expertise with the topic, one can have easier retrieval of related information. Experts have more complex category structures in memory with a greater number of higher and lower level categories and more detail in each category.

CONSUMER BEHAVIOUR CASE The rebranding of Virgin Australia The act of rebranding a company – especially when it is successful – is a classic example of reshaping the memory and knowledge of customers who may have exposure or experience to the previous brand. Perhaps the most successful story of rebranding in the Australasia region in recent years is that of Virgin Australia and how it came to be a formidable challenger to Qantas on both domestic and international routes, all in a matter of 10 years since the financial collapse of Qantas’ previous rival, Ansett Australia.

Virgin Blue was launched in 2000 with two aircrafts operating on a single route. Even until 2010 with 91 aircrafts in its fleet, Virgin Blue was losing money and market share.

The possibility of financial collapse, even with the market share afforded by the exit of Ansett Australia, was so real that it called for a major revitalisation of its brand.

The problem with Virgin Blue was that it was seen as a low-cost carrier and therefore not a direct competitor to the full-service airline that Qantas occupies in the Australian market. Virgin Blue CEO John Borghetti identified this and made it his mission to rebrand the airline in order to attract new customers. Today, the airline we know as Virgin Australia has been recognised by Skytrax, a world airline association, as the best airline and as having the best service in the Asia-Pacific region. It has also taken a large chunk of the domestic market share away from Qantas, eating into its competitors’ finances.

How did Borghetti achieve this in only 10 years?

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Previously, Virgin Blue used various brand names on various domestic and international routes: Virgin Blue, V Australia, Polynesian Blue and Pacific Blue. Borghetti adopted the airline’s current brand name, Virgin Australia, to unify all operations under a single label.

In effect, he changed customers’ previous knowledge structures about each of the airlines into a single structure about the new airline. Previously, customers perceived Virgin Blue primarily for domestic routes and Polynesian Blue primarily on Polynesian routes, but with the rebranding of all the airlines under the single Virgin Australia brand, Borghetti was able to remove customers’ pre-existing associations about each of the separate airlines into a single brand image of the new Virgin Australia.

This new brand image, of course, was also crucial to the rebranding exercise. Not only does simply changing the brand name do enough on its own; customers also had to see the single airline differently. To this end, Borghetti updated the sights, aurals, touch, tastes and smells of each aspect of the Virgin Australia experience. The brand logo was updated, the leather and fabric in both the aircrafts and its lounges were updated featuring a contemporary design by artist Daniel von Sturmer and fashion designer Juli Grbac. The lounges also had Marblo bars, intricate timber panelling, vertical glass screens and natural light, all of which served to present the brand of the new Virgin Australia as modern and upper-class. Along the way, the frequent flyer program was also renamed, as well as the uniforms, scarves, ties and badges of the airline’s front-line staff.

This successful rebranding of Virgin Australia makes use of the concepts of brand image, brand personality and schemas that you have learned in this chapter. Customers previously had different schemas about each of the separate airlines – all of which generally linked the Virgin Blue group of airlines to its ‘low-cost’ status. But as part of the revitalisation, this schema changed into one that linked the single Virgin Australia brand with its ‘modern’ and ‘business class’ image. Therefore, the brand image and brand personality was changed in order to shake up what customers previously knew about the airlines into what Borghetti wanted them to know about the new Virgin Australia.

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CASE QUESTIONS 1. Borghetti was able to change the explicit memories that customers had about Virgin Blue. Do you think he was able to change customers’ implicit memories as well? How do you think this might positively or negatively influence the long-term success of Virgin Australia?

It is likely that Borghetti was able to change consumers’ implicit memories about Virgin Blue as a low-cost carrier to reflect the upscale quality of Virgin Australia. By improving the sights, sounds, touch, tastes and smells, this likely enforced Virgin Australia to be a business-class airline, separating it from its predecessor. However, there can be harm in this change. Customers who may have had valued Virgin Blue for its low airfares may not have the same positive feelings for Virgin Australia precisely because the two airlines are different – one low-cost, one premium. Of course, Virgin Australia is not aiming for the low-cost market, but in doing so, it may have to rely on attracting a whole new segment of consumers loyal to the new airline, and this loyalty and familiarity can take many years to establish.

2. Explain how chunking, rehearsal, recirculation and elaboration might play in the rebranding of Virgin Australia.

Virgin Blue previously had numerous separate airline identities, and by grouping them all under the same Virgin Australia banner, this makes it easier for consumers to develop a single brand image or brand personality for the new airline. Borghetti also used consistent lounge designs, staff uniforms and other marketing communications. This reinforces Virgin Australia’s new branding by allowing consumers to rehearse, recirculate and elaborate the new concepts about the airline repeatedly, all of which can enforce what consumers know about the new airline.

3. Do you think Borghetti was able to change the scripts that customers had about Virgin Blue and Virgin Australia?

Scripts refer to the knowledge of a sequence of events related to performing an activity. Passengers flying on any airline should have the same script – buy tickets,checkin, go through security, board and deplane. But there are likely differences between low-cost carriers such as Virgin Blue and premium airlines such as Virgin Australia. With low-cost carriers, customers might have to print boarding passes themselves and buy food, but with premium airlines, customers’ scripts might involve going to the lounge prior to boarding. By changing the branding of Virgin Australia to reflect its ‘premiumness’, this also likely meant that its passengers would also know that certain aspects of the scripts they have for a low-cost carrier might need to change.

4. What were some other ways that Borghetti could remove customers’ previous associations about Virgin Blue? How might these existing associations interfere with the knowledge structure that Borghetti wants customers to have about the new Virgin Australia?

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Although Borghetti was likely successful in its goals for Virgin Australia, there are some concerns that are evident in terms of memory retrieval. First, there may be interference between what consumers knew about Virgin Blue and what they know about Virgin Australia, and consumers who flew a lot on Virgin Blue or were familiar with it might have a hard time creating new associations for the new airline. Second, by positioning Virgin Australia as a premium carrier, this competes with other premium carriers in Australia such as Qantas. This means that when consumers are thinking of ‘business-class’, they might think of both Virgin Australia as well as Qantas. Previously, when consumers were thinking of ‘low-cost airlines’, there was only Virgin Blue in the marketplace. (Tigerair was not in existence when Virgin Blue first launched.)

SUGGESTED INTERNET EXERCISE WITH SAMPLE ANSWERS Big W and Target Both Big W (www.myerbigw.com.au) and Target(www.davidjoneskmarttarget.com.au) are popular department stores with both physical and online presences. Visit the two websites and click through to examine the women’s apparel selections. Contrast the ways in which the sites organise information about women’s apparel offerings. What are the advantages and disadvantages of each site’s organisation? Which kinds of consumer categorisation does each site reflect?

Instructor notes At Big W’s site, a list of product categories appears on the home page, including women’s items. Some women’s products are grouped together into comprehensive categories, for example, skirts and dresses. This format forces a consumer looking for a dress to sort through information about skirts as well. While this strategy exposes the consumer to a wider variety of products, it may inconvenience or frustrate some consumers. Within some product categories, the site further subdivides individual items by fabric (skirts and dresses), style (sweaters), or both (pants and shorts). A consumer searching for a particular item, for example a blue denim skirt in size twelve, can locate products more easily with this taxonomy. However, this site’s format precludes comparison across different subcategories.

Also, to find its price, the consumer must click on the thumbnail photo of the product, which complicates searching.

Target’s website is organised differently. Within the women’s apparel link, consumers can search for products by product category just like Big W, but it also offers users to sort by colour, size range or any combinations thereof by using handy pull-down menus. By selecting blue and size medium, for example, a consumer could quickly display a page that would include all of Target’s products in blue colour and in a medium size, whether it is a skirt or blouse. On the other hand, a consumer searching for red clothing in size eight could specify the colour and size for ‘all’ product categories, allowing convenient comparison of all of the site’s dresses, skirts, sweaters and other clothing in that colour and size range.

Within its women’s apparel categories, both Big W and Target reflect typical hierarchical taxonomies. But the manner in which they present the taxonomies can make it easier for certain consumers to sort depending on their existing preferences and product needs.

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Additional uses This exercise also relates to concepts in the following chapters: •

Chapter 3, From Exposure to Comprehension (exposure to non-focal stimuli within product categories)

•

Chapter 6, Problem Recognition and Information Search (diagnosticity of clothing attributes, consideration sets, kinds of information acquired in an external search)

ADDITIONAL DISCUSSION QUESTIONS WITH SAMPLE ANSWERS These discussion questions can be used as in-class activities or as thought questions that the students consider while reading the chapter or to test their understanding of the material after the reading and lecture are complete.

1. Discuss the interrelationships between prior knowledge, categorisation and comprehension.

Categorisation is the technique consumers use to identify, label and classify something new. Comprehension is the process of understanding the object that has been categorised. Prior knowledge is essential to categorisation because it allows consumers to place new information about a product, brand, ad, etc., into a framework. In other words, they can label the new object based on its similarity to what they already know.

Prior knowledge is essential to comprehension because it helps consumers to assign higher-order meaning to the information they have gathered.

2. Describe three dimensions marketers can utilise to understand consumer schema about their firm’s brands and explain the importance of this understanding to marketing strategy.

First, marketers can examine the salience of their brands. It is important to know the contexts in which a brand is likely to be ‘top of mind’ for consumers and to decide if these contexts align with the firm’s positioning goals. Second, marketers can assess which of a brand’s associations are favourable and which are unfavourable. Doing so allows the firm to build its marketing strategies to enhance favourability. Third, marketers can determine the degree of uniqueness of their brands. If the ways that a brand is unique are positive (‘the only cold remedy to let you sleep through the night’), the firm can capitalise on this differentiating feature when positioning against the competition.

3. Describe how brand extensions can be a useful means of introducing a new product into the market as compared to building a new brand ‘from scratch’.

The value of introducing a product as a brand extension as compared to building a brand ‘from scratch’ lies in the firm having the opportunity to transfer the existing brand’s associations onto the new product. Firms position their brands in many ways: Walmart represents low prices; Volvo represents safety; 3M represents innovation. If Volvo, for example, were to begin manufacturing and selling tyres (a brand extension), they would have the edge over a ‘from scratch’ competitor representing their tyres as a safe alternative. Consumers already have created associative links between Volvo and safety in their minds. Not only is there value in customers understanding a product’s positioning as soon as it enters the marketplace, there also is the opportunity to build on the brand’s favourable associations. If the firm effectively connects the brand’s

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attributes, benefits, etc., to the characteristics of the brand extension, consumers are likely to evaluate the extension favourably. The unknown brand would not be able to capitalise on these favourable associations. Favourable associations lead to a reduced risk of trial for the brand extensions when compared to the built ‘from scratch’ brand.

ADDITIONAL QUESTIONS 1. Identify prototype brands in the following categories and explain why you believe they are prototypes: beer, soft drinks, candy, tennis shoes and computers.

2. Using the same categories listed in question one, identify the categories in which consumers are likely to place each type of product. Relate these categories to superordinate, basic and subordinate categories, as appropriate.

3. In your small group, outline a script for the following situations: using a vending machine; getting a haircut; getting help with using software (from the manufacturer); flying on an airplane; eating lunch at McDonald’s.

4. Describe how brand extensions can be a useful means of introducing a new product into the market as compared to building a new brand ‘from scratch’.

5. Explain why is it useful for you as a marketer to understand how people categorise information. Discuss how knowing this can help you in the ongoing management of your own brand or organisation.

6. Describe three methods for studying the schema consumers hold about your brand.

Consider the pros and cons of each method.

EXPERIENTIAL EXERCISES AND CLASSROOM EXAMPLES Students who learn more readily through visual and tactile stimuli will benefit from the introduction of physical examples into the classroom.

1. ‘Foods of a feather’ exercise Bring in a wide assortment of products that compete at varying levels of intensity and directness. Have a student volunteer separate the products into competitive groups, label and explain the groupings. After the first student has finished, ask a second student to perform the same task. Talk about the differences; then open the floor to a general discussion about the various ways in which the products could be grouped. The products should exhibit significant variety. An illustrative assortment might include different brands of light, bottled draft, ice, dry, non-alcoholic, imported, micro-brewed, and regular beer; hard liquor; white and red wine; diet, caffeine-free, caffeinated, cola and non-cola forms of soda; flavoured and non-flavoured bottled water; fruit and sports drinks; vending machine items; and even oranges and apples.

2. ‘Dreamboat or dud?’ exercise* Make copies of the personal ads from the Sunday newspaper. Highlight several of the more interesting ads and tell students to draw a picture—literally or figuratively—of the individual who wrote the ad. Discuss their ‘pictures’ in class, noting the number and



These experiential exercises have been contributed by Professor Sheri Bridges of Wake Forest University.

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nature of the inferences made and highlighting the pieces of information in the ad that were key to those inferences.

3. Consider visiting the local grocery store to find examples of marketing efforts that call attention to how companies are making efforts to build categories, schemas or scripts for their products. Examples of these efforts might include: (1) point-of-purchase displays that distinguish the brand within the category or associate it with other categories (e.g., football-beer promotion); (2) unique packages that help establish the brand image (such as with fragrances); (3) soda cans from other countries and in foreign languages; (4) special promotional tools (coupons). Use these and other examples to stimulate discussion about how marketers are or are not using principles of consumer behaviour to support their marketing efforts.

4. Ask students to design/illustrate their taxonomic structure for a broad product category, paying close attention to the different levels of the hierarchical structure as described in the text. Additionally, students could be asked to design a personal schema for a number of concepts such as education, specific retailers, television shows or even sports teams. The importance of marketing and consumer behaviour implications could be illustrated by students sharing their individual schemas.

IN-CLASS EXERCISE* Maximising attention given to a marketing stimulus Your task is to either: 1. Suggest ways to increase the amount of attention received by a marketing stimulus (e.g., print ad, TV ad, web ad or banner, billboard, product package, sign, product placement or sponsorship) or 2. Come up with a new stimulus that you expect would maximise the attention given.

In coming up ideas, you may want to consider: •

The specific goal of the stimulus (e.g., a need to draw attention to new information or the need for a product to stand out in the retail setting so that it will be more likely to be chosen)

•

The target audience that you are trying to reach and o Issues especially relevant to that target market o Common habits and lifestyle choices that may affect opportunities for exposure

•

Aspects of the message to which it may be most important to draw attention

•

The extent of involvement that the consumer group would likely have with this product category or brand and implications for willingness to process information

•

The extent to which ad avoidance and/or habituation may be significant factors— and, if significant, how to address these

*Courtesy of Lars Perner, PhD, University of Southern California.

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•

The complexity of any message and implications for comprehension—i.e., is a message difficult to understand? If so, what can be done to increase the likelihood that it will be correctly understood?

Please prepare a brief talk to the rest of the class discussing your conclusions. The presentation should not exceed 2.5 minutes in length.

CLASSROOM GROUP ACTIVITIES Assessing and changing brand schemas: 20 minutes I. Start up A. Purpose of the activity 1. This activity will give students an opportunity to consider factors related to categorisation and schemas in a brief classroom exercise B. What the instructor will do 1. The instructor will divide people into small groups, assign them a product for consideration, and be available to coach and help the groups as needed C. What the participants will do 1. The participants will work in small groups to brainstorm ideas for applying concepts from the chapter to specific brands. After a period of small-group discussion, they will make reports to the large group D. Rules for this experience 1. Groups are to work separately from each other. Individuals should rely on their knowledge from the book and may refer to their notes and the book as necessary II. Experience A. Group up 1. Have students form groups of no more than five. This exercise will work in groups of any size; however, room restrictions that do not allow for moving furniture may make group work more difficult B. Assign brands 1. Each group should be assigned a single brand on which to focus a) Consider using local brands, including both products and services b) In addition, international brands like the following could be used: Exxon, Disney, United Airlines, McDonald’s, Gap, Toyota and Hisense c) Consider bringing samples of the brands to the class for students to study and review in their groups (e.g., a box of crackers, a candy bar, a cola can) C. Specify actions for groups 1. The groups are responsible for discussing elements of the schemas related to the brand they are considering. Brainstorm words or ideas that come to mind when you think of your brand 2. Questions to be answered by small groups a) Identify positive and negative elements in each of the schemas. To what extent might these factors influence whether a consumer acquires this brand?

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By what means could your brand intentionally alter the contents of the schema(s) in consumers’ minds. How might the brand unintentionally affect the schema(s) in the minds of the consumer?

3. Large-group discussions a) First, have groups present their ideas about the first question, and then proceed to discuss each of the subsequent questions b) If there are many groups, share the discussion among all groups, though not all groups may answer all of the questions III. Debrief and unveil concepts A. Discuss the activity itself 1. The purpose of this discussion is to allow students to express what they felt about the experience itself 2. Ask students to describe their experiences of ‘doing’ the activity a) Likes and dislikes about what just happened b) How they felt during the experience c) What is realistic, unrealistic about the exercise? d) What will be different when they do this for their own brand?

B. Discuss the content of the experience 1. The purpose of this discussion is to ensure that students ‘take away’ important learning points 2. Ask students to describe the important points the experience teaches a) The importance of understanding how brands and their associated ideas are categorised by consumers over time b) How to manage a brand to influence the categorical associations held about the brand 3. Use the chalkboard to record student responses a) Write down their ideas as they are presented b) Concentrate on the principles being discussed rather than the examples being used c) Help them to see the interrelationships between their responses IV. Execute A. Apply what has been learned 1. Lead a discussion on how the concepts can be applied in organisations a) What barriers may be faced in applying the concepts from the exercise? b) What can be done to help others understand the concepts when you use them at work?

B. Transfer and use the knowledge 1. Encourage students to make a record in their notes about how they will use the ideas in the workplace 2. Even if they don’t have a specific job, how will they remember to use what they have learned?

Retail atmospherics and display: 15–20 minutes I. Start up A. Purpose of the activity 1. This activity will give students an opportunity to consider factors related to designing a retail setting

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B.

C.

What the instructor will do 1. The instructor will divide people into small groups and assign them a different type of retail setting (fast-food restaurant, high-end department store, baseball stadium) What the participants will do 1. The participants will work in small groups to brainstorm ideas for compiling a list of ideas that accentuate the consumer interaction with the retail outlet.

Factors such as design, lighting, flooring, décor, traffic flow, retail employee/ customer interaction and music could all be considered, among others 2. Students will then present their ideas to the rest of the class.

USEFUL WEBLINKS US psychologist Elizabeth Loftus explores the myths of memory (SMH) http://www.smh.com.au/nsw/us-psychologist-elizabeth-loftus-explores-the-myths-ofmemory-20161229-gtjp8f.html In this interview by the Sydney Morning Herald, US psychologist discusses why memory is not perfect and how it can be influenced. Her work on ‘faulty’ memories have changed how scientists study memory and how lawyers introduce memory-based evidence at trials.

The Secret of Memorable Marketing (HBR) https://hbr.org/2008/10/the-secret-of-memorable-market This digital article from the Harvard Business Review discusses the science and techniques that marketers rely on to ensure that their brands and products will be memorable to consumers in the long-term.

i

Hans Baumgartner, Mita Sujan, and James R. Bettman, ‘Autobiographical Memories, Affect, and Consumer Information Processing,’ Journal of Consumer Psychology 1, no. 1, 1992, pp. 53–82.

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CHAPTER 5

Attitudes and Persuasion

CHAPTER SUMMARY This chapter focuses on the processes by which marketers can change consumers’ attitudes.

The chapter first discusses the structure, functions and characteristics of attitudes. The chapter then proceeds to examine both the affective (emotional) and cognitive (rational) foundations of consumer attitudes and how marketers can employ different strategies to change those attitudes.

Attitudes can be formed from feelings or emotions such as joy and fear. In essence, consumers can experience emotions either when they are affectively involved with a communication or when the message involves an emotional appeal. In either case, the consumer holistically processes the communication and the feelings that result (either positive or negative) can determine attitudes.

From a cognitive perspective, attitudes can be based on cognitive responses, which are defined as thoughts that individuals have in response to a stimulus. Three major types of cognitive responses are counterarguments, support arguments and source derogations.

Many counterarguments and source derogations would suggest that consumers’ attitudes toward an offering are negative.

Particular models of persuasion include The Theory of Reasoned Action (TORA), which is an extension of the expectancy-value approach. The TORA is designed to predict not only attitudes but also behavioural intentions. This model predicts that intentions are affected by consumers’ attitudes toward the act and normative factors. Another influential model of attitude change is the Elaboration Likelihood Model of Persuasion (ELM), which posits a difference between changing attitudes using either the central or peripheral routes of information processing. Marketers can also affect the salience, strength or favourability of consumers’ beliefs, when attitudes are based on simple beliefs.

Finally, attitudes will better predict a consumer’s behaviour when (1) involvement is high, (2) knowledge is high, (3) consumers analyse their brand preferences, (4) attitudes are accessible, (5) attitudes are held with confidence, (6) they are specific, (7) the time between exposure to product advertising and product trial is short, (8) there are no situational factors present, (9) normative factors are not in operation, and (10) we are dealing with certain personality types.

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CHAPTER LEARNING OBJECTIVES After studying this chapter, students will be able to: 1. explain the key functions and characteristics of attitudes 2. discuss how marketers can apply various affective and cognitive models to understand and influence consumers’ attitudes 3. describe how marketers can use affective or emotional models to change consumers’ attitudes and behaviours 4. outline some issues marketers face in trying to predict consumers’ attitudes 5. explain how marketers can change consumers’ attitudes and the relevance of motivation, ability and opportunity in attitude change.

CHAPTER OUTLINE I. What are attitudes?

A. The importance of attitudes (introduction with luxury watch example): overall evaluation that expresses how much we like or dislike an object, issue, person or action.i Attitudes are learned, and they tend to persist over time. Our attitudes also reflect our overall evaluation of something based on the set of associations linked to it.

1. Attitudes guide thoughts (cognitive function) 2. Attitudes influence feelings (affective function) 3. Attitudes influence behaviour (behavioural function) B. The structure of attitudes All three components come together to determine consumers’ attitudes toward a product or any other object. For consumers to have positive attitudes, they must like it, behave positively towards it, and have positive beliefs about it.

1.

2.

C.

D.

A for affective – the emotional aspect towards an attitude object B for behavioural – the behavioural aspect, consumers must have some action towards it 3. C for cognitive – the cognitive aspect, which refers to what consumers know and believe about an attitude object The functions of attitudes 1. Utilitarian (adaptive) – helps consumers move towards rewards and away from punishment 2. Knowledge – providing consumers with beliefs and facts for a structured environment 3. Value-expressive – allows consumers to express their personality 4. Ego-defensive – protects consumers’ self-esteem The characteristics of attitudes 1. Favourability – how much we like or dislike an attitude object 2. Accessibility – how easily the attitude is retrieved from memory 3. Confidence – how strongly we hold our beliefs 4. Persistence – how long our attitudes stay with us over time 5. Resistance – how difficult it is to change attitudes we hold 6. Ambivalence – when we have strong negative evaluations about some aspects of the attitude object and strong positive evaluations about other aspects of it

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II.

II.

The affective (emotional) foundations of attitudes A. Emotional processing 1. Affective involvement leads to more holistic processing of messages including the activation of images or feelings, which in turn influence attitudes 2. Affective responses are the images or feelings generated as a result of emotional involvement with a message 3. Cross-cultural differences influence the effectiveness of emotional appeals 4. Negative emotions can influence attitude change when feelings encourage action, as when empathy for another is generated 5. Marketing implications a) Marketers can try to influence emotions to affect consumer attitudes through marketing communications How affectively-based attitudes are influenced A. The source 1. Attractiveness of the source – those who are physically appealing, similar to us, likable, or familiar – can influence attitudes 2. When MAO is high, attractive sources can evoke favourable attitudes if they are appropriate for or ‘match up’ with the category – called the match-up hypothesis B. The message 1. Humour appeals a) Humour can be used involving puns, understatements, jokes, ludicrous situations, satire and irony. b) 24% to 42% of all commercials contain some form of humour. c) Humour increases consumers liking of the ad and brand. b)

International considerations in consumer behaviour (1) Humour is one appeal used effectively throughout the world including U.S., China and France.

2. Sex a) For some consumers, sexual messages create negative feelings such as embarrassment, disgust or uneasiness. b) 84% of females and 72% of males believe there is too much sex in advertising. c) International considerations in consumer behaviour (1) In some societies such as Europe, sexual attitudes are open, but not in Muslim and Asian countries.

(2) Different cultures have different definitions of what constitutes ‘sexy’.

2.

Fear appeals a) Fear appeals attempt to elicit fear or anxiety by stressing negative consequences of either engaging in or not engaging in specific behaviours

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b)

Studies of fear appeals found them to be ineffective as consumers’ perceptual defences block the message c) However, fear appeals that evoke guilt, regret or challenge can be effective because of feelings of self-accountability d) Terror management theory (TMT) (1). Consumers develop a worldview of values and beliefs to cope with the inevitability of death (2). A high-fear appeal using a fatal threat may thus be ineffective e) Marketing implications Fear appeals are most effective if: (1). the appeal suggests an immediate action that will reduce the fear (2). the level of fear is moderate (3). at higher levels of involvement, the fear appeals are more effective (4). other factors such as personality, product usage and socioeconomic status will have an impact on the effectiveness of fear appeals C. The mere exposure effect 1. We prefer familiar objects to unfamiliar ones 2. Consumers’ attitudes toward an offering change over time – objects become more liked as they become more familiar 3. Mostly demonstrated in controlled laboratory experiments 4. Can help an unknown brand compete with other unknown brands if performance is similar and consumers expend little processing effort 5. When consumers can easily process stimulus information, they are more likely to prefer the brand and believe the ad claims 6. Marketing implications a) Since consumers’ attitudes may become more favourable with time, even when consumers initially dislike new offerings, marketers may be able to enhance consumers’ liking for a new offering by repeatedly exposing consumers to the offering itself or the messages about it b) Repetition is critical when MAO is low, but watch out for ad ‘wearout’ III. The cognitive foundations of attitudes A. Direct or imagined experience 1. Consumers use direct experience and imagery to form attitudes B. Reasoning by analogy or category 1. Consumers form attitudes by considering how similar an object is to other similarly categorised objects.

C. Values-driven attitudes 1. Attitudes are generated or shaped based on an individual’s values D. Social identity-based attitude generation 1. How consumers view their social identities can play a role in attitude formation E. Expectancy-value models 1. Attitudes based on two factors a) Beliefs about an object or action b) Evaluation of the object or action F. Theory of reasoned action

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Chapter 5: Attitudes and Persuasion

1.

2.

Expectancy-value model for predicting attitudes Model includes normative influences – how other people in the social environment can influence our behaviour 3. TORA model includes belief about consequences (bi) of an action and the evaluation of those consequences (ei) 4. Model predicts that behavioural intentions (BI) are determined by the combination of a person’s attitudes (Aact) and the subjective norms that operate in the situation (SN) 5. Theory of planned behaviour a) Predicts behaviour over which consumers have incomplete control by examining perceived behavioural control G. Marketing implications 1. Diagnosing existing attitudes 2. The TORA model can help identify the perceived strength of existing brands 3. Devising strategies for attitude change 4. The TORA model provides guidance on changing beliefs, changing evaluations, adding new beliefs, encouraging attitude formation based on imagined experience and targeting normative beliefs IV. How cognitively-based attitudes are influenced A. Communication source 1. Source credibility a) Trustworthiness, expertise and status influence credibility b) Credible sources influence consumer acceptance when prior attitudes are negative, when the message is very inconsistent with our prior beliefs and when the message is complex c) Credible sources have less impact when attitudes are confidently held, when consumers are more knowledgeable and when the source endorses a large number of products d) Marketing implications (1). Celebrities thought to be honest, as well as ordinary people, can be credible spokespersons (2). Celebrities who are thought to be experts in their fields can be credible sources, but may become liabilities if they get in trouble (3). A low-credibility source can be effective if he/she argues against his/her own self-interest 2. Company reputation a) Companies with a reputation for quality products, dealing fairly with consumers and being trustworthy, are more likely to be believed b) Marketing implications (1). Many companies devote considerable time and money to developing a positive corporate image B. Message 1. Argument quality a) Strong arguments presenting the merits of the offering in a convincing manner are important b) Marketing implications

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(1). Message strength should match the amount of effort consumers want to use to process it 2. Comparative messages a) Showing relative advantages over competitors can be useful b) Indirect comparative ads referring to unnamed competitors and are effective in increasing consumers’ perceptions of a moderate-share brand, compared to other moderate-share brands c) Direct comparative advertising explicitly names a competitor or set of competitors and can be effective for low-share brands that are attempting to take sales away from high-share brands and when consumer MAO is high d) Marketing implications (1). All information in a comparative ad must be factual and verifiable to avoid legal action from competitors VI. Changing attitudes: the role of motivation, ability and opportunity A. High effort (central route) 1. Consumers have motivation, ability and the opportunity (MAO) to process information B. Low effort (peripheral route) 1. Consumers do not have the MAO to process information 2. Judgements may be more influenced by peripheral cues C. Digital media considerations in consumer behaviour 1. Consumers increasingly use smartphones and carry them everywhere.

2. Ads displayed on mobile phones influence brand attitudes and purchase intentions.

3. Mobile devices can also improve the in-store shopping experience such as by providing coupons to in-store consumers.

VI.

When do attitudes predict behaviour?

Many factors affect whether one’s attitudes will affect one’s behaviour 1. Higher level of involvement/elaboration leads to more strongly held beliefs that are more predictive of a consumer’s future behaviour 2. Higher levels of knowledge and experience are associated with more strongly held attitudes that are more predictive of a consumer’s future behaviour 3. Research shows that asking consumers to analyse their reasons for brand preferences increases the link between attitude and behaviour 4. More accessible attitudes that are ‘top of mind’ are more strongly related to behaviour 5. Attitudes that are more confidently held are more predictive of behaviour 6. Attitudes that are more specific to a behaviour are more predictive of that behaviour 7. The shorter the time between exposure to product advertising and product trial, the more likely it is that attitudes will predict behaviour 8. The more emotionally attached consumers are to a brand, the more likely their attitudes will predict their purchase behaviour. They will also develop counterarguments to negative information about the brand

A.

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9.

Intervening situational factors can prevent a behaviour from being performed and thus weaken the attitude-behaviour relationship 10. Normative factors and motivation to comply with them can affect the attitude-behaviour relationship 11. Personality variables can influence attitude-behaviour relationships a) People who think more (high need for cognition) evidence stronger attitude-behaviour relationships b) People guided by their own internal dispositions (low self-monitors) are more likely to display consistent attitude-behaviour relationships than those who frequently adjust to their situation (high self-monitors) QUESTIONS FOR REVIEW AND DISCUSSION Possible answers are as follows.

1. What are attitudes and what four functions do they serve?

Attitudes are the enduring evaluations that one has regarding the object, issue, person or action. They serve utilitarian, knowledge, value-expressive and ego-defensive functions. In short, attitudes can help us achieve awards or avoid punishments, provide us with beliefs and facts, express our personalities or individuality and protect our selfesteem.

2. How do expectancy-value models seek to explain attitude formation?

Expectancy-value models attempt to explain consumers’ attitude formation as function of the beliefs consumers have about an objective and the evaluations they have of those beliefs. For example, consumer positive attitudes can be formed if they believe a brand is reliable and high quality and they evaluate reliability and quality as good traits for the product.

3. What role does source credibility play in affecting consumer attitudes based on cognitions?

Source credibility directly influences consumer attitudes. High credibility can positively influence consumers’ acceptance of the message even when consumers’ attitudes are negative, when the message deviates from their prior beliefs, and when the message is complex or difficult to understand. In short, high source credibility has the ability to change prior negative product attitudes.

4. Contrast humour and fear appeals. Why is each effective? Are there some products that you think a humour or a fear appeal is better suited for?

Emotional appeals can be effective in forming positive associations within a consumer’s product schema. Many products are purchased to elicit different emotions. Tapping into these underlying motivations can lead to stronger brand connections for even habitually purchased convenience items. Humour appeals can help generate positivity towards an ad when MAO is low, while fear appeals can be effective at garnering attention. These appeals typically cut through advertising clutter, making them more memorable in the process. Tobacco, alcohol, and other ‘sin’ ads can use either appeal depending on the source. On the one hand, manufacturers of such products can use humour to increase consumers’ favourability towards their products, government and policy officials can use fear appeals to make consumers less favourable towards these ads for health reasons.

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5. What are the main differences between high- and low-effort routes to attitude change and persuasion?

Both high- and low- effort routes (also known as central and peripheral routes) pertain to the Elaboration Likelihood Model of Persuasion. When consumers have high MAO, they put effort into processing the information that they receive, and so arguments must be strong in order for their attitudes to be persuaded. But when consumers have low MAO, they put less effort into information processing, and so contextual cues are more important – in these cases, humour and fear appeals as well as celebrity endorsements can be more effective at persuading consumers.

CONSUMER BEHAVIOUR CASE Non-smoking becomes top priority in Australia and worldwide Although smoking was the norm and part of everyday life decades ago, its very act is now often seen as abusive to one’s physical health and harmful to others. Therefore, governments across the world have made it a primary mission to reduce smoking.

Indeed, this priority is a consistent one across both the Western world such as Australia, Canada, the United States and the United Kingdom, as well as developing countries such as China.

Most countries follow similar practices with the goal of reducing the number of people who smoke. In Australia, one of the primary means of doing so is the use of coloured, vivid and graphic photos of the physical dangers of smoking, such as a picture of a young man in his 30s who died from smoking or the impact of smoking on one’s lungs, on cigarette packaging, along with a clearly-labelled text warning regarding smoking.

These changes to the packaging of cigarettes and related tobacco products were thought of because package design is a powerful way for tobacco companies to appeal to young people and minimise the perceptions of harm caused by their products. The goal of these new packaging laws is the very opposite – to minimise their appeal and, at the same time, increase the perceived harm.

In 2012, Australia went one step further in their aim to reduce the appeal of cigarettes among young people by enforcing ‘plain packaging’. That is, cigarette packages include graphic warnings, both text and visual, as before, but as well, the brand logo i s simply replaced by text. For example, instead of the ‘Winfield’ brand logo, this was replaced by ‘Winfield’ in plain text. The aim is to get rid of seductive and exciting packaging that is specifically designed to appeal to young people and make the idea of starting to smoke less attractive. In essence, what used to be branded has now become ‘unbranded’.

Yet, evidence suggests this plain packaging strategy may not be working. Data obtained

by The Australian showed a 0.3 per cent increase in tobacco sales volumes – that is nearly 59 million ‘sticks’. Moreover, since the introduction of plain packaging laws, statistics have shown that demand for cheaper, low-cost cigarettes have increased by more than 50 per cent.

CASE QUESTIONS

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1. Using the ABC model of attitudes, which aspect or aspects of attitudes do you think these graphic warnings regarding smoking are changing?

All three bases of attitudes are likely changed by these graphic ads. Affectively, they likely make smoking less favourable to consumers. Behaviourally, they likely reduce consumers’ likelihood of buying these products. And cognitively, they likely made consumers aware of the health dangers of smoking.

2. Use fear appeals and terror management theory to explain why governments worldwide have decided to use graphic pictures and warnings on cigarette packaging.

What are the necessary conditions for such emotional appeals to reduce the appeal of cigarettes among young people?

Graphic warnings on cigarette packages are a form of fear appeal by making consumers more afraid of and averse to using these products. Regarding terror management theory, graphic warnings can be so scary to some consumers that they rely on what they know already as a way to ‘cope’ with their heightened anxiety. But this means that the intensity of the fear appeal and consumers pre-existing worldview are important. If the warnings are so fearful and consumers are existing smokers, the heightened anxiety may lead consumers to rely on what they already know – which is smoking – the opposite of the desired effect.

3. The purpose of the plain packaging laws in Australia was to reduce the appeal of the cigarettes among young people. But, does this have the consequence of reducing the effectiveness of the emotional appeal to reduce smoking? Do you think this is why the plain packaging laws may not be as effective as predicted?

The response to the question above suggests that under some circumstances the use of graphic warnings may be counterintuitive. But the use of plain packaging may also not be enough to warn consumers about the dangers of smoking, especially if they do not find the smoking behaviours and cigarette products to be harmful. From a strictly marketing standpoint, this means that graphic warnings and plain packaging likely are effective to different market segments.

SUGGESTED EXERCISES AND TEACHER GUIDELINES 1. Collect three pharmaceutical advertisements as these generate elaborative processing.

Perform a detailed analysis of these ads in terms of the following: (a) What types of cognitive responses might consumers have when seeing/reading these ads? (Be sure to identify counterarguments, support arguments and source derogations.) Based on these responses, how effective do you think each ad will be in changing attitudes? (b) Applying the TORA model, what types of attitude-change strategies are these ads using? (c) What kinds of affective responses (feelings or emotions) might occur? How would these responses affect the attitude change process?

Have students review the TORA discussion in this chapter.

2. Find three ads that you think will generate a fair number of cognitive responses from consumers. Show these ads to a sample of 15 consumers and ask them to think out loud about their reactions while reading the ads. Record these responses either on tape or by hand. Then classify the responses into the categories of counterarguments, source derogations, support arguments and affective responses. Use this information to answer

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the following questions: (a) What are the major strengths of each ad? (b) What are the major weaknesses of each ad? (c) How could each ad be improved?

Attempt to find ads that are for products that might be viewed negatively in addition to ads for products that are generally regarded positively. This will help bring more variance to the consumer responses and make for more interesting comparisons.

3. Find ten social media ads (on Facebook, etc.) that you think will elicit elaborative processing. Analyse these ads for the types of source and message factors discussed in the chapter. Based on this analysis, answer the following questions: (a) Which types of source and message factors are most frequently used? (b) Which ads do you think are most effective, and why? (c) Which ads do you think are least effective, and why?

Consider requiring the student to be able to discuss the message content factors such as argument quality, one- versus two-sided arguments and the use of a comparative message. The student should analyse the source factors of attractiveness and credibility.

Additionally, the student should comment on the match-up hypothesis, especially in cases where the source is a famous person.

4. Interview three people who engage in personal selling for a business. Develop a short questionnaire that will identify the types of strategies they use to persuade consumers to buy particular products. First, ask some open-ended questions about how the salespeople try to influence consumers. Then ask some specific questions regarding the source and message factors discussed in the chapter. Be sure to ask how often the salespeople use each technique and how effective they think the techniques are.

Summarise this information and answer the following questions: (a) Which types of persuasion techniques are most likely to be used in a personal selling situation? (b) Which message factors are most effective and why? (c) Which message factors are least effective and why?

Consider having the students present some of their interesting findings to the class for this exercise. Some students may have professional experience in selling products.

Request that these students share with the class their successes and failures.

SUGGESTED INTERNET EXERCISES WITH SAMPLE ANSWERS Rogaine Consumers and potential consumers of hair-loss remedies constitute a large and growing contingent of the adult population. Hair loss is primarily associated with ageing, and in many nations the mean age is increasing. Hair loss products are generally expensive; interest in, and demand for, such products grows during prosperous times. Also, hair loss is a sensitive subject for many consumers, and the internet provides a confidential source of information about products to halt or reverse the process.

Pharmacia and Upjohn provide a comprehensive website about their hair-loss treatment, Rogaine, to maintain consumers’ privacy. Click through the pages at Rogaine’s website (www.rogaine.com) to assess its information for consumers. What impact does consumers’ MAO have on their attitudes about Rogaine? In terms of cognitive and affective bases of attitude formation, how does the overall message at this website help consumers to develop positive attitudes about the product? Assess specifically the argument quality and the use of emotional appeals presented at Rogaine’s website.

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Chapter 5: Attitudes and Persuasion

Instructor notes Current and potential consumers of hair-loss treatments are intensely motivated by social and esteem needs to use, or seek information about, such products. Their involvement with the product is enduring, not situational. Their ability and opportunity to access and process information about Rogaine varies widely. However, for an expensive product like this, internet promotion is a wise choice; the product’s average target customers are very likely to have internet access because of their above-average income.

The Rogaine site is a well-designed comprehensive website that reveals how well its marketer understands its target market. Consumers use central-route processing when forming attitudes about products like Rogaine, exerting considerable effort in processing product information before forming an attitude. The website anticipates and defuses many counterarguments, and provides bases for support arguments, through a series of links to pages that answer common questions about the product’s benefits.

The site’s extensive information also can help to change the beliefs of sceptical consumers concerning Rogaine’s benefits, or add new beliefs for consumers who are less informed about the product. The site’s sponsorship is obvious throughout, which is a mixed blessing in terms of source credibility. Consumers often discount marketer-provided messages; however, consumers’ voluntary exposure to company-provided information may indicate a perception of high source credibility among the site’s visitors.

The quality of the argument presented at the Rogaine site is very high. The persuasive message showcases the product’s most beneficial features, especially at the links for potential users. Pages entitled ‘Why Rogaine,’ ‘How It Works,’ and ‘Are You a Candidate?’ provide powerful evidence to convince the most sceptical nonuser that Rogaine is a good choice. Consumers may indeed form strong positive attitudes toward Rogaine use after evaluating this information.

Clearly, Pharmacia and Upjohn realise that consumers’ attitudes toward hair-loss treatment also have strong affective bases. The emotional appeal of the site’s feature photo of a bald father with his (still) hirsute son relates directly to the affective bases of attitude formation, in hopes of eliciting positive emotions toward the product among potential consumers.

Additional uses This exercise also relates to concepts in the following chapters: •

Chapter 2, Motivation, Ability and Opportunity (sources of motivation concerning hairloss treatment)

•

Chapter 4, Memory and Knowledge (influence of Rogaine’s information about competing treatments on the consumer’s consideration set for hair-loss treatments)

•

Chapter 7, Judgement and Decision Making (contextual and situational influences on decision making concerning hair-loss treatments, cognitively based and affectively based decision making processes concerning hair-loss treatments)

•

Chapter 9, Social Influences on Consumer Behaviour (demographics of Rogaine’s market segments, including young men, middle-aged and older men; women of all ages; married and single consumers)

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Chapter 12, Innovations: Adoption, Resistance and Diffusion (why some prefer baldness to hair-loss treatment)

Discussion idea How important is word-of-mouth communication about products such as Rogaine? What is the role of opinion leaders and celebrity spokespersons in consumer attitude formation about Rogaine?

National Center For Missing And Exploited Children The statistics concerning missing and exploited children in the US are chilling. The National Center for Missing and Exploited Children (www.missingkids.com) uses its home page and various links to inform and persuade visitors concerning child abductions and abuse. Go to the NCMEC’s website and evaluate the various visuals, graphics and text in terms of their effectiveness as emotional appeals.

Instructor notes Appropriately, the home page of the National Center for Missing and Exploited Children incorporates primary colours to dramatize its mission: to stop the abduction and exploitation of children through public awareness and action, and to facilitate the return of missing children to their homes. In addition, heart-tugging pictures of missing children smiling and laughing are used to elicit an affective response from viewers of the website.

For example, the Education and Resources page includes a snapshot of smiling teen girls to highlight the organisation’s Know the Rules campaign targeting this demographic, leaving the visitor to wonder about abducted teens who have little reason to smile. Even the organisation’s toll-free number – 1-800-THE-LOST – serves as an indelible reminder of the crucial significance of NCMEC’s activities. Anyone with a heart for children will find the emotional appeals incorporated in the site’s visuals, graphics and text a moving reminder of the responsibility all adults bear to protect the welfare of all children. The site’s overall influence is to facilitate positive attitudes toward the organisation among its visitors, and to instigate or reinforce negative attitudes toward those who abduct or exploit children.

Additional uses This exercise also relates to concepts in the following chapters: •

Chapter 3, From Exposure to Comprehension (personal relevance of NCMEC’s message to parents, grandparents, neighbours and others)

•

Chapter 4, Memory and Knowledge (chunking of information such as telephone numbers – 1-800-THE-LOST – to enhance retrieval)

•

Chapter 9, Social Influences on Consumer Behaviour (the family as a cultural institution)

•

Chapter 11, External and Internal Influences on Consumer Behaviour (probability of awareness and support for NCMEN among parents versus non-parents, and importance of the family in various cultures).

Solution Manual for Consumer Behavior 2nd Asia Pacific Edition Wayne D. Hoyer

Chapter 5: Attitudes and Persuasion

Discussion idea Would the inclusion of graphic photos of abused children at its website help or hinder the effectiveness of the message provided therein by the National Center for Exploited and Missing Children? Probable answers may include: •

Distinction between abuse and exploitation

•

Ineffectiveness of overly-graphic fear appeals

•

Appropriate website content balance between informative, persuasive text and emotional appeals using visuals

ADDITIONAL DISCUSSION QUESTIONS WITH SAMPLE ANSWERS These discussion questions can be used as in-class activities or as thought questions that the students consider while reading the chapter or to test their understanding of the material after the reading and lecture are complete.

1. Explain central-route processing and discuss ways marketers can influence high-effort consumer attitudes.

When consumers’ motivation, ability and opportunity (MAO) are high, they are more likely to devote a lot of effort to attitude formation and change. This high-effort processing is called central-route processing.

Marketers can influence high-effort consumers’ attitudes either cognitively or affectively. Marketers’ cognitive efforts attempt to influence consumer beliefs and thoughts about the object by focusing on the credibility of the source and the logical appeal of the message used, or a combination of the two. Marketers’ affective efforts attempt to influence consumers’ emotional experiences associated with the offering by focusing on the attractiveness of the source, the emotional appeal of the message used, and consumers’ attitude toward the ad.

2. Explain how marketing communications can affect consumers’ cognitively based attitudes.

Marketers should create communications that incorporate credible sources and messages because these communications are most likely to influence cognitively based attitudes. Source credibility is enhanced by the trustworthiness, expertise, or status of the communication source, as well as by the reputation of the company. Message credibility is enhanced by the argument quality of the message, whether it is a oneversus two-sided message, and whether it is a comparison message.

ADDITIONAL QUESTIONS 1. In your group, develop a definition of attitudes and explain why they are important to marketers.

2. Based on your definition of attitudes, describe how they are formed and give an example of this process in a marketing context.

3. Describe the factors that can influence whether attitudes are more likely to predict behaviour. Explain the marketing implications of each factor.

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4. Describe the expectancy-value model. Explain how attitudes are changed under this model. Develop three marketing examples to show how this model might work for consumers.

5. Discuss source credibility and its dimensions. Provide an example of each type of source credibility. Explain how source credibility can influence attitudes and why this can be important to marketing.

6. Develop an explanation of a ‘strong argument’ and give examples of how strong arguments can affect consumer attitudes.

7. Develop a set of guidelines that tell marketers when it is useful to put negative information into their messages. Explain what types of effects these messages can have on consumers.

8. Explain what a comparative message is and give examples of the basic types. Offer guidelines about when each type of comparative message should be employed. Include a cautionary statement about the dangers of using direct comparisons.

9. Develop a clear explanation of how attitudes can be developed through emotions and feelings. Specify when this is most likely to occur and provide a marketing example.

10. Explain what fear appeals are and when these messages are likely to be most effective.

Offer a marketing example of when a fear appeal might be used.

EXPERIENTIAL EXERCISES AND CLASSROOM EXAMPLES Students who learn more readily through visual and tactile stimuli will benefit from the introduction of physical examples into the classroom.

1. ‘Duelling ads’ Divide the class into groups of six to eight students, and then divide each of these groups in half. Tell the two smaller groups (of three to four students apiece) that they must each develop a print ad designed to influence consumer attitudes toward the same controversial issue, but that they must take different strategic/tactical approaches (i.e., cognitive versus emotional). Examples of controversial issues include organ donation, cremation, physician-assisted suicide, bilingual education in public schools and gun control. When all the ads have been completed, ask the students which ad from each pair they believe works better and why, and discuss the challenges involved in the assignment.

CLASSROOM GROUP ACTIVITIES Advertising influences on affect, cognition and connation: 20 minutes I.



Start up A. Purpose of the activity 1. This activity will give students an opportunity to apply the concepts of attitude formation and change in a brief classroom exercise B. What the instructor will do 1. The instructor will divide people into small groups, provide them an

This experiential exercise was contributed by Professor Sheri Bridges of Wake Forest University.

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Chapter 5: Attitudes and Persuasion

II.

advertisement for consideration and be available to coach and help the groups as needed 2. Advertisements should be collected in advance. Select ads that provide an opportunity for students to uncover components designed to influence affect, cognition and connation through efforts to change beliefs, evaluations, or feelings. Also, look for ads containing elements to which consumers might form support arguments, counterarguments or source derogations 3. Optionally, if resources permit, create transparencies of each ad so small groups can present their ideas to the large group when they have finished their analyses C. What the participants will do 1. The participants will work in small groups to study advertisements to uncover tactics related to concepts presented in the chapter. After a period of small-group discussion, they will make reports to the large group D. Rules for this experience 1. Groups are to work separately from each other. Individuals should rely on their knowledge from the book and may refer to their notes and the book as necessary Experience A. Group up 1. Have students form groups of no more than five. This exercise will work in groups of any size; however, room restrictions that do not allow for moving furniture may make group work more difficult.

B. Assign brands 1. Each group should be assigned a single advertisement on which to focus a) Consider using local brands, including both products and services b) Consider using brands that are not the leaders in their categories (i.e., not Coca-Cola or McDonald’s) c) Consider bringing samples of the brands to the class for students to study and review in their groups (e.g., box of crackers, candy bar, cola can) C. Specific actions for groups 1. The groups are responsible for analysing the advertisement to uncover efforts aimed at forming or changing attitudes in consumers 2. Questions to be answered by small groups a) In what ways is the ad designed to form or change attitudes? b) How does the ad aim to change affect, cognition, or connation? c) What types of support arguments, counterarguments and source derogations might consumers form in response to the ad? d) To what extent does the ad attempt to affect beliefs and evaluations about consequences related to a particular behaviour. Does it target normative beliefs? Does it seek to add new beliefs?

3. Large-group discussions a) Ask for a group to volunteer to discuss their analysis. Have them share the ad they are analysing and then discuss their insights

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b)

If there are many groups, share the discussion among all groups, though not all groups may answer all of the questions III. Debrief and unveil concepts A. Discuss the activity itself 1. The purpose of this discussion is to allow students to express what they felt about the experience itself 2. Ask students to describe their experiences of ‘doing’ the activity. a) Likes and dislikes about what just happened b) How they felt during the experience c) What is realistic, unrealistic about the exercise? d) What will be different when they do this for their own brand?

B. Discuss the content of the experience 1. The purpose is to ensure that students ‘take away’ important learning points 2. Ask students to describe the important points the experience teaches a) The role of advertising in the process of attitude change and formation b) The role of affect and cognition in the attitude formation process c) The behaviour of consumers who may create support arguments, counter-arguments and source derogations when processing advertisements 3. Use the chalkboard to record student responses a) Write down their ideas as they are presented b) Concentrate on the principles being discussed rather than the examples being used c) Help them to see the interrelationships between their responses IV. Execute A. Apply what has been learned 1. Lead a discussion on how the concepts can be applied in organisations a) What barriers may be faced in applying the concepts from the exercise? b) What can be done to help others understand the concepts when you use them at work?

B. Transfer and use the knowledge 1. Encourage students to make a record in their notes about how they will use the ideas in the workplace 2. Even if they do not have a specific job, how will they remember to use what they have learned?

Brand/Parent company quiz: 15 minutes I. Start up A. Purpose of the activity 1. This activity will give students an opportunity to illustrate how incorrect beliefs and attitudes have been acquired over time B. What the instructor will do 1. The instructor will hand out the following exercise to everyone in class (see actual exercise at the end of this outline) 2. After students finish, the instructor will go over the correct responses, most of which will come as a great surprise to the students C. What the participants will do

Solution Manual for Consumer Behavior 2nd Asia Pacific Edition Wayne D. Hoyer

Chapter 5: Attitudes and Persuasion

II.

1. Identify each of the parent companies for the ten different products 2. Go back and rank the confidence of their responses D. Recap 1. Exercise should illustrate how we all have a number of incorrect beliefs that affect our attitudes about the products many use on a regular basis Brand/Parent Company Quiz (Next Page) A. Answers: 1. a (9Lives – Heinz) 2. c (Prego – Campbell’s) 3. c (Aquafresh – GlaxoSmithKline) 4. a (Gatorade – Pepsi) 5. a (Champion – Sara Lee) 6. b (Dr. Pepper – Cadbury Schweppes) 7. c (Country Time Lemonade – Kraft) 8. b (Pine Sol – Clorox) 9. b (Hidden Valley Ranch – Clorox; yes, this is correct) 10. a (Q-Tips – Chesebrough Ponds; yes, this too is correct, it is not J & J; check the box!)

Parent Company Quiz For each of the following products, select the parent company. After you have finished all ten, using each of the numbers 1–10 ONLY ONCE, go back and rank each of the answers based on how sure you are that they are correct. The product that you are most certain of the parent company, rank it as 10. The product that you are least certain should be ranked as a one.

1.

2.

3.

4.

9 Lives Cat Food/Kibbles & Bits a. Heinz Corp. b. Purina c. Kal Kan d. Procter & Gamble RANK: Prego Spaghetti Sauce a. Ragu International b. Kraft Foods c. Campbell’s d. Procter & Gamble RANK: Aquafresh Toothpaste a. Lever Bros b. Colgate-Palmolive c. GlaxoSmithKline d. Procter & Gamble RANK: Gatorade a. Pepsi b. Coca-Cola c. Kraft Foods d. Procter & Gamble RANK:

5.

6.

7.

8.

Champion Athletic Wear a. Sara Lee b. Russell c. Adidas d. Procter & Gamble RANK: Dr Pepper a. Coca-Cola b. Cadbury Schweppes c. RC Cola d. Procter & Gamble RANK: Country Time Lemonade a. General Foods International b. Kraft Foods c. Welch’s d. Procter & Gamble RANK: Pine-Sol a. Lever Bros b. Clorox c. Dial d. Procter & Gamble RANK:

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9.

Hidden Valley Ranch Dressing a. Paul Newman b. Clorox c. Kraft Foods d. Procter & Gamble RANK:

Total Score (Possible 55):

10. Q-Tips a. Chesebrough-Ponds b. Johnson & Johnson c. Colgate-Palmolive d.

Procter & Gamble RANK:

.

SUGGESTED EXERCISES AND TEACHER GUIDELINES 11. Watch at least four hours of commercial television. Prepare a chart that lists all the techniques discussed in this chapter across the top as columns (attractive source, likeable source, visuals, humour, music, sex, emotion, simple message, repetition, and so on). For each ad, tally which techniques are used. Also briefly assess the effectiveness of each ad in terms of creating positive Aad and Ab, attitudes about the ad and the brand. After collecting this information for all ads viewed during the four hours, answer the following questions: (a) Which techniques are used most frequently. (b) In your judgement, which ads tend to be the most effective in influencing attitudes toward the ad and the brand? Why. (c) In your judgement, which ads tend to be the least effective? Why? When discussing this exercise in class, ask students to consider not only the shows that they watched, but also the time of day that the shows were on. How does time of day, even on the same network, influence the likelihood of seeing an ad for a particular product? Also, inquire as to the degree to which prior brand attitudes may have affected their current evaluations of the ads. I find that students do not realise that prior brand attitudes do affect their evaluations of current ads. I point this out to students and they seem to be surprised that advertising does influence them. Many of the students convey to me that they thought advertising influenced others but not them.

12. Collect five magazines that are directed at different target audiences. Prepare a chart that lists all the techniques discussed in this chapter across the top as columns (attractive source, likeable source, visuals, humour, music, sex, emotion, simple message, repetition, and so on). Down the side of the chart, generate a running list of the different product and service categories that appear in the ads. For each ad in each magazine, make a tally of the type of product advertised and the type(s) of techniques used. Then answer the following questions: (a) Which techniques are used most frequently? (b) Do certain techniques tend to be used more often for certain product or service categories? (c) Do the magazines in general use certain techniques more often for certain target audiences?

Similarly, have students carefully consider the target markets of each of these magazines. Would they have similar opinions regarding ads placed in magazines that

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Chapter 5: Attitudes and Persuasion

they do not read frequently or at all? Ask students, if a high-end item is advertised in a magazine they have brought in, what does that tell them about the magazines demographics.

SUGGESTED INTERNET EXERCISES WITH SAMPLE ANSWERS Newman’s Own food products Most consumers are unwilling to exert much effort processing the main concept underlying salad dressing, spaghetti sauce or salsa. So how could a small marketer gain a toehold in the extremely competitive, mature markets for these and other foods? If the marketer is Paul Newman, actor, race car driver, and eclectic celebrity, this task might be easier than it seems. Mr Newman founded the eponymous company in 1982, with a promise to offer high-quality food products at reasonable prices and to donate all profits to charity. At the company’s website (www.newmansown.com), what devices are used to create or reinforce positive attitudes among consumers?

Instructor notes The first device the visitor notices at the website for Newman’s Own is its sly use of humour. The opening page features the same smiling image of the company founder which appears on its products’ labels – except that online, Mr Newman’s right eye winks at the visitor. The site’s slogan also creates gentle humour at the company’s own expense: ‘Shameless Exploitation in Pursuit of the Common Good.’ These unexpected, amusing stimuli draw the consumer into the site almost automatically. Newman’s pleasant appearance, likeability, and celebrity status also create a positive communication source, despite the absence of any ‘match-up’ effect with his products.

All of the links the visitor expects at a food products company’s website – food information, recipes, cookbook offers – are present, alongside links concerning grants to non-profit organisations under the auspices of Newman’s Own; promotional tie-ins (for example, rebates on purchases of the classic movie Butch Cassidy and the Sundance Kid on video or DVD); and a wealth of information about the children’s camps and other charities supported by profits from Newman’s Own. All of these stimuli create an involving message and increase the consumer’s motivation to process actively the information about the company and its products. The page features images of the company’s product line, which may increase positive attitudes because of the mere exposure effect. Also, the links and many headlines are in red, which is the colour of many Newman’s Own products as well as a colour associated with activity and fun. Wit and humour abound also on the What’s New page. For example, the headline ‘Newman’s Fiddles with Creamy Caesar Dressing While the Market Burns for New Products,’ will elicit a giggle, and perhaps a positive mood, again facilitating low-effort processing.

Additional uses This exercise also relates to concepts in the following: •

Chapter 4, Memory and Knowledge (positioning away from the prototype for salad dressings, spaghetti sauces, and other categories of Newman’s Own foods)

•

Chapter 6, Problem Recognition and Information Search (Paul Newman’s face on the label as a retrieval cue)

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•

Chapter 7, Judgement and Decision Making (affect tactic based on liking for Paul Newman or admiration for the company’s charitable activities)

•

Chapter 11, External and Internal Influences on Consumer behaviour (profile of a Newman’s Own consumer)

Discussion idea In what ways might the reputation of Newman’s Own result in incorrect simple inferences about the product, thus producing negative attitudes? Possible answers might include: •

Believing that the company does not donate its profits to charity (incorrectly assuming that a company without profits cannot survive, indicating a misunderstanding of how non-profit organisations operate)

•

Inferring that a product bearing a celebrity’s name and image must be more expensive (incorrectly assuming that the company must compensate Newman for his endorsement)

ADDITIONAL DISCUSSION QUESTIONS WITH SAMPLE ANSWERS These discussion questions can be used as in-class activities or as thought questions that the students consider while reading the chapter or to test their understanding of the material after the reading and lecture are complete.

1. Explain the peripheral route to persuasion and discuss ways marketers can influence low-effort consumer attitudes.

When consumers’ motivation, ability and opportunity (MAO) are low, they are not likely to devote much effort to attitude formation and change. Instead, they are likely to form beliefs based on simple inferences, attributions and heuristics. This low-effort processing results in marketers using the peripheral route to persuasion (aspects other than key message arguments).

Marketers can influence low-effort consumers’ attitudes either cognitively or affectively. When designing cognitively based messages, marketers should consider the credibility of the communication source, the content of the message, and the context of the message. The source should serve as a positive peripheral cue, and the context should include repetition. The message should incorporate category- and schema-consistent information, many supporting arguments, and involving, yet simple, messages.

When designing affectively based messages, marketers should select communication sources that are attractive and likeable or celebrities. They should create messages that include pleasant pictures, music, humour, sex, or emotional content and an appropriate context.

2. Discuss the mere exposure effect and provide examples of how marketers can enhance consumer liking for an object.

According to the mere exposure effect, familiarity with an object leads to liking an object. While the effect’s validity has been questioned, it has been applied by the advertising industry. One of advertising’s goals is to create tactics that increase consumer exposure to products and messages. The mere exposure effect is in use

Solution Manual for Consumer Behavior 2nd Asia Pacific Edition Wayne D. Hoyer

Chapter 5: Attitudes and Persuasion

when product or brand information is repeated within an ad, when a commercial is repeated numerous times throughout a television broadcast or radio program and when a product is advertised through multiple channels simultaneously (television, radio, print media, the internet, etc.).

ADDITIONAL QUESTIONS 1. Give an example of how the mere exposure effect could be used to influence consumers’ affective response to the brand you are considering.

2. Knowing that marketers can influence cognitively based attitudes when consumer effort is low, explain how you could use characteristics of the source, message, and context to influence consumers’ brand perceptions of the brand you are considering.

3. The mere exposure effect and classical conditioning are both ways marketers can influence the affective bases of attitudes when consumer effort is low. Describe how you could use both of these approaches to complement each other in a marketing effort for the brand you are considering.

4. Describe in what circumstances classical conditioning is most likely to be successful.

Develop a list of reasons why it is difficult to use classical conditioning in marketing and advertising.

5. Explain what is meant by ‘attitude toward the ad’. Outline its key components and explain why it is important to advertising and marketing.

6. Explain the dual-mediation hypothesis and explain why it is important to marketing and advertising.

7. Explain why consumers often process messages using heuristics. Describe some common types of heuristics that consumers might employ. Offer examples of situations in which these heuristics could be used.

8. Explain how source attractiveness can influence consumer attitudes and include a description of factors that might mediate this process. Provide several examples of marketing communications that illustrate this process.

9. Discuss how humour in advertising impacts upon consumer attitudes. Provide examples of marketing communications that effectively use this technique.

EXPERIENTIAL EXERCISES AND CLASSROOM EXAMPLES Students who learn more readily through visual and tactile stimuli will benefit from the introduction of physical examples into the classroom.

1. ‘Celebrity spotlight’ exercise Ask students to write down the names of their five favourite celebrities and then identify branded products or services for which those celebrities would make good spokespersons. For example, would Nick Kyrgios’s fiery temper make him a good match (no pun intended!) with Tabasco? Would Donna Hay’s expertise in lifestyle and food make her a candidate for Nickelodeon? Discuss the pairings, why or why not they make strategic sense, and the celebrity’s potential role in building brand equity. 

This experiential exercise was contributed by Professor Sheri Bridges of Wake Forest University.

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2. ‘From the ridiculous to the sublime’ exercise Ask for student reactions to a variety of hypothetical brand extensions, ranging from the weird to the wonderful (e.g., Woolworths laptops, Chanel facial tissues, Holden hospitals, Nikon film, H&R Block travel agency, Sony toaster, Sportscraft hotels, and Weet-Bix deodorant). After discussing why they reacted as they did (explaining the notion of affect transfer in the process), give them an opportunity to try their hand at developing an extension concept. Separate the class into groups of four or five students and give them 15 minutes to come up with an extension of a brand of their choice. After each group has described its idea and explained why they believe it would be successful, ask students to vote for a favourite (it is up to the instructor whether to allow students to vote for their own group’s idea). Give the winning group a small prize (a bag of candy, for example).

3. Consider visiting the local grocery store to find examples of marketing efforts that call attention to how companies are making efforts to build categories, schemas, or scripts for their products. Examples of these efforts might include: (a) coupons that may be designed to induce trial, but may actually serve as a classical conditioning tool, teaching customers to react to the promotion; (b) advertisements that include characteristics designed to influence affectively based attitudes when consumer effort is low (e.g., using source, message or context characteristics). Use these and other examples to stimulate discussion about how marketers are or are not using principles of consumer behaviour to support their marketing efforts.

CLASSROOM GROUP ACTIVITY Influencing attitudes when consumer effort is low: 20 minutes I. Start up A. Purpose of the activity 1. This activity will give students an opportunity to consider factors related to attitude formation and schemas in a brief classroom exercise B. What the instructor will do 1. The instructor will divide people into small groups, assign them a product for consideration, and be available to coach and help the groups as needed C. What the participants will do 1. The participants will work in small groups to brainstorm ideas for applying concepts from the chapter to specific brands. After a period of small-group discussion, they will make reports to the large group D. Rules for this experience 1. Groups are to work separately from each other. Individuals should rely on their knowledge from the book and may refer to their notes and the book as necessary II. Experience A. Group up

Solution Manual for Consumer Behavior 2nd Asia Pacific Edition Wayne D. Hoyer

Chapter 5: Attitudes and Persuasion

1.

Have students form groups of no more than five. This exercise will work in groups of any size; however, room restrictions that do not allow for moving furniture may make group work more difficult.

B.

Assign brands 1. Each group should be assigned a single brand for a low-involvement good (i.e., frequently purchased consumer nondurable) on which to focus. a) Consider using local brands including both products and services. b) In addition, international brands like the following could be used: Exxon, McDonald’s, Coca-Cola, Heinz, Glade, Hungry Jack’s. c) Consider bringing samples of the brands to the class for students to study and review in their groups (e.g., a box of crackers, a candy bar, a cola can).

C. Specific actions for groups 1. The groups are responsible for creating a combination of methods for generating attitudes toward the brand in a competitive environment, given that consumers are likely to expend low levels of effort (involvement) developing attitudes toward these brands 2. Questions to be answered by small groups a) Identify factors that may help or hinder consumers’ likelihood to actively develop attitudes toward the brand b) By what specific means could you influence consumer attitudes toward this brand? c) How might consumers’ attitudes toward the brand be otherwise influenced in a competitive marketplace, and how can you address these sources of influence?

3. Large-group discussions a) First, have groups present their ideas about the first question, and then proceed to discuss each of the subsequent questions. b) If there are many groups, share the discussion among all groups, though not all groups may answer all of the questions.

III. Debrief and unveil concepts A. Discuss the activity itself 1. The purpose of this discussion is to allow students to express what they felt about the experience itself 2. Ask students to describe their experiences of ‘doing’ the activity. a) Likes and dislikes about what just happened b) How they felt during the experience c) What is realistic, unrealistic about the exercise? d) What will be different when they do this for their own brand?

B. Discuss the content of the experience 1. The purpose of this discussion is to ensure that students ‘take away’ important learning points 2. Ask students to describe the important points the experience teaches 3. Use the chalkboard to record student responses. a) Write down their ideas as they are presented b) Concentrate on the principles being discussed rather than the examples being used

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c)

Help them to see the interrelationships between their responses

IV. Execute A. Apply what has been learned.

1. Lead a discussion on how the concepts can be applied in organisations. a) What barriers may be faced in applying the concepts from the exercise? b) What can be done to help others understand the concepts when you use them at work?

B. Transfer and use the knowledge 1. Encourage students to make a record in their notes about how they will use the ideas in the workplace.

2. Even if they do not have a specific job, how will they remember to use what they have learned?

USEFUL WEBLINKS How to Persuade More Customers (Australian Automotive Dealer Association) http://aada.asn.au/how-to-persuade-more-customers/ Presents a discussion of how to apply attitude change and persuasion principles to sell more cars in the automotive industry.

The Communications Council http://www.communicationscouncil.org.au/ Provides regulation of the advertising and communications industry in Australia, with a discussion of advertising techniques and its implications for consumer welfare and public policy.

The Science of Persuasion (Behaviour Works Australia) http://www.behaviourworksaustralia.org/science-persuasion/ Robert Cialdini is a psychology professor famous for his ‘six principles of influence’. This website summarises these influences within the Australian context.

Consumer Behaviour: The psychology of marketing https://www.consumerpsychologist.com/cb_Attitudes.html Website published by Lars Perner, Ph.D. Assistant Professor of Clinical Marketing at the Marshall School of Business, University of Southern California i

Richard E. Petty, H. Rao Unnava, and Alan J. Strathman, “Theories of Attitude Change,” in eds. Thomas S. Robertson and Harold H. Kassarjian, Handbook of Consumer Behavior (Englewood Cliffs, N.J.: Prentice-Hall, 1991), pp. 241–280.

Solution Manual for Consumer Behavior 2nd Asia Pacific Edition Wayne D. Hoyer

CHAPTER 6

Problem Recognition and Information Search

CHAPTER SUMMARY This chapter examines the three initial stages of the consumer judgement and decisionmaking process: problem recognition, internal information search and external information search. Problem recognition is the perceived difference between an ideal state and the actual state. When a discrepancy between these two states exists, the consumer may be motivated to resolve it by engaging in decision making. Without recognising a problem exists, consumers would engage in neither internal nor external information search.

Internal search involves the recall of information, experiences and feelings from memory. In general, the extent of internal search will increase as motivation (e.g., involvement, perceived risk), ability (knowledge and experience) and opportunity (no time pressure or distractions) increase. The brands that consumers recall from their memories are collectively referred to as their consideration or evoked set. They may also recall attributes and evaluations from previous experiences with a particular product or brand.

After internal search, consumers generally engage in external search – that is, they acquire information from outside sources. This included pre-purchase search and ongoing search.

The extent of search can vary widely, depending on the motivation, ability and opportunity to search, but the extent of search is usually rather low. The content of search depends on the salience and diagnosticity of information. In most situations, brand name and price tend to be the most accessed attributes. Consumers also tend to exhibit a confirmation bias in their external search.

The internet is changing the manner in which consumers search for information. They have access to a great deal of information without even leaving home, so much so that they may suffer information overload.

Finally, discussion of the search process shows that more salient and diagnostic information tends to be accessed earlier. In addition, consumers tend to process either by brand or by attribute. Attribute search is easier and preferred, but often the information environment is not organised to facilitate this type of processing.

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CHAPTER LEARNING OBJECTIVES After studying this chapter, students will be able to: 1. describe how consumers recognise a consumption problem and distinguish between an actual and an ideal state 2. discuss what happens when consumers conduct an internal search to solve a consumption problem and identify some of the ways in which marketers can affect internal searches 3. explain why and how consumers conduct an external search to solve a consumption problem 4. identify opportunities and the challenges that marketers face in trying to influence external searches CHAPTER OUTLINE I. Problem recognition A. The actual state: where we are now 1. The consumer’s perception of the situation as it exists now 2. Often determined by simple physical factors 3. Consumers’ needs play a critical role 4. External stimuli can suddenly change perceptions of the actual state B. The ideal state: where we want to be 1. A perception of how consumers would like or desire situations to be across each consumption context 2. Sometimes based on simple expectations, usually based on past experiences 3. Can be a function of future goals or aspirations 4. Changes in life situations also change what is considered to be the ideal state C. Marketing implications 1. Putting consumers in a state of problem recognition may stimulate the decision process and lead to acquisition, consumption or disposition of a product or service 2. Marketers can attempt to create a new ideal state 3. Marketers can attempt to create dissatisfaction with the actual state D. Different types of problems 1. Routine problems are expected and require immediate solutions.

2. Emergency problems are unexpected and require immediate solutions.

3. Planning problems are expected but don’t require immediate solutions.

4. Evolving problems are not expected but don’t require immediate solutions.

E. Not all problems will lead to information search.

II.

Internal search: searching for information from memory A. How much do we engage in internal search?

1. Degree of internal search can vary from simple recall of a brand name to more extensive searches through memory for relevant information, feelings and experiences

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Amount of internal search devoted depends on motivation, ability and opportunity to process information 3. Consumers will attempt to recall more information for decisions that are important to them than for those that are less important B. What kind of information is retrieved from internal search?

1. Recall of brands a) Consideration or evoked set is the subset of brands evaluated when making a choice b) From the marketing standpoint it is important that a brand is in the evoked set, otherwise it will not be considered c) Consideration sets vary in size, stability, variety and equality of preferences toward brands d) Marketing implications.

1. Factors that will increase the possibility of being included in the consideration set include: (i). Prototypicality (ii). Brand familiarity (iii). Goals and usage situations (iv). Brand preference (v). Retrieval cues 2. Recall of attributes a) Factors that influence the recall of attributes include: (1). Accessibility or availability (2). Diagnosticity of attributes: diagnostic information helps us discriminate among objects (3). Salience (prominence) (4). Vividness (5). Goals 3. Recall of evaluations a) Overall evaluations are easier to remember than specific attribute information b) More likely to be remembered if consumers are actively trying to evaluate a brand when exposed to the information (1). This act of processing an ad as you view it is called online processing 4. Recall of experiences a) Vivid, salient or frequent experiences are more likely to be remembered 5. Marketing implications a) Marketers want consumers to recall positive experiences in relation to a certain product or service III. External search: searching for information from the environment A. In external search, consumers acquire information from outside sources B. Pre-purchase search occurs in response to the activation of problem recognition and is related to situational involvement C. Ongoing search occurs on a regular and continuous basis, even when problem recognition is not activated. It is related to enduring involvement D. Where can we search for information?

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1.

2.

3.

4.

5.

6.

E.

H.

Researchers have classified sources of information into five major groups a) Retailer search b) Media and social media search c) Interpersonal search d) Independent search e) Experiential search International considerations in consumer behaviour a) Culture plays a role in external search, with East Asian consumers more price-conscious than their Australian counterparts.

Internet sources a) The phenomenal growth of the internet has dramatically altered the way consumers shop and search for information b) Consumers see product choice as riskier when they lack access to experiential information until after purchasing online Simulations a) Website developers can now simulate the retail experience as well as product trials The online community a) The internet also makes it easier for consumers to talk to each other about product recommendations and usage advice 6. Digital Media considerations in consumer behaviour a) Advances in technology and graphics are improving the online experience. b) Website retailers can simulate the retail experience and provide product trials online.

Marketing implications a) Not all types of products and services are experiencing success on the internet, especially when quality cannot be judged online, or when the cost of delivery is high relative to the cost of the items purchased

What kind of information is acquired in an external search?

1. Brand name information a) Most frequently accessed type of information 2. Price information a) Diagnostic b) Can be used to infer value c) Importance of price varies by culture 3. Information about other attributes a) Varies by product or service category How do we engage in external search?

1. Process includes orientation, evaluation and verification 2. Search stages a) Mass media and marketer-related sources are more influential in the early stages b) Interpersonal sources are more critical when the actual decision is made c) Consumers search first for information when attributes are uncertain or less favourable 3. Searching by brand or attribute

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a)

B.

When searching by brand, consumers acquire all the needed information on one brand before moving on to the next b) When searching by attribute, consumers compare brands one attribute at a time (1). Price comparison shopping is an example c) Consumers are sensitive to the format in which information is presented in the store. d) Different search strategies affect uncertainty reduction differently (1). Consumers who process by brand name remain high in uncertainty until the very end of the search process (2). Those who search by attribute gradually reduce their uncertainty J. Marketing implications 1. Marketers want to ensure that the specific information consumers want is easily and readily available 2. Emphasising that information in advertising can do this 3. Brands need to perform well on attributes that are frequently accessed IV. How much do we engage in information search?

A. Motivation to process information a) Involvement and perceived risk b) Perceived costs and benefits c) Consideration set d) Relative brand uncertainty e) Attitude toward search f) Discrepancy of information Ability to process information a) Consumer knowledge b) Cognitive abilities c) Demographics. For example, consumers with higher education tend to search more than less-educated consumers.

C. Opportunity to process information a) Amount of information available b) Information format c) Time availability d) Number of items being chosen D. Digital Media considerations in consumer behaviour a) QR (quick response) codes can help consumers quickly gather information by scanning the code using their smartphones. b) But don’t let the design overpower the code, post once, link to content not valued by consumers or miss the chance the extend the relationship.

QUESTIONS FOR REVIEW AND DISCUSSION Possible answers are as follows.

1. How does a discrepancy between the ideal state and the actual state affect consumer behaviour?

The difference between the ideal state and the actual state equates to problem recognition. The degree of discrepancy can strongly influence consumer behaviour.

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Marketers attempt to put consumers in a state of problem recognition in an effort to stimulate the decision process. Without problem recognition, marketing efforts are likely to be less effective because the consumer may not be motivated to process information.

2. How do routine, emergency, planning and evolving problems differ from each other?

Routine problems are those that are expected and require immediate solutions.

Emergency problems also require immediate solutions but they are unexpected.

Planning problems are expected but do not require immediate solutions. Evolving problems, like planning ones, also do not require immediate solutions but they are not expected.

3. What factors affect the inclusion of brands in the consideration set and why would a company want its brand in the consideration set?

The consideration set is affected by prototypicality, a brand’s familiarity, goals and usage situations, brand preference and retrieval cues. A company wants its brand to be part of the consideration set, as this is the set of alternatives that consumers evaluate when making a choice. If your brand is not part of a consumer’s consideration set then that brand will not likely be the one purchased.

4. When would a consumer be more likely to conduct an external search by brand rather

than by attribute? Which search process would a marketer prefer consumers to use – and why?

Consumers with more product knowledge tend to process by brand because they have more brand-based knowledge. Consumers also are more likely to process information by brand if information is presented to them by brand, as it is in most stores. Marketers of well-established brands might prefer a consumer to process by brand. It is thought that consumers will use the high brand equity as a symbol of quality. However, there may be situations in which a particular brand excels on a certain attribute. Marketers in this situation attempt to highlight these differences.

5. What kinds of information are acquired during an external search?

The three most central pieces of information that consumers find from external search are brand, price and attribute information. Consumers can find out about other brands for the same product or product category, they can find prices and evaluate whether a price is high or low given the existence of other products and they can find information about the attributes of a certain product relative to others.

CONSUMER BEHAVIOUR CASE Searching for a search engine There’s a big marketing battle brewing among the search engines of the world. Google is so widely used that many consumers talk of ‘Googling’ a product or service when they mean they’re going to do some internet research. Indeed, nearly 92 per cent of Australians who surf the internet use Google as their primary search engine. But as dominant as Google may be in some countries – it handles two out of every three online searches in the United States, for instance – it does face competition, both locally and

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globally. Still, because of Google’s firmly entrenched position, other search engines have to start by stirring consumers to recognise a problem with their current search engine.

The most aggressive of Google’s search competitors is Bing, introduced by parent company Microsoft in 2009. Within months, Bing had arranged to become the official search engine of Yahoo!, one of the web’s original search sites. Thanks to this deal, Bing improved its share and now holds about 15 per cent of the search market in the United States, pulling nearly even with the market share of Yahoo! worldwide; however, Bing holds only a tiny share of the search market, whereas Google still controls more than 80 per cent of the global search market.

To increase brand awareness, to put itself in the consideration set and bring consumers to its search site, Bing runs ads on TV and in cinemas to promote itself as a ‘decision engine’. The messages, delivered with a dash of humour, suggest that consumers can avoid information overload and find just what they need by searching on Bing, whether they’re looking for how-to videos, holiday gift ideas, airline flights or movie show times.

For its part, Google is pouring on the warm feelings in its ads to engage consumers emotionally and retain their loyalty. Ads portray Google as the place to search for longlost friends, for example, among other search stories with affective appeal. In essence, Google is reminding consumers: ‘Remember how it felt when you did those successful searches through our site? Use Google when you’re searching for something you care about, whether it’s videos, images, news, maps or more’.

Google also wants to be sure that mobile users continue to choose its search site when using their phones to locate information about goods and services. Currently, Google is responsible for more than 90 per cent of mobile searches in the United States. However, that may change as many search sites gear up in earnest for this fast-growing segment.

Other search engines have captured considerable market share outside the United States by optimising their searches and the look of their sites and results to meet local needs and preferences. Baidu, for example, is the market leader in Chinese-language searches and Yandex is the leader in Russian-language searches.

In addition, various niche search sites want consumers to choose them for specialised searches. VideoSurf, now owned by Microsoft, enables consumers to search for specific content among 50 million online video clips. It is being marketed in connection with Microsoft’s Xbox system as a way for consumers to locate sports or music videos to stream to their TVs. Mocavo, used to search for names of ancestors, is marketed through mentions on genealogy blogs and websites. Wolfram Alpha calls itself a ‘computational knowledge engine’ that can help users search for data about mathematics, statistics, engineering, units and measures and more. Infomine searches academic resource collections available online. findsounds.com enables consumers to locate and listen to sound effects posted on the web. spezify.com emphasises colourful and intuitive visual display rather than a simple text listing of results. No matter what kind of search consumers want to conduct online, there’s a site to help them locate exactly what they want.

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CASE QUESTIONS 1. Why is achieving a significant level of brand familiarity especially important for Google’s competitors?

It is critical to achieve a significance level in order to even be in the consumers’ consideration set; Google is such a prototypical brand, it tends to dominate users’ internal searches (i.e., consumers can easily recall Google) so that other search engines are never even considered.

2. What are the search sites doing to increase consumers’ motivation, ability and opportunity to process external information?

Search sites try to motivate consumers to search for alternatives by illustrating that the ‘actual state’ of their search engine use is not satisfactory, and then provide easy-toaccess information to increase consumer knowledge about their specific brand and how it can better suit consumer needs.

3. Are consumers likely to search by brand or search by attribute when comparing search sites? Which process is likely to favour the specialised search sites?

If consumers are actively seeking a different search engine, brand may play a part initially because you can’t use a service you’ve never heard of; however, since most people only recognise the brands of a few companies, consumers may subsequently seek out engines by attributes to meet needs unmet by the larger companies. Searching by attribute favours specialised search sites because they offer specialised attributes such as more accurate searches for their specific subject areas and more precise results.

4. Given the role of prototypicality in recall of search engine brands, what do you think niche search sites should do to get into the consideration set?

Niche sites must distinguish themselves from Google, the prototypical brand, by both highlighting the attributes that set them apart from Google, so that when consumers are thinking of a typical search engine, they are unlikely to think of Google but rather of the niche site. However, niche sites still need to ensure that consumers have a positive overall brand evaluation through the company’s marketing communication.

SUGGESTED EXERCISES AND TEACHER GUIDELINES 1. Find 20 magazine, television or radio advertisements that you think are trying to instigate problem recognition in consumers. Group these ads into those you think are (a) trying to influence the ideal state and (b) trying to create dissatisfaction with the actual state. Relate each group of ads to the factors discussed in the chapter on influencing both the ideal state and the actual state. Which types of ads do you think are effective and why?

Students should consider how the ads have tried to create a new ideal state and/or shift consumer preferences by attempting to create dissatisfaction with the actual state. In addition, students should analyse how the marketer has tried to position their product as the solution to the consumer’s problem.

2. Interview five consumers to determine their knowledge about a product or service category for which you think motivation, ability and opportunity to process are high. Ask consumers to discuss: (a) all the brands they would consider, (b) what they know about

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each brand, (c) their evaluations of each brand, and (d) any prior experiences they have relative to these brands. After obtaining this information, ask consumers which brand they would choose if they had to pick one right now and whether they would want any additional information before deciding. Finally, analyse this information in terms of the principles discussed in this chapter: recall of brands, attributes, evaluations and experiences. Do your findings support or contradict these concepts? If so, why? How does internal search relate to the desire for external search?

A good way to present this information is in the context of evoked and awareness sets. It may be interesting to see which brands people are aware of but not consider for a particular product category.

3. Interview five consumers about their external search activity regarding a product or service category for which you think motivation, ability and opportunity to search are high. Be sure to ask them questions about: (a) which brands they would search for information on, (b) which types of information they would look for, (c) what sources of information they would use, and (d) how much time they would take. Analyse the answers in terms of the external search principles discussed in this chapter: the extent, content and sources of search. Do your findings support or contradict these concepts?

Tie student responses into the motivation, ability and opportunity concepts discussed from Chapter 2. Discuss the impact of the internet on the search process for a wide variety of product categories.

SUGGESTED INTERNET EXERCISES WITH SAMPLE ANSWERS Burpee seeds and plants Homeowners who purchase a newly constructed house with little or no landscaping often want to quickly personalise the exterior appearance of their homes. Especially among novice gardeners or those who have moved to a different climate, the problem of what will flourish in their new environment is difficult to solve. The venerable W. Atlee Burpee Company, purveyors of seeds and plants for generations in their colourful catalogues, now offers gardening help online at www.burpee.com. Go to Burpee’s website and click through to Your Plant Finder. Follow the steps to obtain a recommendation for flowers and ornamental plants (choose whatever descriptors you like). How does Your Plant Finder work? What are its advantages and disadvantages for the consumer trying to escape the new-home landscaping blues?

Instructor notes Your Plant Finder at Burpee’s website can be a valuable tool, especially for novice gardeners. The visitor can enter descriptors that fit his situation, such as sunlight level, ease of growth and maintenance, and plant height. Based on these data, Your Plant Finder recommends plants and seeds available through Burpee that are appropriate to the visitor’s needs.

The advantages of Your Plant Finder are its ease of use; speed of recommendations; the ability to preview recommended plants for colour and shape; and the convenience of ordering recommended plants and/or seeds through the website. The disadvantages of Your Plant Finder are its inclusion only of plants and seeds available from Burpee (an extensive but not comprehensive product assortment); its exclusion of important variables such as

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climate, growing conditions, and soil quality; and its failure to specify which plants are environmentally friendly (for example, those that attract beneficial insects).

Your Plant Finder’s advantages provide the visitor with a good starting point. The visitor can also access other pages within Burpee’s website for advice and resources, but because these are not linked directly to Your Plant Finder, they require additional effort to utilise. For more detailed information, the novice gardener may want to supplement his knowledge through a more extensive media search of other catalogues and websites; a retailer search of local garden centres; an independent search through the County Extension Service office; and especially an interpersonal search for advice from neighbours.

Additional uses This exercise also relates to concepts in the following chapters: •

Chapter 5, Attitudes and Persuasion (attitudes about the appearance of one’s home)

•

Chapter 7, Judgement and Decision Making (evaluation of gardening alternatives, including using a landscaping service instead of planting one’s own flowers, shrubs and trees)

•

Chapter 8, Post-Decision Processes (impact of feedback from gardening choices on product satisfaction; for example, is the beauty of certain flowers worth the extra maintenance effort?)

•

Chapter 10, Consumer Diversity (regional variations concerning appropriate garden choices, beyond those accounted for by climactic differences)

•

Chapter 11, External and Internal Influences on Consumer Behaviour (impact on landscaping choices)

Discussion idea As a relevant source of landscaping information, does Burpee’s very traditional, even oldfashioned company image help or hurt its reputation with consumers (especially novice gardeners)?

ADDITIONAL DISCUSSION QUESTIONS WITH SAMPLE ANSWERS These discussion questions can be used as in-class activities or as thought questions that the students consider while reading the chapter or to test their understanding of the material after the reading and lecture are complete.

1. Ask the students to imagine that they are at the grocery store so they can buy food for dinner. What factors will influence their actual state situation?

Responses may vary. A sample student response follows.

These are some of the factors that would influence my actual state decisions: a. How hungry I am? b. What kinds of foods do I classify as dinner foods? c. How busy I am? d. How much money do I have available to spend on dinner?

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e. What is my level of cooking experience? f. What is my experience with the store, products, brands? g. What are my dietary restrictions? h. How is the food displayed? i.

Which items are on sale?

j.

Which items are in stock?

2. What motivates a consumer to resolve a recognised problem?

The degree of difference between the ideal state and the actual state motivates a consumer to resolve a recognised problem. The greater the difference between the two states, the more likely the consumer is to seek a change. This difference is dynamic. It changes as other factors change such as lifestyle, needs and wants, messages from advertisers, family demographics, etc.

3. How can marketers respond to problem recognition?

Marketers can alter the marketing mix to address the consumer problem. In addition, they can identify a latent consumer problem and use the mix to stimulate recognition and information search.

ADDITIONAL QUESTIONS 1. As a group, select two product and two service categories. For each of these categories describe how problem recognition might occur for consumers and how marketers could influence this process.

2. Work together to develop your definition of the ideal state. Create a list of factors that can influence how it is determined. Describe how marketers could influence this perception. Create three examples in which marketers help to create the ideal state in consumers.

3. Duplicate the exercise described in question two using the actual state. Specifically describe how marketers can influence consumers’ dissatisfaction with their actual state.

4. Internal search is one of the search processes people can use. Create a list of conditions under which internal search is most likely to occur. Explain how marketers can influence this process.

5. As a group, select a product or service category to discuss. Now describe how each of the following would influence the nature of the consideration set a consumer might use in making a purchase decision: (a) prototypicality, (b) brand familiarity, (c) goals and usage situations, (d) brand preference, and (e) retrieval cues.

6. Develop a definition for each of the following terms: (a) accessibility, (b) diagnosticity, (c) salience, (d) vividness, and (e) goals. Describe how each might affect the internal search for attribute information. Explain how marketing strategy can influence these variables.

7. Create a definition for each of the following terms: (a) the confirmation bias, (b) inhibition, and (c) mood. Describe how each can bias the internal search process. Offer suggestions for how marketers can overcome these biases.

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8. Not all consumers search the same amount of time for external information prior to making a decision. Discuss how much the average consumer searches. Specify those factors that influence a consumer’s motivation to search for information. Develop a set of recommendations for marketers that address these factors and can help alter consumer search behaviour.

9. Discuss the differences in consumers that may make some more likely than others to search for information. Create a list of the marketing implications for the fact that some will search more than others.

10. The type of information that is sought may be different depending on the product.

Select a product or service category and develop a list of the types of information you believe are most likely to be searched for. Develop a set of recommendations for marketers in this category, given your list.

EXPERIENTIAL EXERCISES AND CLASSROOM EXAMPLES Students who learn more readily through visual and tactile stimuli will benefit from the introduction of physical examples into the classroom.

1. ‘Shop till you drop’ exercise Tell students to assume that they have moved to a new town to start their postgraduation jobs and need to buy several branded items – a Gen X Mx 280 bicycle (men’s version), a Bose stereo system, an RCA 25-inch stereo colour TV, and a copy of Australian Women’s Weekly, the biography of Malcolm Fraser. Announce that you will give a small prize (e.g., a bag of bite-sized Cherry Ripe) to the student who finds the lowest total price for all four items. This exercise generally reveals that students exhibit a variety of search inclinations and strategies. Some expend relatively large amounts of time and effort to find the items, while others buy from the first store (or website) that stocks the product.

2. Consumer buying journal Have students keep track of all the purchases between the current class period and the next class period. Obviously, students will not want to share the entire contents of the list with classmates. However, without sharing the list with the class ask students to start to recognise how they went through the searching process for this chapter and the remainder of the consumer buying process for the next chapters. This should provide numerous examples of the search process for illustrating the chapter concepts.



This experiential exercise has been contributed by Professor Sheri Bridges of Wake Forest University.

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CLASSROOM GROUP ACTIVITY Uncovering problem recognition stimuli: 15 minutes I. Start up A. Purpose of the activity 1. This activity will give students an opportunity to apply the concepts of problem recognition in a brief classroom exercise B. What the instructor will do 1. Collect advertisements from local and/or national media. Select advertisements that incorporate elements encouraging the reader to recognise a problem he or she may be facing. If necessary, advertisements can be selected from among the examples in the book. Ads from current media are preferable.

2. The instructor will divide people into small groups, assign them one or more advertisements for analysis, and be available to coach and help the groups as needed.

C. What the participants will do 1. The participants will work in small groups to study how concepts related to problem recognition can be applied to the advertising of specific brands.

After a period of small-group discussion, they will make reports to the larger group D. Rules for this experience 1. Groups are to work separately from each other. Individuals should rely on their knowledge from the book and may refer to their notes and the book as necessary II. Experience A. Group up 1. Have students form groups of no more than five. This exercise will work in groups of any size; however, room restrictions that do not allow for moving furniture may make group work more difficult B. Assign ads 1. Each group should be assigned one or more ads on which to focus C. Specific actions for groups 1. The groups are responsible for analysing the advertisements to identify methods that (1) are being used, and (2) could be used to help the reader recognise a problem they may need to solve 2. Questions to be answered by small groups a) What is the nature of the problem that the advertiser is trying to call to the attention of the reader? b) What techniques would you propose adding to this advertisement to increase the likelihood that it will generate problem recognition in readers?

3. Large-group discussions a) First, have groups present their ideas about the first question, and then proceed to discuss each of the subsequent questions b) If there are many groups, share the discussion among all groups, though not all groups may answer all of the questions

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III. Debrief and unveil concepts A. Discuss the activity itself 1. The purpose of this discussion is to allow students to express what they felt about the experience itself 2. Ask students to describe their experiences of doing the activity a) Likes and dislikes about what just happened b) How they felt during the experience c) What is realistic, unrealistic about the exercise? d) What will be different when they do this for their own brand?

B. Discuss the content of the experience 1. The purpose of this discussion is to ensure that students ‘take away’ important learning points 2. Ask students to describe the important points the experience teaches a) The role of advertising in generating a sense of problem recognition in readers 3. Use the chalkboard to record student responses a) Write down their ideas as they are presented b) Concentrate on the principles being discussed rather than the examples being used c) Help them to see the interrelationships between their responses IV. Execute A. Apply what has been learned 1. Lead a discussion on how the concepts can be applied in organisations a) What barriers may be faced in applying the concepts from the exercise? b) What can be done to help others understand the concepts when you use them at work?

B. Transfer and use the knowledge 1. Encourage students to make a record in their notes about how they will use the ideas in the workplace 2. Even if they do not have a specific job, how will they remember to use what they have learned?

USEFUL WEBLINKS How to Measure Brand Awareness (Brandwatch) https://www.brandwatch.com/blog/marketing-how-to-measure-brand-awareness/ Provides a discussion and a set of tools to measure how much consumers remember about brands and the information associated with them.

Consumer Information (WA Government) https://www.wa.gov.au/information-about/consumer-information This website by the Western Australian government provides consumers across all of Australia with helpful hints prior to making purchases and paying for services in the marketplace.

Solution Manual for Consumer Behavior 2nd Asia Pacific Edition Wayne D. Hoyer

CHAPTER 7

Judgement and Decision Making

CHAPTER SUMMARY Judgements involve forming evaluations or estimates of the likelihood of events are not always objective, whereas decisions entail a choice between options or courses of action.

Two types of judgements are likelihood and goodness or badness; both can be made by recalling past judgements using imagery or an anchoring and adjustment process.

Once consumers recognise a problem, they may address it using cognitive decision making models (deciding in a rational, systematic manner) or affective decision models (deciding on the basis of feelings or emotions). Consumers face a number of decisions: which brands to consider (developing the consideration set); what’s important to the choice (affected by goals, timing and decision framing); what offerings to choose; whether to make a decision now; and what to do when alternative cannot be compared.

In thought-based decisions about offerings, consumers may use compensatory or noncompensatory models; process by brand or by attribute; and consider gains versus losses.

Feeling-based decisions about offerings may rely on appraisals and feelings, affective forecasts and choices and imagery. Three types of contextual factors can influence the decision process: (1) consumer characteristics; (2) decision characteristics; and (3) the presence of a group.

Consumers also make judgements and decisions using low effort when MAO is low. In these

situations, consumers are more likely to use simplified heuristics or decision rules.

Consumers use the representativeness and availability heuristics to make judgements; that is, they base judgements on comparisons to a prototype or on accessibility of information, respectively. They also rely on the law of small numbers, where they expect information from a small sample to be typical of the larger population.

For simplicity, consumers making low-effort decisions may satisfice rather than optimise.

They may also devise choice tactics over repeat purchase occasions through a process similar to operant conditioning. Cognitively based choice tactics include performance, habit, brand loyalty, price, and normative influence; affective-based choice tactics include affect referral, brand familiarity, variety seeking and impulse buying.

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CHAPTER LEARNING OBJECTIVES After studying this chapter, students will be able to: 1. distinguish judgements from decisions and understand why and how both processes are important to marketers 2. identify the most common factors and biases that influence judgement and decision processes 3. explain between thought- and feeling-based decisions 4. explain how consumers learn from their previous purchases and how they learn about new information that is available to them 5. discuss the major judgement and decision-making processes when consumers are low on motivation, ability and opportunity 6. outline the ways that consumer characteristics, decision characteristics and how other people influence consumers’ judgements and decisions.

CHAPTER OUTLINE I. Distinguishing judgement from decisions A. Judgements of likelihood and goodness/badness 1. Estimations of likelihood involve determinations of how probable it is that something will occur. Judgements of goodness/badness are the consumer’s evaluation of the desirability of product or service features B. Decision making (or choice) involves making a selection among multiple options.

C. Digital media considerations in consumer behaviour 1. Internet plays a role in problem recognition, evaluation of options, making the decision and evaluating the decision D Marketing implications 1. Anchors are used by product and brand managers to bias consumers’ judgements.

II.

Biases and heuristics in the judgement processes A. Biases 1. Because consumers possess a confirmation bias to acquire and process confirming information, they tend to be overconfident in their judgements 2. Consumers often exhibit a self-positivity bias, believing that bad things are more likely to happen to others, rather than themselves 3. Consumers seem to weigh negative information more heavily than positive information, creating a negativity bias B. Heuristics 1. The representativeness heuristic – categorisation process that involves comparisons to the category prototype 2. The availability heuristic – judgements can be influenced by the ease with which instances of an event can be brought to mind

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3. Law of small numbers – the expectation that information from a small sample represents the larger population 4. Marketing implications a. Marketers use representativeness and availability heuristics to bias consumers’ 5. Anchoring and adjustment – judgements starting with an initial one and adjusting it with additional information C. Prospect theory – losses loom larger than gains for consumers, even when they are of the same magnitude 1. Endowment effect – when ownership increases the value of an item.

D.

Marketing implications 1. Marketers can help guide consumers’ judgements by choosing an appropriate anchor from which to adjust their attitudes 2. In brand extensions, the existing brand name and its positive (or negative) associations act as anchors and influence for judgements of the new product 3. Country of origin can also be used as a judgement anchor 4. Marketers can positively influence consumers’ judgements by priming, or creating a positive mood in the consumer 5. Marketers can also affect consumers’ perceptions of the likelihood of events 6. Marketers must make an effort to reduce risks and potential losses for consumers by offering guarantees or easy payment plans 7. Marketers need to carefully consider the amount of a price increase because the greater the increase, the greater the negative reaction from consumers 8. Marketers should try to frame price increases as a gain to consumers, such as an increase in product quality III. Biases in decision processes A. Attraction effect – changing the alternatives in the consideration set can have a major impact on consumers’ decisions B. Marketing implications 1. Critical decision is how a company can get its brand into the consumer’s consideration set.

2. Repetition of brand names and advertising ensure brand name is “top of mind”.

3. Marketers can increase sales of high-margin items by offering higher-priced option with lower margins.

IV.

C. Extremeness aversion – Options perceived as extreme on an attribute will seem less attractive than those perceived as intermediate D. Compromise effect – a brand will gain share when it is seen as an intermediate choice rather than an extreme choice Making thought-based decisions A. Cognitive decision-making models focus on how consumers use information about attributes to reach a decision, while affective decision making models focus on consumers’ choices based on emotions and feelings 1. Compensatory versus non-compensatory models

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a)

With compensatory models, consumers choose the brand that has the greatest number of positive features relative to negative features. A negative evaluation of one attribute can be compensated for by positive features of other attributes b) With a non-compensatory model, negative information leads to immediate rejection of the brand or service from the consideration set c) Non-compensatory models require less cognitive effort than compensatory models because consumers set cut-off levels for each attribute and reject any brand below the cut-off level d) International considerations in consumer behaviour.

(1). Individuals from Western cultures are more analytical, while those from Asia focus more on the feeling or ‘kimochi’. e) Marketing Implications.

(1). As different models can lead to different choices, marketers may want to change the process by which consumers make decisions f) Brand possession – evaluating one brand at a time. g) Multi-attribute expectancy-value model – a type of brand-based compensatory model.

(1) Using a conjunctive model, consumers set minimum cut-offs for each attribute that represent the lowest value they are willing to accept.

(2) A disjunctive model is similar. But consumers set acceptable levels for cut-offs, and consumers base evaluations on several of the most important attributes rather than all attributes.

H.

I.

Marketing implications a) Brand-based models help marketers understand what attributes consumers consider in decision making, and how the consumers evaluate their brands (1). If a consumer does not rate a company’s brand high on a given attribute, the marketer can focus communication efforts on improving the consumers’ opinions b) Decision models can also help in the planning of comparative advertising Decisions based on product attributes 1. Sometimes consumers process one attribute a) Although most consumers prefer attribute processing because it is cognitively easier, they cannot always find information in the correct format to facilitate attribute processing 2. In an additive difference model, brands are compared by attribute, two brands at a time a) Consumers compare each important attribute, evaluate the differences, and combine them in an overall preference 3. In a lexicographic model, consumers order attributes in terms of importance and compare the alternatives one attribute at a time starting with the most important attribute a) If one alternative dominates on the most important attribute, it is selected

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b)

V.

V.

In the case of a tie, the consumer then considers the next most important attribute until there is a clear preference 4. In the elimination-by-aspects model, consumers again rank the attributes in order of importance, but also consider acceptable cut-off levels for each attribute a) This model is not as rigid as the lexicographical model as more attributes are likely to be considered 5. Marketing implications a) An additive difference model allows marketers to present which attributes exhibit the largest differences between brands. They can use this knowledge to improve and position their brands b) A lexicographical model illustrates the ranking of attribute importance.

If the brand is weak on the most important attribute, marketers will need to improve this feature and effectively communicate that improvement c) Identifying consumers’ cut-off levels is also useful to marketers Making feeling-based decisions A. When engaged in affective decision making, consumers make decisions based on what feels right rather than a detailed, systematic evaluation of attributes 1. Consumers who make affectively based decisions tend to be more satisfied than those who make decisions based on product attributes a) Positive feelings for brands may be based on past experiences and associated feelings B. Appraisals and feelings 1. Appraisal theory examines how our emotions are determined by how we think about a situation 2. The theory also explains how and why some emotions affect future judgement and decisions C. Affective forecasts and choices 1. Affective forecasting is consumers’ predictions of how they will feel in the future 2. It involves how consumers think they will feel as a result of a decision, how intense that feeling is, and how long the consumer will have the feeling 3. Consumers’ affective forecasts are not always accurate

Consumer learning A. Classical conditioning occurs when a stimulus that elicits a response is paired with another stimulus that does not initially elicit a response on its own B. Operant conditioning views behaviour as a function of previous actions and of the reinforcements or punishments obtained from these actions 1. Reinforcement – a good experience leads to reinforcement because the consumer feels his or her needs have been satisfied 2. Punishment may lead the consumer to re-evaluate the choice tactic resulting in the use of a new tactic or upgrade of the tactic VI. Low-effort judgement and decision-making processes A. Consumer habit 1. Simplest and most effortless type of consumer decision making

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a) b) c)

B.

C.

D.

E.

F.

Requires little or no information seeking Requires little or no evaluation of alternatives The longer consumers wait in between purchases, less likely they are to buy the habitual brand Brand loyalty 1. Brand loyalty occurs when consumers make a conscious evaluation that a brand or service satisfies their needs to a greater extent than others do a) Results from a very positive reinforcement of a performance-related choice tactic b) High level of commitment distinguishes brand loyalty from habit c) Consumers can be multibrand loyal, committed to two or more brands they purchase repeatedly Brand familiarity 2. Through mere exposure effects, consumers are more likely to prefer familiar brands 3. Co-branding strategies allow marketers to benefit from the combined power and familiarity of both brands Price-related tactics 1. Consumers are looking for good value – high-quality brands at a good price 2. The Deal-prone consumer a) Difficult to identify as research findings are mixed Variety seeking 1. Variety seeking occurs in low-effort situations when the consumer wants to try something different a) Consumers engage in variety seeking for two reasons: satiation and boredom 2. Consumers seek variety when their level of arousal falls below the optimal stimulation level (OSL), an internal ideal level of stimulation a) Sensation seekers have a higher need for stimulation and are a good market for newly introduced products 3. Vicarious exploration occurs when consumers simply collect information to increase stimulation Buying on impulse 1. An impulse purchase occurs when a consumer suddenly decides to buy something he or she had not planned on buying 2. Characterised by: a) An intense or overwhelming feeling of having to buy the product immediately b) A disregard of potentially negative purchase consequences c) Feelings of euphoria and excitement d) A conflict between control and indulgence 3. Often instigated by exposure to an external stimulus 4. Marketing implications a) Stores are organised to maximise impulse buying b) In difficult economic times, impulse buying decreases so marketers need to reposition their products as necessities rather than impulse items

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IV. Individual differences in judgements and decision making A. Consumer characteristics 1. Expertise a) Expert consumers have a larger consumption vocabulary and thus can use more attributes and information in making a decision b) Expert consumers tend to use brand-based decision strategies 2. Mood a) Consumers in a good mood are more willing to process information and take time in decision making b) Consumers in a good mood make more extreme (positive or negative) evaluations c) One study says that consumers in a high-arousal mood tend to process information less thoroughly d) Consumers in a bad mood are more likely to recall a marketing message e) Consumers in a good mood judge objects more positively f) Consumers in a good mood are more likely to try new products/services 3. Time pressure a) As time pressure increases, consumers initially try to process relevant information faster b) Consumers under time pressure then will base their decisions of fewer attributes and place more weight on negative information, thus eliminating bad alternatives quickly using non-compensatory decision strategies c) Time pressure also affects consumers’ decisions to delay their choices 4. Metacognitive experiences a) Metacognitive experiences include factors such as how easy it is to recall information in memory and form thoughts and how easy it is to process new information b) Metacognitive experiences influence retrieval ease, inferences and biases B. Characteristics of the decision 1. Information availability a) The amount, quality and format of available information can affect the decision strategies consumers use b) Having more information will lead to better choices up to the point of information overload c) If information is useful and relevant, decision making is less taxing and better decisions are made d) If information is ambiguous, consumers will likely stay with their current brand rather than risk trying a new brand 2. Information format a) If information is organised by brand, consumers will more likely use brand-based decision strategies b) If information is organised by attribute or in a matrix, consumers will likely use attribute-based strategies

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c)

Consumers presented with a narrative format of information tend to process information more holistically and thus negative information had less impact 3. Trivial attributes a) Consumers sometimes finalise decisions by examining trivial attributes 4. Choice overload a) Negative outcomes of choice overload can occur in some circumstances, although research is uncertain of what circumstances produce this 5. International considerations in consumer behaviour a) Consumers from East Asian backgrounds who are collectivists prefer fewer choices compared to those from Western backgrounds who are individualists.

QUESTIONS FOR REVIEW AND DISCUSSION Possible answers are as follows.

1. How does consumer judgement differ from consumer decision making?

Judgement is the process of coming to the conclusion about the likelihood of an event or about a particular evaluation. Decision making is the act of making a selection between options.

2. What is the anchoring and adjustment process and how does it affect consumer judgement?

The anchoring and adjustment process is when a consumer starts with an initial evaluation and adjusts it accordingly with additional information. The nature of the initial judgement is extremely important, because it greatly affects the outcome of consumer judgements. Since consumers tend to believe information that is consistent with their beliefs, it is often difficult to significantly change consumers’ evaluations from this initial anchoring position.

3. How do consumers use compensatory and non-compensatory decision-making models?

In theory, consumers combine items of information about attributes to reach rational, systematic decisions. Consumers in different purchase situations use different decisionmaking models. A combination of compensatory models (i.e., cost-benefit analysis) and non-compensatory models (i.e., negative information leads to rejection of options) can be employed in the decision-making process.

4. What is prospect theory and the role of gains and losses in judgements?

Prospect theory is a model of judgement in which consumers are motivated to seek gains and avoid losses. It stands in contrast to traditional economic models of judgement by proposing that consumers make judgements against subjective – not objective – utility or wealth. For examine, according to economics, two consumers should be equally happy winning $100 in the lottery. But according to prospect theory, if one of the consumer has no money in her pocket, she will find the win more positive (because $100 is a gain relative to $0) than the other who might have $200 with which to begin (because $100 is a loss relative to $200).

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5. Why do marketers need to know that attribute processing is easier for consumers than brand processing?

When marketers realise situations in which it is easier for the consumer to compare alternatives on a small number of attributes (sometimes one attribute), they are able to adjust their marketing mix variables accordingly. Marketers can highlight the quality and uniqueness of their product with respect to this particular attribute that is important to the consumer. Marketers often attempt to convey a positive image for the overall brand, when in reality the consumer may be making comparisons on a particular attribute.

6. How do appraisals and feeling as well as affective forecasting influence consumer decision making?

Consumers’ decisions are often based on how they appraise a particular situation.

Feelings and emotions can override the careful cognitive examination of a product’s attributes. In addition to current feelings influencing decisions, consumers also engage in affective forecasting, or predicting what they will feel in the future. Affective forecasting allows the consumer to imagine how a purchase will make him/her feel in the future.

7 What are the two basic models that explain how consumers learn?

Classical conditioning occurs when a stimulus that elicits a response is paired with another stimulus that does not initially elicit a response on its own. Operant conditioning is the view that behaviour is a function of reinforcements and punishments received in the past. The

implication of these models is that classical conditioning is largely unconscious (consumers do not need to exert effort to learn), but operant conditioning is effortful (consumers need to consciously learn from reinforcements and punishments).

8 What are the judgement and decision tactics that consumers employ when they are low on motivation, ability and opportunity?

Six basic strategies for consumers low on MAO include: 1) relying on their habits because habits are simple and effortless; 2) using brands to which they are already loyal; 3) using brands with which they are already familiar; 4) focusing on price and looking for products with the ‘best value’; 5) seeking variety in order to try something different; and 6) buying on impulse without any prior planning.

9 What three contextual elements affect consumer decision making?

Consumer characteristics such as their level of expertise, their mood, and the amount of time pressure can influence the decision-making strategies they use. Additionally, most consumers exhibit extremeness aversion. Other consumer characteristics that can influence consumers’ decisions are metacognitive experiences.

Finally, characteristics of the decision itself, including the availability, quality and format of information, and the presence or absence of trivial attributes, can influence consumers’ decision strategies.

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CONSUMER BEHAVIOUR CASE Harley-Davidson wheels into India Can Milwaukee-based Harley-Davidson roar into India – the world’s second-largest market for motorcycles, after China – and attract buyers despite strong competition from local and global motorcycle brands? With more than a century of tradition behind its iconic American brand, Harley isn’t starting from scratch in India. It enjoys high brand recognition worldwide and began planning for a presence in India in 2005. Two years later, a US–India trade deal paved the way for foreign-made, heavy-weight bikes like Harley’s to be imported and sold throughout the country. Once Harley had the green light to go into high gear, it began recruiting dealers in five metropolitan areas.

Marketers for Harley see India’s economy growing rapidly. Its expanding middle class has both considerable buying power and an appetite for world-class, brand-name products. Most of these consumers have seen Harley motorcycles in Hollywood movies, and some have met Harley owners or tested Harley motorcycles at cycling events.

Harley’s research shows that affluent motorcycle enthusiasts tend to own more than one motorcycle (one for weekday commuting and another for weekend trips, for instance). ‘These are people who have worked hard, earn well, and can now allow themselves the chance to explore their passions,’ explains the managing director.

Still, Harley must compete against long-established motorcycle brands such as Royal Enfield, which has its own loyal customer base. Consumers in India can compare Royal Enfield’s four-stroke engines – responsible for the ‘thumper’ sound associated with the brand – with Harley’s more powerful V-twin engines, which produce that brand’s signature thundering sound. Looking at price, they will find Royal Enfield’s motorcycles carry a lower price tag than Harley’s, in part because of import duties. Consumers concerned about the availability of repair services will also compare Harley’s handful of dealerships with Royal Enfield’s countrywide dealership network.

Harley’s unique image of independence and individuality is a clear point of differentiation. The company also has other competitive advantages. One is that it offers a full range of motorcycles and accessories, with customisation options that motorcycle buyers particularly value. The company is developing special customisation kits so buyers can mix and match Harley engines and parts to create one-of-a-kind motorcycles in India as they do in other markets.

A second competitive advantage is that only Harley buyers can join the Harley Owners Group (HOG), a global group whose one million-plus members are invited to events such as motorcycle training ‘boot camp’, weekend rides and film festivals exclusively for Harley owners. HOG members also get to attend the company’s owners-only rock concerts featuring top Indian bands. ‘We want to give bike lovers the full ownership experience in India,’ Harley’s managing director says about local HOG activities.

A third advantage is that Harley-Davidson dealerships permit buyers to test-ride every motorcycle in the product line, which not every competitor allows. Test-rides help buyers try out the various features, experience first-hand the difference between individual models and form an impression of how it would feel to ride a Harley-Davidson motorcycle.

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Harley-Davidson is starting out strong in India. Before the first motorcycle was delivered, the company had hundreds of preorders. As in most of the world, the majority of buyers are men. Unlike most Harley-Davidson markets, however, here the fastest growth in sales is to men in their 30s and 40s. Women are also being targeted, according to the director of marketing in India: ‘While we strongly believe Harley-Davidson is more of a state of mind and it transcends gender and age, we see a tremendous potential with Indian women riders’. In fact, Harley is already the most popular brand among US women motorcycle buyers, a trend that could spread to India in the coming years.i CASE QUESTIONS 1. How is Harley-Davidson using marketing to influence emotional aspects of the motorcycle buying process?

Harley-Davidson creates positive affect by highlighting the brand image of independence and individuality, offering its customers membership into a global community of Harley riders, and ‘thanking’ their customers through special members-only events.

Additionally, by allowing customers to test-drive their products, Harley hopes they will develop a good feeling and emotional connection with the motorcycle even before buying it.

2. What role are consumer characteristics likely to play in a consumer’s decision to buy a Harley-Davidson in India?

Consumer characteristics are likely to play a large role in their buying decisions depending on each consumer’s situation. For example, an avid motorcyclist with years of experience with motorbikes will consider many product attributes before buying a Harley, but on the other hand, mood and time may be a more important factor for someone whose motorcycle broke down and is searching for a new, more reliable replacement.

3. In terms of the anchoring and adjustment process, what challenges and opportunities does Harley-Davidson face in marketing to Indian consumers?

Opportunities – Harley-Davidson has a positive brand image internationally (anchor), which they can build upon through offerings such as the special customisation kit for India (adjustment).

Challenges – Haley-Davidson is more expensive and less familiar to Indians than the long-established motorcycle brands in the country (anchor); however, Harley-Davidson have the opportunity to use the anchor of high price to emphasise their motorcycles’ high quality and the value of becoming a HOG member (adjustment).

4. Using the consumer behaviour concepts in this chapter, explain the marketing thinking behind allowing buyers to test-drive any of the Harley-Davidson motorcycles. Do you agree with this marketing decision? Why or why not?

Allowing customers to test-drive any Harley positively influences both cognitive and affective decision-making processes. Cognitively, it allows consumers to compare and contract different functional features between different Harleys and their competitors.

Affectively, it creates a sense of trust between the brand and consumer and allows customers to ‘feel’ like a Harley rider before they buy.

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5. How might consumers use thought-based decision models when considering a motorcycle purchase in India? What are the implications for Harley-Davidson?

Consumers will likely compare attributes of various brands, such as price, reliability, customisability, etc. when deciding which brand to choose. Thus Harley must emphasise its positive attributes and ensure these outweigh any negative attributes (such as high price). Furthermore, by allowing customers to test-drive any or all of their motorcycles they will have more Harleys to compare with one another, hopefully turning the decision into a choice between different Harley motorcycles rather than the competitor’s.

SUGGESTED EXERCISES AND TEACHER GUIDELINES 1. This chapter discussed several types of estimations of likelihood that consumers can make (such as estimating quality or likelihood of satisfaction, goodness/badness). What other types of judgements do consumers make? List as many as possible and indicate what these judgements have in common.

Students may mention social-related judgements such as the likelihood of acceptance by others, how the product may convey an image, and perceived risk of purchasing the product.

2. Select a product or service category for which you expect the consumers’ motivation, ability and opportunity to process information to be high. Ask five consumers to describe in detail how they would go about making a decision for this product or service category.

First ask them which brands they would consider (consideration set), and then ask them to describe the specific steps they would go through in making a decision. Which brand would they choose? After collecting this information, answer the following questions: (a) How do the descriptions provided by the consumers compare with the decision models discussed in this chapter? (b) How do these processes vary for different consumers? (c) Why did one brand tend to be chosen over another? (d) If these processes were representative of many consumers, how might this information be used to develop a marketing strategy?

This exercise is similar in nature and scope to several of the exercises from Chapter 3.

The key learning point here is to relate this chapter’s material to that of the earlier concepts from the beginning of class.

3. Interview ten consumers about their decision-making behaviour for the following product categories: peanut butter, laundry detergent, canned vegetables, coffee and ice cream.

Ask the consumers to indicate (a) how much time and effort they take in making a decision and (b) how they select the brand they purchase (which choice tactics do they use?). Summarise the responses for each consumer individually and for all consumers; also, answer the following questions: (a) On average, how much time and effort do consumers spend on these decisions? (b) What are the major types of tactics employed for each category? (c) How do the tactics differ for the product categories? (d) Do consumers use the same or different tactics across product categories? (e) What are the marketing implications of your findings?

For many of these products, the amount of cognitive processing will be low as these products will often be habit purchases. Choice tactics that might be used to categorise responses include performance-related tactics, habits, brand loyalty, price tactics and normative tactics, affect tactics and variety seeking.

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4. Pick two common product categories where low-elaboration decision-making is likely to occur. Go to your local store and observe 20 consumers making a choice for these two products. Record the amount of time taken and the number of brands examined. If possible, ask consumers why they chose the brand they did immediately after the choice.

(Be sure to get the store’s permission first.) Summarise this information and answer the following questions: (a) How much time and effort did consumers typically devote to these decisions? Are your findings consistent with those reported in the chapter? (b) What were the most common types of choice tactics employed? (c) Did the types of choice tactics differ between product categories? If so, why do you think this occurred?

This exercise helps students to understand that we follow patterns based on our perception/habits when it comes to decision making.

SUGGESTED INTERNET EXERCISES WITH SAMPLE ANSWERS AAA’s 55 Alive program According to humour columnist Dave Barry, the typical American is convinced that he/she is an above-average driver. Joking aside, this common conviction explains the presence of so much danger on the road. Self-positivity bias concerning driving ability and behaviour can result in severe consequences. How many incidents occur because a bad driver is in denial about his/her shortcomings? Of particular concern is the potential problem of the growing number of older drivers. Examine the product offerings available at the website for the American Automobile Association Foundation for Traffic Safety, www.aaafts.org. Describe the products and programs intended to help reduce older drivers’ self-positivity bias concerning their driving skills. Identify a potential barrier to their effectiveness. Hint: check out the links to quizzes and products.

Instructor notes AAAFTS promotes two major products targeted to older drivers. The 55 Alive driver education program for older drivers is available in many communities to both members and non-members of AAA. The AAAFTS website provides a quick, easy diagnostic quiz concerning driving habits and skills. The site scores the quiz automatically and offers advice for improvement, including the 55 Alive program. The Older and Wiser Driver, an inexpensive video which describes new strategies for drivers whose skills have changed with ageing, is also available through the AAAFTS site. Both product offerings are designed to reduce older drivers’ self-positivity bias and to modify potentially dangerous driving habits, by reframing drivers’ thoughts and emotions concerning driving. The major barrier to the effectiveness of these product offerings is that they ‘preach to the choir’. Drivers with the highest degree of self-positivity bias are the least likely to take the online quiz, give honest answers, enrol in the 55 Alive program, or buy the video.

Additional uses This exercise also relates to concepts in the following chapters: •

Chapter 4, Memory and Knowledge (schemas and semantic networks for driver education products or programs for older consumers) and (AAA brand name as a salient and prototypical retrieval cue)

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Chapter 11, External and Internal Influences on Consumer Behaviour (impact of gender on driving behaviour and willingness to consume driver education products, influence of adult children on elderly parents concerning driving skills)

Discussion idea What are the benefits of driving? Do these benefits change throughout a consumer’s lifetime? Possible answers include: •

Ability to earn a living (driving to and from work)

•

Ability to enjoy life (vacation and leisure travel)

•

Convenience (travel when one wants to do so)

•

Independence (no need to rely on others for transportation)

•

The ability to earn a living may be more important for younger and middle-aged drivers than for older drivers (who are more likely to be retired)

•

The ability to enjoy life, convenience and especially independence may be even more important for older drivers than for other drivers

The Diamond Information Centre There are few high-effort decisions that incorporate both thinking and feeling as completely as the purchase of a diamond engagement ring. Typically, these buying decisions are made by either a nervous young man or by a lovestruck young couple. The purchase comprises a substantial financial commitment at a time when emotions run high. Presented by Diamond Rocks, an online diamond retailer based in London, the Diamond Information Centre (http://www.diamondrocks.co.uk/Diamond-Information-Centre/) is designed to help with this important purchase. What marketing techniques does the Diamond Information Centre use to influence consumers’ thought-based decisions and feeling-based decisions concerning the purchase of an engagement ring? How does the site encourage more consumption of diamond products?

Instructor notes Certainly a consumer contemplating the purchase of a diamond engagement ring is motivated to process information. His mood is positive and the incentive to make the best choice is very high. The Diamond Information Center provides details about the characteristics of high-quality diamonds, summarised by the ‘4 Cs’ mnemonic (colour, clarity, cut and carat weight). Inexperienced buyers will find this information particularly helpful; they can even print it as a ready reference to use when shopping. The site reiterates the heuristic (probably invented and promoted by the diamond industry) that a diamond engagement ring should cost approximately two months’ salary, which may frame the anchor point for the consumer’s product judgements. Thus the Diamond Information Centre influences the consumer’s ability to process by helping him to develop the appropriate consumption vocabulary. The online availability of information allows the consumer the opportunity to process in private before engaging in a retail search.

The Diamond Information Centre also describes the tradition underlying the diamond engagement ring in hopes of relegating non-diamond jewellery to the consumer’s inept set.

Because the benefits of diamond jewellery are mainly hedonic and symbolic, the visually

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stunning Diamond Information Centre emphasises emotionally loaded words throughout its text, and provides rich imagery of diamond jewellery being worn. Other pages within the website suggest appropriate occasions or reasons to give diamond jewellery. The obvious purpose of this information is to influence the visitor to consume more diamond products.

In addition, women are encouraged to buy their own diamond rings for their right hands.

Additional uses This exercise also relates to concepts in the following: •

Chapter 3, From Exposure to Comprehension (personal relevance of the Diamond Information Center to people in love)

•

Chapter 4, Memory and Knowledge (schemas and scripts concerning diamond purchases)

•

Chapter 5, Attitudes and Persuasion (adding new beliefs about the appropriate price for a diamond engagement ring or occasions for giving diamond jewellery)

•

Chapter 11, External and Internal Influences on Consumer Behaviour (prevalence of diamond engagement rings across social classes)

•

Chapter 13, Symbolic Consumer Behaviour (transfer of symbolic meaning, marital transitions)

Discussion idea How does the Diamond Information Centre use priming and framing to influence the decision?

ADDITIONAL DISCUSSION QUESTIONS WITH SAMPLE ANSWERS These discussion questions can be used as in-class activities or as thought questions that the students consider while reading the chapter or to test their understanding of the material after the reading and lecture are complete.

1. In what context are products that are not in a consumer’s consideration set likely to be chosen? Give examples.

A product that is not in a consumer’s consideration set will be selected only if the consumer is unexpectedly exposed to it. For example, a consumer might consider an unfamiliar brand of salsa if another shopper happens to say, ‘I just love this brand’ or if a friend serves it at a party.

2. Explain how consumers use anchoring and the adjustment process in decision making.

Anchoring is the standard against which product prices are compared to evaluate their reasonableness. Imagine that a travel agency quoted a consumer a price of $498 for an airline ticket for a route he just recently travelled for $328. He most likely would say the new fare was high because he would be comparing it to the $328 anchor. However, a businessperson, whose company normally purchases her ticket at full fare, $950, would think that $498 was a great bargain because her anchor is much higher. The consumer’s anchor price can be based on information in the external environment, an affective response or information in memory (in this case, what the consumer paid for the initial trip), or consumer values or norms.

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Consumers update or adjust the anchor as they receive new information. For example, the pleasure traveller might talk to a trusted friend who says there have been airfare increases across the board and that he has not been able to get a $328 ticket for months. The cheapest fare he has found is $650. The consumer may increase his anchor price based on this new information from his friend.

ADDITIONAL QUESTIONS 1. Judgement and choice are not the same thing. Create a brief definition of each, which characterises the differences between the two. Develop three examples of marketingrelated judgements and decisions that consumers might make.

2. Estimation of likelihood is a term we have been using. Work together to create a concise definition of this term. Develop three new examples of these kinds of judgements.

Explain why these estimations are important to marketers.

3. Explain how consumers make judgements of goodness/badness. Develop an example to illustrate these processes. Explain the marketing implications of these processes.

4. Briefly explain how compensatory and non-compensatory models differ. Then select a high-effort situation and describe how someone would make the decision differently under each model. Explain the marketing implications of each of these models.

5. Explain how motivation, ability and opportunity to process information influence the judgement and decision processes.

6. Give an example of a situation in which consumer motivation, ability and opportunity to make decisions is low. Explain how marketers can address this situation to help consumers.

8. How might unethical marketers take advantage of consumers in the low-elaboration situation? What care must be taken to avoid taking advantage of consumers in these situations?

EXPERIENTIAL EXERCISES AND CLASSROOM EXAMPLES Students who learn more readily through visual and tactile stimuli will benefit from the introduction of physical examples into the classroom.

1. ‘From soup to nuts’ exercise Have students keep diaries of their purchase/consumption behaviour for a week. At the end of the week, ask them to select the three purchases that differed the most in terms of the underlying choice process, then compare and contrast the purchases on relevant dimensions. Talk about the reasons for the differences and similarities.

2. ‘Back to school’ exercise* Select four different universities profiled in a publication such as The Good University Guide. The unis should be chosen based on their likely appeal to students in the class. In general, the four should include large and small student bodies, CBD and suburb campuses, strong and weak athletic teams, high and low ATAR scores, etc., to be as varied as possible. Edit and condense the profiles down to a few paragraphs, along with 

These experiential exercises have been contributed by Professor Sheri Bridges of Wake Forest University.

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information about average ATAR scores, selectivity, faculty-student ratios and size.

Remove or obscure the names of the schools, then make a copy of the four profiles for each student in the class. Tell students to pick a school based on information in the profiles. Discuss the reasons for their choices and the processes they used in decisionmaking.

3. ‘Students undercover’ exercise Tell students to observe the behaviour of three or four consumers in a particular section of the grocery store (e.g., the cereal aisle, near the soft drinks, at the snack food display). After noting the length of time taken to make a choice and the number of alternatives examined, students should interview the consumers about their selections and the processes underlying them. Discuss their findings in class.

IN-CLASS ACTIVITY Working with consumer knowledge Your task is come up with an advertising and/or promotional campaign for a brand of your choice that works with consumers’ existing knowledge structure and memory. You can focus either on the brand as a whole or on a specific product or product line.

Some approaches you may want to consider: •

Increasing awareness of a brand or increasing memorability of the brand or related information (e.g., website address, phone number)

•

Creating additional associations for a brand

•

Ads that use priming to make consumers receptive to favourable beliefs

•

Tying a product into a consumer associative network of knowledge

•

Influencing a brand schema and/or personality

•

Integrating a specific brand name into a script (either focusing on the choice of the specific brand to represent the product category [e.g. White Wings self-raising flour] or presenting the brand as a means of accomplishing a specific task [e.g., Quilton paper towel helps fix messes when children’s friends come over]

•

Graded structure – trying to promote or enhance a brand’s stature as the product category prototype

•

Integrating the brand into goal derived categories

•

Strategies to prevent decay of brand knowledge or to generally enhance recall

•

Creating ads to facilitate retrieval by frequently occurring retrieval cues.

Creativity – within limits of good taste – is encouraged.

Please prepare a brief talk to the rest of the class discussing your conclusions. The presentation should not exceed 2.5 minutes in length.

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CLASSROOM GROUP ACTIVITY Interviewing to expose decision processes: 40 minutes I. Start up A. Purpose of the activity 1. This activity will give students an opportunity to practice an interview effort to learn how consumers make decisions in a brief classroom exercise B. What the instructor will do 1. The instructor will divide people into small groups, and assign them roles (interviewer, interviewee, and recorder/observer) C. What the participants will do 1. The participants will work in small groups to study how concepts related to decision making can be studied in consumers. After a period of small-group discussion, they will make reports to the larger group D. Rules for this experience 1. Groups are to work separately from each other. Individuals should rely on their knowledge from the book and may refer to their notes and the book as necessary II. Experience A. Group up 1. Have students form groups of no more than five. This exercise will work in groups of any size; however, room restrictions that do not allow for moving furniture may make group work more difficult. If necessary, this exercise can be run in a ‘fish bowl’ format with two students put in the front of the classroom, and most students observing and recording their own thoughts.

Several pairs might be run during a single class session B. Specific actions for groups 1. The groups are responsible for selecting a product for which a high-effort decision would be required (alternatively, this could be assigned) 2. Next, the roles of interviewer, interviewee, and recorder/observer should be assigned (or self-selected) 3. The interviewer should then proceed to ask the following questions, probing as necessary to learn more about the interviewee’s answers a) Which brands would you consider (eliciting a consideration set)? b) How would you go about making a decision among these? c) Based on that process, which brand would you be most likely to choose?

4. Based on the notes and observations of the group members, they should then prepare an analysis using the following questions: a) How did the descriptions provided by the interviewee compare to the decision models discussed in this chapter? b) How are these processes likely to vary across consumers? c) Why did this consumer choose one brand over another? d) If this person was representative of a certain segment, how would knowing that help in developing a marketing strategy?

5. Large-group discussions a) First, have groups present their ideas about the first question, and then

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proceed to discuss each of the subsequent questions b) If there are many groups, share the discussion among all groups, though not all groups may answer all of the questions III. Debrief and unveil concepts A. Discuss the activity itself 1. The purpose of this discussion is to allow students to express what they felt about the experience itself 2. Ask students to describe their experiences of doing the activity a) Likes and dislikes about what just happened b) How they felt during the experience c) What is realistic, unrealistic about the exercise? d) What will be different when they do this for their own brand?

B. Discuss the content of the experience 1. The purpose of this discussion is to ensure that students ‘take away’ important learning points 2. Ask students to describe the important points the experience teaches a) The role of different high-effort judgement strategies among consumers 3. Use the chalkboard to record student responses a) Write down their ideas as they are presented b) Concentrate on the principles being discussed rather than the examples being used c) Help them to see the interrelationships among their responses IV. Execute A. Apply what has been learned 1. Lead a discussion on how the concepts can be applied in organisations a) What barriers may be faced in applying the concepts from the exercise? b) What can be done to help others understand the concepts when you use them at work?

B. Transfer and use the knowledge 1. Encourage students to make a record in their notes about how they will use the ideas in the workplace 2. Even if they do not have a specific job, how will they remember to use what they have learned?

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USEFUL WEBLINKS Dan Ariely http://danariely.com/resources/the-blog/ Dan Ariely is a marketing professor and writer. His online blog presents a discussion of how consumers’ judgements and decisions often deviate from economic norms by drawing upon insights from psychology and human behaviour.

The Consumer Decision Journey (McKinsey & Company) http://www.mckinsey.com/business-functions/marketing-and-sales/our-insights/theconsumer-decision-journey An application of judgement and decision-making theories discussed in this chapter to marketing contexts, with a particular discussion of how marketers can better use judgement and decision theories to provide better product offerings.

How Emotions Influence We People Buy (PsychologyToday) https://www.psychologytoday.com/blog/inside-the-consumer-mind/201302/howemotions-influence-what-we-buy An online discussion of the emotional (vs. cognitive) drivers of consumer behaviour, with a focus on the ways that emotions and other feelings both positively and negatively helps consumers make better judgements or decisions.

i “Harley, the Century-old Iconic Brand,” Economic Times (India), November 6, 2011, www.economictimes.indiatimes.com;

“Harley Davidson Enjoys Romance with Indian Women,” Economic Times (India), July 19, 2011, www.economictimes.indiatimes.com; Arathi Gunnupuri, “Harley Davidson India Opens for ‘Mumbikers,’” CNN Go, September 22, 2010, www.cnngo.com; Sara Sidner, “Harley-Davidson To Build Bikes in India,” CNN, November 4, 2010, www.cnn.com; Penny MacRae, “Harley-Davidson ‘Hogs’ Ride into India,” AsiaOne, July 18, 2010, www.asiaone.com; and Rudraneil Sengupta, “Anoop Prakash, Man Behind the Machine,” Livemint.com, September 2, 2011, www.livemint.com.

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CHAPTER 8

Post-Decision Processes

CHAPTER SUMMARY This chapter examines some of the major processes that occur after a decision has been made. Consumers sometimes develop post-decision dissonance – a feeling of anxiety or uncertainty regarding a decision. Consumers are motivated to reduce dissonance by collecting additional information that is used to upgrade the chosen alternative and downgrade rejected ones. Post-decision regret is formed when the consumer feels that the wrong purchase decision was made.

Satisfaction is both a subjective feeling and a positive evaluation that a decision has fulfilled a need or goal. Dissatisfaction occurs when there are negative feelings and an evaluation that goals or needs have not been fulfilled. It is important for marketers to keep consumers satisfied because losing customers can be very costly in the long run. However, customer satisfaction may not be enough to prevent defections to competitors’ brands. Customerretention strategies attempt to build customer loyalty.

Generally, consumers learn from experience through a process of hypothesis testing in which they attempt to either confirm or disconfirm expectations by actually engaging in acquisition, consumption or disposition. This process is influenced by motivation, prior knowledge or ability, ambiguity of the information environment or lack of opportunity, and two types of biases, the confirmation bias and overconfidence. Marketers can use several strategies to influence the learning process, depending on whether the offering is a top dog or an underdog.

Finally, consumers can dispose of products in a variety of ways. This process has important implications for marketing strategy and an understanding of consumer behaviour. Recycling, which is one form of disposition, is dependent on consumers’ motivation, ability and opportunity to act.

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CHAPTER LEARNING OBJECTIVES After studying this chapter, students will be able to: 1. describe consumer satisfaction and how consumers make satisfaction evaluations 2. discuss the importance of managing consumers’ expectations on satisfaction and how marketers can do so 3. distinguish between the dissonance and the regret that consumers may experience after acquisition, consumption or disposition 4. explain how consumers can learn from experience and why marketers need to understand this post-decision process 5. describe how consumers may dispose of something, why this process is more complex for meaningful objects and what influences consumer recycling behaviour.

CHAPTER OUTLINE I. How do consumers make satisfaction or dissatisfaction judgements?

A. The importance of customer satisfaction 1. If consumers feel their needs or goals have been met, they are satisfied 2. If they have a negative evaluation, they will be dissatisfied 3. Consumers can evaluate in terms of: a) Utilitarian dimensions (how well the product/service functions) b) Hedonic dimensions (how it makes one feel) 4. Levels of satisfaction can vary by involvement and over time B. The role of expectations: the disconfirmation paradigm 1. Disconfirmation occurs when there is a discrepancy between prior expectations and actual performance. Disconfirmation may be positive or negative a) Expectations are desired product/service outcomes b) Satisfaction based on expectations (1). Performance measures whether expected outcomes have been achieved (2). If performance is better than expected, a positive disconfirmation has occurred and satisfaction results (3). If performance is as good as expected, a simple confirmation has occurred, also leading to satisfaction (4). If performance is lower than expected, negative disconfirmation and dissatisfaction results c) Other influences on satisfaction (1). Performance, expectations and feelings can affect satisfaction, independent of disconfirmation d) Satisfaction or dissatisfaction are important to the learning process because they provide information (1). Satisfaction levels are subject to change (2). May not be transaction-specific (3). May be related to outside factors inconsequential to the transaction e) Marketing implications

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(1). Raising consumers’ expectations of how well a product or service will perform can increase ratings of product performance (2). One aspect of managing customer expectations is how many products to offer—the intuition that offering more choices is better can lead to unrealistic expectations that can not be met.

(3). Proving consumers with a good warranty or guarantee can create positive expectations and lead to satisfaction.

II.

Theories of consumer satisfaction A. Attribution theory 1.

In a marketing context, the consumer will attempt to find an explanation as to why a product or service does not fulfil his or her needs

a)

B.

Three key factors influence the nature of this explanation: (1). Stability (2). Focus (3). Controllability b) Marketing implications (1). Attribution theory can provide guidance on how to deal with potential or existing perceptions of consumer dissatisfaction (2). If dissatisfaction is real and permanent, something must be done to correct problems or provide restitution (3). If dissatisfaction is perceived, marketers can correct misperceptions Equity theory a) Examines the exchange between a buyer and a seller b) The buyer must perceive that there is fairness in the exchange c) Marketing implications (1). When consumers perceive that their inputs and outputs are equitable in relation to those of the seller, satisfaction results (2). Salesperson-customer interactions and promotions can affect consumers’ perceptions of fairness in an exchange d) Marketing implications (1). Marketers should make sure that consumers’ feelings of product offerings are as positive as possible, such as by using promotions.

(2). Businesses and nonprofits can build long-term relations by encouraging consumers’ involvement and identification with the organisation.

(3). Knowing that dissatisfied consumers may feel stress, companies can aid the coping process by providing feedback mechanisms and expert advice.

III. Responses to dissatisfaction A. Complaints 1. Indicate marketing-related problems that need attention 2. When complaints are likely to occur a) When motivation, ability and opportunity are high

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b)

When the level of dissatisfaction, severity of problem or perception of unfairness of the exchange increases 3. Marketing implications a) A large percentage of consumers do not complain, but it is in the marketer’s best interest to be responsive when they do b) Sometimes complaining should be encouraged because problems can be corrected and valued customers retained B. Responding by negative word of mouth 1. Negative WOM is more likely to occur when the problem is severe, consumers are unhappy with the company’s responsiveness and consumers perceive the company is at fault 2. Negative WOM tends to be highly persuasive and very vivid and consumers place great emphasis on it when making decisions 3. Marketing implications a) Marketers need to respond to negative WOM by trying to identify the reason or source of the difficulty so steps can be taken to rectify or eliminate the particular problem IV. Is customer satisfaction enough?

A. Customer satisfaction may not be enough to prevent defections to competitors’ brands B. Customer-retention strategies attempt to build customer commitment and loyalty 1. Marketing implications a) Marketers should take the following steps to retain customers (1). Care about customers (2). Remember customers between sales (3). Build trusting relationships (4). Monitor the service-delivery process (5). Provide extra effort V. Post-decision dissonance and regret A. Dissonance 1. Uncertainty as to whether one made the right decision 2. Most likely to occur when there is more than one attractive alternative and the decision is important B. Regret 1. Occurs when consumers perceive an unfavourable comparison between the performance of the chosen option and the performance of unchosen options C. Marketing implications 1. By reducing post-decision dissonance and regret, marketers can diminish negative feelings related to the product or service V. Is customer satisfaction enough?

A. Customer satisfaction may not be enough to prevent defections to competitors’ brands B. Customer-retention strategies attempt to build customer commitment and loyalty 1. Marketing implications a) Marketers should take the following steps to retain customers (1). Care about customers (2). Remember customers between sales

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(3). Build trusting relationships (4). Monitor the service-delivery process (5). Provide extra effort C. Consumers, after having made their choice or decision, often require closure.

1. One way to cope with lack of closure is by re-evaluating the choice after making it.

2. Another way is for consumers to engage in other activities and re-direct attention away from the choice they just made.

D. International considerations in consumer behaviour 1. Consumers with interdependent self-construals experience more post-choice dissonance and engage in more decision justification compared to consumers with independent self-construals.

VI. Learning from consumer experience A. A model of learning from consumer experience 1. Consumers can learn from experience by engaging in hypothesis testing a) On the basis of past experience or on information from some source b) Consumers form a hypothesis or expectation about a product or service, consumption experience, or disposition option, and then set out to test it c) Four basic stages in testing hypotheses for learning (1). Hypothesis generation (2). Exposure to evidence (3). Encoding of evidence (4). Integration of evidence and existing beliefs B. What affects learning?

1. Motivation a) When consumers are motivated to process information, they will generate a number of hypotheses; when motivation is low, few or no hypotheses will be generated 2. Prior knowledge or ability a) When knowledge or ability is high, consumers are likely to have welldefined beliefs and expectations and therefore will be unlikely to generate new hypotheses 3. Ambiguity of the information environment or lack of opportunity a) Experience does not provide information that confirms or disconfirms the hypothesis 4. Processing biases a) Inhibit learning by making consumers avoid both negative and highly diagnostic information b) Types of processing biases (1). Confirmation bias (2). Overconfidence bias 5. Marketing implications

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a)

b)

c)

Ambiguous information and processing biases often inhibit consumer learning about products and services, which have important strategic marketing implications Top-dog strategies occur when a product or service is the market leader or has a strong share (1). Consumers will tend simply to confirm beliefs and expectations, so consumers are less likely to learn new information that will lead to brand switching Underdog strategies occur when lower-share brands have everything to gain by encouraging consumer learning because new information may lead to switching (1). Underdogs need to facilitate comparisons with the market leader (2). Facilitating product trials is crucial

VII. Disposition A. The many ways we can dispose of something 1. Disposition is the simple throwing away of meaningless or used-up items without any thought 2. Possessions may be an extension of self, thus complicating disposition decisions 3. Disposition may be temporary or voluntary 4. When a possession is no longer of use, consumers can: a) Give it away b) Trade it c) Recycle it d) Sell it e) Use it up f) Throw it away g) Abandon it h) Destroy it B. Disposing of meaningful objects 1. Physical detachment is the process in which an item is physically transferred to another person or location 2. Emotional detachment is a more lengthy, detailed and sometimes painful process 3. Marketing implications a) Disposition decisions often influence later acquisition decisions b) Consumers increasingly choose to sell or trade old items rather than throw them away c) Disposition behaviours can sometimes have a major impact on society in general, as with anti-litter campaigns d) Disposition patterns can sometimes serve as economic indicators C. Recycling 1. Motivation to recycle a) Consumers are more likely to recycle when perceived benefits outweigh costs 2. Ability to recycle a) Consumers are more likely to recycle when they know how to do it

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3.

Opportunity to recycle a) If recycling procedures are difficult, consumers will usually avoid doing it 4. Marketing implications a) Marketers can facilitate recycling by increasing consumers’ motivation, ability and opportunity to recycle b) All three (motivation, ability and opportunity) work together to determine recycling behaviour. A consumer may be motivated to recycle but not have the ability or opportunity to do so QUESTIONS FOR REVIEW AND DISCUSSION Possible answers are as follows.

1.

What are the three types of expectations regarding the performance of a consumer product or service?

Equitable performance expectation is met when the product or service meets functions or operates as it should. Ideal performance expectation is met when the product or service meets a consumer’s ideal expectations about its performance. The mixer meets ideal performance expectation when a consumer ideally. Finally, expected performance expectation is met when the product or offering matches what consumers expected of it.

2. How can the expectation disconfirmation paradigm produce either satisfaction or dissatisfaction?

Consumers often have certain expectations about a product. When the performance of the product is below expectations, this is negative disconfirmation, in which case consumers are unsatisfied. But when the performance exceeds expectations, this is also an example of disconfirmation – specifically, positive disconfirmation – and consumers are satisfied.

3. Define attribution theory and equity theory and explain how they relate to dissatisfaction.

Attribution theory demonstrates how individuals explain events. It is based on the factors of stability, focus and controllability. If the cause of the dissatisfaction with a product or service is permanent, marketer related, and under the marketer’s control, then consumers will likely be dissatisfied with the consumption experience. If, for example, the dissatisfaction is not seen as the fault of the marketer, happens very rarely, or is out of the control of the marketer, then consumers are less likely to be dissatisfied with the product or service. Equity theory is a theory that focuses on the fairness of exchanges between individuals. If consumers perceive inequity in the exchange that does not benefit the consumer, dissatisfaction will likely occur. Fair exchanges, as defined by the consumer, likely lead to satisfaction with the exchange.

4. What is the role of feelings in influencing satisfaction and dissatisfaction?

Feelings are a part of the acquisition, usage and disposal process. Feelings after consumption and or disposal contribute to an evaluation. In some cases, a feeling of regret, or buyers’ remorse, can work alongside dissatisfaction. In other cases, a feeling of buyers’ remorse can work with satisfaction, in that the consumer regrets not buying more of the offering that they were very satisfied with.

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Marketers should make sure that customers’ feelings about trying, buying and using the products are positive so that they positively impact satisfaction and negatively impact dissatisfaction.

5. What influence can experienced emotions and mispredictions about emotions have on consumer satisfaction or dissatisfaction?

The emotions consumers experience when using a product can definitely affect whether they are satisfied with a purchase. Consumers often make an affective forecast, predicting how they will feel when consuming a product. If the actual experience does not equal the affective forecast, consumers may feel a level of dissatisfaction.

6. Why is complaining important to marketers and how should complaints be handled?

Marketers should make sure that customers’ feelings about buying and using their offerings are as positive as possible. Customer satisfaction leads to repeat purchase, brand loyalty and positive word of mouth. If the customer is dissatisfied, the marketer must seek to correct the problem as soon as possible in order to lower post-decision dissonance and regret and diminish any negative feelings related to the product or service. Solving a customer problem quickly and completely helps consumers develop a positive attitude and to feel better about the purchase.

7. How does post-decision dissonance differ from post-decision regret and what effect do these have on consumers?

Post-decision dissonance and regret are a matter of degree. Dissonance is the feeling of anxiety or uncertainty that the correct decision was made. Regret is a stronger feeling that one has made the wrong purchase decision. Dissonance has a better chance to be contained by a marketer as they attempt to reduce this feeling of uncertainty. Regret is likely to have a stronger, longer-lasting negative effect on the consumer.

8. Describe how consumers acquire information about goods and services by learning from their experiences with the commodities.

Consumers must be motivated to learn from their experiences. There also must be as much information as possible so there isn’t a lack of information for consumers to learn.

Consumers should also avoid confirmation bias and overconfidence because they inhibit their learning. However, consumers who have prior knowledge about a certain product may be less likely to learn about new commodities because their previous knowledge can inhibit their learning.

9. In what eight ways can consumers dispose of something?

To dispose of an item, consumers can give it away, exchange it for something else, recycle it, sell it, use it up, throw it out (socially acceptable), abandon it (socially unacceptable) or destroy it.

10. Why is it important for marketers to consider both physical and emotional detachment aspects of consumer disposition?

Disposition decisions often influence later acquisition decisions because a consumer who decides to dispose of a particular item often acquires another. In addition, product disposition behaviours can sometimes have a major impact on society in general. Finally, by examining broad disposition patterns, we can gain marketing insights that might not

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otherwise have been possible. In short, possessions can define an individual and the emotional detachment may be a more extensive process than the physical separation.

CONSUMER BEHAVIOUR CASE Uber: turning satisfaction into a two-way street In recent years a new economy has emerged. It has been termed the sharing economy, and looks to unlock the value of sharing resources through collaborative consumption.

Why not share your home while you are away on holidays, or share your car while you’re not using it? The rise of these ‘peer-to-peer services’ is, more often than not, facilitated by online platforms. One of the most successful names in the sharing economy for accommodation is Airbnb. Specialising in ‘home sharing’, Airbnb caters to people looking to share all or part of their homes for short-term stays, as well as to people looking for lower-cost authentic accommodation options. Those sharing their home are termed ‘hosts’. After a stay guests are prompted to rate the host and their accommodation offering. Similarly, hosts rate their guests, contributing towards Airbnb’s user-based system of quality control.

Accommodation is just one market where this trend of collaborative consumption is taking place. Another rapidly growing market is transport. Ride-sharing services, whereby individuals transform their private cars into common resources, are taking market share from traditional transport providers such as taxis. The most widely recognised facilitator of ride-sharing is Uber, which is now available in 35 countries globally. Established in San Francisco in 2009, it first launched in Australia in 2012.

Despite a number of legal hurdles, the ride-sharing app has now been downloaded by over one million Australian consumers, and is adopted predominantly by those within the 24–35 years’ age bracket.

In contrast to traditional taxi services, Uber harnesses technology in order to keep customers more informed. There is no longer a need to hail a taxi from the street or wait in a taxi rank. The Uber app is designed to facilitate ‘mobile hailing’ from wherever you may be located. The Uber app interface is easy to use, allows customers to split bills and pay via a pre-registered credit card, eliminating the need for cash or card processing facilities. Another differentiating characteristic is the increased transparency of the Uber service. Upon requesting and booking an Uber ride, customers are provided with the cost upfront, which is dynamic, based on supply and demand of available rides. In addition, they are given the drivers name, contact details, car make and model, registration details, as well as their driver’s star rating out of 5. By leveraging GPS technology and Google maps, customers can view in real-time the approach of their ride and the route their driver is taking.

When a person is looking to become a driver for Uber they are encouraged to follow a set of service delivery principles, including being friendly to customers, accepting a certain percentage of ride requests and offering added service flourishes such as mints and bottled water to Uber customers. All of these principles are aimed at increasing customer satisfaction and in turn increasing the drivers’ service rating.

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A key differentiating feature of Uber from traditional taxi services is the mandatory completion of driver and customer feedback. The Uber service is a democracy, whereby at the end of the service delivery the customer is prompted by the Uber app to rate their satisfaction with the driver, and the driver must rate their satisfaction with the customer. If a customer receives a poor rating for one reason or another, this will potentially discourage Uber drivers from accepting future ride requests from this customer, the same applying for drivers.

Where customer satisfaction is critical to business success, Uber take feedback seriously, intervening with a driver should their rating drop below a certain level. By encouraging customers to get to know their Uber drivers, Uber is actively building strong emotional bonds between the service participants which enhance the satisfaction and loyalty of both parties.

CASE QUESTIONS 1. How does Uber influence customer satisfaction expectations?

Uber recognise that expectations are an important determinant of satisfaction. If actual performance meets customer expectations, satisfaction occurs. Customers’ expectations are influenced by the provision of transparent service information including driver details, car details, past driver ratings, real-time tracking and an expected pickup time.

2. How are Uber drivers encouraging positive disconfirmation?

In order for positive disconfirmation to occur, the Uber service needs to exceed customers’ satisfaction expectations. One means of encouraging positive disconfirmation is by offering complimentary mints and water to Uber customers; an added feature that is not part of the core service.

3. Relate Uber’s feedback feature to the coping process.

Unlike traditional taxi services, Uber service feedback is mandatory. This defining feature of the service aids the coping process by making available a channel through which customers and drivers can express satisfaction or dissatisfaction.

4. How is Uber putting equity theory into practice?

Uber operates not unlike a democracy, where all participants involved in the service are equal. It is no longer a case whereby the customer is always right. Drivers can rate their satisfaction with the customer just as customers can rate their satisfaction with the driver. This two-way feedback aligns with equity theory, whereby consideration is given of the outcome for both seller and buyer.

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SUGGESTED EXERCISES AND TEACHER GUIDELINES 3. Pick five durable or nondurable product or service categories. Develop a set of questions to ask consumers to tell (1) how satisfied they are with the offerings in each category, (2) recall any instances when they have been dissatisfied in the past, (3) indicate how they dealt with the situation when they were dissatisfied, and (4) identify how they felt about the company or retailer response (if any). Administer this questionnaire to at least 15 consumers. Based on the data, try to answer the following questions: (a) With what types of products or services are consumers most satisfied? (b) For what products or services are consumers most dissatisfied? Why do you think this is the case? (c) What are the most common responses to dissatisfaction? (d) How well have the companies handled dissatisfaction?

Ask students to consider different avenues of interacting with companies when a state of dissatisfaction occurs (e.g., internet, in person, telephone, mail). What effects do the different avenues have on the consumer’s evaluation of the attribution process? Does speaking with an individual reduce dissatisfaction? Does a prompt email from the company reduce dissatisfaction? Can complaints be solved via email, or is it better for companies to contact the consumer personally?

4. Interview two marketing professionals (from different companies), either by phone or in person. Ask them to describe in detail (1) how important satisfaction/dissatisfaction is to their business, (2) how they try to generate satisfaction, and (3) what kinds of experiences they have had with dissatisfied consumers and how they handled these problems. Summarise your findings for each topic.

Again, students who have worked in the customer service field should be able to amply supply dynamic discussion material on this topic. Ask them to couch their responses in terms of the attribution theory and/or the equity theory to illustrate their applications.

Did they ever have an angry customer who was being unreasonable? How did they handle the situation? Was the consumer’s complaint based on attribution or equity theory?

5. Pick five durable and five nondurable products. Develop a set of questions to determine how consumers disposed of each product the last time they needed to do so. Administer the questionnaire to at least ten consumers. Summarise the responses and answer the following questions: (a) For each product category, which are the most frequently used methods of disposition? (b) Which product categories are most alike in terms of disposition patterns? Why? (c) Which product categories are most dissimilar in terms of disposition patterns? Why? Remind students to refer to the chapter exhibit for a thorough representation of the different methods of product disposition. Challenge students to come up with pertinent examples of each of these different disposition approaches.

6. Make an inventory of at least 30 of your possessions. For each, indicate when and how you plan to dispose of it. Also, provide detailed reasons for this behaviour. Then summarise this information, and answer the following: (a) Which possessions will be the easiest to dispose of and why? (b) Which possessions will be the hardest to dispose of and why? (c) What are your most frequent disposition options and why?

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Since disposition decisions often influence later acquisition decisions, it is important to understand this often-overlooked phase of the consumer behaviour process. How might the students’ disposition behaviour change in the future due to advances in technology?

How have disposition behaviours changed during the students’ lifetimes?

SUGGESTED INTERNET EXERCISES WITH SAMPLE ANSWERS Goodwill Industries The motivation, ability and opportunity of consumers to sell, donate or trade items they already own has changed with the advent of online technology. Even venerable non-profit organisations like Goodwill Industries (www.goodwill.org/page/guest/about) use the internet to inform and persuade consumers concerning the disposition of their possessions.

Visit Goodwill’s website and search for ways in which the site may influence consumers’ disposition activities. What benefits to consumers and to society does the organisation’s website emphasise?

Instructor notes Goodwill Industries’ website reminds consumers of the organisation’s mission: job training and placement for people with disabilities and other disadvantages relative to work.

Consumer donations of used products fuel the organisation. Its trainees gain skills by repairing or refurbishing donated items; working in Goodwill’s retail operations; or providing staff or clerical support. The sale of donated items provides revenue for the organisation’s ongoing operations.

The website emphasises that consumers benefit from donating to Goodwill because the value of their donations is tax-deductible. Goodwill also facilitates consumers’ processes of physical detachment from possessions for which they have no further use (or have difficulty storing, using or disposing of by other means) with ubiquitous donation centres. The website provides a toll-free telephone number and a map with address links for locating the nearest Goodwill facility, guidelines for donating, and information about tax deductions for charitable contributions. Consumers who are interested in purchasing used items may visit nearby Goodwill retail facilities or may shop online at ShopGoodwill.com.

Certainly Goodwill’s site focuses on the organisation’s benefit to society as well as to consumers. Its original and continuing mission improves the lives of some of society’s most disadvantaged members, which benefits society directly. Indirectly, Goodwill also benefits society by changing potential tax consumers (for example, recipients of government disability and welfare programs) into taxpayers.

Additional uses This exercise also relates to concepts in the following chapters: •

Chapter 5, Attitudes and Persuasion (influencing attitudes about donation to Goodwill)

•

Chapter 7, Judgement and Decision Making (impact of normative tactics or brand familiarity on consumers’ decision to donate to, or shop at, Goodwill)

•

Chapter 11, External and Internal Influences on Consumer Behaviour (impact of social class and income on donation and consumption behaviour regarding Goodwill, and psychographic profile of Goodwill donors and supporters).

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Discussion idea What marketing tactics can Goodwill implement to help consumers to detach from items to which they have a strong emotional attachment? Possible answers might include: •

Powerful marketing messages about the altruism of donation

•

Persuasion to identify with Goodwill’s mission, enabling consumers to donate

•

Providing simple and convenient ways to donate (home pick-up of donated items, for example)

•

Sending messages of appreciation after donation, to reduce post-decision dissonance

ADDITIONAL DISCUSSION QUESTIONS WITH SAMPLE ANSWERS These discussion questions can be used as in-class activities or as thought questions that the students consider while reading the chapter or to test their understanding of the material after the reading and lecture are complete.

1. Define and discuss the four primary post-decision processes.

The first process a consumer may experience is post-decision dissonance: the anxiety a consumer may feel after a purchase. Dissonance is greater when the purchase is more costly, is made less often, is riskier, and is more public, or when the item lasts longer.

The second process is post-decision learning. Here the consumer learns about a product by using it. A consumer is more likely to be receptive to information acquired during acquisition, consumption and disposition than earlier information because this earlier information often is viewed as a sales tactic. Information gained through experience also is more vivid and easier to remember.

Satisfaction/dissatisfaction is the third process. Consumers determine their level of satisfaction by comparing their expectations of a purchase process with the actual purchase situation. In the expectancy-disconfirmation model, the consumer will be satisfied if the experience is equal to or better than the expectation; the consumer will be dissatisfied if the experience is less than the expectation.

The final process is disposition: how a consumer parts with an object. He or she may give it away, sell it, use it up, abandon it, etc. Disposition is influenced by the consumer’s motives, situational and product-related facts, and the value and meaning of the product.

2. What steps can a consumer take in response to dissatisfaction? What is likely to be the outcome of each choice?

A consumer can choose to act or not. The majority of consumers (estimates are upwards to 95 per cent) do not complain. (a) Some will not act at all. (b) Others will not say anything to the firm but will spread their bad feelings through word of mouth.

Individuals in both of these situations are likely to remain dissatisfied because their issue with the product or service does not get resolved. (c) In addition, a consumer may just stop buying the product. Just like in examples (a) and (b), the firm has no way of knowing what the problem is and has no opportunity to resolve this issue. (d) Other consumers choose to react by complaining to the store manager or manufacturer. If this interaction has a positive outcome, the consumer may continue to use the product or

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even consider the experience satisfactory. (e) Some consumers may contact a watchdog group or government agency to complain or file a legal action. In these instances, the likelihood of the customer returning decreases significantly.

ADDITIONAL QUESTIONS 1. Is it possible to dissatisfy someone before they make a purchase? How? How can this situation be avoided?

2. Explain what makes service situations (such as airlines, hotels, doctors and restaurants) different from tangible products with respect to how they might generate dissatisfaction. Describe how dissatisfaction can be avoided or addressed in service situations (mention ways that are different from when you are working with a physical good).

3. Consider each of the three ways consumers make dissatisfaction judgements. How could each type of dissatisfaction emerge with respect to (1) a long-distance phone company, (2) a computer hardware maker, or (3) a university?

4. Knowing that consumers might respond to dissatisfaction in predictable ways, how can an organisation prepare to address such responses?

5. Describe how the following ‘underdogs’ would manage consumer learning: (a) PepsiCola, (b) Ford automobiles, and (c) Dell computers. Develop a similar explanation for each of the following ‘top dogs’: (a) Colgate toothpaste, (b) Carlton Draught or XXXX Gold beer, and (c) Compaq computers.

6. Develop a diagram showing how satisfaction and dissatisfaction occur through the disconfirmation paradigm by providing examples from your own experience.

7. Explain why marketers should or should not be concerned about negative word of mouth. Provide a plan for dealing with negative word of mouth for an offering of your choosing.

8. Describe three situations in which marketers should be concerned about disposition.

Explain what can be done to address these concerns.

9. Discuss the factors that are making disposition an increasingly important issue for marketers. Predict how these factors are likely to change in the future. Offer suggestions for dealing appropriately with this situation.

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EXPERIENTIAL EXERCISES AND CLASSROOM EXAMPLES Students who learn more readily through visual and tactile stimuli will benefit from the introduction of physical examples into the classroom.

1. ‘Spread the word’ exercise Have students visit the following consumer opinion and complaint websites to familiarise themselves with the resources available to dissatisfied consumers. Tell them to record two or three of the most extreme complaints they found on the sites and share them with the class. Discuss the implications to consumers and companies of these and other websites. www.epinions.com www.untiedproductreview.com.au 2. ‘From trash to treasures’ exercise Tell students to visit the Web’s largest auction site, www.eBay.com.au, and find five ‘recycled’ items of interest to them (e.g., a 1960s tuxedo for a Ken doll, a AC/DC ticket stub, a pair of Spice Girl platform sneaker sandals, a program from the Sydney Opera House). Ask students to explain why they chose the items they did. Discuss the effects on a product’s life cycle of online auctions specifically and the collectibles craze in general.

3. Service complaint/compliment Letter Ask students to consider their recent product/service purchase experiences. Have them select one of these experiences that was very memorable – in other words, choose an encounter with a product or service that definitely did not meet their expectations or greatly exceeded their expectations. Have them find the address/email address of the organisation that provided them with this memorable (positive/negative) experience, and compose a professional letter/email that provides the details of the experience, explains why the experience didn’t meet their expectations/greatly exceeded their expectations, explains how they feel the situation could be remedied/continued in the future, and make specific recommendations as to what the company might do to keep them as a valued customer. Make sure the student provides an avenue for the organisation to get in touch with them (phone number, return address, email, etc.).

CLASSROOM GROUP ACTIVITY Separating satisfaction from dissatisfaction: 15 Minutes I. Start up A. Purpose of the activity 1. This activity will give students an opportunity to apply the concepts of satisfaction and dissatisfaction in a brief classroom exercise B. What the instructor will do 1. The instructor will divide people into small groups, assign them a product for consideration and be available to coach and help the groups as needed 

These experiential exercises were contributed by Professor Sheri Bridges of Wake Forest University.

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C.

What the participants will do 1. The participants will work in small groups to brainstorm ideas for applying concepts from the chapter to specific brands. After a period of small-group discussion, they will make reports to the larger group D. Rules for this experience 1. Groups are to work separately from each other. Individuals should rely on their knowledge from the book and may refer to their notes and the book as necessary II. Experience A. Group up 1. Have students form groups of no more than five. This exercise will work in groups of any size; however, room restrictions that do not allow for moving furniture may make group work more difficult B. Assign brands 1. Each group should be assigned a single brand on which to focus a) Consider using local brands, including both products and services b) Consider using brands that are not the leaders in their categories (i.e., not Bundaberg or Hungry Jack’s). c) Consider bringing samples of the brands to the class for students to study and review in their groups (e.g., a box of crackers, a candy bar, a cola can).

C. Specific actions for groups 1. The groups are responsible for analysing how the offering might lead to dissatisfaction on the part of consumers. Then they are to discuss how the organisation could alleviate the likelihood of this occurring and be prepared in case it does occur a) What might lead consumers to experience dissatisfaction with this product? b) How can the organisation plan so that these sources of dissatisfaction can be eliminated? c) What would you propose be done to address consumer dissatisfaction when it occurs for this brand?

2. Large-group discussions a) First, have groups present their ideas about the first question and then proceed to discuss each of the subsequent questions b) If there are many groups, share the discussion among all groups, though not all groups may answer all of the questions III. Debrief and unveil concepts A. Discuss the activity itself 1. The purpose of this discussion is to allow students to express what they felt about the experience itself.

2. Ask students to describe their experiences of doing the activity a) Likes and dislikes about what just happened b) How they felt during the experience c) What is realistic, unrealistic about the exercise? d) What will be different when they do this for their own brand?

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B.

Discuss the content of the experience 1. The purpose of this discussion is to ensure that students ‘take away’ important learning points 2. Ask students to describe the important points the experience teaches a) The role of dissatisfaction in the consumer experience b) The organisation’s responsibility to prevent dissatisfaction and address it when it arises 3. Use the chalkboard to record student responses a) Write down their ideas as they are presented b) Concentrate on the principles being discussed rather than the examples being used c) Help them to see the interrelationships among their responses IV. Execute A. Apply what has been learned.

1. Lead a discussion on how the concepts can be applied in organisations. a) What barriers may be faced in applying the concepts from the exercise? b) What can be done to help others understand the concepts when you use them at work?

B. Transfer and use the knowledge.

1. Encourage students to make a record in their notes about how they will use the ideas in the workplace.

2. Even if they do not have a specific job, how will they remember to use what they have learned?

USEFUL WEBLINKS Product Review http://www.productreview.com.au/ An Australian-based website that allows customers to post reviews and complaints of local product offerings, often useful for consumers prior to making purchases.

Australian Competition and Consumer Commission http://www.accc.gov.au/ The federal government agency helps consumers understand their consumer rights before, during, and after making a purchase.

CHOICE www.choice.com.au Australia’s leading advocacy group provides opinions and reviews on popular product offerings. Online version of the Australian Consumers Association’s magazine.

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Social Influences on Consumer Behaviour

CHAPTER SUMMARY Reference groups are part of a general set of influence sources – those that are marketer dominated and non-marketer dominated and those that are delivered through the mass media and personally. Non-marketer-dominated sources are often regarded as more credible than marketer-dominated sources, and personally delivered information generally involves less reach, but more capacity for two-way communication than mass-media sources.

Opinion leaders and market mavens represent special sources of influence. Opinion leaders are experts in a product category; market mavens are individuals involved in the marketplace in general. Given their potential to serve as brokers of information, marketers may target these individuals explicitly or simulate opinion leaders in marketing communications. Opinion leaders can also be important by providing symbolic meanings to products and brands.

Consumers are members of groups, and these groups can have tremendous influence on consumer behaviours. Reference groups are sets of people with whom individuals compare themselves to guide their attitudes, knowledge, and/or behaviours. We have aspirational, associative and dissociative reference groups, which can be described according to their degree of contact, formality, homophily, density, degree of identification and tie-strength.

Brand communities are particular types of associative reference groups. Reference groups may play a powerful socialising role, influencing key actions, values and behaviours of consumers. Marketers can take advantage of reference-group types, characteristics and socialising influences by associating products with aspirational reference groups, accurately representing associative reference groups, targeting formal reference groups, targeting dense networks and making use of weak ties to build customer networks.

Sources of influence can create normative and/or informational influence. Normative influence may create effects like brand-choice congruence, conformity, compliance and reactance. Normative influence tends to be greater for products that are publicly consumed, considered luxuries, or regarded as a significant aspect of group membership. Normative influence is also strong for individuals who tend to pay attention to social information.

Strong ties and the extent to which consumers identify with the group also increase the likelihood that consumers will succumb to normative influences. Finally, normative influence is greater when groups are large and cohesive, when members are similar and/or experts and when the group has the power to deliver rewards and sanctions.

Informational influence operates when individuals affect others by providing information.

Such information, in turn, may greatly affect consumers’ search and decision-making.

Consumers are more likely to seek and follow informational influence when products are

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complex, when product purchase or use is regarded as risky and when brands are distinctive. The more the influencer is regarded as an expert, the less the consumer’s knowledge and confidence, and the more consumers are predisposed to listen to information from others, the greater the informational influence. Informational influence is also greater when groups are cohesive.

Social influence, whether normative or informational, varies in valence (whether information is positive or negative) and modality (whether information is communicated verbally or non-verbally). Negative information should be avoided as much as possible because it is communicated to more people and given greater weight in decision making than positive information. Marketers are particularly interested in word-of-mouth (WOM) information – both positive and negative. Strategies may be designed to identify, target and reward individuals who serve as positive WOM referral sources. Sources of negative information, such as rumours, might also be targeted.

CHAPTER LEARNING OBJECTIVES After studying this chapter, students will be able to: 1. explain the main sources of social influence and their delivery methods, as well as

how these are important to marketers; and highlight the types and characteristics of reference groups and how each can affect consumer behaviour 2. explain normative influence and how marketers can use it for more effective marketing, as well as the different types of informational influence and the importance of word of mouth for marketing.

CHAPTER OUTLINE I. Sources of influence A. Marketing and non-marketing sources 1. Marketing sources delivered via mass media a) Include advertising, sales promotions, publicity and special events 2. Marketing sources delivered personally a)

B.

Include salespeople, service representatives and customer service agents

Non-marketing sources delivered via mass media a) Can also yield great influence, may have less bias, example- consumer blog 4. Non-marketing sources delivered personally a) Word-of-mouth communications from friends, family, neighbours, casual acquaintances and even strangers 5. Marketing and non-marketing sources delivered via social media a) Facebook, Twitter, YouTube, Pinterest have a mass reach but more personal feel How do these general sources differ?

1. Reach a) Number of consumers exposed to the message 2. Capacity for two-way communication 3.

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a)

II.

Personally delivered sources of influence provide a two-way flow of information and are more vivid and thus persuasive 3. Credibility a) Information delivered through marketing sources tends to be perceived as less credible, more biased and manipulative b) Non-marketing sources appear more credible because they are not perceived as having a vested interest in our decisions to acquire, use or dispose of an offering 4. Marketing implications a) To the extent possible, it is helpful to have non-marketing sources promote the marketer’s offering in order to enhance credibility b) Marketing efforts may be more effective when personal information sources are used to enhance two-way communication c) A mix of complementary sources of influence can enhance impact C. Opinion leaders 1. What are the characteristics of opinion leaders? a) Tend to learn a lot about products b) Heavy users of media like newspapers, TV, radio and magazines c) Tend to buy new product variants when they are first introduced to the marketplace d) Found to be self-confident, gregarious and willing to share productrelevant information e) Opinion leaders are part of the general category of gatekeepers, people who have influence on what information is disseminated 2. Why do people become opinion leaders? a) They have an intrinsic interest in and enjoyment of products b) May share information because it puts them in a position of power c) May believe their actions will help people 3. Why do opinion leaders have influence? a) Generally have no vested interest in whether consumers actually heed their opinions, therefore opinions regarded as unbiased and credible b) Regarded as having knowledge relevant to consumers’ acquisition, usage and disposition options D. Marketing implications 1. Because of the impact opinion leaders have, one marketing implication is to target them directly 2. Opinion leaders may be used in marketing communications 3. Marketers can target consumers and ask them to refer to a knowledgeable opinion leader Reference groups as sources of influence A. Types of reference groups 1. Aspirational reference groups a) Groups that we admire and wish to be like but are not currently a member of 2. Associative reference groups a) Groups we do belong to 3. Dissociative reference groups

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B.

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Groups whose attitudes, values and behaviours we disapprove of and that we do not wish to emulate (Jersey Shore for example) 4. A brand community is a special type of associative reference group with a structured set of relationships involving a particular brand, fellow customers of that brand and the product in use 5. Marketing implications a) If marketers know their target consumers’ aspirational reference groups, they can associate their product with that group and/or use spokespeople who represent it b) Marketers need to accurately represent associative reference groups in their ads by reflecting the clothing, hairstyles, accessories and general demeanour of the groups c) Marketers can create a brand community which is a social group sharing a specialised interest in the product d) Dissociative reference groups should be avoided in marketing communications Characteristics of reference groups 1. Degree of contact a) Reference groups with whom we have a great deal of contact tend to exert the greatest influence b) Primary reference groups are those groups with whom we have face-toface interaction c) Secondary reference groups are those with whom we do not have direct contact but whose behaviour may still influence us 2. Formality a) Formally, structured groups have rules outlining criteria for membership and the expected behaviour of members 3. Homophily: the similarity among group members a) When reference groups are homophilous, reference-group influence tends to be strong 4. Group attractiveness a) The more attractive a group is to one, the stronger the intention to conform 5. Density a) The degree to which all members know each other 6. Degree of identification a) The degree to which an individual feels he or she belongs in a group 7. Tie-strength a) The strength of the relationship connecting members within a group 8. Marketing implications a) Marketers must understand how information is transmitted among and between groups of consumers b) Formal reference groups provide marketers with clear targets for marketing efforts c) Homophilous consumers are targeted with information about similar products

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d)

Sometimes it makes sense to target the network itself as opposed to individual consumers e) Weak ties can serve as ‘bridges’ by transporting information between groups (1). An embedded market is a market in which the social relationships among buyers and sellers change the way the market operates C. Reference groups affect consumer socialisation 1. Consumer socialisation refers to the process by which we learn to become consumers 2. People as Socialising agents a) The impact of reference groups as socialising agents can change over time 3. The media and the marketplace as socialising agents a) Media communications and consumer goods can be seen as contributing in positive or negative ways to consumer socialisation III. Normative influence A. How normative influence can affect consumer behaviour 1. Brand-choice congruence and conformity a) Brand-choice congruence is the likelihood that consumers will buy what others in their group buy b) Conformity is the tendency for an individual to behave as the group behaves 2. Compliance versus reactance a) Compliance involves doing what someone asks us to do b) Reactance is doing the opposite of what the individual or group wants us to do c) The boomerang effect occurs when we believe our freedom is being threatened 3. Social-relational theory a) The way people interact with others depends on whether there are any shared rights or responsibilities, whether there is any reciprocity and if there are differences in status or authority between the individuals. If any or all of these exist, they create ‘norms’ that guide behaviour B.

What affects normative influence strength?

1. Product characteristics a) A reference group affects whether we buy a product and what brand we buy b) Reference groups have little influence on whether we buy necessity items, but may have an effect on whether we buy a luxury item c) Products consumed in public give others the opportunity to observe what brand we have purchased d) Normative influence is affected by the significance of the product to the group 2. Consumer characteristics a) Some consumers have personalities that make them more susceptible to the influence of others

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Attention to social comparison information is related to normative influence c) Tie-strength affects the degree of normative influence d) Normative influence is also affected by a consumer’s identification with a group 3. Group characteristics a) Coercive power is the degree to which a group has the capacity to deliver rewards and sanctions b) Group cohesiveness and similarity also affect the degree of normative influence by allowing for communication and interaction on a regular basis c) Normative influence tends to be greater when groups are large and when group members are experts C. Marketing implications 1. It may be possible to create normative influence by using advertising to demonstrate rewards or sanctions that can follow from product use or nonuse 2. Marketing organisations may create groups whose norms guide consumers’ behaviours 3. Companies can use normative influences to encourage referrals from current customers 4. Marketers may attempt to create conformity pressures 5. Marketers use compliance techniques a) The foot-in-the-door technique suggests that compliance is enhanced by getting an individual to agree first to a small favour, then a larger one, then an even larger one b) With the door-in-the-face technique, the consumer is first asked to comply with a very large and possible outrageous request, followed by a smaller and more reasonable request c) With the even-a-penny-will-help technique, individuals are asked to provide a very small favour; because the people would look foolish denying the request, they usually comply and give an amount appropriate for the situation 6. Asking consumers to predict their behaviour increases the likelihood that they will actually behave in the stated manner 7. Marketers need to make sure consumers believe they have freedom of choice 8. Use expert service providers who are similar to target consumers IV. Informational influence A. How informational influence can affect consumer behaviour 1. It can affect how much time and effort consumers devote to information search and decision-making 2. It is important for marketers to increase the likelihood that consumers engage in information search, especially if the product is new and superior B. Factors affecting informational influence strength 1. Product characteristics

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a)

C.

D.

E.

Consumers tend to be susceptible to informational influence when the product is complex b) Informational influence is likely to be high when product purchase and/or usage are perceived to be risky c) Informational influence is also likely to be high when brands on the market are very different from one another 2. Consumer and influencer characteristics a) Informational influence is greater when the source communicating the information is regarded as an expert b) Personality traits, such as consumers’ susceptibility to reference-group influence and attention to social comparison information, influence the extent to which consumers look to others for cues on product characteristics c) Informational influence is also affected by tie-strength and culture 3. Group characteristics a) Group cohesiveness affects informational influence, with cohesive groups having greater opportunity and motivation to share information Marketing implications 1. Since source expertise and credibility affect informational influence, marketers can use sources regarded as experts and/or those regarded as credible for a given product category 2. Informational influence may be enhanced if marketers can create a context for informational influence to occur 3. Marketing efforts may be most successful when both normative and informational influences are used Descriptive dimensions of information 1. Valence: is information positive or negative? a) Valence describes whether the information is positive or negative b) Negative information is more likely than positive information to be communicated c) People may pay more attention to negative information and give it more weight 2. Modality: does information come from verbal or non-verbal channels? a) Modality describes whether information is communicated verbally or nonverbally b) Informational influence can be delivered verbally or nonverbally The pervasive and persuasive influence of word of mouth 1. Word of mouth (WOM) is pervasive and refers to information about products or services that is communicated verbally 2. WOM is more persuasive than written information and more effective than other media 3. WOM can have unexpected or even negative effects, as in the case where it dilutes the uniqueness of a particular product offering, making it less special to certain groups of consumers 4. Online word of mouth a) Online forums, review sites, websites and email magnify the effect of word of mouth

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6.

7.

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Social media word of mouth a) Disseminates word of mouth through public messages and through messages visibly only to friends When is word of mouth important? a) When a decision is difficult, consumers are more likely to follow the advice of others because they need more information. As a result, Word of mouth can have a dramatic positive or negative effect on consumers’ product perceptions and an offering’s marketplace performance Preventing and responding to negative word of mouth a). Preventing negative word of mouth can be best accomplished by providing quality products and service b). Rectifying negative word of mouth can be accomplished by dealing with consumers’ dissatisfaction before more negative word of mouth occurs

QUESTIONS FOR REVIEW AND DISCUSSION Possible answers are as follows.

1. What are the major sources of influence and how do they differ?

The sources of influence differ in terms of their reach, capacity for two-way communication and credibility. Sources can be marketer-dominated, such as advertising, sales promotions, publicity, special events and salespeople or non-marketer-dominated like family, friends, acquaintances, news reports and professional reviews.

2. How does social media affecting social influence?

Social media create networks, with network implications of tie strength, consumer connections to other consumers and to brands and organisations. Social media may spread positive or negative eWOM about a company or brand. Marketers may buy ad space on social media sites to target lifestyle or life stage groups (e.g., brides, newlyweds, tennis players, etc.). Social media makes these consumer networks more apparent as to who are opinion leaders and who are influential individuals.

3. Why do companies sometimes target opinion leaders for marketing attention?

Opinion leaders have less bias than traditional advertising, because often they are a part of a consumer’s reference group. Opinion leaders exert influence often because they are highly involved in the product category or are popular. For instance, Serena Williams is an opinion leader in tennis; as a pro athlete, consumers care more about what brands she uses and likes (and dislikes) more so than an average person. Targeting such influential people (celebs or others) is a smart marketing strategy.

4. How does the strength of weak ties affect embedded markets?

Weak ties can serve as a ‘bridge’ between different groups. For example, you may not be friends with a certain individual in university, but both of you might be friends with Susan. Once you pass information along to Susan, she might pass this information onto the other individual. In some cases, word of mouth can spread faster and effectively.

Marketers can use weak ties to identify new networks for marketing efforts.

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5. What are the three types of reference groups and what characteristics define them?

Reference groups include aspirational, associative and dissociative. Aspirational reference groups are groups that we admire and desire to be like. Associative reference groups are groups to which we currently belong. Dissociative groups are groups that we do not want to emulate. Brand communities is a special type of associative reference group.

6. What are the two types of influence and how do they differ?

Normative influence is social pressure designed to encourage conformity to the expectations of others. Informational influence is the extent to which sources influence consumers simply by providing information.

7.

How might consumers respond to normative influence?

This type of influence implies that we will be punished if we do not follow the norms set by others and will be rewarded for performing the expected behaviours.

8. What three techniques can marketers use to encourage consumer compliance?

To encourage compliance, marketers attempt to use techniques such as the foot-in-thedoor, the door-in-the-face, and the even-a-penny-will-help approach. The foot-in-thedoor technique suggests that by getting a consumer to agree first to a small purchase, they are more likely to agree to a larger purchase. The door-in-the-face approach asks the consumer to comply with a very large or unreasonable request, and then presents a smaller and more reasonable request. The even-a-penny-will-help approach asks for a very small favour, one that is extremely difficult to turn away to gain an audience.

9. How does online and social media words of mouth influence consumer behaviours?

The proliferation of internet and online communities makes word of mouth easier to spread. For example, many consumers are part of online groups on Facebook and other social media where information about products, brands and companies can be easily shared. However, this can be both good and bad. While many marketers use social media to pass on information to many online individuals at the same time, what is shared is often out of their control – and negative information can also be shared and proliferated just as well and as quickly as positive information.

CONSUMER BEHAVIOUR CASE Celebrity endorsements go social Do celebrity endorsements really work? Surely as consumers we can recognise that the celebrity is being paid to endorse the particular product or service, which would in turn diminish its influence, right? The Oprah Effect is proof that they do work. After the highly influential TV host featured a book light and magnifier called the ‘Light Wedge’ on one of her episodes of the Oprah show, the company which averaged sales of $3700 per day made $90 000 in sales in a single afternoon. Oprah selected nineteenth-century novel Anna Karenina by Leo Tolstoy for her book club. The book skyrocketed to number 1 on USA Today’s best-selling book list shortly after.

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With the rise of social media channels, celebrity endorsements are now being reinvented for our digitally saturated society. Where they were once channelled through marketing mediums such as TV commercial spots and magazine advertisements, celebrity endorsements are taking the shape of sponsored tweets and Instagram product placements. Take the example of Charlie Sheen who tweeted ‘I’m looking to hire a #winning INTERN with #TigerBlood. Apply here…’ followed by a URL link to Internships.com. The tweet generated over 95 000 clicks, reached 181 different countries and resulted in 74 000 internship applications.

Unlike traditional advertising channels, social media channels are interactive, they have increased the word-of-mouth dynamic and provide consumers with what they believe is a more meaningful look into the personal life and feelings of a celebrity. Celebrity endorsements in social media are successful because the consumer feels an emotional connection with the celebrity. One of the most current and successful celebrity endorsers is Kim Kardashian, complimented by her sisters Khloe, Kourtney, Kylie and Kendall. Kim Kardashian has over 47 million Twitter followers and over 80 million Instagram followers, while her younger sister Kylie Jenner has over 72 million Instagram followers. Along with their reality TV show, the Kardashians harness social media to grant their audience what is perceived as an unfiltered glimpse into their private lives.

This perceived honesty makes their endorsements seem more credible, influencing consumers’ attitudes, intentions and behaviour towards product purchasing. The Kardashian sisters endorse an array of products, ranging from cosmetics and fashion labels, to tanners, jewellery brands, diet pills, waist trainers and false eyelashes. Their sponsored tweets are sometimes complimented by a #spon or #ad to indicate that it is endorsed, however their Instagram posts often feature no text at all which can lead the consumer to question whether they are doing it for pleasure or profit.

While sponsored tweets and celebrity endorsed Instagram product placements provide marketers with a lucrative opportunity to connect with their audience, today’s sceptical consumers are forcing advertisers to continuously ensure their chosen celebrity endorser is making a representation that appeals to the emotional side of consumers.

Beyonce became spokesperson for Michelle Obama’s ‘Let’s Move’ campaign for combating child obesity in 2011; however, the following year she endorsed Pepsi.

Celebrity endorsers hold persuasive power, created through consumers’ awareness and admiration for them. However there also must be an appropriate matchup of celebrity to product to increase the credibility of the source.

CASE QUESTIONS 1. What are the characteristics of the Kardashians that make them suitable as celebrity endorsers?

They have established themselves as opinion leaders and gatekeepers with considerable social influence. They are heavy mass media users and are willing to share product information. The Kardashians are infamous for their self-confidence – representing a certain image or ideal to consumers that listen and follow them.

2. Would you say that the Kardashians exert more normative influence or more informational influence? What affects the strength of their influence?

The Kardashians exert more normative influence than informational influence. The

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strength of their normative influence is increased by the choice of products they endorse. As the Kardashians are an aspirational reference group, they have more influence on consumption of a product when it is viewed as a luxury item. Kylie Jenner endorses high-end fashion labels and luxury cars, while Kim Kardashian endorses de Grisgono and Lorrain Schwartz diamonds. The Kardashians also endorse products that are consumed publicly – another product characteristic for which a reference group has increased normative influence.

3. How could Beyonce’s choice of product endorsements impact on her credibility?

By supporting a campaign that is directed around combating child obesity and then shortly after endorsing a brand like Pepsi which can be credited to contributing to child obesity, it makes her endorsements less trustworthy, as the two are highly conflicting.

SUGGESTED EXERCISES AND TEACHER GUIDELINES 1. Keep a word-of-mouth log for 24 hours. Document (a) what information you hear, (b) whether it is positive or negative, (c) what effect do you think it will have on your behaviour, and (d) why. Think about what implications the entries in your log have for marketers.

It is also important for students to consider the source of this word-of-mouth information. Was the other party part of an aspirational group? Associative reference group? Homophily and degree of contact may also significantly influence how quickly information is transmitted between consumers.

2. Take an entry in your word-of-mouth log (from Exercise #1) and try to track down the source of the information. Did the information flow within a relatively dense social network, or did it flow across social networks via weak ties? Try to diagram the nature of the information flow within and across various groups.

Have students comment on tie-strength of the relationship. Referring to Figure 9.7, have students draw the network of word-of-mouth information, indicating tie-strength and social influence.

3. Observe a salesperson trying to make a sale. Try to understand which aspects of his or her selling attempts represent informational influence and which represent normative influence. Was the salesperson successful in inducing a sale? Which concepts from this chapter may explain? Why or why not?

Informational influence is influence exerted by the salesperson that is affected by the characteristics of the product, the consumer and the influencer. Normative influence is thought of as social pressure designed to encourage conformity to the expectations of others. What would you recommend to improve selling? Again, some students may bring personal work experience examples that can be used in class to illustrate these concepts.

4. As a marketing manager for a new brand of diet hot chocolate, you want to use an opinion leader to stimulate sales of the brand. How might you identify an opinion leader, and what strategies do you have for using an opinion leader in your marketing communications program?

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Again, referring to Figure 9.7, students might attempt to draw a social network to identify an opinion leader for this group. Using the class as an example, you might ask students to draw a network for the class to identify opinion leaders.

5. You have recently learned that a lot of positive and negative information is being communicated about the new brand of diet hot chocolate. Should your strategy be to try to bolster the positive information or to stop the negative information? Why? Marketers should obviously be concerned about preventing negative word of mouth and rectifying it once it occurs. Quality offerings are the best way to prevent negative word of mouth. To rectify negative word of mouth, firms can try to deal with consumers’ dissatisfaction before more negative word of mouth spreads. Companies may be able to bolster positive information while slowing down negative information at the same time by responding to consumer complaints. Offering free goods and going the extra mile in a service recovery situation should help reduce negative information and increase positive information flow regarding your product.

SUGGESTED INTERNET EXERCISES WITH SAMPLE ANSWERS Ain’t It Cool?

No one knows a product category quite as well as an industry insider. That’s why many movie consumers go to Ain’t It Cool News (www.aintitcoolnews.com) for reviews by Harry Knowles, a quintessential Hollywood insider and self-appointed Movie Geek. Visit Harry’s website and check out the information provided there. Why is he regarded by many as an opinion leader? How well does Harry serve as an opinion leader for the average moviegoer?

To what demographic group does Harry appeal most?

Instructor notes Harry Knowles is a self-described Movie Geek who is acquainted with the movers and shakers in the motion picture industry, yet is removed enough from these influential people to be able to write amusingly of both the fun and the foibles of Hollywood.

Harry Knowles is an opinion leader concerning movies because of his enduring involvement with this entertainment product. He has seen and discussed more movies than most consumers will see in their lifetimes; his combination of expertise and informal prose provide a very different type of movie review than the visitor will find at other sources. Also, Harry’s reviews include links to comments about various movies submitted by average moviegoers; if the website visitor wants additional information from non-experts, he can find it at Ain’t It Cool News.

The website’s graphics, use of colour, choice of language and encouragement of visitor participation appeal most strongly to younger visitors. Today’s Generation Y and Generation X members are heavier consumers of movies than any other age groups, and Ain’t It Cool News effectively targets this demographic.

Additional uses This exercise also relates to concepts in the following: •

Chapter 4, Memory and Knowledge (schemas for movie reviews)

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•

Chapter 5, Attitudes and Persuasion (impact of communication source characteristics and message characteristics on affective attitudes)

•

Chapter 6, Problem Recognition and Information Search (evoked set for movie information, use of internet as a search tool)

•

Chapter 10, Consumer Diversity (characteristics of teens and Generation Xers)

Discussion idea Could a marketer deliberately manipulate a website like Ain’t It Cool News to generate favourable word of mouth?

ADDITIONAL DISCUSSION QUESTIONS WITH SAMPLE ANSWERS These discussion questions can be used as in-class activities or as thought questions that the students consider while reading the chapter or to test their understanding of the material after the reading and lecture are complete.

1. How is a group different from a reference group?

A group is two or more people who have a shared set of experiences, beliefs, and/or values and whose relationship is interdependent. A reference group is a set of people with whom individuals compare themselves as a guide to developing their own attitudes, knowledge, and or behaviour. A reference group exerts social influence on the individual. Although a reference group is one type of group, not all groups are reference groups.

2. Define homophily and discuss its importance to understanding reference groups.

Homophily is the amount of similarity within groups. The more similar the group members are, the more homophilous they are said to be. Homophilous individuals tend to interact frequently, have similar viewpoints and develop strong ties. Homophily is one of the six characteristics that define a reference group, along with degree of contact, formality, density, degree of identification and tie strength. Along with the other reference group characteristics, homophily can be targeted by marketers to influence consumers.

ADDITIONAL QUESTIONS 1. We have considered several different kinds of reference groups. Develop a marketingrelated example that illustrates the influence of dissociative, associated and aspirational reference groups.

2. As college students, you are all members of many different groups. Work together to select two very different groups that a college student might belong to. Describe the degree of contact, formality, homophily, density and tie-strength that characterises each of these two groups.

3. Opinion leaders and market mavens are not the same thing. Discuss the differences between these two types of consumers. Give an example of how a marketer can develop efforts to target each type of person.

4. Discuss the differences between normative and informational influence. Create a matrix in which you give marketing examples under conditions in which (1) normative influence

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is high but informational influence is low, (2) normative influence is low but informational influence is high, (3) both are high, and (4) both are low.

5. As a group, discuss the differences between socialisation and consumer socialisation.

Explain why knowing these differences can be helpful to marketers.

6. We have discussed the concept of socialisation and consumer socialisation. Discuss how these processes work. Discuss the role socialising agents play in this process. Give some examples of socialising agents. Suggest how marketers might influence the consumer socialisation process.

7. Compliance, conformity and reactance are all responses a consumer might have to marketing communications. Discuss what each of these responses is and create examples of each.

8. Several methods have been suggested to induce compliance. Give examples of the footin-the-door, door-in-the-face and even-a-penny-will-help techniques and explain why they work.

9. What are the advantages and disadvantages of viral marketing? Discuss how a company may try to encourage viral marketing.

EXPERIENTIAL EXERCISES AND CLASSROOM EXAMPLES Students who learn more readily through visual and tactile stimuli will benefit from the introduction of physical examples into the classroom.

1. ‘Home alone’ exercise Tell students to make a shopping list of items they would buy – food, decorations, gifts – if they were (1) planning an anniversary party for their parents, or (2) planning a birthday party for their roommate.

2. ‘Musical chairs’ exercise This venerable birthday party game is a fun and simple way to demonstrate feelings of (literal!) displacement. Bring an MP3 player or a smartphone to class. Arrange ‘n’ chairs back to back in a line. Ask for ‘n + 1’ student volunteers. Tell students that while the music is playing, they should walk around the chairs in a circle, but that when the music stops, they should sit down as quickly as possible. The student without a chair is required to quit playing, but must continue to stand in front of the class. With each iteration, remove one chair. The game ends when one student is left standing, with another sitting in the last remaining chair. Talk to the students about how it felt to be left out, even if it’s only a silly children’s game. Make the point that our desire/need to belong and feel included drives much of our behaviour.

3. Group decision making exercises After dividing into small groups, ask each group to arrive at one consensus vote for different scenarios. In one scenario, suggest that your university is thinking of changing to a A/B grading system (i.e., a grade of a High Distinction will now be an A (3.3 GPA) and a Distinction will be a B- (2.7 GPA)) (reverse this if your school already incorporates +/into the grades). Remember, one vote per group. For another round of group decision

This experiential exercise was contributed by Professor Sheri Bridges of Wake Forest University.

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making, suggest a second scenario where your school is considering adding more sections of classes so students can graduate quicker. However, space is tight so, MWF classes would meet for 1 hour and 40 minutes for only 8 weeks (allowing you to take more classes), and TTh classes would meet for 50 minutes and 2 hours every other Saturday to help relieve classroom scheduling and add more class sections (adjust the days/times to reflect your curriculum). Of course, no one is likely to want to take Saturday classes. To this end, discreetly encourage one student per group to persuade their group to vote for the Saturday option. Have groups announce their votes (again, only one vote per group) to see if students were able to convince the rest of their group.

CLASSROOM GROUP ACTIVITY Managing targeted, positive word of mouth: 10 minutes I. Start up A. Purpose of the activity 1. This activity will give students an opportunity to consider how to encourage the use of targeted, positive word of mouth as a medium for promoting an offering B. What the instructor will do 1. Select products that the students will discuss in their small groups.

Depending on the instructor’s objectives, these can be either at the product category level (e.g., meat, milk, eggs) or at the brand level (e.g., Crown, Haigh’s or Lorna Jane). Each will generate different results. Giving some of each to groups throughout a classroom will allow for a discussion of the differences between product and brand-level marketing 2. The instructor will divide people into small groups, assign them a product for analysis, and be available to coach and help the groups as needed.

3. Optionally, groups may be provided with clear overhead acetates and markers, or electronic equivalent, so they can summarise their discussions and make presentations after their analysis and discussion C. What the participants will do 1. The participants will work in small groups to develop methods for encouraging consumers to engage in positive WOM about their offering.

After a period of small-group discussion, they will make reports to the large group D. Rules for this experience 1. Groups are to work separately from each other. Individuals should rely on their knowledge from the book and may refer to their notes and the book as necessary II. Experience A.

Group up 1. Have students form groups of no more than five. This exercise will work in groups of any size; however, room restrictions that do not allow for moving furniture may make group work more difficult

B.

Assign products 1. Each group should be assigned a single product on which to focus Specific actions for groups

C.

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1.

The groups are responsible for (1) analysing the offerings they have been assigned and (2) developing a list of possible ways to encourage positive WOM among particular consumer target markets. Students should be guided to state how each method they propose is designed to generate positive WOM in a particular target market 2. Optionally, groups can summarise their discussions on clear overhead acetates to facilitate presentations after their analysis and discussion 3. Questions to be answered by small groups a) Consider the product your group has been assigned. How might the product be marketed so that different segments of the market are encouraged to engage in positive WOM about the offering? State specifically the target market being considered, the methods suggested, and why these methods will influence positive WOM 4. Large-group discussions a) Have each group present its ideas to the class in a round-robin format III. Debrief and unveil concepts A. Discuss the activity itself 1. The purpose of this discussion is to allow students to express what they felt about the experience itself 2. Ask students to describe their experiences of doing the activity a) Likes and dislikes about what just happened b) How they felt during the experience c) What is realistic, unrealistic about the exercise? d) What will be different when they do this for their own brand?

B. Discuss the content of the experience 1. The purpose of this discussion is to ensure that students ‘take away’ important learning points 2. Ask students to describe the important points the experience teaches a) The role of specific marketing techniques to encourage consumers to engage in positive WOM 3. Use the chalkboard to record student responses a) Write down their ideas as they are presented b) Concentrate on the principles being discussed rather than the examples being used c) Help them to see the interrelationships among their responses IV. Execute A.

Apply what has been learned 1.

B.

Lead a discussion on how the concepts can be applied in organisations a) What barriers may be faced in applying the concepts from the exercise? b) What can be done to help others understand the concepts when you use them at work?

Transfer and use the knowledge 1. Encourage students to make a record in their notes about how they will use the ideas in the workplace 2. Even if they do not have a specific job, how will they remember to use what they have learned?

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USEFUL WEBLINKS 10 Fascinating Australian Subcultures You Had No Idea Existed (SBS) http://www.sbs.com.au/guide/article/2016/04/13/10-fascinating-australian-subculturesyou-had-no-idea-existed A presentation of 10 different subcultures that marketers, journalists and other cultural commentators often neglect.

Aboriginal Young People and Youth Subcultures (AIFS) https://aifs.gov.au/publications/family-matters/issue-38/aboriginal-young-people-andyouth-subcultures The culture of Aboriginals in Australia is often less discussed. This website presents the subcultures of this important group of Australians. Presented by the Australian Institute of Family Studies.

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CHAPTER 10

Consumer Diversity

CHAPTER SUMMARY Six major aspects of consumer diversity have important effects on consumer behaviour: age; gender; sexual orientation; and regional, ethnic and religious differences. Age is a key factor because people of the same age have similar life experiences, needs, symbols and memories that may lead to similar consumption patterns. Teens have significant spending power and influence family purchasing as well. Generation Y consists of consumers in their twenties.

Consumers who make up Generation X were born between 1965 and 1983. Baby boomers, born 1946 to 1964, are the largest age category in Australia. Seniors in the 65 and older segment are considered by marketers as the grey market.

Gender differences and sexual orientation also affect consumer behaviour. Sex roles are changing as more women delay marriage, become financially independent and build careers; men are learning to become more sensitive and caring. Men and women also differ in terms of consumer traits, information-processing styles, decision-making styles and consumption patterns. In addition, masculine, feminine and androgynous individuals have different preferences for certain products or attributes which marketers need to consider.

Consumption patterns may differ in various regions of Australia and the world, leading some marketers to tailor strategies specifically to these regions. Clustering helps marketers describe consumers in different regions based on similar demographic and consumption characteristics rather than by geographic location only. Differences in climate, attitudes toward leisure and work and attitudes toward progressiveness distinguish the various states in Australia.

In Australia, 30% of the population are born overseas. Most Australians have a European heritage, but nearly 15% have Māori, 12% have Asian and 7% have Pacific Islander backgrounds. The changing cultural demographics and immigration landscape in Australia makes it important to understand the new influx of consumers who will consider Australia their home, while also maintaining ties to their cultural backgrounds, resulting also in the need to understand acculturation, accommodation and cross-cultural marketing strategies.

Finally, religious values and customs can influence consumer behaviour and form the basis of marketing strategies.

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CHAPTER LEARNING OBJECTIVES After studying this chapter, students will be able to: 1. explain how the consumer’s age affects acquisition, consumption and disposition behaviour and why marketers need to consider age influences when planning marketing activities 2. describe how gender and sexual orientation each affect consumer behaviour and how companies can create more effective marketing by understanding these two influences 3. discuss how regional, ethnic and religious influences can affect consumer behaviour and why marketers must consider such influences when targeting specific groups.

CHAPTER OUTLINE I. How age affects consumer behaviour A. Age trends in Australia 1. The mean age of Australian consumers is at an all-time high of 37 2. The text covers four groups: teens, millennial, Gen Y; Gen X; baby boomers; and seniors B. Teens and millennials (Generation Y) 1. The transition from childhood to adulthood makes the teen years a time of immense change 2. Teens have considerable influence in household decision-making and enjoy a great deal of financial independence. That said, teens will search in-store and online for options and place a high importance on value and convenience 3. More similar to teenage counterparts in other parts of the world sharing many similar characteristics and attitudes to those in other countries 4. Generation Y (which includes millennials) is composed of 20-30 something consumers born from 1980 through 1994 a) Generation Y is media and tech savvy 5.

Boomerang kids are the Xers who live at home and have more discretionary income

6.

Marketing implications a) Very large and fast-growing market segment; they are media and techsavvy b) Brand loyalties started in teen years may be carried into adulthood c) Brands can be positioned as helpful for dealing with adolescent pressures d) Advertising messages often incorporate symbols, issues and language to which teens can relate e) Other types of promotion include traditional and social media f) Other ways to reach Generation Y is through recreation or special events Digital media considerations in consumer behaviour a) Because millennials are the major group of consumers who use social media the most and are the most “tech-savvy,” marketers can often appeal to this segment online. b) But, millennials still trust real human beings more than digital endorsement by influencers.

7.

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C.

II.

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Generation X 1. Generation X is composed of those who were born between 1965 and 1983 (6.5 million are in this group) 2. While there is some feeling of angst among the underachievers of this generation, many have begun building careers, having families and buying homes 3. Gen X's believe they will not match their parents’ level of success 4. Marketing implications a) High spending power b) Gen Xers tend to be cynical about obvious marketing techniques c) Can be reached through the internet as Xers watch less television d) Targeted sales promotions can be effective D. Baby Boomers 1. In Australia, the 5.5 million Baby Boomers represent 30% of the population 2. Born between 1946 and 1964 3. Created a revolution in social attitudes, music, fashion and politics 4. Sub segments of consumers exist within this very large and diverse group a) The oldest and youngest groups are the most different as they have less in common 5. Marketing implications a) As Baby Boomers have so much buying power, they are the target for many products including cars, housing, travel, entertainment, recreational equipment and motor homes b) Baby Boomers are heavy consumers of financial services c) Some companies have profited by developing special products for ageing baby boomers E. Seniors 1. The grey market consists of consumers born before 1946 2. Women outnumber men in this age category, as women tend to live longer 3. Information-processing skills tend to decrease over time; therefore, mature consumers are less likely to seek out information 4. Have difficulty making complex decisions and processing large amounts of information 5. Marketing implications a) Seniors represent a critical and growing market for health-related and medical products and services b) Marketers can target boomers through the use of media geared to this group’s interests, including oldies rock and roll, radio and TV programs, and activity-specific publications and TV shows c) Models in ads for seniors should represent active, contributing members of society d) Retailers can design their stores to provide a more age-friendly shopping environment for both boomers and seniors How gender and sexual orientation affect consumer behaviour A. Sex roles 1. In most cultures, men and women are expected to behave in-line with norms learned early in childhood

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2.

Sex roles around the world are changing a) Traditionally men were guided by agentic goals and women were guided by communal goals b) However, globally more women are working and delaying both marriage and having children c) At the same time, more men are helping with the household and raising children. While many stereotypes still exist, this has meant a change in marketing and advertising campaigns as well as changes in consumption habits by different genders 3. Traditional sex roles are also changing in conservative, male-dominated countries 4. Marketing implications a) Use of sexual stimuli predominantly female, especially teenage girls and younger women, portraying unrealistic ideals. b) Social comparisons occur with female consumers comparing themselves to the models. c) Males also compare themselves to male models, resulting in perceived unattractiveness.

B.

Differences in acquisition and consumption behaviours 1. Women are more likely to engage in thorough examination of a message and make extended decisions based on product attributes 2. Males are selective information processors 3. Males are more sensitive to personally relevant information 4. Women pay attention to personally relevant information as well as information relevant to others 5. Women see shopping as a pleasurable experience that also fulfils social and entertainment needs. By contrast, men see shopping as a pragmatic exercise that is undertaken to acquire goods C. Marketing implications 1. Many products are developed – and advertised – to meet gender-specific needs 2. Many products become less sex-typed as sex roles evolve 3. Marketers often target a particular gender 4. Marketers are increasingly using sexual orientation to target gay and lesbian consumers 5. Sex differences still exist in media patterns D. Sex, gender and sexual orientation 1. Sex refers to a biological state (male or female) 2. Gender refers to one’s identity as male or female regardless of biological differences.

3.

4.

Sexual orientation reflects a person’s preference toward certain behaviours Sexual orientations are important because they can influence consumer preferences and behaviour 5. Marketing implications a) More and more marketers are targeting the LGBT population.

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b) 11% of Australians identify themselves as LGBT. c) LGBT consumers dislike and distrust ad messages more than heterosexual consumers, but respond favourably to messages that ‘reflect their lives and culture’.

III. How regional influences affect consumer behaviour A. Regions within Australia 1. Australia is geographically large, but with a relatively small population in 4-5 major centres 2. As such, Australia has a relatively homogenous population 3. That said, there are still ethnic differences, particularly between the British, Europeans, Chinese and Indians 4. More pronounced differences are the regional comparisons between Victorians, New South Welshmen and Queenslanders, where on-going rivalries are seen 5. To differentiate and group similar consumers, companies will use clustering, grouping of consumers according to common characteristics using statistical techniques 6. Consumers in each region emphasise different values and lifestyles 7. To determine differences and similarities in consumers researchers will identify regions based on clustering techniques a) Areas placed in clusters based on similarities in demographic and consumption characteristics b) Information is summarised and grouped using sophisticated statistical techniques. c) The major types of neighbourhoods are derived from systems such as Mosaic (from Experian) and PRIZM (from Nielsen Claritas) d) Clustering systems have been individually developed for many countries 8. One big issue in Australia is the divide between metropolitan and regional consumers, given regional consumers appear to be more concerned with products that are relevant to work or local existence, for example, farm machinery, animal handling and veterinary equipment as well as agricultural engineering and construction tools.

9. Marketing implications a) A product, service or communication can be developed to appeal to different regions of the country b) Different parts of the country will respond better to certain types of messages than other parts B. Regions across the world 1. The area of the world in which a consumer resides can influence consumption patterns 2. Cultural influences affect consumer behaviours in three main dimensions a) Individualism versus collectivism b) Horizontal versus vertical orientation c) Masculine versus feminine 3. Consumers in different countries will spend their income differently 4. Tastes will vary between countries and within specific regions of the world

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5.

International considerations in consumer behaviour a) Global differences in consumer behaviour will sometimes lead to alterations in marketing strategy in order to appeal to specific regions and countries IV. How ethnic influences affect consumer behaviour A. Through the process of acculturation, members of a subculture learn to adapt to their host country B. Ethnic groups in Australia and New Zealand 1. Both Australia and New Zealand are ethnically diverse nations a) Australia is particularly diverse, with 30% of the population born in another country b) In both Australia and New Zealand, the coming years should give rise to two distinct ethnic sub-cultures: Chinese and Indian c) Language issues are but one challenge facing marketing trying to target these groups d) They are also hard to access through traditional media channels C.

Ethnic groups around the world 1. Population trends are greatly changing the demographic profiles of many countries a) Immigration and population trends are leading to greater ethnic diversity in many western nations b) When new immigrants do arrive in a country, they will go through a process of acculturation, which is learning how to adapt to a new culture c) International considerations in consumer behaviour 1) Hispanic Americans, a notable group in the U.S., can be divided based on their level of acculturation to American culture: acculturated, bicultural, and traditional 2) Many marketer in the U.S. market exclusively to Hispanic Americans and other groups such as African Americans. d)

V.

Degree of the intensity of ethnic identification affects consumption patterns e) Ultimately, consumption patterns are influenced by the consumer’s level of acculturation and intensity of ethnic identification f) Importantly for marketers, accommodation theory states that when a company or brand makes an effort to be inclusive with ethnic groups, it will have a positive effect on brand evaluations g) However, marketers typically don’t concentrate on a single ethnic group, instead employing a form of multicultural marketing to appeal to a diverse target variety of cultures The influence of religion A. Religion provides individuals with a set of beliefs and values that serve as a code of conduct B. Binds people together to make groups different from others C. Can prevent consumers from consuming certain products and services

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D.

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Marketing implications 1. Marketers can segment the market by focusing on religious affiliation, delivery, targeted messages and promotions or using certain media

QUESTIONS FOR REVIEW AND DISCUSSION Possible answers are as follows.

1. What type of Australian consumers are in the Generation X, the millennial generation and Baby Boomer segments?

Generation X consumers are individuals born from 1965 to 1979. They are frequently stereotyped as feeling alienated and resentful due to difficulties in career placement and advancement. These consumers are not apathetic slackers. They tend to find success and achievement in being at the very cutting edge of technology.

Millennial generation consumers are media and tech savvy, loyalty could ensue from childhood experiences and they value price and convenience. AKA Generation Y, they are born from 1980 to 1994.

Baby boomers were born between 1946 and 1964. They have considerable economic power and are a very influential consumer segment. Many boomers delayed their child rearing until their late 20s or 30s and created a population explosion referred to as the baby boomlet, or Generation Y. 2. What is the difference between gender and sexual orientation and why is this distinction important for marketers?

Gender is the biological state of being male or female. Sexual orientation reflects a person’s preference toward certain masculine or feminine behaviours. Marketers used to rely heavily on gender as a basis for segmentation. Today, the line has been blurred when it comes to many gender-specific products. A greater acceptance of different sexual orientations by society as a whole has spurred changes in how many products are advertised.

3. What is clustering and why do marketers use it?

Clustering is the grouping of consumers according to common characteristics using statistical techniques. Marketers uses clustering as a method of identifying consumers who are similar in terms of demographic and/or psychographic characteristics, such as income, education, age, household type, attitudes and preferred radio format.

4. What are the three main subcultures within the Australian population?

Because Australia has a relatively homogenous population, this question can be answered in a number of ways. An obvious distinction could be to focus on age divisions across the nation, specifically Baby Boomers, Generation X and Teens, and Millennials.

Alternately, answers might reference the level of urbanisation amongst different groups in Australia, such as rural, regional and metropolitan dwellers. Alternately, answers could point out the differences between the three major population centres (Queensland, New South Wales, Victoria) on Australia’s eastern seaboard. Finally, it may be that students develop answers that point out the major ethnic groups discussed in the text (British, Chinese, Indian).

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5. How do acculturation and intensity of ethnic identification affect consumer behaviour?

Acculturation is the process of adapting to a new culture. One’s intensity of ethnic identification is often inversely correlated to one’s degree of acculturation. If one chooses to strongly identify with their ethnic group, then one is less likely to acculturate to their new culture. These consumers are more likely to exhibit the consumption patterns of the ethnic group.

6. Define the accommodation theory and explain its importance for marketers who target Asian Australians.

The accommodation theory suggests that the more effort one puts forth in trying to communicate with an ethnic group, the more positive the reaction. For example, marketers who target Chinese Australians by featuring Chinese-speaking advertisements increase perceptions of the company’s sensitivity toward and solidarity with the Chinese community, thereby creating positive feelings toward the brand and company.

7. Why would a company adopt multicultural marketing rather than target a single subculture?

Multicultural marketing is an effort to appeal to a variety of cultures at the same time.

Targeting each individual subculture by making a large number of different commercials can be very expensive for a company. Multicultural marketing attempts to include all of the likely users of the product into one message. It is a message of inclusion rather than singling out. Obviously, this type of strategy needs to be considered thoroughly before implementation to make sure that different cultures interpret the message as it is intended.

8. Why do marketers have to consider regional influences when targeting consumers in a given country?

Regional influences, such as geography, climate and clusters of different types of people, vary within states and nations. Different values and lifestyles can be directly be influenced by these factors, so marketers need to be aware of the differing customer needs that would evolve.

9. Identify some of the ways in which religion can influence consumer behaviour.

Religion can prevent consuming certain products and services. Religious beliefs can alter the types of food that are consumed during different times of the year. Some religions forbid the consumption of different types of food, such as beef, pork, and other types of meat.

CONSUMER BEHAVIOUR CASE Marketing to teens worldwide via music Knowing that teenagers in many nations have similar attitudes and tastes, the world’s two largest soft drink companies see this group of consumers as an extremely important target market with long-term profit potential. Both Coca-Cola and PepsiCo know that not only do their soft drinks have to taste good, their marketing has to be relevant to capture teens’ attention and keep them engaged with the brands. Both are using music as part of their strategy for reaching out to teens through their shared interest in new

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music and bands. Although Coca-Cola and PepsiCo have long been identified with music – Coca-Cola on TV with American Idol, PepsiCo with commercials starring legendary performers like Michael Jackson – these new teen campaigns focus on cutting-edge music and involve more interactivity than ever before.

‘The number one passion point for teens is music,’ explains a Coca-Cola senior vice president. During the recent World Cup soccer tournament, for example, the company scored a global hit when its TV ads showed the Somali rapper K’naan performing the brand-related ‘Flag Wavin’ song. The song was released commercially and quickly hit the top of the charts in 18 nations. During another campaign, Coca-Cola invited the popular band Maroon 5 to create a new song based on suggestions and comments submitted by teens via Facebook and Twitter during an intense 24-hour jam session – all streamed live online to a global audience.

For the 2012 Olympics in London, Coca-Cola continued the focus on music with its ‘Move to the Beat’ campaign. A new song written expressly for this campaign, incorporating sports sounds and performed by singer Katy B, was released before the games began and featured in TV ads, online ads, mobile marketing, social media posts and other global marketing activities. ‘We can’t afford not to talk to teens,’ says a Coca-Cola official. ‘You can’t think, ‘Teens already know us,’ and skip a couple of years. Every six years there's a new population of teens in the world.’

Like Coca-Cola, PepsiCo uses music in marketing to attract teens’ attention and demonstrate its hip factor. In addition to global campaigns featuring music enjoyed by teens in many nations, PepsiCo tailors some marketing events to the musical tastes of teens in specific regions. It has sponsored new-talent festivals in India, for instance, and major rock concerts in Argentina. Knowing that the Grammy awards are popular among music-loving teens, Pepsi is one of the award program’s sponsors. And Pepsi’s association with X Factor is a high-profile way to associate the brand with up-andcoming musical artists who may, with a dash of luck and a lot of talent, blossom into stars who become wildly popular with teen audiences.

PepsiCo is also using social media as a pivotal part of its international marketing to teenagers. During its recent ‘Summer Time is Pepsi Time’ TV and online campaign, the company pictured parks, beaches, and pools from around the world. Consumers who checked in via Foursquare at any three of the sites received special badges and were entered into a sweepstakes for the chance to win prizes. These ads are still drawing viewers on YouTube, where teens and everybody else can enjoy and share them again and again.

CASE QUESTIONS 1. What long-term results do you think Coca-Cola and PepsiCo hope to achieve by investing heavily in marketing to teens around the world?

These companies are attempting to create brand loyalty among teens that will persist for the rest of their lives.

2. What are the marketing advantages and disadvantages of associating a soft drink brand such as Coca-Cola or PepsiCo with musical groups that are just beginning their careers?

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Do you agree with this strategy? Explain.

Advantages – the popularity of the group may grow exponentially and the brand benefits from the association in various ways, such as featuring the group in advertisements, sponsoring concert tours and placing their logo on group paraphernalia Disadvantages – the group may never become very popular and there is no significant return on investment; or the group may be involved in a scandal future that reflects poorly on the sponsoring company When used carefully, this strategy can add credibility to the company as being hip, youthful and innovative.

3. From a consumer behaviour perspective, why would these two companies emphasise new music and emerging performers in their ads, rather than well-known songs and groups?

New and emerging performers are more relatable to the average teen. New artists may more actively reach out to fans as they try to expand their fan base, providing fans with more personal experiences through local appearances and social media. Also, it allows the companies to be seen as new and cutting-edge, rather than the stodgy beverage of an older generation.

SUGGESTED EXERCISES AND TEACHER GUIDELINES 1. Pick a product or service category that individuals of all age groups consume. Conduct a detailed research analysis of the marketing techniques used to attract the four demographic segments discussed in this chapter in the following areas: (a) brands or services offered, (b) package design, (c) advertising content, (d) media selection, (e) sales promotion, and (f) distribution strategy. Collect this information via a library search, a content analysis of advertising messages and media used, in-store visits and interviews with marketers. Then answer the following questions: (a) Which techniques are used to market to multiple age groups? (b) Which techniques are used to appeal to specific age groups? (c) How do these techniques differ from age group to age group?

Have students discuss the potentially objectionable ads that contain exaggerated claims, stereotypes, cigarette and alcohol advertising, sexually explicit content, and political, religious or social messages. What is the difference between ads that attract attention and those that cross the line in the eyes of different age groups?

2. Conduct a detailed research analysis of the marketing techniques used to appeal to males and females in the following areas: (a) brands or services offered, (b) package design, (c) advertising content, (d) media selection, (e) sales promotion, and (f) distribution strategy. Collect this information in the same manner as described in Exercise 1 and then answer the following questions: (a) Which techniques are used to market to both males and females? (b) Which specific techniques are used to appeal to males? To females?

Here the students should better understand the portrayal of males and females in marketing efforts. How has this changed over time? What predictions might the students make with respect to the use of gender in marketing efforts in the future?

3. You have been assigned to develop a marketing strategy for a new fruit drink that provides high energy and is high in nutrients. It is also light and very refreshing,

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especially on a hot day. How would you market this product in different regions of the world? Develop a detailed marketing plan for two regions that addresses the advertising message, media selection, distribution and sales promotion.

Students should consider using market research tools such as clustering. Certainly different regions influence consumption patterns and often require different marketing mixes to meet the needs of consumers. This can certainly include changing the composition of the product to a degree to best fit cultural tastes. In the US, for example, there are different beverage preferences in different regions. For example, sweet tea is a popular drink in the South and available at the vast majority of restaurants in the region, but typically not on the menu in other parts of the country.

4. You are developing a marketing strategy for a fashion clothing store chain that wants to specialise in providing products for minorities in your area. The stores plan to sell medium- to high-priced clothing for local women of either European or Asian descent.

Develop a questionnaire to collect information about acquisition and consumption patterns among your potential customers. Be sure to ask questions that will provide insight into your decisions about (a) store design, (b) products offered, (3) pricing, and (4) advertising. Administer this questionnaire to at least ten members of one of the three ethnic groups. Summarise the key findings of your research and make a recommendation in each of the areas mentioned.

This exercise provides an open-ended way of getting the student to recognise the differences between cultures and understand how marketers can better address the needs of these groups. Ask students to attempt to identify products/services that can benefit from multicultural marketing and which products/services should be tailored to individual subcultures.

5. Pick three product/service categories that you think will show consumption differences across different religious subcultures. Design a questionnaire to assess major consumption patterns for each of these products/services and administer it to at least five consumers in each of the major subcultures. Summarise the responses and answer the following questions: (a) How do these cultures vary in terms of consumption? (b) How would marketing efforts differ for the groups?

Food and beverage are likely points of differentiation among religions. Challenge the student to identify other areas of consumption behaviours that elicit differences. Are there differences in other consumer behaviours with respect to acquisition and disposition behaviours? Do some religions emphasise the avoidance of wasting products more so than others?

SUGGESTED INTERNET EXERCISES WITH SAMPLE ANSWERS El Andar El Andar’s website (www.elandar.com) touts the publication as ‘the Latino magazine for the new millennium.’ Visit the site for this publication; click the ‘Advertise’ link and discover the characteristics of the target audience of El Andar. Describe the demographic and psychographic profile of the typical reader of El Andar. In what ways is this consumer similar to the average Hispanic American consumer? In what ways does she differ? Based on the reader profile, give some examples of marketers who might target the readers of El Andar.

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Instructor notes The typical reader of El Andar is an affluent, technologically-proficient, well-educated, bilingual Latino professional. She is involved in community affairs and is influential in business, education, and or politics. The magazine’s content (essays, poetry, fiction, and investigative and photojournalism) appeals to the reader who thinks differently than the average, and who has a progressive outlook on life. In contrast, the average Hispanic American consumer is a blue-collar worker with both income and educational attainment below the national average.

Marketers who might advertise in El Andar include those whose product offerings match the needs of the magazine’s target audience. For example, political parties and causes; charitable organisations; community leadership groups; financial services companies; travel and entertainment firms; art galleries; symphony orchestras and other musical organisations; and haute couture clothing marketers all might find the reader of El Andar to be an attentive audience for their product messages.

Additional uses This exercise also relates to concepts in the following chapters: •

Chapter 5, Attitudes and Persuasion (attitude toward both editorial and entertainment content of El Andar)

•

Chapter 11, External and Internal Influences on Consumer Behaviour (relative influence of social class and ethnicity on consumer behaviour and VALS-2 categorisation of the typical El Andar reader)

Discussion idea What other publications target upscale consumers? How well do these publications address the needs and wants of Hispanic or Latino consumers?

ADDITIONAL DISCUSSION QUESTIONS WITH SAMPLE ANSWERS These discussion questions can be used as in-class activities or as thought questions that the students consider while reading the chapter or to test their understanding of the material after the reading and lecture are complete.

1. Explain the concept of acculturation.

Acculturation is learning how to adapt to a new culture, and is strongly influenced by family, friends and institutions – like the media, place of worship and schools.

Acculturation, which results in consumers who blend their traditional customs with the customs of their host culture, has been divided into three levels: (a) traditional – individuals who primarily hold on to their traditional customs and who speak their native language; (b) bicultural – individuals who balance their primary and host cultures and speak both their native and host languages; and (c) acculturated – individuals who predominantly exhibit the customs of the host culture and who predominantly use the host language.

2. Why is intensity of ethnic identification important to marketing strategy?

Ethnic identity – ow strongly people identify with their ethnic group – influences consumers’ consumption patterns. Individuals who have a strong ethnic identity are

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more likely to exhibit the consumption patterns of their ethnic group and, therefore, will respond more favourably to marketing strategies that target those patterns.

ADDITIONAL QUESTIONS 1. Western. culture has been described as one of both convenience and choice. Explain how the availability and variability of goods and services has influenced the consumer behaviour of students compared to that of their older relatives.

2. Create a detailed list of the basic characteristics of the region where your school is located. Describe how this region differs from other regions. Explain how these differences could influence marketing strategy.

3. As a group, select three different countries (for greater challenge, do not include the local country) with which you are familiar. Describe how these countries vary in terms of their consumption patterns. Explain how knowing these patterns can help marketers in these countries.

4. Describe some of the major ethnic groups in Australia (or your country). Outline the growth trends that are expected for each of these groups, noting why some groups are growing faster than others. Discuss how knowing about these trends can help marketers.

5. Discuss the major characteristics of each of the following ethnic groups in Australia: (1) English, (2) Chinese, (3) Indian. Explain how the characteristics of each of these groups affect their consumption behaviours. Explain how ignoring these characteristics can be risky for marketers.

6. Discuss what is meant by the phrases 'level of acculturation' and 'intensity of ethnic identification'. Describe how these concepts influence consumer behaviour and how understanding them can influence marketing strategy.

7. Develop a list of the major religious subcultures in Australia or New Zealand. Describe the conditions under which marketers might want to reach these specific groups. Explain what methods would be used to reach these groups.

8. A well-known roach-killing product works by burning it inside the home and fumigating the bugs. The product sells very well in South America. The product is introduced in South Asia but fails. Explain what differences between these two regions might explain the failure. Consider both cultural and religious issues.

EXPERIENTIAL EXERCISES AND CLASSROOM EXAMPLES Students who learn more readily through visual and tactile stimuli will benefit from the introduction of physical examples into the classroom.

Consider bringing examples of marketing to regional, ethnic and religious subcultures into the classroom. Examples of these efforts might include ads that are in languages other than English or emphasise lifestyles associated with particular subcultures, products packaged for particular subcultures, and so on. Use these examples to stimulate discussion about how marketers need to be sensitive to and knowledgeable about the needs of many cultures when preparing their marketing efforts.

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1. ‘Let Mikey try it’ exercise Go to the grocery store and purchase a food product likely to be considered disgusting by most students in the class – a cow’s tongue or a jar of pig’s knuckles/feet will probably do the trick. Show it to the class and solicit their reactions to the prospect of eating the item. After determining that few students, if any, would be willing to sample the fare, ask them to describe the conditions in which someone would eat it and, then, those in which they would be willing to eat it. The discussion generally touches on many of the demographic and cultural factors described in the text.

2. ‘Cultural Confusion’ Exercise* Divide the class into two groups, each of which represents a different culture: tradecentred versus people-centred. Give each group a set of rules and characteristics describing its culture and tell them to study the description for five minutes. After they’ve had an opportunity to learn about their respective cultures, bring the two groups together again to interact with one another. See which group can figure out the other culture’s rules first. Possible rules (which can be changed to suit the instructor but which should be silly and difficult to figure out) are: Trade-centred culture •

Men are dominant in this culture

•

Money talks; individuals from the other culture must begin and end all conversations with representatives of this culture by saying aloud a type of currency (e.g., dollar, lira, franc, etc.)

•

Women from the other culture are never allowed to talk to men in this culture; they may, however, talk to women

•

Members of the trade-centred culture who break the rules of the people-centred culture are required to leave the room until other members of the culture sing ‘Happy Birthday’ three times

People-centred culture •

Women are dominant in this culture

•

Conversations must begin with the person from the other culture touching a female on the left shoulder and saying aloud the name of a fruit

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Conversations must end with the person from the other culture touching a female on the right shoulder and saying aloud the name of a vegetable

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Men from the other culture are allowed to talk to women in this culture, but they may not make eye contact

•

Members of the people-centred culture who break the rules of the trade-centred culture are required to leave the room until other members of the culture sing ‘For he’s a jolly good fellow’ three times.

 These experiential exercises were contributed by Professor Sheri Bridges of Wake Forest University.

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This exercise demonstrates the importance of learning about other cultures before attempting to do business with them and the awkwardness one can feel in the absence of such learning.

CLASSROOM GROUP ACTIVITY Marketing to subcultures: 40 minutes I. Start up A. Purpose of the activity 1. This activity will give students an opportunity to consider development of a marketing effort targeted at one of three ethnic subcultures in Australia B. What the instructor will do 1. The instructor will divide people into small groups and be available to coach and help the groups as needed 2. Assign each group one of the three products and one of the three subculture markets. This may be facilitated by writing each on an index card and having students randomly draw one from each set. Products are (1) a telephone company, (2) a vacation destination, or (3) a light beer. Subcultures are (a) Chinese Australians or (b) Indigenous Australians 3. Optionally, groups may be provided with clear overhead transparencies and markers so they can summarise their discussions and make presentations after their analysis and discussion.

C. What the participants will do 1. The participants will work in small groups to outline their considerations for marketing (1) a telephone company, (2) a vacation destination, or (3) a light beer to either (a) Chinese Australians, or (b) Indigenous Australians. After a period of small-group discussion, they will make reports to the larger group D. Rules for this experience 1. Groups are to work separately from each other. Individuals should rely on their knowledge from the book and may refer to their notes and the book as necessary II. Experience A. Group up 1. Have students form groups of no more than five. This exercise will work in groups of any size; however, room restrictions that do not allow for moving furniture may make group work more difficult B. Specific actions for groups 1. The groups are responsible for developing a list of issues associated with marketing their particular product for their particular group 2. Optionally, groups can summarise their discussions on clear overhead acetates to facilitate presentations after their analysis and discussion.

3. Questions to be answered by small groups a) For the marketing of your product to the subculture you have selected, what would be the major considerations for the following: (1). Product development (2). Media targeting (3). Advertising messages

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(4). Promotions (5). Distribution 4. Large-group discussions a) After about 20 minutes of small-group activity, proceed to have each group present its ideas to the class in a round-robin format III. Debrief and unveil concepts A. Discuss the activity itself 1. The purpose of this discussion is to allow students to express what they felt about the experience itself 2. Ask students to describe their experiences of doing the activity a) Likes and dislikes about what just happened b) How they felt during the experience c) What is realistic, unrealistic about the exercise d) What will be different when they do this for their own product B. Discuss the content of the experience 1. The purpose of this discussion is to ensure that students ‘take away’ important learning points 2. Ask students to describe the important points the experience teaches. a) The importance of considering many issues when developing marketing efforts for any group 3. Use the chalkboard to record student responses a) Write down their ideas as they are presented b) Concentrate on the principles being discussed rather than the examples being used c) Help them to see the interrelationships among their responses IV. Execute A. Apply what has been learned 1. Lead a discussion on how the concepts can be applied in organisations a) What barriers may be faced in applying the concepts from the exercise? b) What can be done to help others understand the concepts when you use them at work?

B. Transfer and use the knowledge 1. Encourage students to make a record in their notes about how they will use the ideas in the workplace 2. Even if they don’t have a specific job, how will they remember to use what they have learned?

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USEFUL WEBLINKS 5 Ways to Effectively Market to Baby Boomers https://www.entrepreneur.com/article/274727 As 75.4 million baby boomers enter retirement over the next decade, their spending power and buying habits will evolve to match a new post-career lifestyle. Adjusting marketing tactics to meet the needs of seniors is not a practice reserved solely for senior-centric industries. Whether it’s getting back-to-basics or hiring a team tailored to meet senior needs, nearly every company should be considering new ways to reach this massive market of consumers.

The next step in marketing to women is to stop marketing to women https://www.theguardian.com/media-network/2016/mar/02/marketing-women-advertisinggender-equality

Traditional views of gender are moving faster in culture than in advertising. Acknowledging stereotypes is not enough – our industry must lead the change.

Mediareach Ethnic Marketing Blog http://www.mediareach.co.uk/ethnic-marketing/ Leading blog on diversity and ethnic marketing.

Australian Bureau of Statistics http://www.abs.gov.au The Australian federal government provides official statistics on the economics and demographics of the country, providing a valuable resource for consumer researchers and marketers.

Ethnic Online Network http://www.ethniconlinenetwork.com A one stop ethnic marketplace for agencies, publishers and advertisers

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AUTHOR’S NOTE TO INSTRUCTORS Several activities have been retained in this manual that pertain to means-end chain analysis and VALS. While these topics are not explicitly covered in this chapter these are good activities that you could use with your students if you wish.

CHAPTER SUMMARY Chapter 11 examines external (social class/households) and internal (values/personality) influences on consumer attitudes and behaviour. In this sense, social class is seen as an overarching construct that, together with an individual's household status, will influence their values and, ultimately, their personality. However, while values and personality are internal outcomes, an individual's lifestyle is the manifestation of these influences in that it represents actual patterns of behaviour.

Social class Individuals in a society can be grouped into status levels (upper, middle and lower), making up a social class hierarchy. Class distinctions are significant because members of a particular class share common life experiences and therefore values and consumer behaviour patterns, although many variations occur within groups. Individuals are most likely to be influenced by members of their own class because they regularly interact with them. Still, influence can cross class lines through the trickle-down effect (when lower classes copy upper-class values and behaviour) or the status float effect (when trends start in the lower classes and spread upward).

A variety of factors determine social class, the most critical of which are occupation and education. Researchers use a battery of items, such as the Computerized Status Index, to measure social class. Three major trends producing an evolution in social class structure are upward mobility, downward mobility and social class fragmentation. Social class influences consumer behaviour in three major ways: (1) through conspicuous consumption, the acquisition and display of status symbol offerings to demonstrate social standing; (2) through compensatory consumption, trying to offset some deficiency by engaging in greater-than-usual consumption; and (3) through the meaning of money.

Households Households include both families and unrelated people living together, as well as singles.

The proportion of non-traditional households has increased because of factors such as (1) later marriages, (2) cohabitation, (3) dual-career families, (4) divorce, and (5) smaller families. Households exert considerable influence on acquisition and consumption patterns.

Members can play different roles in the decision process (gatekeeper, influencer, decider,

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buyer and user). Also, husbands and wives vary in their influence in the decision process, depending on whether the situation is husband dominant, wife dominant, autonomic or syncratic. Children can influence the decision process by making requests of parents. The nature of this influence partly depends on whether the household is authoritarian, neglectful, democratic or permissive. In general, the older the child the greater the influence on decision-making.

Values Values are enduring beliefs that inform us what is important. They are learned through the processes of socialisation and acculturation. Our values exist in an organised value system, with some values being viewed as more important than others. Some are regarded as terminal values and reflect desired end states that guide behaviour across many different situations. Instrumental values are those needed to achieve these desired end states.

Domain-specific values are those that are relevant within a given sphere of activity. Western cultures tend to place a relatively high value on material goods, youth, the home, family and children, work and play, health, hedonism, the environment and technology.

Marketers use tools like value segmentation to identify consumer groups with common values. Three methods for identifying value-based segments are discussed: inferring values based on the cultural milieu of the group, the means-end chain analysis and questionnaires like the Rokeach Value Survey and List of Values.

Personality Personality consists of the distinctive patterns of behaviours, tendencies, qualities and personal dispositions that make people different from one another. Approaches to the study of personality include (1) the psychoanalytic approach, which sees personality arising from unconscious internal struggles within the mind at key stages of development; (2) trait theories, which attempt to identify a set of personality characteristics that describe and differentiate individuals, such as introversion, extroversion and stability; (3) phenomenological approaches, which propose that personality is shaped by an individual’s interpretation of life events; (4) social-psychological theories, which focus on how individuals act in social situations (e.g., compliant, detached or aggressive); and (5) behavioural approaches, which view an individual’s personality in terms of past rewards and punishments.

Lifestyles Marketers also measure lifestyles, which are patterns of behaviour (or activities, interests and opinions). These lifestyles can provide some additional insight into consumers’ consumption patterns. Finally, some marketing researchers use psychographic techniques that involve all of these factors to predict consumer behaviour.

CHAPTER LEARNING OBJECTIVES After studying this chapter, students will be able to: 1. define the different external (social class and household) influences on consumer behaviour, including explaining why marketers should consider social class influences

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when planning strategy and tactics, and how the family life cycle and other forces affect household structure and consumption decisions 2. define the different internal (values and personality) influences on consumer behaviour, including explaining how values differ across groups, the personality characteristics most closely related to consumer behaviour, and the associated implications for marketing.

CHAPTER OUTLINE I. External influences on consumer behaviour A. Social class 1. Types of social class systems a) Most societies have high, middle and low class hierarchy b) Although most societies have some kind of hierarchical structure, the size and composition of the classes depend on the relative prosperity of a particular country c) 2. Social class influences a) Trickle-down effect: trends that start in the upper classes and are copied by lower classes b) Status float: whereby trends start in the lower or middle classes and spread upward B. How social class is determined 1. Occupation and education a) The greatest determinant of class standing is occupation, particularly in Western cultures b) Education, skill or training is critical because it often determines their type of occupation, and therefore social class c) Educational attainment is considered the most reliable determinant of a consumer’s income potential and spending patterns 2. Income versus social class a) Income is weakly related to social class b) Most overlap is in the middle and lower levels c) Both factors are important 3. Other indicators of social class a) Area of residence b) Possessions c) Family background d) Social interactions e) Inherited status: derived from parents at birth f) Earned status: acquired from personal achievements 4. Social class indexes a) Researchers use indexes such as the Computerized Status Index (CSI), which assesses consumers’ education, occupation, area of residence and income b) Status crystallisation occurs when consumers are consistent across the various dimensions and social class is easy to determine C. How social class changes over time 1. Upward mobility

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E.

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a) Individuals rise to a higher level of status b) Usually achieved by educational or occupational achievement 2. Downward mobility a) Individuals move to a lower class and lose social standing b) Increasing trend in many industrialised countries c) Usually caused by loss of job or inflation d) Status panic occurs when children cannot maintain the same status level as their parents 3. Social class fragmentation a) Old social class distinctions are beginning to disintegrate b) Upward and downward mobility have blurred class divisions c) Mass media has exposed consumers to norms and values of other classes d) Advances in communication technology have increased interaction across social class lines How does social class affect consumption?

1. Conspicuous consumption and voluntary simplicity a) Conspicuous consumption is the acquisition and visible display of luxury goods and services to demonstrate one’s ability to afford them b) Occurs with different items across all social classes c) Conspicuous waste occurs when wealthy individuals buy products that are never used d) Voluntary simplicity is limiting acquisition/consumption for a less material life 2. Status symbols and judging others a) Status symbols indicate their owners’ place in the social hierarchy b) Parody display – occurs when status symbols move in a reverse way c) Fraudulent symbols – occurs when status symbols become widely possessed and lose their status connotations 3. Compensatory consumption a) An attempt to offset deficiencies or a lack of esteem by devoting attention to consumption 4. Marketing implications a) Tapping into the desire for visible signs of upward mobility can be effective in marketing some products b) The use of credit and debit cards is rising in many nations, creating opportunities and challenges The consumption patterns of specific social classes 1. The upper class a) In most societies, the upper class is a small group consisting of the aristocracy, the new social elite (nouveaux riches) and the upper-middle class (professionals) b) Likely to view themselves as intellectual, liberal, political and socially conscious c) Attend cultural events, travel, invest in art, and donate to causes d) More likely to judge products based on attribute other than price 2. The middle class

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F.

a) The middle class consists primarily of white-collar workers, many of whom have attended university b) The middle class tends to look to the upper class for guidance 3. The working class a) Mainly represented by blue-collar workers b) Heavy dependence on family members for economic and social support c) More locally oriented socially, psychologically and geographically than other classes d) More likely to spend than save e) More likely to judge product quality on the basis of price 4. Marketing implications a) Social classes can serve as a way of segmenting the market b) Product or service development i.

Social class motives and values can determine which products or services consumers’ desire ii.

Marketers can appeal to consumers’ aspirations for upward mobility c) Messages i.

Advertising and personal selling messages can be designed to appeal to different social classes i.

Advertisers targeting a particular social class within the larger population can be effective by tapping into the group’s distinctiveness. When targeting the upper classes, for instance, the advertiser might suggest the group’s status as a small, elite group d) Media exposure ii.

Classes differ in their exposure to media, with upper classes reading newspapers and magazines and lower classes watching TV e) Note of caution i.

Marketers have had difficulty in using social class as a segmentation variable for several reasons (1). First, a variety of factors affect social classes, making it difficult to measure (2). Second, due to social class fragmentation, traditional social class distinctions may be becoming too broad to be useful Household influences on consumer behaviour 1. Types of households a) Nuclear family: mother, father, children; the most typical unit b) Extended family: nuclear plus aunts, uncles, grandparents, cousins, nieces c) Household is a broader term that includes a single person or a group of nonrelated people living together i.

Cohabiting couples – an unmarried male and female living together ii.

Gay couples iii.

Roommates iv.

Single-parent households v.

Boomerang children (come back home after university)

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2. Households and the family life cycle a) Households differ in the family life cycle. It is different stages of family life, depending on the age of the parents and how many children are living at home b) Marketers consider the great variation in needs depending on the family life cycle. Generally, spending increases in households when couples marry and decreases when families become older, single households c) Family in the midst of a life cycle change are more likely to switch brand preferences and be more receptive to marketing efforts G. Changing trends in household structure 1. Delayed marriage and cohabitation a) Many are waiting to raise a family while establishing a career. It is not as common anymore to get married right after high school or college.

More people are living together before marriage 2. Dual-career families a) Dual-career families spend more money on childcare, eating out, and services in general than other families typically do b) The increased burden of both career and family leads to role overload and less time for cooking, housekeeping, shopping and other activities c) More money is spent on time saving devices such as fast food d) More husbands are taking on household responsibilities, including shopping and cooking. For a small but growing percentage, some men are staying home to care for children. As a result, some ads are now geared towards men. In Asia, ads that are geared toward men are viewed negatively by both men and women since sex roles are considered more traditional even though more men are handling more housework 3. Divorce a) Up to 4 out of 10 marriages are likely to end in divorce. This trend has levelled off, but the impact for consumer behaviour, including separation, needs to be considered b) Consumers dispose of old possessions when forming a new household, creating new patterns of consumption c) Changes in lifestyle to form a new identity or to relive stress during the transition can lead to acquiring goods and services d) Recently divorced consumers might buy a new house, car, furniture or clothing, get a new hairstyle, or go to singles clubs to assume a new image or simply to feel better e) The divorced individual with custody of children may be less economically stable than married counterparts. Such individuals may also need services such as day-care or convenience products such as prepared food f) Divorced individual with little or no responsibility for children may be older but still have characteristics more common to singles, but with generally more income for housing, cars etc. g) Consumption patterns of divorced parents are influenced by having children who travel between families, which requires duplicate supplies of clothes, toothbrushes and toys

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4.

H.

Smaller families a) In many countries the average household is getting smaller b) More discretionary income to spend on recreational items, vacations, education, toys and entertainment c) Can spend more money per child. d) Childless married couples tend to have more discretionary income than other households; spending more on food, restaurant meals, entertainment, liquor, clothing and pets 5. Same-sex couples a) The number of same-sex couples is growing b) Some states and countries are now allowing same-sex marriage 6. Marketing implications a) Products that offer convenience can be targeted to dual-career and divorced households b) In dual-income families, working wives gain influence over consumption and acquisition decisions c) Singles are an attractive market to marketers d) Marketers target same sex couples via sponsoring gay pride festivals and ads Roles that household members play 1. Types of roles a) Household decision roles are roles that different members play in a household decision i.

Gatekeeper ii.

Influencer iii.

Decider iv.

Buyer v.

User b) Instrumental roles relate to tasks affecting the buying decision c) Expressive roles involve an indication of family norms 2. The roles of spouses a) Husband-dominant decision is made primarily by the male (e.g., lawnmower) b) Wife-dominant decision is made predominantly by the female head of household c) An autonomic decision is equally likely to be made by either party but not both d) A syncratic decision is made jointly by the husband and wife 3. The role of children a) Children influence (or attempt to) their parents buying and disposition b) Children overestimate how much influence they have in most decisions c) Children may bargain, persuade, use emotional appeals and request d) Authoritarian households stress obedience and this determines the child’s obedience

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Marketing implications a) marketers need to recognise that appealing only to deciders or purchasers may be too narrow a strategy, because different household members may play different decision roles b) marketers should determine which family members are involved in each acquisition decision and appeal to all important parties.

III. Internal influences on consumer behaviour A. Values a) Values are enduring beliefs that a given behaviour or outcome is desirable or good b) A value system is our total set of values and their relative importance 1. How values can be described a) Global values are values at the broadest level that represent the core of an individual’s value system. They are different from domain-specific values, which are relevant only to particular areas of activities such as religion, family or consumption b) Terminal values are highly desired end states c) Instrumental values are those needed to achieve desired end states d) Domain-specific values are relevant only to particular areas of activity, such as religion, family or consumption 2. Why values change e) Societies and their institutions are constantly evolving, so value systems also change B. Influences on values 1. Culture and values a) People in different cultures are exposed to different cultural experiences, so there are cross-cultural differences in values b) Dimensions along which cultures can vary include: (1). Individualism versus collectivism (2). Uncertainty avoidance (3). Masculinity versus femininity (4). Power distance 2. Ethnic identification and values a) Ethnic groups within a larger culture can have some values that are different from other ethnic subcultures 3. Social class and values a) A main characteristic of the different social classes is that each one tends to hold values that differ from the other classes 4. Age and values a) Because different cohorts grew up during different times in history, members of a generation can share similar values that differ from those of others 5. Marketing implications a) Consumption patterns (1). Consumers tend to buy, use and dispose of products in a manner consistent with their values

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C.

D.

(2). Marketers will know more about what consumers will do and what they will like if they understand their values b) Market segmentation (1). Marketers can identify groups of consumers who have a common set of values that are different from those in other groups, a process called value segmentation (2). Values can be useful in understanding just what attributes consumers within a market segment are likely to find important in a product and therefore what may motivate them to buy one brand over another c) New product ideas (1). Values are likely to influence consumers’ reactions to products that are new and different d) Ad development strategy (1). Examining the value profile of a target segment can aid in designing appealing ads e) Ethical considerations (1). Values guide consumers’ evaluations of the appropriateness of others’ behaviour, including marketers (2). Practices perceived as inconsistent with these values are likely to generate responses like boycotting, protesting and complaining Personality a) Personality consists of the distinctive patterns of behaviours, tendencies, qualities or personal dispositions that make one individual different from another and lead to a consistent response to environmental stimuli Research approaches to personality 1. Psychoanalytic approaches a) Propose that personality arises from a set of dynamic, unconscious internal struggles within the mind 2. Trait theories a) Propose that personality is composed of characteristics that describe and differentiate individuals (1). For example, levels of introversion and extroversion 3. Phenomenological approaches a) Propose that personality is largely shaped by an individual’s interpretations of life events b) Locus of control relates to how people interpret why specific things happen 4. Social-psychological theories a) Focus on social as opposed to biological explanations of personality b) Propose that individuals act in social situations in order to meet their needs 5. Behavioural approaches a) Propose that personality differences are a function of how individuals have been rewarded or punished in the past

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F.

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Determining how personality characteristics affect consumer behaviour 1. Optimal stimulation level a) We prefer things that are moderately arousing to things that are either too arousing or not arousing at all 2. Dogmatism a) Refers to an individual’s tendency to be more resistant to change and new ideas 3. Need for uniqueness a) Reflects one’s creative/unpopular choice counter conformity and avoidance of similarity b) Consumers with a high need for uniqueness resist conformity and strive to buy one-of-a-kind and individual items.

4. Creativity a) A departure from conventional consumption practice in a novel and functional way 5. Need for cognition a) Individuals may vary in terms of how much pleasure they derive from active thinking and contemplating b) Consumers who enjoying thinking extensively about things like products, attributes and benefits would be high in need for cognition (NfC) 6. Susceptibility to influence a) Consumers can vary in terms of their susceptibility to persuasion attempts 7. Frugality a) The degree to which consumers are disciplined and resourceful in their consumption behaviours 8. Self-monitoring behaviour a) Individuals differ in the degree to which they look to others for cues on how to behave 9. National character a) Personality traits can sometimes be used to stereotype people of a particular country 10. Marketing implications a) Personality traits may be related to consumption behaviour b) Marketers can develop products, services and communications that appeal to various personality types Lifestyles a) Patterns of behaviour represented by consumers’ activities, interests and opinions (AIOs) 1. Lifestyle and behaviour patterns a) Outside activities are a good indicator of consumer lifestyles b) Lifestyle research can help marketers understand how a product fits into consumers’ general behaviour patterns c) Consumers in different countries may have characteristic lifestyles 2. Voluntary simplicity

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3.

a) Consciously limiting acquisition and consumption for a less materialistic, more eco-friendly lifestyle Marketing implications a) Segmentation and targeting i.

Lifestyles can be used to identify consumer segments for various offerings ii.

Marketers monitor lifestyle changes to identify new opportunities b) Communications i.

Ad messages and promotions are often designed to appeal to certain lifestyles ii.

Lifestyles have implications for specific media used by consumers iii.

Media usage patterns may be related to lifestyles c) New product ideas iii.

Marketers can develop new product and service ideas by uncovering unfulfilled needs of certain lifestyle segments

QUESTIONS FOR REVIEW AND DISCUSSION Possible answers are as follows.

1. Define the terms ‘nuclear family’, ‘extended family’ and ‘household’.

A nuclear family is the typical family structure, consisting of a father, mother and children. Some families unofficially include their pets in the nuclear family. The extended family includes relatives such as grandparents and cousins, aunts and uncles. It may include nephews and nieces as well. A household is a single person living alone or a group of people who live together. You do NOT have to be related to be in a household.

For instance, your college or university roommates are considered to be a part of your household when you reside together in any given year.

2. What five key factors have altered the basic structure and characteristics of households?

1. Delayed marriage age and cohabitation. People are getting married at an older age (e.g., to start their career and save for a family) and are testing out living together before marriage more than other generations.

2. Dual-career families. More women work out of the home, and thus more often we see both parents split duties bringing home money and taking care of the home.

3. Divorce. Unfortunately, not all marriages last, and as a result any impacted children may have two or more families with step-parents, etc. Divorce is about 40 per cent, according to the text – and that is a conservative figure based on some other reports.

4. Smaller families. Children are expensive and it is difficult to raise many children when both parents work.

5. Same-sex couples. There are about 645,000 same-sex households, conservatively.

This includes relationships and partnerships (e.g., a lesbian couple), and many more states are considering legal marriages among same-sex couples.

3. What is the social class hierarchy?

A social class hierarchy is the grouping of members of society according to status – high or low. Different cultures have differing hierarchies. For instance, in the US, there are upper, middle and lower classes. It is thought that classes tend to behave more similarly

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with others in their class than with those in other classes.

4. What are the determinants of social class?

The classes depend on occupation, education, income, and inherited vs. earned status.

Also, where you live (e.g., home ownership vs. renting an apartment) can be a component. An upper class person tends to have an esteemed career (e.g., doctor or teacher), education (college or post grad), above average income, an upper class family, and owns a home. Not all of these are necessary, yet, each are indicators of social class.

5. Why is social class fragmentation taking place?

Social class fragmentation is the disappearance of class distinctions. They are starting to have blurred barriers. This is because of upward and downward mobility. Note that class is transient, so you may have an inheritance to high social class, but that can be lost. Or, one can earn a higher status by hard work and education. Increased availability to the internet and media exposes all groups to the lifestyles of other classes, and consumers may mimic what they see. For instance, the show the Real Housewives of Orange County showcases wealthy housewives, and some consumers may aspire to use the brands that these women use on the show. Also, there is increased interaction among classes due to social media and communication technology.

6. Why would a consumer engage in conspicuous consumption, conspicuous waste or voluntary simplicity?

Conspicuous consumption is to show a brand, or attributes of the brand that go along with a self-schema, or one in which a consumer is proud of and wants attention to the purchase or product. A shiny set of chrome wheels with a brand prominently displayed is an example of conspicuous consumption.

Conspicuous waste is visibly buying products and services that one never uses. This could be because one wants to put out an image. For instance, pianos look nice and show an image of music appreciation. That piano may never be used though.

Counter to this, sometimes consumers choose not to spend, or to underspend. They may choose to opt out of Valentine gift exchange with their partner, and make a card and dinner versus a more conspicuous dinner date at a high-end restaurant. Note, this is not because they can’t afford the restaurant – it is a choice to be low-key in consumption. It can be a lifestyle for some to live minimally.

7. If a company was looking to launch a consumer product in your country, how might current household structures influence its planning and operations?

Because households often make many more acquisition, consumption and disposition decisions than individuals, the household is an important unit of analysis for any marketing decisions. The critical aspect is that the structure of the household will vary depending on the family life cycle. The nature of the product will determine the relevant target customer, and this target customer’s place in the household structure and the family life cycle must be considered. So, if the target customer belongs to a household in the midst of a family life cycle change, they may be more receptive to marketing efforts, and be more willing to switch brands.

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8. Why might a company develop different offerings for consumers in different social classes?

Companies develop different offerings because upper class consumers may want to wear signs of wealth, such as a pair of designer sunglasses with diamonds. Other classes may not be able to afford those sunglasses, but instead a different brand without diamonds. Car companies such as Toyota understand this, so they have tiered branding (Lexus for upper-class consumers, Toyota for the middle class, and Scion for Gen X or Y).

9. Explain the differences among global values, terminal values, instrumental values and domain-specific values.

Global values are a person’s most enduring, strongly held and abstract values that hold across many situations. Terminal values are highly desired end states such as social recognition and pleasure. Instrumental values are values needed to achieve a desired end state such as ambition or cheerfulness. Domain-specific values are those that may apply to only a particular area of activities.

10. What factors are seen as key determinants of an individual’s values?

Values are learned from an early age and a person’s value systems are often in place by the age of 10. In this respect, we learn values through exposure to a range of reference groups, in a process called socialisation. Because we are exposed to such a broad range of external stimuli, values can be influenced by the culture in which we live and our ethnicity. At the same time, the social class to which we belong will often have a strong influence on our values. Importantly, group values will often change with the times, so people in different age groups, while they may share the same culture, ethnicity and social class, can have very different values to those younger or older.

11. What are three personality traits which affect consumer behaviour?

There are a number of personality traits outlined in the text which students could use as examples. Certain types of personality traits may be more related to consumer behaviour than others, these include: • • • • • •

•

optimal stimulation level – people prefer things that are moderately arousing to things that are either too arousing or not arousing at all dogmatism – an individual’s tendency to be resistant to change and new ideas need for uniqueness – consumers who pursue novelty through the purchase, use and disposition of goods and services have a high NfU. creativity – Consumer who possess high creativity may differ from ‘conventional consumption practice in a novel and functional way’ and this difference can have a positive influence on their consumption experience and brand attitudes need for cognition – consumers with different needs for cognition differ in terms of their product interests, information search and reaction to different ad campaigns susceptibility to influence – consumers also vary in their susceptibility to persuasion attempts. Those who have lower confidence at processing information may be more susceptible to influence through advertising, and viceversa. frugality – the degree to which consumers take a disciplined approach to short-

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term acquisitions and are resourceful in using products and services to achieve longer-term goals • self-monitoring behaviour – individuals differ in the degree to which they look to others for cues on how to behave • national character – marketers must consider how differences in national character may influence reactions to advertising and other communications • competitiveness – the desire to outdo others through conspicuous consumption of material items.

12. How does the locus of control affect personality?

Locus of control is the process of how people interpret why things happen. Specifically, individuals with an internal locus of control attribute more responsibility to themselves for good or bad outcomes. Locus of control can heavily affect consumers’ perceptions of satisfaction in a consumption experience.

13. What are the three components of a consumer’s lifestyle?

The three components of lifestyle include one’s activities, interests and opinions.

CONSUMER BEHAVIOUR CASE IKEA’s household appeal No matter where you live, no matter what kind of household you live in – married with children, same-sex couple, single, single parent or just roommates – IKEA wants to be ‘your partner in better living’. The Swedish retailer rings up $33 billion in sales through 284 stores in 26 countries, offering stylishly designed furniture and quality housewares at affordable prices. In fact, IKEA continues to lower prices year by year on popular items so it can both attract new customers and stimulate repeat business, even among consumers whose household incomes are stalled or falling. Offering a range of good- betterbest products widens the store’s appeal to consumers setting up new households, families getting ready for new babies, families where children regularly travel from one parent’s household to another and households that are buying on a limited budget. Also, consumers who might have bought IKEA’s top-of-the-line items now have more choices if they’re trading down to less-expensive products.

Shopping at IKEA is deliberately family friendly. Many of its stores feature a play area where youngsters can be dropped off while parents browse the store for adult or children’s furniture and make purchases without their children. The stores also are equipped with restaurants that serve Swedish-style foods for breakfast, lunch and dinner and have high chairs for the youngest shoppers. When the IKEA store in Wednesbury, England, added a children’s play area and expanded the restaurant, it saw an immediate sales increase and found that the length of the average customer visit had doubled, to about four hours.

Yet not every family member looks forward to an IKEA shopping trip. For Father’s Day weekend in Australia, the IKEA store in Sydney set up a temporary Manland, a room where men could watch sports programming and play video games while their wives or girlfriends shopped. ‘Manland is the perfect solution for both the blokes who find shopping a chore and the ladies who are forced to drag their partners around,’ said

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IKEA’s PR manager in Australia.

Although targeting singles and couples with advertising that appeals to their needs and wants is nothing new, IKEA was among the pioneers of mainstream advertisers to target gay couples. Its TV commercial showing two men shopping for furniture together caused a stir in part because the men were depicted as a committed couple. A recent – and controversial – billboard for IKEA in Italy features two men holding hands (and a shopping bag) under the headline: ‘We are open to all families.’ The ad goes on to say: ‘With us, you will feel at home. What we want to do is make life easier for everyone, every family, every couple, whoever they are.’

IKEA’s word-of-mouth reputation for quality and value gives the company an advantage in expanding to new markets. Before the first IKEA store opened in Bangkok, Thailand, the marketing manager acknowledged the presence of competition but also noted that many locals ‘have travelled abroad or learned from friends about IKEA furniture’. In advance of this store opening, IKEA distributed one million copies of a special 16 -page catalogue featuring items chosen specifically for the Thai market. IKEA’s full 370 -page catalogue is available to consumers worldwide for ideas as well as for shopping. IKEA prints more than 200 million copies each year and makes the catalogue available online and via an app.

Consumers in the United Kingdom who use Facebook were recently invited to create a 3D IKEA bedroom on YouTube and click on items from the company’s catalogue to furnish it as they wish. IKEA adds the finishing touch by hanging photos from each user’s Facebook wall in the bedroom. ‘We want to be the experts in truly understanding people’s needs, wants and dreams to help them live a happier life at home,’ explains an executive. Of course, any merchandise chosen for the virtual bedroom can be easily ordered for delivery in the real world.

CASE QUESTIONS 1. The Manland experiment lasted only one weekend in one store. What are the marketing advantages and disadvantages of expanding it to other stores? Do you think IKEA should do more with this idea? Why or why not?

One advantage in expanding the Manland concept to other stores is that Sydney has been used as a test market. Assuming the concept received positive responses from consumers, expansion would seem viable. However, there are a number of disadvantages. First, it means for some households, one decision-maker is not participating in the shopping experience. This could be an issue, given more expensive household items may be selected through a syncretic decision process. Secondly, some segments of the market may perceive such an offering as an implied message IKEA is a more feminine brand designed for female consumers. Part of the reason for not doing more with this concept is that it overlooks the change in household structures and may, in fact, have a negative influence on female consumers who feel neglected. An option may be to explore a similar ‘Woman’s Land’ concept around Mother’s Day. Retailers highlight the convenience and ease of using a walk-in clinic and position the service as fitting into a consumer’s everyday life allowing the retailer to save its customers’ time.

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2. Would you classify IKEA’s products as suitable for conspicuous consumption, voluntary simplicity and/or compensatory consumption? Explain your answer.

In many western countries, IKEA is not considered a brand that is purchased as a result of compensatory consumption (to compensate for loss of self-esteem) or conspicuous consumption (to display status). However, in certain countries, like Thailand, the purchase of European products such as those from IKEA allow consumers to display wealth or global knowledge. At the same time, consumers in Western countries may see the broader product line offerings (good-better-best) as an opportunity to trade up to more expensive IKEA products at different stages of their household/life cycle. Similarly, voluntary simplicity might be applicable, given consumers may see IKEA’s reputation for value and quality as a way to fulfil their desire for quality products while demonstrating their less materialistic ways.

3. IKEA’s ads targeting gay couples have drawn criticism as well as acclaim. What effect do you think such controversy has on the retailer’s image and appeal?

Globally, there have been significant changes in societal views on same-sex marriage, with many nations allowing same-sex marriage or being more tolerant of same-sex relationships. That said, the effect of such ads is dependent on the consumer segment being considered and the nation in which the ads are appearing. One interesting effect is that consumers with a high ‘Need for Uniqueness’ may see the ads as edgy and groundbreaking, and offer a way for consumers to demonstrate their unique self-identity.

4. Why would IKEA continue to print millions of catalogues every year, while other retailers are eliminating printed catalogues in favour of online and instore shopping?

While IKEA is a global bastion of value and quality, the use of print catalogues serves two functions. First, the media channel used by marketers is often dependent on the target audience. In this case, the use of print media and magazines is often a vehicle for communicating to upper-middle class consumers. Because of this, the use of printed catalogues is a way to position IKEA as a high-status brand. Second, the use of catalogues provides IKEA with a high level of control over its messages, and allows the company to develop tailored catalogues for each country or region.

SUGGESTED EXERCISES AND TEACHER GUIDELINES 1. Conduct a content analysis of the advertisements that appear over four issues of a selected magazine. For each ad, record the type of product or service and whether and how each of the following values is reflected in the message: (a) materialism, (b) youthfulness, (c) the home, (d) work and play, (e) the family, (f) health, (g), hedonism, and (h) technology. Summarise this information and answer the following questions: (a) Which values are most often reflected in the advertisements? (b) Do certain types of values appear more often types of products? (c) Which themes appear in relationship to each value?

Ask students to note the source of the magazine and analyse the relationship between the magazine’s target audience and the values contained in the ads. How might different publications reflect different values?

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2. Develop a questionnaire to measure some of the key activities, interests and opinions of university students. Also, develop a series of items to measure the consumption of five product or service categories that may be related to university or student lifestyles.

Administer this questionnaire to 20 fellow students (across different majors if possible).

Summarise the results and answer the following questions: (a) What are the key lifestyle segments of the students you surveyed? (b) For each segment, are there recognisable consumption patterns in terms of products or services? (c) What general types of marketing strategies would you use to appeal to each group?

University students are often portrayed in advertisements as party animals, irresponsible slackers only concerned with being popular or bookworms. What types of university lifestyles are not often represented in advertisements? How could a marketer better reach some of these student segments?

3. Visit the VALS website (www.strategicbusinessinsights.com/vals/presurvey.shtml ) and answer one of these online surveys to see how psychographics might describe you as a consumer. (a) How do the questions in this survey compare with the questions you developed for exercise 2? (b) Do you agree that the segment in which the survey placed you, based on your answers, in an accurate description of your lifestyle, personality, and/or values? Explain. In terms of psychographics, what additional details about your values, personality, or lifestyle would help a car manufacturer target you more effectively for a new car purchase? What questions would you add to the survey in order to elicit these details?

Students’ answers will vary.

SUGGESTED INTERNET EXERCISES WITH SAMPLE ANSWERS The VALs online survey Many organisations have used the VALS classification system to gain greater understanding of their consumers and potential consumers and have successfully developed or reformulated their marketing mixes based on VALS findings. An abbreviated form of the VALS survey is available online at www.strategicbusinessinsights.com/vals/presurvey.shtml .

Click on the link to the VALS survey, follow the instructions and submit your responses. What are your primary and secondary VALS types? According to the website, what can the marketer gain from using the VALS categorisation scheme to research consumer behaviour?

Instructor notes Results of students’ VALS self-assessment will vary widely. Strategic Business Insights publishes the online VALS survey as an enticement to marketers who might consider paying to use the more comprehensive assessment instrument. By purchasing SBI’s research services, the marketer hopes to gain insight concerning which consumers to target; why they behave as they do; where they live; and how best to communicate with the them.

Additional uses This exercise also relates to concepts in the following chapters: •

Chapter 2, Motivation, Ability and Opportunity (impact of resources on ability and opportunity)

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Chapter 10, Consumer Diversity (comparison and contrast of VALS with PRIZM)

•

Chapter 11A, Psychographics: combining values, personality and lifestyles (comparison and contrast the VALS categories with typical social class values and lifestyle factors)

•

Appendix to Ch 1, Conducting Research in Consumer Behaviour (external research firms)

Discussion idea Does your VALS category accurately reflect your values and lifestyle? Why, or why not?

Possible negative answers might include: •

Too few questions in the abbreviated VALS survey; it cannot adequately capture the complexity of factors that contribute to an individual’s values and lifestyle

•

Too few determinants in the VALS model; it needs more factors than simply a consumer’s resources and self-orientation

•

Arbitrary demarcations between categories; there should be more classifications

•

Results differ according to whether the student answers based on individual or household situation (many students are dependents within a parent-headed household).

Storm Chasing Adventure Tours What kind of person spends precious vacation time in Tornado Alley? Find out by going to www.stormchasing.com ! Describe a typical vacation package available through Storm Chasing Adventure Tours. Which instrumental and terminal values does this kind of recreation reflect? Relate the desire to participate in a storm-chasing vacation to consumer personality theories and characteristics.

Instructor notes Featured on CBS’ 48 Hours, The Discovery Channel and the British Broadcasting Company, Storm Chasing Adventure Tours offers two-week vacation packages during violent storm season in Tornado Alley (Texas, Oklahoma, Kansas and eastern Colorado). According to the website, the primary reason for the tours is the possibility of a firsthand encounter with violent weather, such as tornadoes, supercell thunderstorms or hailstorms. The tour vehicles have real-time, on-board weather monitoring systems, which allows the tour operators to drive to areas of severe weather in time to witness the storms in action.

Storm Chasing Adventure Tours arranges all ground transportation and lodging during the vacation; however, meals and transportation to and from the tour’s origin are the vacationer’s responsibility. If no severe weather occurs on a given day within reasonable driving distance, the tour provides alternate activities such as visits to theme parks. The tour’s operators post rules (no alcohol except in the evening after chasing hours are over), packing suggestions (warm-weather clothing, no hard-sided luggage), fee information and other useful tips at the website.

Terminal values reflected by participation in a storm chasing vacation might include an exciting life; pleasure; self-respect; a sense of accomplishment; or hedonism. Instrumental values related to this activity might include being imaginative and capable. The CAD socialpsychological theory of personality has some explanatory power; aggressive consumers may participate in storm chasing because of their general assertiveness and self-confidence.

Certainly consumers who seek such vacations have a very high optimal stimulation level!

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Additional uses This exercise also relates to concepts in the following chapters: •

Chapter 2, Motivation, Ability and Opportunity (consistency of storm-chasing vacation with consumers’ values, goals, and needs; risk perceptions)

•

Chapter 4, Memory and Knowledge (schemas for highly-stimulating vacations)

•

Chapter 5, Attitudes and Persuasion (application of TORA, contrast of storm-chasing vacation with ski vacation)

•

Chapter 7, Judgement and Decision Making (applications of cognitively-based and affectively-based models to storm-chasing vacation decision)

•

Chapter 9, Social Influences on Consumer Behaviour (normative influences on decisions concerning highly-stimulating vacations)

Discussion idea What other kinds of vacations might appeal to the same target market served by Storm Chasing Adventure Tours?

ADDITIONAL DISCUSSION QUESTIONS WITH SAMPLE ANSWERS These discussion questions can be used as in-class activities or as thought questions that the students consider while reading the chapter or to test their understanding of the material after the reading and lecture are complete.

1. Provide an example of a means-end chain analysis and use this example to explain how such an analysis can benefit consumer behaviourists.

An example of a means-end chain is the following series of statements about Estée Lauder liquid foundation makeup; each step in the chain is ascertained after further probing about its preceding step.

Interviewer: What type of makeup do you use?

Consumer: Estée Lauder liquid foundation. (Product) Interviewer: Why do you like this product?

Consumer: Because it provides good coverage. (Attribute) Interviewer: Why is good coverage important?

Consumer: Because it gives my face a smooth, unblemished appearance. (Benefit) Interviewer: Why is it important to have a smooth, unblemished appearance?

Consumer: Because it makes me look prettier. (Instrumental Value) Interviewer: Why is looking prettier important to you?

Consumer: Because the prettier I am, the more likely people are to like me.

(Terminal Value) By moving from the consumer’s initial announcement of a product preference through the product’s attributes and benefits to its instrumental and terminal values, the consumer behaviourist is able to gain valuable insight into the relationship between the

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product’s attributes and value to the consumer. Marketers can use this information to develop product offerings and to market existing offerings.

2. What types of advertising appeals would be effective for consumers who display each of the personality traits discussed in the text and why?

The first trait is optimum stimulation level (OSL), which refers to the level of arousal with which an individual is most comfortable. For customers with high OSL, ads that emphasise the newness or adventuresome nature of a product would be appropriate.

The second personality trait is dogmatism, which relates to how open- or close-minded a person is. Consumers who are reluctant to change would prefer ads that remind the consumer of the longevity of the product or its spokespeople, such as Betty Crocker, the Morton Salt girl, Mr Whipple and the Coppertone girl.

The third personality trait, need for uniqueness reflects one’s creative choice counter conformity, unpopular choice counter conformity and avoidance of similarity.

Consumers with a high need for uniqueness resist conformity and strive to buy one-of-akind and individual items.

Need for cognition, the fourth personality trait, refers to how much pleasure a consumer derives from thinking. Individuals with low need for cognition would prefer ads with heuristics, humour and simple messages, such as the ‘Got Milk’ campaign.

The fifth personality trait, susceptibility to influence, relates to how easily persuaded a person is. The sixth trait, self-monitoring behaviour, refers to the degree to which a person looks to others for cues on how to behave. An individual with lower social and information processing confidence and high self-monitoring would react to ads that utilise relevant reference group members discussing a product’s attributes and benefits.

Beer ads that show men enjoying each other’s company and bonding around their favourite brew address both influence and self-monitoring.

Frugality is the seventh trait. This is the degree to which consumers are disciplined and resourceful in their consumption behaviours. Frugal consumers will spend money only when necessary. It does not always mean that they will buy the cheapest alternative, especially in cases where higher quality will ensure a longer product life, thereby enhancing long-term goals.

The eighth personality trait, national character, relates to the personality of a country.

The Pepsi-Cola ads showing families watching an Independence Day parade, picnicking together while surrounded by red, white and blue bunting, and enjoying a Pepsi draw on national character.

ADDITIONAL QUESTIONS 1. In your group, develop a definition of values. Explain the distinction between a global value, a domain-specific value, an instrumental value and a terminal value. Clarify the two ways in which the term terminal value is used.

2. Explain how values are learned. Discuss what the terms assimilation and acculturation mean. Describe the characteristics of a society that stimulates assimilation.

3. Explain the concept of value segmentation. Illustrate the concept by indicating how it applies to several different product markets.

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4. Provide several examples of products or appeals that you think are particularly compatible with the values of (a) Hispanic consumers, (b) Asian consumers, and (c) middle-class versus working-class consumers.

5. Discuss what is meant by means-end chain analysis. Explain how the process works and what it is intended to show about consumers’ values.

6. Explain the difference between a value and a personality trait. Explain how understanding this difference can help marketers.

7. Discuss what extroversion, introversion and locus of control mean. Explain how these concepts can relate to marketing and consumer behaviour.

8. Each person in the group should take a couple of minutes to write down a brief description of his or her own lifestyle. Include at least five examples of how your lifestyle relates to the consumption of products and services. Discuss as a group and identify similarities and differences in lifestyles.

9. Develop a list of guidelines regarding the kinds of marketing tactics that are likely to be effective for people with high versus low needs for stimulation.

10. Develop a brief description of VALS and explain why it lost favour with market researchers. Describe the segments in the VALS2 scheme. Indicate what products, marketing communications, and consumption behaviours might be particularly relevant to the Believers, Strivers and Makers.

EXPERIENTIAL EXERCISES AND CLASSROOM EXAMPLES Students who learn more readily through visual and tactile stimuli will benefit from the introduction of physical examples into the classroom.

1. ‘Who am I?’ exercise Tell students to write a personal ad for themselves (or, if this makes them uncomfortable, for someone they know very well). They should prepare it in eight-point type, column style, with a headline – just as it would appear in an actual newspaper.

Have the students turn in the ads anonymously so that you can compile them on 8 x 10 sheets of paper. Copy the compiled ads, distribute them, and discuss them in class.

What are the values expressed in the ads? Do common themes emerge? Some students write ads describing themselves and their own characteristics, while others describe the characteristics they seek in another person. Ask students why they took the approach they did. (They often reply that they find it difficult or awkward to write about themselves.) What did they learn about themselves in the process of completing the assignment? What surprised them the most? What general insights did they gain from the assignment? (You can ask a volunteer or two to ‘choose’ a date from among the ads and explain the choice. However, you should be prepared for the possibility that no one will volunteer, especially in a small class!)

* These experiential exercises were contributed by Professor Sheri Bridges of Wake Forest University.

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2. ‘Know thyself…and others, too’ exercise Tell students to visit the VALS site at www.strategicbusinessinsights.com/vals/ustypes.shtml and determine their profile. Ask them to print out the description of their profile (accessible after the test results are computed) and bring it to class. Use the board to record the types represented in the class. (Because students have relatively limited financial and other resources, Strivers often are over-represented, while Actualizers often are under-represented.) Ask students to retake the survey without indicating a level of income to see if their segmentation type differs. Invariably, some students will disagree with their classifications or with the classifications’ implications for product and media usage. You can use this to motivate a discussion of statistical concepts related to standardised testing (such as reliability and validity) or to seed a more interesting exploration of better ways to ‘type’ consumers. It usually does not take students long to realise that although the test might be inaccurate at a level of detail about specific individuals, it does a good job of capturing the broad segments in the marketplace. (Students who are particularly interested in personality tests might also want to complete a Myers-Briggstype test called the Keirsey Temperament Sorter at www.keirsey.com/sorter/register.aspx .

Other fun tests, including ‘What breed of dog are you?’ are available at www.brainfall.com .

CLASSROOM GROUP ACTIVITY Means-end chain analysis: 10 minutes (refer to 'additional discussion questions' section for a basic outline of a means-end chain analysis) I.

Start up A. Purpose of the activity 1. This activity will give students an opportunity to consider how to conduct a means-end chain analysis to understand terminal values held by consumers B. What the instructor will do 1. Select products that the students will discuss in their small groups.

Depending on the instructor’s objectives, these can be either at the product category level (e.g., meat, milk, eggs) or at the brand level (e.g., Crown, Coles, Country Road). Each will generate different results. Giving some of each to groups throughout a classroom will allow for a discussion of the differences between product and brand-level marketing 2. The instructor will divide people into small groups, assign them a product for analysis and be available to coach and help the groups as needed 3. Optionally, groups may be provided with clear overhead acetates and markers so they can summarise their discussions and make presentations after their analysis and discussion C. What the participants will do 1. The participants will work in small groups to elicit the means-end chain of one participant in the group for a particular product. After a period of smallgroup discussion, they will make reports to the large group D. Rules for this experience

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1.

Groups are to work separately from each other. Individuals should rely on their knowledge from the book and may refer to their notes and the book as necessary II. Experience A. Group up 1. Have students form groups of three to no more than five. This exercise will work in groups of any size; however, room restrictions that do not allow for moving furniture may make group work more difficult B. Assign products 1. Each group should be assigned a single product on which to focus C. Specific actions for groups 1. The groups are responsible for (1) interviewing one of their own members to elicit responses about a product and (2) developing a description of the means-end chain for that individual related to that product 2. Optionally, groups can summarise their discussions on clear overhead acetates to facilitate presentations after their analysis and discussion 3. Process to be followed by small groups a) Select an interviewer and interviewee from the group. The other members are observers b) Ask the interviewee why s/he likes/dislikes the product. Following the response, probe further as to why that response was given. Keep asking, ‘why’ questions until the interviewee ‘doesn’t know.’ Repeat the process by asking ‘Why else do (don’t) you like it?’ Again, proceed until the interviewee ‘doesn’t know’ c) As a group, identify attributes, benefits, instrumental values and terminal values in the responses offered by the interviewee d) Consider how the product your group has been assigned might be marketed to a segment similar to that described by the interviewee’s values 4. Large-group discussions a) Have each group present its findings to the class in a round-robin format III. Debrief and unveil concepts A. Discuss the activity itself 1. The purpose of this discussion is to allow students to express what they felt about the experience itself 2. Ask students to describe their experiences of doing the activity a) Likes and dislikes about what just happened b) How they felt during the experience c) What is realistic, unrealistic about the exercise d) What will be different when they do this for their own brand B. Discuss the content of the experience 1. The purpose of this discussion is to ensure that students ‘take away’ important learning points 2. Ask students to describe the important points the experience teaches a) The importance of understanding the underlying means-end chains in consumers’ minds 3. Use the chalkboard to record student responses

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Write down their ideas as they are presented Concentrate on the principles being discussed rather than the examples being used Help them to see the interrelationships among their responses

IV. Execute A. Apply what has been learned 1. Lead a discussion on how the concepts can be applied in organisations a) What barriers may be faced in applying the concepts from the exercise? b) What can be done to help others understand the concepts when you use them at work?

B. Transfer and use the knowledge 1. Encourage students to make a record in their notes about how they will use the ideas in the workplace 2. Even if they do not have a specific job, how will they remember to use what they have learned?

USEFUL WEBLINKS The US VALS Survey http://www.strategicbusinessinsights.com/vals/presurvey.shtml The purpose of the US VALS™ survey is to identify the VALS type of the person taking the survey. That's it. To find out about a person's product ownership, media preferences, hobbies, additional demographics, or attitudes (for example, about global warming), the questions in the VALS survey integrate into larger questionnaires that ask about these topics.

The means-end chain model http://skymax-dg.com/mecanalyst/chain.html The MEC Analyst website provides information on means-end chain analysis, a way to explore connections between the consumer and a product through the construction of a simple associative network.

The Five Values of The New Affluent Consumer http://www.forbes.com/sites/onmarketing/2013/07/02/the-five-values-of-the-newaffluent-consumer/#401a4721651a An interesting article that shows how changing distributions of wealth around the world are shaping consumer values

CHAPTER 12

Innovations: Adoption, Resistance and Diffusion

CHAPTER SUMMARY Innovations are products, services, ideas or attributes perceived to be new by consumers in a market segment. Innovations can be characterised as functional, symbolic, and/or hedonic/aesthetic in nature. Innovations also vary in the degree of behavioural change their adoption requires. A continuum of innovativeness in products ranging from continuous to discontinuous innovations can be identified. Innovations may represent fads, fashions or classics, and hence may exhibit a short, moderate, or long lifecycle. Product life-cycle length may be fostered by enhancing the breadth of the innovation and by encouraging use innovativeness in consumers.

There are three key issues of importance to marketers introducing innovations. First is breaking down consumers’ resistance to innovations, second is facilitating consumers’ adoption of the innovation, and third is affecting the diffusion of the innovation through the marketplace. A high- (vs. low-) effort hierarchy-of-effects adoption process occurs when the innovation is seen as economically, physically, socially or psychologically risky. Some individuals called innovators adopt products independently of the decisions of others.

Special marketing efforts may be geared toward innovators since their adoption directly or indirectly influences the adoption of other consumers (by word of mouth or social modelling).

Characteristics of the innovation and the social system in which it is introduced affect resistance, adoption and diffusion. First resistance is more likely to be overcome when the innovation is perceived to provide value (i.e., involve a relative advantage, low cost and low switching costs), involve minimal consumer learning (i.e., high compatibility with existing needs, values and behaviours; trialability; and low complexity), involve relatively high certainty, and be viewed as high in social relevance, legitimacy and adaptability. Consumers’ perceptions of the characteristics of the innovation can in turn be affected by marketing decisions.

Resistance, adoption and diffusion are also affected by the characteristics of the social system in which the innovation operates. The denser the social network and the more homophilous the social system, the more likely information will be transmitted from adopters to non-adopters. This information transmission may directly affect adoption likelihood. Although they offer relative advantages, innovations can result in negative social and economic consequences.

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CHAPTER LEARNING OBJECTIVES After studying this chapter, students will be able to: 1. describe how innovations can be classified in terms of their type, the benefits they offer and their breadth 2. Explain what resistance to innovation is and the tactics marketers might use to overcome it, as well as how consumers adopt an innovation and why marketers must understand the timing of adoption decisions 3. describe the different types of diffusion curves and the factors that influence the rate of diffusion 4. outline the main factors that affect adoption, resistance and diffusion and show how marketers can use their knowledge of these factors to market more effectively.

CHAPTER OUTLINE I. Innovations A. Defining an innovation • An innovation is a product, service, attribute or idea that is perceived as new by consumers within a market segment and that has an effect on existing consumption patterns • Innovations are classified by (1) the type of innovation, (2) the type of benefits offered and (3) the breadth of innovations 1. Innovations characterised by degree of novelty a) Continuous innovation has limited effect on existing consumption (1). Most new products on the market are continuous innovations b) Dynamically continuous innovation has a more pronounced effect on our consumption practices (1). Often these innovations involve new technology c) Discontinuous innovation is a product so new that we have never known anything like it before 1. Innovations characterised by benefits offered a) Functional innovations offer functional performance benefits over existing innovations b) Aesthetic or hedonic innovations appeal to aesthetic, pleasure seeking, and/or sensory needs c) Symbolic innovations are products, services, attributes or ideas that have new social meaning 2. Innovations characterised by breadth a) Refers to the new and different uses to which a new product is put B. Innovations and co-creation a) Actively involving consumers in creating value through participation in new product development and marketing activities II. Resistance versus adoption A. Whether consumers adopt an innovation 1. Resistance reflects consumers’ desire not to purchase the innovation, even in the face of pressure to do so a) Separate concept from adoption © 2021 Cengage. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

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B.

C.

D.

How consumers adopt an innovation 1. High-effort hierarchy of effects a) The consumer thinks carefully about the product, gathers as much information about it as possible and forms an attitude based on this information b) Based on the attitude, the consumer may try the product and, if the trial experience is favourable, may adopt the product 2. Low-effort hierarchy of effects a) When the new product involves less risk and when fewer people are involved in the buying process, decision-making may be less involved b) Consumers engage in trial after they become aware of the innovation c) Assuming attitudes are positive, adoption may follow 3. Marketing implications a) Marketers need to know if consumers’ adoption decisions are based on high- or low-effort adoption i.

If the adoption process is low-effort, marketers need to do all they can to encourage trial because trial affects brand attitudes ii. If the adoption process is high-effort, marketers need to do all they can to reduce the perceived risk associated with the innovation When consumers adopt innovations 1. Innovators – the first 2.5 per cent a) Venturesome b) Technology enthusiasts 2. Early adopters – the next 13.5 per cent a) Respectable b) Visionaries 3. Early majority – the next 34 per cent a) Deliberate b) Pragmatic 4. Late majority – the next 34 per cent a) Traditional b) Wary of progress 5. Laggards – the final16 per cent a) Sceptical 6. Some researchers say these categories do not exist for all types of innovations Marketing implications 1. Innovators are important to marketers because they adopt new products independently of others’ opinions 2. Demographics a) Innovators tend to be younger b) Have more discretionary income and education c) Culture of origin affects willingness to accept innovations 3. Social influence a) Innovators tend to have a great deal of influence beyond their own immediate groups and tend to be opinion leaders 4. Personality

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a) Innovators have a high need for stimulation b) Inner directed c) Less dogmatic d) Less planning when making decisions Cultural values a) Innovativeness is associated with cultures that value individualism, assertiveness and openness to change Media involvement a) Innovators are frequent users of the media and rely on external information extensively Usage a) Innovators are heavy users within the product category

III. Diffusion 1. Diffusion is the percentage of the population that has adopted an innovation at a specific point in time. Whereas adoption reflects the behaviour of individuals, diffusion reflects the behaviour of the marketplace of consumers as a group A. How offerings diffuse through a market 1. The S-shaped diffusion curve a) Products first spread through the market relatively slowly b) After a certain period of time, the rate of adoption dramatically increases and then slows again 2. The exponential diffusion curve a) Characterised by rapid initial growth, where a high percentage of the market purchases the product as soon as it is available b) With each additional time period, the adoption increases at a decreasing rate B. Factors affecting the shape of the diffusion curve 1. An S-shaped curve can come about when there is high consumer perception of social, psychological, economic, performance or physical risks 2. Likewise, a lack of consumer certainty about the length of time a product will be on the market, as well as high switching costs, will lead to an S-Shaped curve 3. By contrast, when consumers perceive little risk and switching costs are low, a rapid, exponential diffusion curve is more likely 4. Diffusion curves reflect the rate of adoption only, not the time period under analysis C. How diffusion relates to the product life cycle 1. The product life cycle (PLC) concept is based on the following process: a) Products go through a period of introduction b) Growth becomes rapid as more competitors enter the market and consumer acceptance increases c) As competition increases, weaker competitors drop out and product sales stabilise d) Eventually consumer acceptance wanes and product sales decline 2. Diffusion focuses on the percentage of the overall market that has adopted the product

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3.

4.

PLC relates to sales of a product over time Marketing implications a) Marketers can try to prevent a product’s decline b) Marketers can encourage use innovativeness c) Marketers can try to diagnose their product’s likely life-cycle pattern (1). Fads have very short PLCs (1). Fashions or trends have lengthier PLCs than fads (3). Classics have lengthy PLCs IV. Influences on adoption, resistance and diffusion A. Characteristics of the innovation 1. Perceived value a) An innovation is perceived to have value if it offers greater benefits or lower costs than existing alternatives 2. Perceived benefits a) An innovation’s value to consumers is affected by what it is thought to offer above existing products or its perceived relative advantage (1). Relative advantage does not exist in a product, but rather it is something the product does for the consumer 3. Perceived costs a) Actual purchase cost – the higher the purchase cost, the greater the resistance and the slower the diffusion b) Switching cost – the cost of changing from the current product to a new one 4. Marketing implications a) If the innovation is not perceived to have a relative advantage, marketers may need to add one by physically redesigning or reengineering the product b) If the product has an advantage, but it is not perceived by consumers, marketers need to communicate and demonstrate the relative advantage c) Marketers can use price promotions to reduce perceived costs d) Marketers can use incentives to switch B. Uncertainty 1. Doubt about the standard product in the industry 2. Uncertainty about the relative advantage 3. When innovations are resisted because consumers are worried about a short product life cycle, marketers should show how adaptable the product is and hence how likely it is to have a long PLC C. Consumer learning requirements 1. What consumers need to do in order to use the innovation effectively?

2. Compatibility a) The extent to which the innovation or its usage is consistent with consumer values, norms and behaviours 3. Trialability a) The extent to which an innovation can be tried out on a limited basis before adoption 4. Complexity

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The more difficult consumers think a product is to understand or use, the slower the diffusion 5. Marketing implications a) Marketers can enhance the compatibility or reduce the complexity of their innovations b) Advertising can educate consumers about how compatible the innovation really is with existing needs, values and norms c) Marketers can use change agents such as opinion leaders to enhance perceived compatibility d) Marketers can avoid incompatibility by designing the innovation to fit with an entire system of products e) Marketers can work with regulators to force the innovation to be used as the industry standard f) Trialability can be overcome with advertising and promotion tactics g) Demonstrations can show the benefits of using the product h) Simulating trials is another way to encourage consumers to try innovations 6. Social relevance a) Observability a) The extent to which the innovation is observable to others (1). Consumers are more likely to adopt an observable product visibly consumed by others b) Social value a) The extent to which a product has social cachet (it is seen as socially desirable and/or appropriate and therefore generates imitation) c) Marketing implications a) Extensive advertising, promotion and distribution can be used to overcome observability problems b) Distinctive packaging, styling, colour or unique promotions can enhance observability c) Social relevance can be heightened by advertising, particularly advertising that ties product use with potential social approval d) Social value can be enhanced by associating the product with some social entity, cause or value Legitimacy and adaptability 1. Legitimacy refers to the extent to which the innovation follows established guidelines for what seems appropriate in the category 2. Adaptability refers to the innovation’s potential to fit in with existing products or styles 3. Marketing implications a) Legitimacy can be enhanced by demonstrating how the innovation came into being b) Lack of adaptability can be overcome by showing the product as having uses that extend beyond its original functions Characteristics of the social system 1. Modernity

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a) 2.

3.

2.

Modern social systems are those that have a positive attitude toward change Physical distance a) When members of the social system are spread far apart, diffusion is slower Homophily a) Overall similarity among members of a group (1). Normative pressures may speed adoption and diffusion of an innovation Opinion leadership a) Key influencers among members can affect adoption and diffusion through credibility

QUESTIONS FOR REVIEW AND DISCUSSION Possible answers are as follows.

1. What is the difference between continuous and discontinuous innovations? In the next decade, what are some examples of discontinuous innovations that we might see enter the marketplace?

Continuous innovations are often an extension of existing offerings and don't require the consumer to radically alter their product usage or purchase behaviour. By contrast, discontinuous innovations are unlike current market offerings and require (or allow) consumers to change both their purchase or consumption behaviour and their product usage experience.

2. What is co-creation and what are its potential benefits?

Co-creation is when a consumer (or other party besides the manufacturer) works together to create a brand, product, service or other offering. This is a smart way to involve customers and to get their feedback at a higher level. For instance, Doritos had an opportunity for a customer to design their Super Bowl ad and they received many entrants. They gave a prize away and in return received free ad production. A related idea is to have consumers suggest a new flavour for their chips. Potential benefits: cost saving, increased consumer involvement, being consumer-driven, avoids managerial myopia.

3. What is the difference between adoption and diffusion? How does the concept of resistance relate to adoption?

Adoption is the purchase of an innovation by an individual consumer or household.

Diffusion is the percentage of the population that has adopted that particular innovation at a specific point in time. An example of a very high level of diffusion is email. In the modern business world, it is hard to communicate without using email. Alternately, resistance is the desire to not adopt an innovation, even in the face of pressure to do so.

For instance, people over forty years old resisted the change to computers – and email – when they first came out.

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4. Under what circumstances might a consumer follow the high-effort hierarchy of effects in adopting an innovation?

Consumers are more likely to follow a high-effort decision-making process when the innovation is discontinuous because they know less about the innovation and must learn about it. A high-effort adoption process may also be used when many people are involved in the decision.

5. How can marketers minimise consumers’ perceived risk in an effort to promote adoption of new innovations?

For innovations that require low effort on the part of the consumer, marketers must try to maximise the opportunity for consumers to trial the product. Product trials will increase consumer familiarity with the product, its attributes and usage benefits and has a positive influence on purchase intent. However, when the adoption process requires high consumer effort, marketers must focus on minimising the perceived risk faced by consumers.

6. What is the difference between an S-shaped diffusion curve and an exponential diffusion curve?

An S-shaped diffusion curve is typically characterised by slow initial growth followed by a rapid increase in diffusion. By contrast, An exponential diffusion curve is typically characterised by rapid initial growth.

7. What is the product life cycle and how does it differ from product diffusion?

The product life cycle has four primary phases: introduction, growth, maturity and decline. It differs from product diffusion in that diffusion focuses on the percentage of the market that has adopted the product. The product life cycle deals with sales of the product over time.

8. How do consumer learning requirements and social relevance affect resistance, adoption and diffusion?

Consumer learning requirements reflect the difficulty in understanding what consumers need to do to effectively use an innovation. If an innovation can increase its level of compatibility with consumers’ values, norms and behaviours, that increases the extent to which an innovation can be tried prior to adoption (trialability), and decreases the innovation’s complexity so that consumers will likely adopt the product. Social relevance indicates the extent to which the innovation can be observed or the extent to which having others observe it having social cachet. Increasing the innovation’s social relevance will improve the diffusion rate of the product.

CONSUMER BEHAVIOUR CASE RedBalloon: Revolutionising digital marketing with artificial intelligence RedBalloon is a leading Australian m-commerce company that specialises in selling experiential gifts. These experiences include action-packed outdoor activities, exciting water sports, gourmet experiences, luxury getaways, scenic flights and relaxing spa treatments, delivered by a network of over 1500 suppliers across Australia and New Zealand.

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RedBalloon originated in 2001 through the efforts of Naomi Simson and enjoyed phenomenal growth in its early years. However, after a decade in business, the number of its competitors had increased significantly. The proliferation in similar products meant customer acquisition costs had skyrocketed from a low of $0.05 to almost $50 per customer.

This was despite spending over $45 000 per month across a range of advertising agencies.

There was minimal transparency, a lack of control and, consequently, very little value being delivered.

Having stepped away from the operational side of the business in 2011, Simson returned in 2017, looking to take back control. One of the first things she did was to develop a deeper understanding of the customer journey. The focus was on which customers were visiting the website, where in the funnel they were situated, what they were buying, who they were buying it for and what data was being captured to guide marketing and strategy.

From the initial investigations, the team at RedBalloon realised they needed help managing data to provide a better customer experience. The solution was ‘Albert’, an AI-enabled tool that analysed Red Balloon’s customer databases and ad accounts to target, optimise and run their ad campaigns through sophisticated machine learning capabilities. Albert was able to sift through large amounts of data and convert it into valuable insights, which were then used to develop and optimise different ad campaigns in real time across multiple channels.

The automation that Albert provided meant that RedBalloon was able to eliminate a plethora of manual, time-consuming tasks. This allowed them to execute strategy and scale campaigns at a greater pace. As a result, marketing staff were able to better focus their efforts on creativity, customer acquisition and growth.

To make the best use of AI-enabled technology, a critical requirement is large amounts of data. Fortunately, this was something RedBalloon had in abundance. To begin with, the team supplied Albert with six months of data involving campaign creative, campaign insights and campaign performance metrics. In its first hour of operation, Albert optimised almost 46 000 keywords, and within 24 hours it could proficiently identify and test approximately 6400 keyword variations of a particular RedBalloon AdWords campaign. The important aspect was that Albert was ‘learning’, and doing so at such a rate that comparable analysis by a professional search engine analyst would have taken over one year to complete. Had this been the case, any first-mover advantage would have been lost. Importantly, within the first month of operation, Albert reduced the customer acquisition costs from around $50 to less than $17.

Because of the optimised advertising, Albert allowed RedBalloon to set some ambitious ad spend targets. Considering the results after just one month of operation, the team at RedBalloon set 500 per cent as the goal for return on ad spend. Not only was Albert able to achieve such an ambitious target, the learning capability of AI-enabled technology now means that RedBalloon is consistently reporting a return of 1100 per cent on ad spend, with some individual ads achieving an outrageous 3000 per cent.

Today, RedBalloon spends 25 per cent less on marketing while enjoying 30 per cent better results. The company hopes to help other marketing firms also revolutionise their digital

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marketing through AI-enabled technology, as it has recently signed a reseller agreement and is now the exclusive distributor of Albert across Australia and New Zealand.

CASE QUESTIONS 1. What could be some additional unexpected benefits of using AI in digital marketing As part of the ‘test and learn’ phase, Redballoon’s marketing team used the power of machine learning and allowed Albert to operate without any restrictive inputs. Because of this, Albert identified a new segment of customers that wanted their products. These consumers were typically travellers from the UK and USA who were looking to add an experience while in Australia. This was a shift for RedBalloon, as they had previously dedicated their ad spend to domestic campaigns within Australia.

2. How important is it to identify all possible target markets?

The benefit of Albert was the ability to identify smaller target audiences and hyperpersonalize ad campaigns. This allowed the team to reach newly identified audiences.

For example, Australian expats were willing to purchase experiential gifts for friends and colleagues travelling to Australia, for family and friends within Australia or for themselves upon returning back home to Australia. Albert was also able to identify new micro-segments – such as 65yr old females who were interested in rally driving – thereby offering greater scope for long term growth.

3. Is AI-enabled technology for everyone?

AI-enabled technology like Albert may not be for everyone, especially start-ups. Part of this is due to the fact that for AI-enabled technology to work properly, it needs lots of data. Therefore, if a company hasn’t been spending enough on marketing - or if the company hasn’t acquired any customers - there is nothing to optimize. RedBalloon had data dating back to 2001 as well as having six months of robust advertising performance data for Albert to optimise.

4. What effect could the introduction of AI have on an organisation’s marketing department?

Even though Albert is probably best for consumer brands, it also requires the firm’s marketing team to embrace AI-enabled technology. Executives may fear a loss of control that could make their positions redundant. To combat this, RedBalloon ensured their people worked alongside Albert, so that it became part of the team. For example, staff responsible for implementing paid advertising campaigns transitioned into roles where they oversaw Albert. This gave them responsibility for implementing marketing plans, allowing them more time and resources to focus on value-add tasks 5. Why is it important to collect marketing data across the different digital marketing channels?

The use of different channels is a key determinant for long-term digital success.

However, data management and analysis provide the insights necessary to optimise digital properties. This allows the firm to develop consumer pathways and funnels that maximise conversion rates. In RedBalloon’s case, not only did they gather a vast range of sales data and marketing metrics, they were able to capture real-time customer feedback. In essence, not only did RedBalloon become a marketing agent for its

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suppliers, it’s provision of real-time customer feedback situated RedBalloon as a key contributor in the co-creation of experiences.

SUGGESTED EXERCISES AND TEACHER GUIDELINES 1. Read several publications like BusinessWeek, Fortune, or the Wall Street Journal and identify two innovative products and/or services. (a) Why are these offerings innovations? (Relate your answers to the chapter’s definition of an innovation.) (b) What type of innovations are they – continuous, dynamically continuous, or discontinuous?

Functional, aesthetic or symbolic? (c) Describe whether you think adoption and diffusion of these offerings will be fast or slow by using concepts associated with the innovations, such as relative advantage, operability and legitimacy. (d) Indicate how marketers might overcome resistance and speed adoption and diffusion for those offerings whose diffusion is likely to be slow.

Ask students to consider other publications that might contain more innovations such as a computer or electronics-related publication. How does the nature of the publication influence the type of innovations contained in advertisements in that publication. Can one find ads for innovations in popular magazines like People or Sports Illustrated?

2. Consider a product that you think represents an innovation but that you have not yet purchased. Using the terms discussed in this chapter, indicate why your resistance to this product is high or low.

Satellite radio might be an example of a product category that is in the early adoption phase of diffusion. While some new car models come equipped to receive satellite radio, most consumers need to purchase special equipment to be able to subscribe to a satellite radio service. Resistance to date may still be high as there might be some degree of uncertainty to the total amount of cost and effort required to be able to receive satellite transmission (high degree of complexity). The inability to try the product before purchasing may also be a factor. Social relevance, however, may positively influence the diffusion as using this service may reflect positively on consumers. Finally, the product appears to be compatible with consumer lifestyles, given the degree of importance that music has for many consumers and therefore should positively affect the adoption rate of this product.

3. Identify a new product that you consider to be a fad. Why is it likely to be a fad? What can marketers do to enhance the length of this product’s life cycle?

The Atkins diet is a great example of a fad. It is a fad because it is an unsustainable diet plan that promises quick and easy results. When a fad catches on, consumers gravitate to it because it is the next big thing. Marketers can use celebrity spokespeople, news media, and other events to help push the Atkins diet. In fact, they created a line of food products based on the Atkins diet – yet the company was later placed in receivership.

The key with diets and weight loss pills is that long-term results can only be sustained by changing habits, not symptoms. Changing habits is harder to do, as most people do not like to change, even if their behaviours may be destructive. For instance, in all weight loss ads there is a disclaimer at the bottom of the ad that states, ‘These results are not typical.’ The reason they are not typical is it takes a considerable discipline to change our eating behaviours. Another example you could use with students is TrimSpa (another weight loss product) which the late Anna Nicole Smith once used to lose weight. What

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they won’t tell you is she was given a personal trainer, changed her diet, exercised and took TrimSpa. Was it the Trimspa, or the fact that she worked out and ate fewer calories?

4. Think about a new product or service you have recently encountered. How did the social system of which you are a member influence your knowledge about, attitudes toward and willingness to adopt this innovation?

The answers to this question will vary. As an instructor, look to make sure that students explain their experience and why they chose to adopt this new product or service.

Students are generally surprised to learn that their background tends to help them accept an innovation.

5. Identify a set of offerings that you consider to be symbolic innovations. How has the meaning of each innovation changed? What cultural forces explain these changes?

The answer to this question will vary. The key is for students to understand that over time meanings of brands and symbols change. One of the best examples is the word ‘gay.’ In the 1920s, ‘gay’ meant you were a happy person; now it has a different connotation. Cultural forces changed the word ‘gay’ into a slang word for a homosexual group. Another example that seems to interest students is that in the early 19th century, women that were voluptuous (overweight by today’s standards) were considered more attractive then skinny women. This is due to the thinking that women who were overweight were considered to be healthier (since they could afford food). Another interesting example is that richer people in those times avoided getting a tan. It had nothing to do with skin cancer. Instead it conveyed their status because they didn’t work in the field like the common people. Nowadays, tanning beds and lying on the beach to get a nice tan are considered a way to make ourselves more attractive.

SUGGESTED INTERNET EXERCISES WITH SAMPLE ANSWERS Minimed insulin pump Since Drs Banting and Best first isolated human insulin in the 1920s, physicians and patients have struggled to improve control of Type I (insulin-dependent) diabetes. Insulin injections provide relief from the disease’s effects for many; others will develop severe complications despite their best efforts. A relatively recent innovation in diabetes control is the insulin pump. Minimed manufactures several of the leading models of this device and maintains an informative website at www.minimed.com. Visit Minimed online, including its links describing what an insulin pump is; how to live with an insulin pump; and how to determine if an insulin pump is right for a patient. In terms of degree of novelty and benefits offered, what kind of innovation is the Minimed insulin pump? How does its use differ from that of traditional insulin treatment? Why might some patients resist using an insulin pump instead of traditional insulin treatment?

Instructor notes The Minimed insulin pump is a dynamically continuous, functional innovation. Its use results in a profound change from the usual routine of insulin injections for Type I diabetics. The insulin pump certainly is a new technology with several important utilitarian benefits to the user. The patient programs the Minimed pump for the right insulin dosage from its reservoir. The infusion set, which resembles an intravenous medicine port, connects to the

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pump on one end and into the patient’s abdomen on the other. The patient must change the infusion set once every two to three days, instead of injecting insulin several times per day. Because the pump provides a larger dose of insulin at mealtimes and a more gradual dose between meals, its operation more closely mimics the way a healthy pancreas works.

The advantages of the Minimed pump over injected insulin are substantial. It allows the diabetic to maintain much closer control over blood glucose levels, avoiding the severe complications that fluctuating glucose levels precipitate. Using the Minimed pump frees the diabetic from the inconvenience of rigidly scheduling meals, physical activity, and sleep as an injection-dependent diabetic must do to maximise control over the disease. Quality of life is vastly improved. However, the insulin pump is more expensive to purchase and maintain than are traditional insulin treatments. Its use requires frequent consultation with health professionals to maximise its effectiveness. These factors may increase the cost of switching beyond what some patients can afford. Also, some diabetics may perceive substantial psychological and physical risk from changing to an insulin pump; they may prefer to forego potential risk of using a relatively new technology if they perceive their disease to be under good control with traditional injections.

Additional uses This exercise also relates to concepts in the following chapters: •

Chapter 2, Motivation, Ability and Opportunity (impact of product knowledge, experience, cognitive style, intelligence, education, and money on ability to process information about insulin pumps)

•

Chapter 3, From Exposure to Comprehension (miscomprehension of product information about the insulin pump, e.g. diabetics who believe they can eat anything as long as they use the pump)

•

Chapter 5, Attitudes and Persuasion (impact of cognitive responses, argument quality, comparative messages on attitudes about the insulin pump)

•

Chapter 7, Judgement and Decision Making (evaluating treatment alternatives)

•

Chapter 8, Post-Decision Processes (positive disconfirmation concerning the insulin pump’s benefits)

Discussion idea In what ways does the adoption of, or resistance to, a medical innovation, differ from these processes for non-medical products?

ADDITIONAL DISCUSSION QUESTIONS WITH SAMPLE ANSWERS These discussion questions can be used as in-class activities or as thought questions that the students consider while reading the chapter or to test their understanding of the material after the reading and lecture are complete.

1. Explain the relationship between consumer learning requirements and adoption and diffusion of innovations.

Consumer learning requirements are defined as what consumers need to do to effectively use an innovation. They are one of the characteristics affecting resistance, adoption and diffusion of innovation. There will be less resistance and more diffusion if

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an innovation requires smaller amounts of consumer learning. Three factors that positively affect adoption and diffusion are compatibility, trialability and complexity. The more compatible an innovation is to consumers’ norms, values and beliefs, the more it can be tried on a limited basis before it is adopted and the less complex it is in nature.

2. Discuss the characteristics of the social system that influence adoption, resistance and diffusion of innovations.

The more positive a social system’s attitude toward change, the more receptive consumers will be to new products. Similarly, the more dense the social network and the more homophilous the social system, the more likely that information will be transmitted from adopters to non-adopters, which, in turn, can influence the likelihood of adoption. Finally, the positive attitude of opinion leaders in a social system regarding an innovation can favourably influence adoption and diffusion.

ADDITIONAL QUESTIONS 1. Develop a definition of an innovation. Identify those characteristics of innovations that are important for marketers.

2. Discuss what it means to introduce a marketing innovation. Develop a process for successfully introducing a marketing innovation.

3. Recreate the typical adoption/diffusion curve. Identify the factors you believe will influence the actual shape of this curve for a real product. Identify two innovations you are familiar with and discuss how the factors you have identified influenced its diffusion in the market.

4. Create a list of reasons to explain why a marketing innovation might fail. For each of these reasons for failure, propose a way for avoiding the failure.

5. Marketers are responsible for ensuring the successful adoption of new innovations.

Select a new innovation and explain what marketers could do to make its adoption successful.

6. Recreate the curve that shows how consumer segments adopt innovations (innovators, early adopters, and so on). Explain how this curve can be helpful to marketing managers trying to project production, pricing, distribution and other issues.

7. Characteristics of an innovation might cause it to be accepted or rejected. Explain what can be done to decrease the likelihood that these characteristics will cause resistance to the innovation.

8. Describe those characteristics of the social system that might cause an innovation to be accepted or rejected. Propose how marketers can address these potential barriers to adoption.

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EXPERIENTIAL EXERCISES AND CLASSROOM EXAMPLES Students who learn more readily through visual and tactile stimuli will benefit from the introduction of physical examples into the classroom.

1. ‘Gotta have it’ exercise Buy several packets of play money from a local toy store and distribute it in equal amounts to each student in the class. Tell students they are to use the money to bid in an auction of products with limited commercial availability. The items are: Folding bicycle helmet: The only bicycle helmet that folds after use, combining function, convenience and safety in a streamlined design. The three-piece helmet meets or exceeds international safety standards, providing maximum impact absorption and head protection. Complete with nylon ‘fanny pack’ carrying case.

Writing pen with light: This brushed aluminium ballpoint pen with enclosed light is perfect for taking notes in class during videos and PowerPoint presentations. The pen’s patented Accu-Light, which is powered by a replaceable watch battery, illuminates your notepaper without disturbing others in the room.

Solar radio: Patented spring-engine technology powers this advanced radio. Simply turn the crank for 30 seconds to generate enough energy to operate the AM/FM radio for one hour. Also operates indefinitely in direct sunlight thanks to a solar panel that draws energy as needed.

Virtual reality glasses and smartphone adaptors: Transform any video source, including those from a smartphone, into a personal screening device with virtual reality capabilities.

Cordkeeper hairdryer: This lightweight, 1875-watt, two-speed, two-heat setting hairdryer has a push-button mechanism that allows you to retract the electrical cord to keep it out of sight and out of harm’s way.

Tea bag mug: Colourful 12-ounce ceramic mug has a built-in bag holder for soggy tea bags. Use it to carry your fresh tea bag to a favourite spot, brew your tea then tuck the used bag into the handy holder and sip the tea while it’s hot.

Electronic wall calendar: This multifunction, programmable wall calendar lets you keep track of all the important information in your life with the touch of a digital pen. Hang it on your wall and ‘pencil’ in meetings, appointments, holidays, birthdays, anniversaries, and reminders. Includes a shopping list function, calculator, clock/timer, and address book for quick-and-easy access to all the information you need to stay organised and on top of things.

Programmable alarm clock: Rest assured that you’ll get to class on time with this electronic alarm clock that allows you to set seven different wake-up times – one for each day of the week – with the touch of two simple buttons. In less than 30 seconds on Sunday night, you can program your rise-and-shine calls for the entire week. Sleep peacefully knowing that, even if you forget about your 8 a.m. class on Tuesday, your alarm clock will not.



Professor Sheri Bridges of Wake Forest University contributed this experiential exercise.

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The instructor has the option of setting reserves (minimum opening bids) on each item or of letting students determine the starting price. Do not be concerned that students will not ‘get into’ the activity – even the quietest individuals often get caught up in a bidding war. After the auction, discuss both the outcome (who ended up with what) and the process (why they bid on specific items and how they determined what their highest bid would be). It usually becomes clear that some students get a great deal of utility out of being the ‘first on the block’ to have something (innovators), while others only bid and bought if they truly needed the product. This leads to a broader discussion of the diffusion process and ways in which marketers can attempt to accelerate the acceptance of new products and services.

CLASSROOM GROUP ACTIVITY Innovative product advertisement analysis: 15 minutes I. Start up A. Purpose of the activity 1. This activity will give students an opportunity to analyse how marketers use advertising to influence the adoption and diffusion process B. What the instructor will do 1. The instructor must identify advertisements from one of the following sources a) Assign students to search for advertisements containing innovative marketing initiatives in advance of the class activity b) Collect advertisements for innovative or new products from current media c) Select advertisements included in the chapter 2. The instructor will divide people into small groups, assign them an advertisement for analysis, and be available to coach and help the groups as needed 3. Optionally, groups may be provided with clear overhead acetates and markers so they can summarise their discussions and make presentations after their analysis and discussion C. What the participants will do 1. The participants will work in small groups to study how marketers use advertisements to influence the adoption and diffusion process. After a period of small-group discussion, they will make reports to the large group D. Rules for this experience 1. Groups are to work separately from each other. Individuals should rely on their knowledge from the book and may refer to their notes and the book as necessary II. Experience A. Group up 1. Have students form groups of no more than five. This exercise will work in groups of any size; however, room restrictions that do not allow for moving furniture may make group work more difficult B. Assign advertisements 1. Each group should be assigned a single advertisement on which to focus a) These advertisements will come from one of the sources discussed above

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C.

Specific actions for groups 1. The groups are responsible for (1) developing a list describing how the ads effectively present the innovative product, and (2) developing recommendations for improving the ad 2. Optionally, groups can summarise their discussions on clear overhead acetates to facilitate presentations after their analysis and discussion 3. Questions to be answered by small groups a) Consider the advertisement your group has been assigned. Develop a critique of the ad that outlines (1) what the ad does well to present the innovative product (especially how it addresses potential sources of resistance in the marketplace), and (2) what can be done to make the ad (or one like it) potentially more effective 4. Large-group discussions a) Have each group present its ideas to the class in a round-robin format III. Debrief and unveil concepts A. Discuss the activity itself 1. The purpose of this discussion is to allow students to express what they felt about the experience itself 2. Ask students to describe their experiences of doing the activity a) Likes and dislikes about what just happened b) How they felt during the experience c) What is realistic, unrealistic about the exercise? d) What will be different when they do this for their own advertisement?

B. Discuss the content of the experience 1. The purpose of this discussion is to ensure that students ‘take away’ important learning points 2. Ask students to describe the important points the experience teaches a) The role of specific marketing techniques to encourage consumers to adopt new products, services and ideas 3. Use the chalkboard to record student responses a) Write down their ideas as they are presented b) Concentrate on the principles being discussed rather than the examples being used c) Help them to see the interrelationships among their responses IV. Execute A. Apply what has been learned 1. Lead a discussion on how the concepts can be applied in organisations a) What barriers may be faced in applying the concepts from the exercise? b) What can be done to help others understand the concepts when you use them at work?

B. Transfer and use the knowledge 1. Encourage students to make a record in their notes about how they will use the ideas in the workplace 2. Even if they do not have a specific job, how will they remember to use what they have learned?

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ADDITIONAL LECTURE TOPICS In the chapter, there are various issues raised with respect to how consumers adopt innovations and how innovations diffuse through the marketplace. Many students will not make the connection between the characteristics of innovations and the implications for marketers. In the case of each issue of diffusion, ask students to draw out the marketing implications of the issue at hand. The following provides an example of how such a question might be phrased.

Relative advantage suggests that consumers must perceive the additional value of an innovation before they will continue adopting it. Therefore, the marketer must consider how to communicate the advantage so that it is perceived by potential customers. What can marketers do to enhance the consumer’s understanding of relative advantage in an innovation? (Consider giving an example innovation for discussion.)

The following table provides more ideas about discussing different barriers to innovation adoption and potential marketing solutions. You might use this to guide a class discussion by placing the left-hand column on the board and having the students generate their own ideas for the right-hand column.

Innovation Problem Value Barrier Lack of Perceived Relative Advantage

Perceived High Cost Perceived High Switching Costs

Uncertainty Barrier Uncertain Standards Uncertain Life-Cycle Length Consumer Learning Barrier Lack of Perceived Compatibility

Lack of Trialability

Potential Marketing Solution Redesign product Use comparative advertising Add value via positioning Invent, create, or borrow an image Use endorsements by credible sources Use price-oriented promotions Use warranties or guarantees Pass manufacturing savings to consumers Provide incentives for switching Demonstrate problems of not switching Force the innovation to be the industry Standard Force the innovation to be the industry standard Enhance the life cycle by adapting the product to new uses Understand cultural traditions via research Stress consistency with norms and values via education Use change agents Develop a systems perspective Integrate the innovation with a precedent product Force the innovation to be mandatory via government regulation Use free samples if possible Use demonstrations and advertising to show product functions

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High Perceived Complexity Social Relevance Barrier Lack of Observability

Lack of Social Value Legitimacy Barrier Adaptability Barrier

Use high-service outlets Distribute through high-service outlets Use skilled salespeople Use product demonstrations Extensive advertising and promotion Enhance product visibility via distinctive packaging, styling, colouring, promotions Associate the product with a visible referent Associate the product with a social entity, cause, or value Associate the product with a visible referent Show the product’s relationship to legitimate precursors Build adaptability into the product. Use communications to demonstrate adaptability

This table is adapted from Jagdish N. Sheth and S. Ram, Bringing Innovation to Market (John Wiley Sons, 1987); Del Hawkins et al., Consumer Behavior (Irwin / McGraw-Hill); and Hubert Gatignon and Thomas S. Robertson, “Innovative Decision Processes,” in Thomas S. Robertson and Harold Kassarjian, eds., Handbook of Consumer Behavior (Prentice-Hall, 1991), 316–348.

USEFUL WEBLINKS National Innovation and Science Agenda http://www.innovation.gov.au The National Innovation and Science Agenda is an Australian Government initiative designed to drive smart ideas that create business growth, local jobs and global success. The Agenda includes initiatives worth $1.1 billion over four years.

Innovative New Zealand http://www.mbie.govt.nz/info-services/science-innovation/innovative-new-zealand Innovative New Zealand is a series of 25 initiatives that will see a total of $761.4 million invested over the next four years in science, skills, tertiary education and regional development initiatives. These will help diversify the economy and support more jobs and higher wages for New Zealanders in the decade ahead.

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CHAPTER 13

Symbolic Consumer Behaviour

CHAPTER SUMMARY This chapter discusses the symbolic role that products can play. Some products are used as conscious badges that designate the various cultural categories of which we are members.

Products and rituals also hold symbolic significance when we undergo role transitions. They serve as symbols by connecting us to people, places and times that have been important to us, and they are symbols of our individuality and uniqueness. The combined symbolic uses of products and rituals affect our self-concept.

Some of our possessions are regarded as very special. They are non-substitutable, will not be sold at market value and will be purchased with little regard for price. They are rarely discarded, even if their functional value is gone, and may not even be used for their original functional purpose. We personify these possessions, may feel powerful emotions in their presence, and may have feelings of fear or sadness over their potential or actual loss. In part, possessions are special because they serve as unique emblems, facilitate role transitions, connect us to others or express our unique styles. In part, they are special because they indicate personal mastery and achievements or are mood enhancing.

Background characteristics such as social class, gender and age all seem to influence just what type of object is regarded as special.

Some entities are so special they are worshipped, set apart and treated with inordinate respect – that is, they are sacred. A number of things outside the realm of possessions – people, places, objects, times and events – also take on sacred status. Sacred objects transcend time and space and have strong approach/avoidance powers and great fascination. They are cared for and nurtured. Often, special rituals are devised to handle them. Sacred objects can be profaned or made more ordinary by commercialisation, inappropriate usage or divestment patterns. As such, marketers need to take care in developing, changing or profaning sacredness in objects.

Gift giving is a process of transferring meaning in products from one person to another. Gift giving entails three phases: gestation, presentation and reformulation, and is a complex process, involving single or multiparty donors, along with single or multiparty recipients.

Gift-giving occasions are often culturally prescribed, but may vary in their timing.

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CHAPTER LEARNING OBJECTIVES After studying this chapter, students will be able to: 1. discuss how products, special possessions and consumption activities gain symbolic meaning and how this meaning is conveyed from one consumer to another 2. identify how marketers can influence or make use of the symbolic meaning that consumption may have for consumers 3. distinguish between sacred and profane entities and show why this distinction is important for marketing strategy 4. understand the process of gift giving and describe how marketers can use knowledge of this process to market more effectively.

CHAPTER OUTLINE I. Sources and functions of symbolic meaning A. Meaning derived from culture 1. Cultural categories are natural groupings or categories of objects that reflect culture. These may include: a) Time (work time, leisure time) b) Space (home, office, safe/unsafe places) c) Occasions (festive versus sombre) d) Gender, age, social class, ethnicity 2. Cultural principles are ideas or values that specify how aspects of culture are organised and/or how they should be perceived or evaluated. Cultural principles give meaning to products B. Meaning derived from the consumer 1. Consumers can develop their own individual meanings associated with products 2. Consumption symbols can be used a) To say something about the consumer as a member of a group b) To say something about the consumer as a unique individual C. The emblematic function Consumers use different symbols as emblems, to denote their membership to a particular social group. There are five distinct types of emblems used by individuals: 1. Geographic emblems a) Products can symbolise geographic identification (1). Preppie clothing style symbolises identification with New England 2. Ethnic emblems a) Products and consumption activities can symbolise identification with a given culture or subculture (1). Clothing and food are used to express ethnic identity b) Consumers sometimes use ethnic emblems of other cultures to differentiate themselves 3. Social class emblems a) Products we consume reflect our social class b) Social classes use different symbols in consumption rituals

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4.

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Gender emblems a) Products seem to be characterised as having membership in the male or female gender category (1). Stems from culturally devised notions of fatness and thinness 5. Marketing implications a) Marketers play three roles in establishing the emblematic function of products (1). Symbol development (a) Identifies cultural principles associated with a cultural category and imbues the product with attributes deemed to represent those characteristics (2). Symbol communication (a) Advertising can imbue a product with meaning through the selection of setting, time of day, types of people in the ad and how the product is presented (3). Symbol reinforcement (a) Other marketing mix elements are designed to reinforce the symbolic image (4). Symbol removal (a) Some marketers help consumers erase symbols associated with groups with whom they no longer identify D. The role acquisition function 1. Role acquisition phases a) We fill many roles in our lives and these roles are constantly changing b) Moving from one role to another involves three phases (1). Separation from the old role (1). Often involves disposing of products associated with the role we are leaving (2). Transition from one role to another (a) Marked by experimentation with new identities (3). Incorporation (a) Taking on the new role and the identity associated with it 2. Use of symbols and rituals in role transitions a) We feel uncomfortable with a new status because we have not had experience in the role and have little knowledge about how to fulfil it b) A common reaction is to buy and use many products stereotypically associated with that new role c) Feedback from others, called reflexive evaluation, tells us whether we are fulfilling the role correctly 3. Marital transitions a) When a couple weds, they have to decide which possessions they wish to dispose of and which to move to the new household b) They begin to acquire new products that are considered culturally appropriate for the role and help them create a mutual history c) A similar process occurs in the transition from married to single status

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4.

Marital transitions a) Consumers engage in role changes when they move to get married or divorced.

5. International considerations in consumer behaviour a) Consumers engage in role changes when they move to a new culture b) Usually involves abandonment of old traditions and adoption of new ones 6. Social status transitions a) Consumers who newly come into money, the nouveau riche, will ostentatiously spend to demonstrate and validate their new role 7. Marketing implications a) Consumers’ role transitions have many important implications for marketers (1). Consumers in transition are an important target market b) Those leaving a role may wish to dispose of products, which can develop inventory for marketers of second-hand products c) When consumers are anticipating role transitions, marketers can promote their product as instrumental in incorporating a new role d) By stressing the importance of product constellation, marketers can persuade consumers in the process of role acquisition to purchase a bundle of goods e) Marketers can develop services that manage rituals surrounding role transitions E. The connectedness function 1. The use of products and consumption activities that express our membership in a group and serve as symbols of our personal connections to significant people, events or experiences in life F. The expressiveness function 1. The use of products as symbols to express something about our uniqueness – how we stand out from others 2. Marketing implications a) Marketers can invoke nostalgia by connecting their product with people, places or events b) Marketers can convince consumers their product will help make them stand out as unique G. Multiple functions 1. A given product can satisfy several symbolic functions at one time H. Digital media considerations in consumer behaviour 1. Consumers from non-Western cultures are more likely to “like” brands online and subscribe to digital feeds.

2. They are also more likely to see brands as offering greater symbolic value.

I. Marketing implications 1. Marketing can help consumers develop self-concept.

2. Products and brands can fit with self-concepts.

3. At times, products and brands can fit with multiple self-concepts.

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Chapter 13: Symbolic Consumer Behaviour

II.

4. Advertising should also appeal to identity concepts appropriate to the target market.

Special possessions and brands A. The meaning of money 1. Money can be a tool but also acts like a drug as it is addictive.

B.

C.

D. B.

C.

D.

Special brands 1. A brand becomes special when consumers feel emotionally attached to it 2. Special brands evoke brand loyalty and can command a premium price\ Brand anthropomorphism 1. Anthropomorphism refers to the tendency to assign human-like attributes to otherwise non-human objects, including products and brands.

Brand relationships 1. Consumers can treat brands as real people by forming relationships with them.

Types of special possessions 1. Pets a) Special treatment of pets is culturally specific 2. Memory-laden objects a) Some products acquire special meaning because they evoke memories or emotions of special people, places or experiences 3. Achievement symbols a) Consumers often regard possessions that symbolise achievement as special 4. Collections a) Collectors often view their collections as extensions of themselves The characteristics that describe special possessions 1. Often non-substitutable 2. They will not be sold at market value 3. Often purchased with little regard for their price 1. Often not discarded, even after they lose their functional value 2. May not be used for their original functional purpose 3. Can provide powerful emotions 4. Often personified 5. Often treated as though they were our partner, feeling such commitment and attachment that we are devastated by their loss Why some products are special 1. Symbolic value a) Fulfils the emblematic, role adoption, connectedness and expressiveness functions 2. Mood-altering properties a) Can evoke feelings of pride, joy and comfort 3. Instrumental importance a) Extremely useful 4. International considerations in consumer behaviour a. In China, wulu is the name for a gourd, but it also has a symbolic element to Chinese culture.

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a) The cross is symbolic to Christians, the peace sign is symbolic to the hippie generation in the U.S., and the fern is symbolic in New Zealand.

E.

Consumer characteristics affect what is special 1. Social class a) People in different social classes value possessions differently 2. Gender a) Men tend to regard symbols of identity as special, especially products that symbolise activity and physical achievement b) Women tend to regard as special symbols of identity, as well as products that symbolise their attachment to other people 3. Age a) What is regarded as special changes as people age F. Rituals used with special possessions 1. Possession rituals enable consumers to claim personal possession of new goods 2. Grooming rituals used to bring out the best in special products 3. Divestment rituals are designed to wipe away all traces of our personal meaning in a product G. Disposing of special possessions 1. People dispose of these possessions to mark rites of passage and progression 2. Often given to close friends and family in the hope that the meaning of the possession is transferred to recipient III. Sacred meaning A. Sacred entities are objects that are set apart, revered or worshipped.

B. Profane things are objects that are ordinary and have no special power.

C. Marketing implications 1. Marketers can create and maintain a product’s sacredness.

2. Marketers should avoid profaning sacred objects and entities.

3. Marketers can sell objects regarded as instrumental to sacred activities and rituals.

IV. The transfer of symbolic meaning through gift giving A. International considerations in consumer behaviour 1. Gift-giving culturally determined and timed (e.g., holidays like Valentine’s Day) 2. Culturally prescribed with timing specific to the individual (e.g., birthday, weddings) 3. How to wrap a present is also culturally-prescribed.

B. Three stages of gift giving 1. The gestation stage a) Motives for and emotions surrounding giving (1). Altruistic – giving to help the recipient (2). Agnostic – giving because the donor derives positive emotional pleasure from the act of giving (3). Instrumental – giving because donors want the recipient to give them something in return (4). Obligatory – giving because donors feel the situation or relationship demands it

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Chapter 13: Symbolic Consumer Behaviour

(5). Relationship mending – giving to reduce guilt or alleviate hard feelings (6). Antagonistic – giving to ‘bother’ the recipient b) The appropriateness and meaning of the gift (1). Nature of gift signals feelings toward recipient (2). Token gifts (a) Not appropriate for clearly demarcated gift-giving occasion (b) May seem highly significant when no gift is expected (3). Gift may symbolise the meaning we wish to transfer to the donor c) The value of the gift (1). Decisions about the value of the gift are culturally determined d) The amount of time spent searching (1). Symbolises the nature and intensity of the relationship the donor has with the recipient 2. The presentation stage a) Rituals or ceremonial aspects, such as gift wrapping b) Timing and surprise element of the gift c) Attention devoted to gift-giving process or recipient d) Reaction donor hopes to elicit from recipient 3. The reformulation stage a) Donor and recipient re-evaluate their relationship based on the giftgiving process b) An appropriate gift may strengthen relationship bonding c) This stage has implications for whether the recipient will reciprocate on the next gift-giving occasion C. Digital media considerations in consumer behaviour 1. Many consumers give gifts digitally nowadays.

2. Even contributions to Wikipedia can be considered a form of gift-giving as there is no expectation of one’s time being returned.

C.

Marketing implications 1. Marketers can promote their products and services as gifts 2. Technology has created major changes in the gift-giving process 3. Growing use of gift cards 4. Alternatives to traditional gifts are increasing

QUESTIONS FOR REVIEW AND DISCUSSION Possible answers are as follows.

1. How does the emblematic function of a product differ from the role acquisition function?

For a recent graduate starting a new job as a marketing coordinator, what products might relate to the emblematic function and what products might relate to the role acquisition function?

The emblematic function is the use of products to symbolise membership in social groups. The role acquisition function uses products as symbols to help feel more comfortable in a new role. An emblematic product signifies that you belong to a particular group. A sweatshirt sporting your fraternity’s Greek letters indicates to others

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that you are a member of that organisation. A new briefcase could help an individual transition from college to the working world and would exemplify the role acquisition function. The connectedness function is the use of products as symbols of our personal connections to significant people, events or experiences. An example of this might be a collection of ticket stubs from concerts attended that help the individual connect to those memories and the people with whom they shared the experiences. The expressive function is the use of products to demonstrate our uniqueness from others. We express our unique personalities through offerings like clothing, home decoration, art, music, leisure activities and food consumption.

2. What is reflexive evaluation and how does it affect role acquisition?

Reflexive evaluation is the feedback from others that tells us whether we are fulfilling a role correctly. If the feedback a consumer receives is not to their liking, they will likely be motivated to acquire additional products to aid in building confidence in their new role.

3. How does the ideal identity schema relate to a person’s actual identity schema?

Ideal identity schema and actual identity schema is conceptually similar to the ideas of actual and ideal states back in Chapter 9. Here the ideal identity schema is a set of ideas about how our identity would be indicated in its ideal form while the actual identity schema is the set of multiple, salient identities that reflect our self-concept.

4. What is frame switching and why do marketers have to consider it when targeting bilingual, bicultural consumers?

Frame switching is often seen in bicultural individuals, who switch back and forth between their cultural identities. For instance, an Asian-Australian has their traditional Asian frame of reference – with traditional language, food and other cultural customs.

Yet, as Australians, they may switch behaviours in other situations and wear local fashions and consume local foods. Because it is very common to have consumers who have roots in more than one religion (e.g., mother is Jewish, father is Catholic), ethnicity, or country, it is important for marketers to consider that these consumers are a part of two or more segments. Thus, there should be no conflicting messages.

5. What are the three main reasons for possessions taking on special meaning?

Possessions take on special meaning when they have symbolic value; they possess mood-altering properties; or have a level of instrumental importance to the consumer.

Possessions may be special because they fulfil the emblematic, role adoption, connectedness and expressiveness functions.

6. Why do consumers engage in possession, grooming and divestment rituals?

Possession rituals are the processes we engage in when we first acquire a product that help to make it ‘ours.’ Grooming rituals then bring out or maintain the best in our special products. Divestment rituals are designed to wipe away all traces of our personal meaning in a product. We engage in these rituals to create, energise or enhance the meaning of our special possessions.

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7. How do sacred objects or entities differ from profane ones? How might marketers go about redefining profane objects as sacred?

Sacred entities are those that we have awarded special status to. These include people, things and places that are set apart, revered, worshipped and treated with great respect.

We profane something by removing this special status to make the person, place or thing ordinary.

8. Identify the three stages of gift giving and explain how gift giving can affect relations between the giver and the recipient.

Stage one is the gestation stage. Here we consider what to give someone. In stage two, the presentation stage, we actually offer a gift to someone. The third stage is the reformulation stage, when we re-evaluate the relationship based on the gift-giving experience. Gift giving has some potentially strong effects on relationships. These include strengthening the relationship, affirming the relationship, weakening the relationship, and severing the relationship. Gift giving might also have a negligible effect or provide a negative confirmation when the gift receipt validates an existing negative quality of the relationship between giver and receiver.

CONSUMER BEHAVIOUR CASE Bicycles: more than pedal power Not so long ago, a bicycle was, well, just a pedal-powered way to get around. Today, the bicycle is not just two-wheeled transportation – it has become a major industry worldwide. A growing number of consumers are buying bikes for commuting, for fun, for status, for personal style and for environmental reasons.

Especially in developing nations, where incomes are rising and middle-class consumers are looking for more than basic transportation, demand for better bicycles is rising year after year as the product category takes on new significance as a sign of wealth and of interest in a healthy leisure-time activity. ‘As people become more affluent, they tend to go to global brands,’ says the director of international sales for Wisconsin-based Trek Bicycles, ‘and that’s where global brands have advantages’. Trek’s high-quality bikes are now marketed in two dozen nations, with even wider distribution on the way.

Some top automotive firms are putting their brands on upscale bicycles. Porsche, for example, offers high-end bicycles with precision-made bodies and brakes so riders can glide smoothly on paved paths and navigate off-road trails. Each carries the red, black and gold brand badge positioned below the handlebars, signalling that the rider is pedalling a Porsche.

Luxury designer brands are also involved in the burgeoning bicycle business. Gucci’s creative designer has developed a lightweight, high-performance bicycle and accessories (such as a helmet and riding gloves) for Bianchi, decorated with the red and green stripes that are Gucci’s brand symbol. Missoni’s colourful bicycle, marketed by cheap chic retailer Target at a more affordable price, is for city-dwellers or suburbanites who want to pedal along in style.

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Folding bicycles are increasingly popular, everywhere from Kentucky to Kuala Lumpur.

On a recent World Car-Free Day, cyclists rode folding bicycles along Kuala Lumpur roads to nearby mass-transit stations, folded their bikes and took them on board. They were not just demonstrating a greener alternative to gas-powered vehicles – they were also showing the convenience and ease of taking folding bikes on commuter trains. Another use of bicycles is for tourist transportation. In Santiago, Chile, cyclists have ridden through the streets to promote environmentally friendly bicycle tourism and encourage the construction of bicycle paths throughout Patagonia.

From the great outdoors to the inner city, bicycles are often used to show off the rider’s personal style. In China, for example, wealthy Chinese consumers are purchasing highend bicycles as status symbols. In some cases, such high-end products cost more than three times the average annual salary. Zhou Jiannong, general manager of Chinese bicycle retailer Rbike Networks says, ‘demand for mainstream luxury items such as premium cars, watches has come to a point of saturation’. Because of this, he adds ‘high income groups now turn to high-end bikes to show off their uniqueness in taste and healthy lifestyles’.

Consumers who are serious about their bicycling look carefully at specifications and notice which brands the top athletes endorse. When Australian cyclist Cadel Evans won the Tour De France in 2011 on a BMC bicycle, sales in the three weeks after the race finished were more than the preceding three months. Likewise, BMC produced 140 yellow bikes that were direct replicas of the bike Evans rode down the Champs-Elysees on the final day of the race. Despite costing more than $18 000 each, 14 of the 15 designated for sale in Australia were sold before they had even left the factory. Because cycling and sport generally is accompanied by such passion, many enthusiasts attend bicycle shows, watch bicycle races, test-ride new models and compare every technical detail before deciding what to buy. One purchase leads to another as enthusiasts acquire all the gear they need – bike racks, locks, seats, tools and anything else they must have to keep their bikes looking good and working properly. No wonder the twowheeler business is gaining speed.

CASE QUESTIONS 1. What emblematic functions can a bicycle serve? Be specific.

A bike can serve several different emblematic functions: Social class – are you riding a custom Porsche brand bike or a Huffy from a big box retailer?

Gender – typically ‘girl’ and ‘boy’ bikes have different designs, but colour, style and personalisation can also contribute to this emblem Reference group – such as individuals who customise ‘scraper bikes’ identify with their urban reference group 2. How can a bicycle be part of a social status transition?

Purchasing a high-end bike may allow a consumer to try out a newly acquired or desired status. For example, a college student who was riding a ‘beater bike’ to avoid theft on campus may purchase a new bike as they transition into the workplace as a young

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professional.

3. In what ways is the purchase of a replica BMC bike by Australians similar or different to that by wealthy Chinese consumers? Explain your answer.

BMC bicycles are high performance bikes from Switzerland. They are priced at the top end of the market. For Australian consumers, BMC links with the country, in that Australian cyclist and Tour De France winner Cadel Evans was a member of the team and continues to be a Global Ambassador for the BMC Racing team. Because of this, it is possible Australians will see BMC not just as a reference group emblem (being a part of the elite cycling fraternity) but as a quasi-ethnic emblem that links with their patriotic support of Evans. In turn, this may mean a BMC bike serves a role acquisition function, as it is the machine to purchase to become a great cyclist. In contrast, Chinese consumers are more likely to identify the elite, expensive status of the Swiss brand.

Ultimately, the purchase would serve as an expressive function, given it is a social class emblem that would signify their intended or actual movement between social classes (social status transition).

4. What sacred meaning(s) might a bicycle hold for a consumer? What are the implications for marketers?

One sacred meaning may be a consumer’s association of a particular brand or type of bike with a loved one. Marketers could use nostalgia when marketing their bikes, reminding customers of the fun times they had when they were young, riding a bike with a loved one, for example.

SUGGESTED EXERCISES AND TEACHER GUIDELINES 1. Consider the cultural category of occupational status and the typical clothing of doctors, farmers, waitresses, politicians, businesspeople, truck drivers and pharmacists. Identify the cultural principles that reflect membership in each of these occupational groups and explain how the clothing worn by members of each group illustrates these characteristics.

Students might also consider not only the clothing typical to each of these professions, but also the frequently used objects that are important to the occupation. How do the objects help define each of these roles?

2. Consider two role transitions: graduation and new parenthood. For each, identify the rituals that mark these role transitions and the enabling products that mark their passage. (This task will be easier if you can actually attend a graduation or watch a new parent care for a baby.) Find several advertisements for the products or services that are relevant to these rituals. Identify a set of marketing implications regarding marketing to groups undergoing these transitions.

3. Interview someone you know about one or more possessions that they regard as special/sacred. Try to get them to indicate why these possessions are special and compare their answers with the reasons given in the chapter for why possessions are special. What marketing implications can you derive from their responses?

Since this exercise deals with very personal thoughts, it is important to be very careful when discussing this in class. Feelings may be hurt if negative comments are part of this discussion.

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SUGGESTED INTERNET EXERCISES WITH SAMPLE ANSWERS Margaritaville Do you know any Parrotheads? Chances are you do – you may even be one yourself.

Parrotheads are the reference group comprised of aficionados of singer Jimmy Buffett and the Coral Reefer Ban; their tropical lifestyle, their music, and other products. Now Parrotheads and the merely curious may change their latitudes and attitudes with a virtual visit to Margaritaville at www.margaritaville.com. Click through to any of the Margaritaville cities, including Charleston, Key West, New Orleans, Las Vegas, Myrtle Beach, Glendale, Panama City and Cancun – and examine the product offerings. Which symbolic functions are served by the products and services that Parrotheads find at this website?

Instructor notes The Parrothead reference group subsumes members from all age groups, income levels, genders, geographic regions, ethnicities and lifestyles. The one characteristic they share is that they are fans of all things Buffett; their ideal identity schemas include ‘resident of Margaritaville’ at some real or symbolic level. As is the case at most fan-oriented stores, the majority of products are clothing and accessories with various Parrothead or Margaritaville logos. These items serve very well as reference group emblems. They identify the wearer as a Parrothead to other reference group members and to non-members alike. Margaritaville items also serve the connectedness function for Parrotheads by reminding the wearer of the positive emotions associated with listening to Jimmy Buffett’s music, traveling to and participating in his concerts, and enjoying (or fantasising about) a casual, laid-back lifestyle.

For some, being a Parrothead is an essential element of their self-concept; thus, for these intense fans Margaritaville gear can reinforce their actual and ideal identity schemas.

Additional uses This exercise also relates to concepts in the following chapters: •

Chapter 2, Motivation, Ability and Opportunity (social and symbolic needs as motivators to purchase Margaritaville gear)

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Chapter 5, Attitudes and Persuasion (role of simple inferences, attractive, likeable and celebrity message sources, pleasant pictures and music on attitudes toward Margaritaville items)

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Chapter 4, Memory and Knowledge (song lyrics as a recall cue)

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Chapter 9, Social Influences on Consumer Behaviour (characteristics of reference groups with strong influence on brand choices)

Discussion idea Are the products offered for sale through the Margaritaville webpage special possessions? If so, what kind? If not, why not?

The Wedding Channel One of the most complex role transition rituals in most cultures is the wedding ceremony and its associated activities. Many websites that help to plan, coordinate and execute the perfect wedding have proliferated during the past few years, much to the relief of future brides and

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grooms and their families. A particularly comprehensive site is the Wedding Channel (www.weddingchannel.com) Describe the features of this site. To those who are planning a wedding, what are the major benefits and detriments of using a site like this? How can a marketer use the Wedding Channel to better reach its target market?

Instructor notes The Wedding Channel’s home page links to a wedding planning site for those involved with the wedding and to a guest site for others. Future brides, grooms and others involved in planning the wedding can find general advice and product information about a wide variety of important products and services from the invitations to the honeymoon. They can arrange or suggest travel plans for out-of-town guests and can create a gift registry online as well. Through the guest site, those invited to the happy occasion can check out travel suggestions, examine gift suggestions and purchase gifts.

Convenience and time savings are among the most significant benefits of using the Wedding Channel. As is often true of role transitions, an enormous number of activities involve purchase and/or consumption of culturally prescribed products. This website allows the planners to coordinate everything without having to spend precious time running from store to store; with a few clicks, all of the necessary resources are on screen in handy product constellations.

The detriments are considerable, however. The site clearly caters to the needs and tastes of consumers from the middle class up, featuring brands that appeal mostly to those social classes. Wedding planners and guests who lack internet access are left out. Furthermore, the Wedding Channel promotes products marketed by its affiliates. While this is hardly surprising, it could pose a significant limitation to some future brides and grooms and to their guests.

The most effective way for a marketer to use a website like the Wedding Channel is to arrange for the site to sell or feature its products. The required distribution arrangements are an example of evolving e-commerce practices. Another way to reach or to influence its target market is for the marketer to affiliate formally with the Wedding Channel. Under the website’s affiliation terms, any other website with links to the Wedding Channel can earn commissions for referred customers who create a gift registry at the Wedding Channel.

Additional uses This exercise also relates to concepts in the following chapters: •

Chapter 3, From Exposure to Comprehension (selective exposure to, attention to and perception of wedding-related information)

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Chapter 4, Memory and Knowledge (creating a new script for wedding planning and shopping)

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Chapter 6, Problem Recognition and Information Search (evoked set for wedding information)

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Chapter 7, Judgement and Decision Making (compensatory vs. non-compensatory models, brand vs. attribute models, for wedding decision making)

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Chapter 10, Consumer Diversity (weddings as both religious ceremonies and social occasions)

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Discussion idea Will websites that offer product constellations (such as the Wedding Channel) succeed or fail in the long run?

Dan’s Chocolates Any chocoholic can tell you that there’s always an appropriate occasion for giving fine chocolates. Dan’s Chocolates (www.danschocolates.com) provides a simple way to make chocoholics and others ecstatic. Visit Dan’s website then describe the ways in which the site can help consumers with the gestation and presentation stages of the gift-giving process.

Instructor notes Dan’s Chocolates offers far more than just dozens of different assortments of chocolates. It is a gift-giver’s paradise, with something for everyone who likes chocolate and who enjoys giving chocolate.

At the gestation stage of the gift-giving process, the giver must first develop motives for giving, then ponder the nature, meaning, and value of the gift, and finally engage in an appropriate amount of searching. Dan’s home page provides vivid visual cues along with suggested gift-giving motives; for example, during September the site features chocolate assortments for Grandparents’ Day and Back to School gifts, as well as seasonless motives such as birthdays. The site’s other links offer products to symbolise relationships with different types of recipients, from significant others to family members to corporate clients or colleagues. Using the site’s suggestions, the giver can confidently select a gift that will carry the right connotation. Although the prices of Dan’s Chocolates are comparable with those for other brands of fine chocolates (e.g., Godiva), assortments range from eight ounces to 2 pounds and are priced accordingly. This allows the giver at least some degree of latitude in selecting a gift of appropriate value. The site minimises search time in comparison to real-world shopping trips.

The website also assists the giver with some elements of the presentation stage of the giftgiving process. Dan’s offers a broad range of gift wraps and special packaging, allowing the giver to tailor the gift to the exact tastes of the recipient. The giver also can include other special touches, such as gift cards, online greetings and combinations of chocolates and flowers. Dan’s will ship the selected gift at the specified time, to ensure both freshness and appropriate arrival (for example, on an anniversary, not five days afterward). The element of surprise may be reduced somewhat if the gift arrives with a shipping label that reveals its contents. Also, it is difficult or impossible for the giver to provide personal attention to the recipient, and to gauge the recipient’s reaction, unless he or she has the gift shipped to him or herself and then presents it in person to the recipient.

Additional uses This exercise also relates to concepts in the following chapters: •

Chapter 4, Memory and Knowledge (salience and vividness of recall cues)

•

Chapter 5, Attitudes and Persuasion (impact of category- and schema-consistent information at Dan’s website)

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Chapter 6, Problem Recognition and Information Search (online gift searching)

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Chapter 9, Social Influences on Consumer Behaviour (normative influences on gift-giving processes)

Discussion idea What other reasons might consumers have to purchase chocolates from Dan’s, as opposed to chocolates from other retail sources, online or bricks-and-mortar? Possible answers might include: •

Dan’s charitable donations

•

Convenience of shopping for oneself online, not solely for gifts

ADDITIONAL DISCUSSION QUESTIONS WITH SAMPLE ANSWERS These discussion questions can be used as in-class activities or as thought questions that the students consider while reading the chapter or to test their understanding of the material after the reading and lecture are complete.

1. Imagine that you have graduated and are about to embark on your ideal job (or think about your first important job). What changes in your attire might symbolise the three stages of the role acquisition function in your life?

Student answers will vary. The following is a sample response.

My first job will be as an outside sales representative for a pharmaceutical company.

I will be calling on doctors’ offices throughout the metropolitan area. I imagine myself separating from some of my old wardrobe items. (Separation from the old role is the first stage of the three-stage process.) I’ll throw away my beat-up college backpack and no longer wear khakis and casual shirts on a daily basis. My Nikes will be pushed to the back of my closet. These changes will physically represent the end of my college days and the start of my career.

I imagine that, for a while, I will feel like I’m playing dress up as I put on my slacks, dress shirt, tie, and sport coat and grab my briefcase. The attire of the people at my office will give me a clue to the type of clothes that are acceptable. I bet there are no men wearing an earring – guess I better leave mine at home. This second stage, transition, will take some time. I know I will try different retailers, different styles, and different brands until I develop my own business look. When I do, I will have evolved into the final stage, incorporation. At this point, the ‘new professional me’ will be just as familiar and comfortable as the ‘old college me.’

2. Scan your home environment and name possessions that are special to you. Explain why you regard these items as valuable.

Student answers will vary. The following is a sample response.

The three items that are special to me are my cat, my sports pin collection, and my railroad memorabilia. My cat, Poco, is 14 years old. She is both ‘just a pet’ and a ‘special member of the family.’ She is just a pet in that she doesn’t get fancy food, have her teeth brushed like the vet suggested, or own any toys; but she is spoiled.

She has her favourite piece of furniture, gets to eat vet-recommended food on demand, and requires a pet sitter when we leave town.

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My sports pin collection began with give-away pins at our hometown ballpark. Over the years, I started buying a pin here and there and then getting them as gifts. Three years ago, I put up a bulletin board and the collection rapidly grew. When I look at the board, I am reminded of special days, good friends, and great ballplayers.

My railroad memorabilia is sentimental too. My dad was a railroad engineer. He gave me his and his dad’s pocket watches. I can still see Dad opening up his watch to make sure he wasn’t going to be late to work. I also have a silver-plated oil can that his peers gave him on his retirement. The oil can represents his decades of hard work, long hours and his dedication.

ADDITIONAL QUESTIONS 1. We have considered how in some cases symbolic meaning can be derived from a culture.

Develop a list of symbols that have unique meaning among college students. Explain how knowing this might be helpful to marketers.

2. Several types of emblems have been discussed: geographic, ethnic, social class, gender and reference group. Describe three types of emblems in each category that are evident in the student groups on your campus.

3. Role acquisition can be instrumental in adding symbolic value to various products. Select a product to consider and discuss how it might be seen differently by consumers during different role phases, role transitions, marital transitions, cultural transitions or social status transitions.

4. Connectedness can have a strong influence on perceptions and behaviours. Explain how marketers can use the connectedness function to alter the role their offering plays in the lives of consumers.

5. As a group, discuss how the expressiveness function is reflected in the campus environment. Explain how knowing this could be helpful to retailers deciding to enter a college-centred market.

6. Provide an example of how marketers can attempt to match their advertising message with the correct gender and cultural identity concept.

7. We have discussed the role of special possessions. Discuss whether it is possible to market products in a way that makes them special. In other words, explain what, if anything, marketers can do to make their offering special.

8. Some possessions may reach the level of sacredness. Explain why understanding the sacred and profane nature of things is important for marketers.

9. Gift giving may arise from various motives. Describe these motives and explain how each can influence a marketer’s efforts at positioning an offering as a gift.

10. New media are making it possible to exchange new kinds of gifts with each other.

Discuss how the internet, for instance, can be a source of gift exchanges.

EXPERIENTIAL EXERCISES AND CLASSROOM EXAMPLES Students who learn more readily through visual and tactile stimuli will benefit from the introduction of physical examples into the classroom.

1. ‘Celebrity-product matching’ exercise

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Present students with a list of current celebrities and products and have them match the celebrities to the product commercials they have been paid to be part of. After giving students time to do so, discuss which match-ups were easy to remember and/or seemed to be the best fit based on brand image congruence between the celebrities and products. Here is a brief list of celebrities and the products that have advertised: Nicole Kidman: Chanel; Chris Hemsworth: TAG Heuer; Simon Baker: Givenchy; Arnold Schwarzenegger: Realestate.com.au; Nick Youngquest: Paco Rabonne; Cate Blanchett: Giorgio Armani; Jamie Oliver: Tefal CLASSROOM GROUP ACTIVITY Exploring emblematic meaning: 20 minutes I. Start up A. Purpose of the activity 1. This activity will give students an opportunity to consider how the emblematic role of one’s product can be systematically considered B. What the instructor will do 1. The instructor will divide people into small groups and be available to coach and help the groups as needed 2. Optionally, groups may be provided with clear overhead acetates and markers so they can summarise their discussions and make presentations after their analysis and discussion C. What the participants will do 1. The participants will work in small groups to develop a set of guidelines to help marketers consider the emblematic nature of their offering for different groups. After a period of small-group discussion, they will make reports to the large group D. Rules for this experience 1. Groups are to work separately from each other. Individuals should rely on their knowledge from the book and may refer to their notes and the book as necessary II. Experience A. Group up 1. Have students form groups of no more than five. This exercise will work in groups of any size; however, room restrictions that do not allow for moving furniture may make group work more difficult B. Specific actions for groups 1. The groups are responsible for developing a list of questions marketers can ask to uncover the emblematic nature of their offerings. Sources of emblematic meanings include geographic, ethnic, social class, gender and reference group. Students should be guided to state how each question they propose is designed to generate useful information for marketing managers.

2. Optionally, groups can summarise their discussions on clear overhead acetates to facilitate presentations after their analysis and discussion 3. Questions to be answered by small groups a) Consider the following sources of emblematic meaning: geographic, ethnic, social class, gender and reference group. Develop a set of

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questions to help marketers uncover the potential emblematic meaning for their offering in each of these sources. Be sure to explain how the questions you propose will generate answers that are useful to marketers 4. Large-group discussions a) Have each group present its ideas to the class in a round-robin format III. Debrief and unveil concepts.

A. Discuss the activity itself 1. The purpose of this discussion is to allow students to express what they felt about the experience itself 2. Ask students to describe their experiences of doing the activity a) Likes and dislikes about what just happened b) How they felt during the experience c) What is realistic, unrealistic about the exercise d) What will be different when they do this for their own brand B. Discuss the content of the experience 1. The purpose of this discussion is to ensure that students ‘take away’ important learning points 2. Ask students to describe the important points the experience teaches a) The importance of considering the emblematic nature of their offering 3. Use the chalkboard to record student responses a) Write down their ideas as they are presented b) Concentrate on the principles being discussed rather than the examples being used c) Help them to see the interrelationships among their responses IV. Execute A. Apply what has been learned.

1. Lead a discussion on how the concepts can be applied in organisations a) What barriers may be faced in applying the concepts from the exercise? b) What can be done to help others understand the concepts when you use them at work?

B. Transfer and use the knowledge 1. Encourage students to make a record in their notes about how they will use the ideas in the workplace 2. Even if they don’t have a specific job, how will they remember to use what they have learned?

USEFUL WEBLINKS Jimmy Buffett's Margaritaville www.margaritaville.com The Wedding Channel www.weddingchannel.com Dan's Chocolates www.danschocolates.com

Solution Manual for Consumer Behavior 2nd Asia Pacific Edition Wayne D. Hoyer

CHAPTER 14

Marketing, Ethics and Social Responsibility in Today’s Consumer Society

CHAPTER SUMMARY When marketers and consumers make decisions, they often face potentially conflicting priorities and outcomes. Attempts to resolve these conflicts can raise ethical issues that can be distinguished between social and temporal dilemmas.

Critics have questioned whether and/or how much marketing practices influence these behaviours. Advertising has been accused of promoting obesity, perpetuating idealised body images, creating materialistic values and invading consumer privacy. In response, many companies are adopting strategies to reduce public criticism and put marketing practices in a more favourable light. Marketers are also interested in the social responsibility issues of conservation and environmentally friendly behaviour. Consumers are showing their disapproval of practices regarded as unwanted, disreputable, objectionable, and/or unethical through individual resistance, support of advocacy groups and participation in boycotts.

Deviant consumer behaviour covers both illegal and psychologically/physically abnormal behaviour. Deviant acquisition behaviours include compulsive buying, consumer theft and black markets; deviant consumption behaviours include addictive and compulsive consumption and underage drinking and smoking. These behaviours are fairly pervasive, and although some (such as black markets) can have certain consumer benefits, most have fairly negative effects on consumers and the social groups in which they operate.

Behaviours such as gambling and overeating and attitudes toward privacy are of interest to both public policy officials and marketers. Public policy and government officials tend to set legal regulations for these indulgent or sinful acts, but they also depend on understanding the consumers behind these actions – those who gamble, those who overeat and consumers’ views about trading off their privacy in return for some marketing or other benefit.

Even the decision whether or not to dispose products that still function and charitable behaviour are based on an understanding of consumer behaviour.

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CHAPTER LEARNING OBJECTIVES After studying this chapter, students will be able to 1. distinguish between social and temporal dilemmas and explain the search for balance in decisions that involve such dilemmas 2. define marketing ethics and consumer ethics and identify some of the issues that arise from unethical or deviant acquisition, consumption and disposition behaviours 3. discuss some of the ways in which consumers and organisations use marketing for socially responsible purposes 4. describe what consumers can do to resist unwanted marketing practices.

CHAPTER OUTLINE I. In search of balance A. Self-interest versus the interests of others 1. Me vs. we is a way to frame this 2. Focusing on ‘me’ is not intrinsically bad a) Helpful other focus is sharing of ideas, for instance via social media b) A social dilemma is when me vs. we conflicts c) Harmful self-focus is for instance, shoplifting. They diminish the loss to others 3. Immediate versus long-term interests a) Temporal dilemma is how the decision will impact interests immediately compared with in the future b) Positive WOM is often a long-term goal for companies c) Decisions that push short-term interests may have positive or negative long-term effects 4. ‘Dark side’ versus ‘bright side’ outcomes a) Conflicts that arise from dilemmas in marketing can lead to outcomes that can harm consumers or marketers b) Financial results can entail a social and temporal dilemma, which could entice some to inflate financial results (e.g., Enron) c) These extreme examples of Enron, World-Com, etc. are rare, but problematic to many when they happen II. Marketing ethics, consumer ethics and deviant consumer behaviour A. Acquisition controversies 1. Materialistic behaviour a) Materialism is a value in many cultures b) It is on the rise in China and Asia, due to more media and branding c) It is a neutral value d) Family influences on materialism are strong. Parents who are materialistic tend to pass that down and have materialistic children more than others e) Consumers who perceive they are less well off than others may be not as satisfied in their life. Although materialism does not buy happiness 2. Addictive and compulsive behaviour a) Addictive behaviour reflects excessive behaviours typically brought on

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b) c) d) e) f) g)

h)

3.

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by chemical dependence Consumers may become addicted to many goods and services including cigarettes, drugs, alcohol, internet use, TV, video games, etc.

Addicted individuals feel that stopping is beyond their control Addictive behaviours can be harmful to addicts and those around them Compulsive consumption is an irresistible urge to perform an irrational consumption act Examples of compulsive consumption include compulsive gambling, eating and shopping Characteristics of compulsive buying (1). Strong emotional component (2). Compulsive buyers feel anxious when not buying (3). Emotional arousal from store’s atmosphere (4). Emotional high followed by remorse, guilt, shame and depression Why do people buy compulsively?

(1). Compulsive buyers may have low self-esteem and buying results in attention and social approval (2). compulsive buyers, especially among young Australians, also tend to perceive money as a source of power and prestige, and so spending makes one feel powerful and strong

(3). Compulsive buyers often come from families whose member show compulsive or addictive behaviours i) Compulsive gambling is another type of compulsive consumption (1). Compulsive gamblers tend to come from families in which other members exhibited addictive or compulsive behaviours, be generally impulsive and view materialism as a measure of success (2). There seems to be a link between compulsive gambling and consumption of alcohol, tobacco and illicit drugs Consumer theft a) Prevalence of consumer theft (1). Whereas compulsive buying reflects an uncontrollable desire to purchase things, consumer theft reflects a desire to steal things, (2) Retail losses of $3.4 billion yearly in Australia (2). Theft is increasing and becoming more sophisticated (3). Identity theft is of particular concern to today’s consumers b) Factors affecting consumer theft (1). Temptation to steal (a). Arises when consumers want products they cannot acquire through legitimate forms of acquisition (b). May be too embarrassed to buy through conventional channels (c). Represents a contraband item (d). Thrill-seeking tendency (2). Rationalisations for stealing (a). Feel the environment has encouraged it (b). Social influences encourage theft

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4.

5.

6.

(c). More likely to rationalise theft if store has negative public image (d). Consumers whose moral development is weak may not see the act of stealing as wrong Black markets a) Situations where consumers refuse to pay for available items, so they pay for unavailable items b) They may be legal, but in short supply (e.g., university graduation tickets) c) They can also be brands or illegal items (counterfeit goods) Targeting vulnerable segments a) Consumers in developing nations, elderly, children are examples of vulnerable segments b) Ad messages may prey on children’s needs for sensual satisfaction, play and affiliation c) Australian children watch an average of 11 hours of television per week Marketing implications a) Does marketing perpetuate materialism?

(1) Consumers slow spending during recessions, thus marketing does not cause buying. Marketing is designed to influence spending; it does not cause it. Marketing serves to make acquisition attractive and convenient. It is up to the consumer how much they choose to buy. b) Does marketing encourage addictive and compulsive acquisition behaviours?

(1). An ethical issue for marketers is whether marketing activities encourage addictive, compulsive and impulsive behaviours in consumers (2). There are marketing activities that attempt to reduce addictive and compulsive consumption c) How can marketers deal with consumer theft?

(1). Some marketing activities encourage impulsive behaviour, such as candy and gum near the checkout lane of a grocery store. Theft has resulted in increased usage of theft-reducing devices. Because retailers have to find a way to pay for lost merchandise and pay for the cost of high-priced security systems, theft increases the price of products. Security systems may interfere with retailers’ ability to serve customers d) How can marketers deal with black markets?

(1). Marketers attempt to thwart online and offline black markets (2). Many products are fake and the real versions can fight this due to stolen brand equity (3). Fake merchandise may be hazardous, so marketers should communicate these dangers e) Should marketers target children?

(1). CARU has developed guidelines for children’s advertising

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Consumption controversies 1. Underage drinking and smoking a) Overuse of alcohol has been implicated in campus violence, campus property damage, academic failures, teen highway fatalities, youth suicides and campus hazing deaths 2. Idealised self-images a) Advertising may contribute to an idealised self-image based on society’s b) Thinness is a characteristic of attractive people and critics question any links to anorexia 2. Compulsive gambling a) Affects nearly 400 000 Australians b) There are links with alcohol, drugs and cigarettes with compulsive gambling c) Industry and marketing practices may perpetuate this, so many casinos run a gambling addiction hotline and support system 4. Overeating and obesity a) Obesity is an epidemic. It cannot be blamed on advertising and marketing, although critics claim a link. Marketers can help by communicating nutritional information b) Advertisers and marketers cannot make someone eat a marketed food; it is up to the consumer what they put in their mouth c) Consumers tend to underestimate the calorie content of foods they consume, and perceive unhealthy foods to be tastier 5. Privacy controversies a) Social media and e-commerce highlight this issue b) The point of tracking online consumer behaviour is to provide consumers with more useful ads based on their interests and history c) There is concern that businesses take too much personal information 6. Marketing implications a) Does marketing encourage underage or excessive drinking and smoking?

(1). Distribution systems make it easy for underage consumers to buy these products (Availability) (2). Advertising for these products heightens young consumers’ interest in them (Exposure) (3). Mainstream advertisers may send inappropriate messages about cigarette and alcohol even if they do not sell these products (4). Packaging should more effectively spell out the risks of products (Warning labels) b) Does advertising affect self-image?

(1). Some are unhappy with their bodies as they compare themselves to thin models; others are happy with their bodies and are hostile to advertisers that portray unrealistic images (2). Marketers must disclose risks that some take for their body image (e.g., muscle supplements) c) Does marketing affect compulsive gambling behaviour?

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(1). The expansion of casinos (e.g., into China) may cause concern to those who have a tendency to compulsive gambling (2). Most programs set aside funds for consumer education (3). Online gambling is generally illegal in the US, but legal elsewhere d) Does marketing contribute to overeating and obesity?

(1). The WHO sees a link between junk food advertising and childhood obesity. Parents play a key role (2). Advocacy groups are campaigning for more restrictions on junk food (3). Marketers also encourage healthy behaviour e) Do marketers invade consumers’ privacy?

(1). Marketers believe the biggest reason for privacy concerns is that consumers do not understand how the information marketers collect is used and might benefit consumers. The point is to better target ads so consumers get ads they are interested in (2). The EU has the strictest privacy laws (3). Marketers are doing more to reassure consumer privacy online and off C. Disposition Controversies 1. Disposing of products that still function a) Give away, trade, sell, donate, auction, recycle vs. throwing away 2. Disposing of products that do not function a) Throw them away in an acceptable way – recycle or garbage b) There may be value in the parts 3. Marketing implications a) Marketers can communicate how to dispose or recycle (e.g., batteries) b) Goodwill and related charities encourage donations c) Companies are being pushed to use less product packaging and more ecofriendly products and parts IV. Social responsibility issues in marketing A. Environmentally conscious behaviour 1. Marketers can be directly and indirectly involved in efforts to foster environmentally conscious behaviour and address concerns about global warming a) While these marketing behaviours may have additional costs, they also may open up opportunities for additional profits b) Increased trash in the environment is another concern and marketing activities such as refillable containers and recycling has had an effect c) Conservation behaviour is key; when are consumers likely to conserve?

(1). When they accept personal responsibility for the pollution problem (2). When there are no barriers to prevent them from conserving (3). When there is social pressure to conserve d) Can consumers be motivated to be environmentally friendly?

(1). Many organisations are attempting to increase environmentally friendly behaviour (a) Ads encouraging conservation behaviours

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(b) Providing consumers with information on how to be environmentally friendly (c) Most effective is to give consumers incentives to conserve B. Charitable behaviour 1. The influence of marketing on charitable behaviour is researched d) A consumer’s cognitive resources can deplete upon a foot in the door charity tactic that reduces self-control and has an enhanced outcome of donation e) Charitable behaviour varies by culture C. Community involvement 1. Marketing can be a catalyst for community-based social responsibility 2. Marketers often have policies to encourage employees to get involved in the communities where they do business 3. This can generate goodwill and WOM IV. How can consumers resist marketing practices?

A. Consumers may engage in individual resistant tactics such as choosing not to patronised, complaining to the marketer and spreading negative WOM when they are dissatisfied with a firm’s marketing practices B. Formal advocacy groups may engage in resistance by informing the public about socially inappropriate business behaviours C. Groups may organise boycotts in which consumers avoid purchasing the products or services from a company whose practices are seen as unfair or unjust 1. Consumers susceptible to normative influence will more likely participate in boycotts 2. Consumers may attempt to limit guilt or boost self-esteem by participating in boycotts 3. Boycotts may gain publicity and have more impact than individuals acting on their own 4. A boycott may be aimed at either a company’s products or its activities QUESTIONS FOR REVIEW AND DISCUSSION Possible answers are as follows.

1. Why is balance needed in decisions that involve social dilemmas and temporal dilemmas?

Decisions come with potentially conflicting outcomes and consequences. A social dilemma is deciding whether to put self-interest or the interests of others first.

Temporal dilemmas refer to deciding whether to put immediate interests on long-term interests first. Thus, it can be a ‘me vs. we’ situation. Thus, there need be a balance among: self-interest versus the interests of others, immediate vs. long-term interests, and dark side vs. bright side outcomes.

2. What is deviant consumer behaviour and is it always unethical?

Deviant consumer behaviour is when consumer behaviour is unexpected or not sanctioned by members of society. Note, this is not necessarily illegal – nor unethical behaviour. For example, one could consider some shopping deviant if a person buys all that is remaining of a hard-to-get product (the iPhone 5) and sells extras to their ‘friends’ for a hefty profit. It is deviating from social and shopping norms.

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3. How does addictive behaviour differ from compulsive behaviour?

Addictive behaviour is often physical (e.g., to alcohol, drugs) and needs medical treatment (e.g., to detox the body of the chemicals). Addiction can also be to caffeine, and one may go through withdrawal symptoms (e.g., shaking) when not getting the substance. Yet, some can be ‘addicted to’ shopping or gambling. Often, this manifests in either compulsive or impulsive behaviours.

Compulsive buying is a level of spending in which consumers purchase excessive quantities of items they do not need and sometimes cannot afford. Individuals who buy compulsively gain satisfaction from the buying process, not the owning process. It is a problem when it compromises an individual’s ability to function normally within the confines of daily life and negatively affects the lives of those people important to the consumer.

4. What factors in the environment might influence the potential for shoplifting?

The temptation to steal arises when consumers want products that they cannot legitimately buy, either to satisfy real needs or due to greed. However, there may be a number of environmental factors that influence shoplifting, including stores being noisy or crowded, the absence of any security, lax return policies, low numbers of salespeople in the store, poor layout that allows criminal behaviour to be hidden and poorly fixed price tags that can be switched between products.

5. What is social comparison theory and how does it apply to advertising?

Social comparison theory proposes that individuals have a drive to compare themselves with other people. Advertising often uses social comparison theory. To illustrate, advertisers might show individuals with many luxury goods, and consumers who see these ads may judge their own personal wealth to be lower than these individuals they see in ads.

6. How might marketers influence a consumer’s charitable behaviour?

Simply requesting that consumers consider donating can deplete their cognitive resources, which reduces their self-control and makes them more likely to respond positively to a donation request. Alternately, asking consumers to donate time can put people in a positive frame of mind, which has a positive influence on their willingness to donate money.

7. What can consumers do to resist unwanted marketing practices?

Consumers can form advocacy groups that engage in resistance by informing the public about business practices they regard as socially inappropriate. Additionally, they might boycott a company and its products whose policies or practices are seen as unfair or unjust.

CONSUMER BEHAVIOUR CASE The Odd Bunch: joining the fight against food waste According to the Food and Agriculture Organization of the United Nations, roughly onethird of the food produced in the world each year for human consumption is wasted or lost. Interestingly, in developing countries a large percentage of food loss occurs at the

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post-harvest stage, whereas in developed countries food is predominantly wasted in the later retail and consumer levels of the supply chain. Australians waste close to $10 billion worth of food every year, with 20 to 40 per cent of fruit and vegetables grown being rejected and wasted prior to reaching the retailer solely due to cosmetic quality standards.

Consumers have come to expect straight uniform coloured carrots and blemish-free apples, round onions and smooth skinned aubergines. In an effort to change consumers’ perceptions of less uniform ‘ugly’ looking fruit and vegetables, supermarket giant Woolworths launched The Odd Bunch campaign. The campaign follows the success of a similar initiative by French supermarket chain Intermarche called ‘Inglorious Fruits and Vegetables’ which reached over 13 million people, was an immediate success and stirred a national conversation about food waste. Woolworths’ The Odd Bunch campaign looks to show consumers that despite cosmetic imperfections, funny shaped carrots and marked apples taste just as good on the inside. Woolworths encourages consumers to choose taste over waste in support of Aussie farmers and food waste reduction by choosing fruit and vegetables from The Odd Bunch range, which are sold at a discounted price. Consumers can now get their daily serve of 2 fruit and 5 vegetables a whole lot cheaper. The social responsibility behind the campaign is threefold – it supports environmentally conscious behaviour (waste reduction), educates consumers and inspires a healthier Australia, and supports local producers. Farmers now have the opportunity to sell a larger percentage of their crop which would have otherwise been wasted. Woolworths are no longer being as highly selective in what they will retail, instead taking the whole crop, which in turn is increasing producers bottom line. Despite being paid much less for irregularly sized or odd shaped vegetables and fruit, farmers receive a better price per kilo for these ‘seconds’ than alternatives which include going to a processor, being sold for livestock feed or being dumped.

In furthering their commitment to waste reduction, Woolworths have also formed a partnership with Australia’s leading local food rescue organisation OzHarvest. The partnership sees OzHarvest as the principle organisation to collect and distribute edible food to people in need right across Australia. Woolworths recognises that they are part of almost every community, making the partnership with OzHarvest an ideal means of building their community involvement while reducing food waste.

But is there another side to the conversation about food waste? Why do consumers perceive fruit and vegetables with imperfections as ‘ugly’ or as ‘seconds’ in the first place, when that is often the way nature intended? Are consumer expectations to blame for the degree of waste due to cosmetic flaws in the first place? Or are supermarkets setting too high the cosmetic standards and then claiming corporate social responsibility status for waste reduction initiatives such as The Odd Bunch?

CASE QUESTIONS 1. Does the marketing of The Odd Bunch raise any social dilemmas? If so, how has Woolworths looked to decrease this dilemma?

When a consumer is deciding whether to purchase from The Odd Bunch range or from Woolworths regular range of fruit and vegetables they may feel conflicted. The

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Odd Bunch is not as visually appealing; however, it is a more environmentally conscious option. By offering The Odd Bunch range at a considerable discounted price, Woolworths aims to reduce the social dilemma, as it benefits both the consumer (through lower prices) and the local producer and wider community (through waste reduction).

2. Can you identify a potential ‘dark side’ to The Odd Bunch campaign?

Supermarkets such as Woolworths attribute their high quality standards to consumer demands and expectations of the appearance of fruit and vegetables. Consumers, however, can only buy what is available at the supermarket. By setting cosmetic standards in the procurement of fruit and vegetables, and differentiating between 'normal' and 'ugly' foods, supermarkets are in effect implementing practices that ultimately contribute to higher levels of food waste, while claiming social responsibility through campaigns such as 'The Odd Bunch'. Without stringent cosmetic standards in the first place consumers would be less likely to differentiate between 'normal' and 'ugly' produce, and farmers may not have to accept a lower price for there so called 'seconds'.

3. How would you, as a consumer, resist Woolworths’ marketing practice?

In an effort to decrease the supply chain power that large supermarket chains hold in Australia, including Woolworths, consumers may look to alternative sources for fruit and vegetables such as more direct 'paddock to plate' Farmers Markets. Choosing not to patronise Woolworths and shifting from mainstream retail channels to local producer driven markets is an individual consumer resistance strategy.

SUGGESTED EXERCISES AND TEACHER GUIDELINES 1. Using library sources, research retailers’ and service companies’ yearly losses due to theft, insights about factors affecting theft, whether theft has been increasing or decreasing in recent years and what marketers are doing to reduce theft. Report your results to the class. Interview consumers and ask whether they have ever engaged in theft and why. Discuss your findings with other members of the class.

What impact, if any, has technology had in helping retail establishments decrease consumer theft? Is employee theft an issue? What controls are in place to reduce this problem?

2. Collect and share magazine advertisements that deal with cigarettes or alcohol. Do these ads suggest that such advertising (a) is excessive, (b) targets youths, or (c) represents images that are attractive to youths?

It has been stated within the cigarette industry, that since brand loyalty is so high amongst cigarette users, the only way to compete is to capture starters. If you were a marketer for these types of products, would you argue that targeting consumers would benefit rather than harm them by providing consumers with products best suited to their particular needs and wants?

3. Collect and share magazine advertisements that use models. Use these advertisements and your own personal experience to argue for or against the idea that advertising perpetuates negative body images.

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How have society’s views of body images changed over time? What might the future hold for these types of marketing techniques?

4. Collect and share magazine advertisements that portray women, minorities, and mature consumers. Based on your observations, evaluate whether advertisers misrepresent these key segments or represent them in stereotypical ways.

Student evaluations will vary.

5. Examine the privacy policies of three internet retailers. What types of data does each retailer say it collects and why? Under what circumstances can you review the data each site would be collecting about you? What does each retailer say it plans to do with consumers’ personal data? Do you think these sites are addressing consumers’ privacy concerns? What can you suggest to improve these privacy policies?

The answer to this question depends on the internet retailers that students visit. Most internet retailers have a privacy policy that describes what they do with your personal information. They will keep it to themselves, sell your email address/personal information to mailing lists, or send you marketing communications. Internet retailers such as Best Buy, Amazon.com, and others are allowing consumers to opt out of advertising communications from the company. To improve consumer’s privacy concerns a retailer should allow consumers to opt out of advertising and having their name sold to a mailing list. Some e-tailers are asking for the consumer’s permission to store their credit card number on their internal server. This at least allows the consumer to have a sense of control and security when it comes to privacy/security on the internet.

Suggestions for improvements to these policies vary, students should focus on opt out clauses, descriptions of what the site does with its personal information, and the steps a consumer needs to take to ensure the company does not share the information with others. For instance, Apple makes the popular iTunes software, which is available free.

Yet, when a consumer downloads the iTunes software, there is a box they have to check if they want to receive communications from Apple.

SUGGESTED INTERNET EXERCISES WITH SAMPLE ANSWERS The Australasian Gaming Council Does the prevalence of government-run lottery games encourage compulsive gambling? The Australasian Gaming Council provides evidence to the contrary at its website, (https://www.austgamingcouncil.org.au/ ). However, the organisation’s home page does not solely boost lotteries, but includes links to a wealth of opinions on both sides of this controversial issue. Visit the website for the AGC and click the various links to associated pages. What information at the site offers lotteries a defence against critics? In what ways might the AGC’s site help compulsive gamblers?

Instructor notes As a visitor would expect, the Australasian Gaming Council provides considerable evidence to support government-operated lotteries. The site points out that in surveys concerning gambling preferences and encourages responsible gaming behaviour. In its general description of problem gambling behaviour, the AGC site asserts that only a small fraction of

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gamblers become compulsive in their behaviour; the vast majority enjoy the experience without becoming dysfunctional, just as most social drinkers do not become alcoholics.

Furthermore, the site includes an exhaustive list of the uses of lottery revenues in various states and provinces. Foremost are support for education, infrastructure and social programs. The implication is clear: lotteries provide revenues for these activities that otherwise would come from higher taxes or would not be funded at all.

The AGC’s website offers considerable assistance to compulsive gamblers and those dealing with them. Toll-free phone numbers for problem gambling hotlines appear prominently at the site. Also included is a diagnostic list of behaviours that may indicate the existence of, or potential for, compulsive gambling. Those affected may recognise the problem by comparing their own or another’s behaviour with the points on the list, and may actually turn to help before serious repercussions occur.

Additional uses This exercise also relates to concepts in the following chapters: •

Chapter 3, From Exposure to Comprehension(subjective miscomprehension concerning lotteries and compulsive gambling)

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Chapter 5, Attitudes and Persuasion (marketing messages about lotteries as recall cues; affective bases of attitudes)

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Chapter 6, Problem Recognition and Information Search (online information search concerning problem gambling)

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Chapter 13, Symbolic Consumer Behaviour (compulsive gambling and actual and ideal identity schemas)

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Appendix to Chapter 1, Conducting Research in Consumer Behaviour (ways to improve consumer research methods for describing and predicting compulsive gambling)

Discussion idea Do you agree with critics of lotteries who claim that they prey on poor consumers? Why or why not?

Plus-size e-tailing The average adult consumer is taller and heavier than at any time in Australian history, yet many marketers continue to include unnaturally thin models in their advertisements.

Considerable evidence exists to corroborate the negative effects of exposure to such images on the body images and general psychological health of consumers. A healthy niche market online involves clothing and accessories for so-called plus-size consumers, who often encounter great difficulty shopping for, and locating, fashionable items. Visit e-tailers that offer clothes catering to the needs of this market, such as Be Me (www.beme.com.au) and The Iconic (www.theiconic.com.au ). How do the women’s clothing e-tailers comply with, or deviate from, the usual marketer-promoted images of women? Other than the styles of clothing (for women or for men), how do these sites differ from one another?

Instructor notes The women’s clothing e-tailers both deviate from and comply with the usual marketerpromoted, unnaturally thin images of women. In particular, the Iconic site often features

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images of runway models who are only of average (or very slightly larger than average) body size, wearing body-revealing clothing such as midriff-baring tops. This reinforces two potentially damaging messages: average-size women are overweight; and sexiness relates to a woman’s willingness to reveal skin, not to her mental or emotional characteristics. On the other hand, the Be Me website depicts a larger-than-average woman wearing a flowing garment in a bright, floral print fabric. This defies the conventional wisdom that truly large women must conceal their forms with dark clothing in inconspicuous designs. Both sites seem to emphasise the fashionable nature of their product offerings, rather than focusing on shopping convenience, breadth of selection, or other factors in evidence at both of the men’s e-tail sites.

Additional uses This exercise also relates to concepts in the following chapters: •

Chapter 3, From Exposure to Comprehension (non-focal attention to marketing cues at fashion websites)

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Chapter 5, Attitudes and Persuasion (TORA model applications to online fashion shopping)

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Chapter 6, Problem Recognition and Information Search (self-definition as large-size consumer as a trigger for online information search)

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Chapter 7, Judgement and Decision Making (brand-based and attribute-based models)

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Chapter 9, Social Influences on Consumer Behaviour (normative influences on body image)

Discussion idea What are the other advantages to marketers and to large-size consumers of niche marketers online?

National check fraud centre Among the fastest-growing forms of consumer theft are check and credit card fraud.

Sometimes used to fund other illegal activities, sometimes a way of financing compulsive buying, sometimes simply for greed, a few consumers will use fraudulent means to obtain funds or merchandise. Visit the identity crime section of the website for the Australian Federal Police at https://www.afp.gov.au/what-we-do/crime-types/fraud/identity-crime .

What suggestions does the site provide for consumers to protect themselves from check and credit card fraud? Besides check and credit card fraud, what other criminal activities are described at the AFP’s website? How has modern technology made check and credit card fraud easier and more lucrative?

Instructor notes The AFP provides several helpful suggestions to reduce the probability of becoming a victim of check or credit card fraud. The key is preventing criminals from obtaining sensitive identifying information (e.g., tax file and Medicare numbers, driver license numbers) thereby thwarting their attempts to access existing accounts or to create fraudulent ones.

First, consumers should provide only the minimum necessary identifying information for check approval at a retailer. Second, consumers should make sure to retrieve all information

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sources (e.g., driver license, credit card) and all receipts before leaving the counter after making a purchase. Third, consumers should secure all receipts in a safe place or shred them. Finally, consumers should guard their purses and wallets carefully to prevent pocket picking. The AFP’s website also provides information on other financial crimes such as marketing scams and identity theft. Unfortunately, modern technology enables check fraud perpetrators to reproduce very accurate counterfeits of financial documents such as personal checks. Armed with these counterfeits, clever criminals can deplete consumers’ bank accounts and credit lines.

Additional uses This exercise also relates to concepts in the following chapters: •

Chapter 2, Motivation, Ability and Opportunity (impact of motivation, ability, and opportunity on the probability of consumer crime)

•

Chapter 10, Consumer Diversity (influences of these factors on consumers’ vulnerability to check and credit card fraud)

•

Chapter 12, Innovations: Adoption, Resistance and Diffusion (influence of consumer crime on consumer attitudes concerning cashless transactions)

Discussion idea Will credit card fraud and identity theft stop or reverse the trend toward online purchasing?

Why, or why not?

ADDITIONAL DISCUSSION QUESTION WITH SAMPLE ANSWER This discussion question can be used as an in-class activity or as a thought question that the students consider while reading the chapter or to test their understanding of the material after the reading and lecture are complete.

1. Discuss the psychological factors that primarily impact consumer theft.

The two psychological factors that primarily influence consumer theft are the temptation to steal and the ability to rationalise theft behaviour. Consumers are tempted to steal when they do not have legitimate means to acquire a good, are embarrassed to purchase the item, or believe that the theft is worth the risk. Consumers who steal frequently rationalise their behaviour by arguing that their behaviour is in some way justified. They argue that it is motivated by external factors or encouraged by the environment.

ADDITIONAL QUESTIONS 1. Discuss the factors that influence compulsive buying. Focus on those marketing practices that might be particularly problematic for compulsive buyers. Explain what marketers might do to target and help compulsive buyers. Discuss the ethical and legal questions that arise regarding these issues.

2. Describe the structure of a black market. Explain why such markets exist and the factors that perpetuate them.

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3. In recent years, compulsive gambling has been on the rise. Discuss the factors that may be causing this rise. Discuss what role, if any, gambling organisations should have in helping compulsive gamblers.

4. Discuss whether advertising creates idealised images of appearance and body type.

Discuss the extent to which advertising might influence consumers’ satisfaction with their own appearance.

5. Create a list of examples in which you believe advertisements might have influenced consumers’ materialistic values and/or satisfaction with their own material possessions.

6. Argue both sides of the following statement using logic and evidence to support your views: Advertising encourages sexual, violent and materialistic values in children.

7. Discuss how advertisers have historically represented women, ethnic minorities and the mature market. Discuss whether these representations are changing. Use examples to support your discussion.

8. Discuss whether advertising saves or costs the consumer. Develop logical arguments and support for both positions.

EXPERIENTIAL EXERCISES AND CLASSROOM EXAMPLES Students who learn more readily through visual and tactile stimuli will benefit from the introduction of physical examples into the classroom.

1. ‘The bad and the ugly’ exercise Ask students to bring in to class examples of ads (print, radio, or TV) they find offensive and to explain their reactions. This exercise generally produces a fascinating array of ‘ugly’ advertising. It is great for demonstrating that ugliness is in the eye of the beholder, because what acutely offends one student might not bother others at all. Some students have low ‘offensive’ thresholds, reacting negatively to ads that use sex to sell, that portray an individual or group of individuals in a demeaning fashion, that insult the audience’s intelligence, that stretch the truth, or that use humour inappropriately. Other students have difficulty finding any advertising that bothers them. Reactions often differ widely across genders. Use the exercise to motivate a discussion of whether advertising leads or reflects social values, of where the responsibility for offensive advertising lies (with the client who pays for it, the agency that creates it, or the media that runs it), and of how advertisers can minimise unintended consumer reactions (by developing creative and media strategies that focus more clearly on the target market).

2. End-of-the-Semester taste tests Taste tests are always an interesting way to illustrate consumer behaviour principles.

One obvious example is holding a blind taste test to differentiate between Bundaberg and Kirk’s ginger beers. It is interesting to see how brand loyal consumers (i.e., Bundaberg/Kirk’s drinkers) fare under these conditions. An offshoot of the BundabergKirk’s taste test is to prepare two-litre bottles with another brand of ginger beer in both.

Before class, empty out the contents of a two-litre of both Bundaberg and Kirk’s. Pour in the other brand into both the Bundaberg and Kirk’s. Announce to class that there will be 

This experiential exercise was contributed by Professor Sheri Bridges of Wake Forest University.

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a soft-drink taste test. Pull out the doctored two-litre bottles of Bundaberg and Kirk’s.

Ask for student volunteers to help pour each into a different coloured small cup. Student volunteers will help the credibility of the exercise as both coloured cups should taste identical, given they are the same product, the third brand of ginger beer. Eating a cracker in between drinking the two cups should keep them from realising that the contents are the same. Ask for student input as to how easy it was to tell the difference between the two (most will say it is fairly easy). After some students guess which cup is which soft drink, explain how both cups were filled with the third brand of ginger beer.

It’s guaranteed to get quite a reaction when they learn the truth.

Another useful comparison taste test is to have students differentiate between a namebrand item and a generic item of the same product category. Generic/name-brand granola bars and soft-batch cookies make good products to use.

CLASSROOM GROUP ACTIVITY Marketing addictive substances: 40 minutes I. Start up A. Purpose of the activity 1. This activity will give students an opportunity to consider marketers’ social responsibility when bringing offerings into the marketplace B. What the instructor will do 1. The instructor will divide people into small groups, be available to coach, and help the groups as needed 2. Optionally, groups may be provided with clear overhead acetates and markers so they can summarise their discussions and make presentations after their analysis and discussion C. What the participants will do 1. The participants will work in small groups to address concerns marketers should have for promoting the use of cigarettes, alcohol and caffeine. After a period of small-group discussion, they will make reports to the larger group D. Rules for this experience 1. Groups are to work separately from each other. Individuals should rely on their knowledge from the book and may refer to their notes and the book as necessary II. Experience A. Group up 1. Have students form groups of no more than five. This exercise will work in groups of any size; however, room restrictions that do not allow for moving furniture may make group work more difficult B. Specific actions for groups 1. The groups are responsible for developing a list of issues associated with the marketing of addictive products 2. Optionally, groups can summarise their discussions on clear overhead acetates to facilitate presentations after their analysis and discussion 3. Questions to be answered by small groups a) Discuss whether marketers should be allowed to market products, like cigarettes, that are addictive. What about alcohol? What about

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caffeine? Consider whether the responsibility for the addictive behaviour lies completely with the consumer or completely with the marketer. Take the role of a public policy committee and develop your recommendations regarding the sales and marketing of addictive products like those above. As much as possible, support your recommendations with consumer behaviour research and theory 4. Large-group discussions a) After about 20 minutes of small-group activity, proceed to have each group present its ideas to the class in a round-robin format III. Debrief and unveil concepts A. Discuss the activity itself 1. The purpose of this discussion is to allow students to express what they felt about the experience itself 2. Ask students to describe their experiences of doing the activity a) Likes and dislikes about what just happened b) How they felt during the experience c) What is realistic, unrealistic about the exercise? d) What will be different if they do this outside of the classroom situation?

B. Discuss the content of the experience 1. The purpose of this discussion is to ensure that students ‘take away’ important learning points 2. Ask students to describe the important points the experience teaches a) The importance of considering broader social issues when making marketing decisions 3. Use the chalkboard to record student responses a) Write down their ideas as they are presented b) Concentrate on the principles being discussed rather than the examples being used c) Help them to see the interrelationships among their responses IV. Execute A. Apply what has been learned 1. Lead a discussion on how the concepts can be applied in organisations a) What barriers may be faced in applying the concepts from the exercise? b) What can be done to help others understand the concepts when you use them at work?

B. Transfer and use the knowledge 1. Encourage students to make a record in their notes about how they will use the ideas in the workplace 2. Even if they do not have a specific job, how will they remember to use what they have learned?

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Chapter 14: Marketing, Ethics and Social Responsibility in Today’s Consumer Society

USEFUL WEBLINKS Engage for Good http://engageforgood.com/ Engage for Good (formerly Cause Marketing Forum) helps companies and causes succeed by engaging consumers and employees in a variety of ways.

Australian Centre for Corporate Social Responsibility http://accsr.com.au/ An non-profit organisation devoted to promoting social causes and well-being among forprofit organisations that are part of its network.

Australian Human Rights Commission https://www.humanrights.gov.au/ The federal government’s commission on promoting human rights within the country and abroad. Also provides a discussion on the application of human rights to corporate social responsibility and marketing activities.

Australian Network on Disability http://www.and.org.au/ A non-profit organisation devoted to promoting knowledge and access regarding disability in Australia. Also provides a discussion on how companies, including marketers, can better adapt their product offerings to this segment.

Solution Manual for Consumer Behavior 2nd Asia Pacific Edition Wayne D. Hoyer