Consumer Behavior Buying, Having, and Being, 12E Michael R. Solomon Instructor Manual

Type:

Instructor Manual

Consumer Behavior Buying, Resource: Having, and Being Edition:

12th Edition

Author(s):

Michael R. Solomon

Chapter 1: BUYING, HAVING, and BEING CHAPTER OBJECTIVES When students finish this chapter, they should understand why: 1. Consumer behavior is a process.

2. Marketers have to understand the wants and needs of different consumer segments.

3. Our choices as consumers relate in a powerful way to the rest of our lives.

4. Our motivations to consume are complex and varied.

5. Technology and culture create a new “always-on” consumer.

6. Many different types of specialists study consumer behavior.

7. There are differing perspectives regarding how and what we should understand about consumer behavior.

CHAPTER SUMMARY After reading this chapter, students should understand why: Consumer behavior is a process.

Consumer behavior is the study of the processes involved when individuals or groups select, purchase, use, or dispose of products, services, ideas, or experiences to satisfy needs and desires.

A consumer may purchase, use, and dispose of a product, but different people may perform these functions. In addition, we can think of consumers as role players who need different products to help them play their various parts.

Marketers have to understand the wants and needs of different consumer segments.

Market segmentation is an important aspect of consumer behavior. Consumers can be segmented according to many dimensions, including product usage, demographics (the objective aspects of a population, such as age and sex), and psychographics (psychological and lifestyle characteristics). Emerging developments, such as the new emphasis on relationship marketing and the practice of database marketing, mean that marketers are much more attuned to the wants and needs of different consumer groups.

Our choices as consumers relate in powerful ways to the rest of our lives.

Marketing activities exert an enormous impact on individuals. Consumer behavior is relevant to our understanding of both public policy issues (e.g., ethical marketing practices) and the dynamics of popular culture.

Our motivation to consume are complex and varied.

Marketers try to satisfy consumer needs but the reasons people purchase any product can vary widely. The identification of consumer motives is an important step to ensure that a product will satisfy appropriate needs. Traditional approaches to consumer behavior focus .

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on the abilities of products to satisfy rational needs (utilitarian motives), but hedonic motives (e.g., the need for exploration or for fun) also play a key role in many purchase decisions.

Technology and culture creates a new “always on” consumer.

The Web and social media transformthe way consumers interact with companies and with each other. Online commerce allows us to locate obscure products from around the world, and consumption communities provide forums for people to share opinions and product recommendations.

Many different types of specialists study consumer behavior.

The field of consumer behavior is interdisciplinary; it is composed of researchers from many different fields who share an interest in how people interact with the marketplace. We can categorize these disciplines by the degree to which their focus is micro (the individual consumer) or macro (the consumer as a member of groups or of the larger society).

There are differing perspectives regarding how and what we should understand about consumer behavior.

Researchers who study consumer behavior do so both for academic purposes and to inform marketing organizations about practical decisions.We can roughly divide research orientations into two approaches: The positivist perspective emphasizes the objectivity of science and the consumer as a rational decision maker. The interpretivist (or CCT) perspective, in contrast, stresses the subjective meaning of the consumer’s individual experience and the idea that any behavior is subject to multiple interpretations rather than to one single explanation.

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CHAPTER OUTLINE I. Consumer Behavior: People in the Marketplace A. The average consumer can be classified and characterized based on demographics (e.g. age, gender, income, occupation) and psychographics (lifestyle and personality). The average consumer’s purchase decisions are heavily influenced by the opinions and behaviors of their family, peers, and acquaintances.

B. Community heavily influences us.

1. The growth of the Web has created thousands of online consumption communities where members share opinions and product recommendations.

2. As members of a large society, U.S. consumers share certain cultural values or strongly held beliefs about the way the world should be structured.

3. Subcultures, or smaller groups within the culture, also share values (e.g. Hispanics, teens, Midwesterners).

4. The use of market segmentation strategies may be used to target a brand to only specific groups of consumers rather than to everybody.

C. Brands often have clearly defined images or “personalities” created by product advertising, packaging, branding, and other marketing strategies that focus on positioning a product in a certain way.

D. When a product succeeds in satisfying a consumer’s specific needs or desires it may be rewarded with many years of brand loyalty, a bond between product and consumer that is difficult for competitors to break.

II. What Is Consumer Behavior?

Consumer behavior is the study of the processes involved when individuals or groups select, purchase, use, or dispose of products, services, ideas, or experiences to satisfy needs and desires.

A. Consumer behavior is a process.

1. Most marketers recognize that consumer behavior is an ongoing process, not merely what happens at the moment a consumer hands over money or a credit card and in turn receives some good or service (buyer behavior).

2. The exchange—a transaction where two or more organizations or people give and receive something of value—is an integral part of marketing. However, the expanded view of consumer behavior emphasizes the entire consumption process. This view includes issues that influence the consumer before, during, and after a purchase. ***** Use Figure 1.1 Here; Use Consumer Behavior Challenge #14 Here ***** B. Consumer behavior involves many different actors.

1. A consumer is a person who identifies a need or desire, makes a purchase, and then disposes of the product during the three stages in the consumption process.

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2. The purchaser and user of a product might not be the same person. A separate person might be an influencer. This person provides recommendations for or against certain products without actually buying or using them.

3. Consumers may be organizations or groups (in which one person may make the decision for the group or a large group of people may make purchase decisions). ***** Use Review #13 Here ***** III. Consumers’ Impact on Marketing Strategy A. Understanding consumer behavior is good business.

1. Marketers can only satisfy consumer needs to the extent that they understand the people or organizations that will use the products and services they sell.

2. Consumer response is the ultimate test of whether a marketing strategy will succeed.

3. Data about consumers help organizations define the market, identify threats to and opportunities for a brand, and help ensure a product continues to appeal to its core market.

B. Consumers Are Different! How We Divide Them Up 1. Society is evolving from a mass culture to a diverse one, which makes it more important to identify diverse market segments and to develop specialized messages and products for those groups. a. Just think about how many shades of lipstick or neck tie patterns compete for attention. This change makes it more important than ever to identify these distinct markets.

2. The process of market segmentation identifies groups of consumers who are similar to one another in one or more ways and then devises strategies that appeal to one or more groups. There are many ways to segment a market. a. Companies can define market segments by identifying their most loyal, core customers or heavy users. Marketers use the 80/20 rule as a rule of thumb, where 20% of users account for 80% of sales. b. Demographics are statistics that measure observable aspects of a population, such as birth rate, age distribution, and income.

3. Important demographic dimensions include: a. Age b. Gender c. Family structure d. Social class and income e. Race and ethnicity 4. Geography and Lifestyles (a psychographic variable) are other important bases for segmenting consumers.

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Discussion Opportunity—Have students describe themselves demographically. Ask: Does this have any bearing on your purchase patterns? How could a marketer find out about you in a demographic sense? Describe one purchase occasion where a demographic dimension had an impact on your purchase decision.

C.

Relationship and Database Marketing 1. Relationship marketing occurs when a company makes an effort to interact with customers on a regular basis, giving customers reasons to maintain a bond with the company over time.

Discussion Opportunity—Provide the class with an example of relationship marketing. Ask: What types of organizations can make best use of relationship marketing? Have students offer additional examples of relationship marketing.

2. Database marketing involves tracking consumers’ buying habits very closely and creating products and messages tailored precisely to people’s wants and needs based on this information.

Discussion Opportunity—Ask: How can database marketing help an organization improve its relationship marketing? What databases are you in? How did you get there?

IV. Marketing’s Impact on Consumers A. Popular Culture 1. Popular culture consists of the music, movies, sports, books, celebrities, and other forms of entertainment consumed by the mass market; it is both a product of and an inspiration for marketers.

2. Product icons (e.g. Pillsbury Doughboy, Jolly Green Giant) often become central figures in popular culture.

B. What Does It Mean to Consume?

1. A fundamental premise of consumer behavior is that people often buy products not for what they do, but for what they mean.

2. People, in general, will choose the brand that has an image (or even a personality) that is consistent with his or her underlying needs.

3. Role theory takes the view that much of consumer behavior resembles actions in a play. Consumers have roles and they may alter their consumption decisions depending upon the role being played at the ti Discussion Opportunity—Give some examples of products that might be consumed strictly for image. Have students offer examples of products that they purchase for this reason. Ask: How does the image of the product enhance your sense of self when you use or consume the product?

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4. People may have various relationships with a product: a. Self-concept attachment—the product helps to establish the user’s identity. b. Nostalgic attachment—the product serves as a link with a past self. c. Interdependence—the product is a part of the user’s daily routine. d. Love—the product elicits emotional bonds of warmth, passion, or other strong emotion. ***** Use Consumer Behavior Challenge #20 Here ***** Discussion Opportunity—Ask students to give an illustration of a product that they have a strong attachment for and explain the relationship. How did this relationship develop?

C. What Do We Need – Really?

1. A want is a specific manifestation of a need that personal and cultural factors determine.

2. A utilitarian need emphasizes objective, tangible attributes of products. Hedonic needs are subjective and experiential.

3. A productivity orientation refers to a continual striving to use time constructively.

D. How We Classify Consumer Needs 1. Henry Murray developed a set of 20 psychogenic needs that result in specific behaviors.

2. Some important needs for understanding consumer behavior are listed below: a. Need for affiliation b. Need for power c. Need for uniqueness 3. Maslow’s hierarchy of needs implies that the order of development of needs is fixed.

Figure 1.2 presents this model. The needs include physiological, safety, social, esteem, and self-actualization.

E. The Global “Always On” Consumer 1. A global consumer culture is one where people around the world are united by their common devotion to brand name consumer goods, movie stars, and musical celebrities.

2. When companies expand overseas, it increases the pressure to understand how customers in other countries are the same or different from those in one’s own country.

F. The Digital Native: Living a Social [Media] Life 1. The digital revolution is one of the most significant influences on consumer behavior.

2. Electronic marketing has increased convenience by breaking down barriers of time and location.

3. There is now B2C e-commerce (businesses selling to consumers) and C2C ecommerce (consumers selling to consumers).

4. Virtual brand communities are often brought together by their interests, which expand consumption communities beyond those available in local communities.

Discussion Opportunity—Have students describe the characteristics of their virtual communities. Ask: How do these interactions shape your consumption behaviors? .

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5. Digital natives are consumers who grew up “wired” in a highly networked, alwayson world where digital technology always existed.

6. Consumers are part of a horizontal revolution, where each consumer can communicate with huge numbers of people by a click on a keypad so information flows across people instead of just coming from big companies and governments.

7. Social media are the online means of communication, conveyance, collaboration and cultivation among interconnected and interdependent networks of people, communities and organizations enhanced by technological capabilities and mobility.

Discussion Opportunity—Ask students to give some examples of social media platforms they use.

Have students offer examples of brands they interact with via social media. Ask: How do these interactions relate to your relationship with the brand?

8. User-generated content, where everyday people film commercials, voice their opinions about products, brands and companies on blogs, podcasts and social networking sites, is part of the Web 2.0 era, which shifted the Internet from a oneway transmission medium to a social, interactive medium. ***** Use Consumer Behavior Challenge #18 Here ***** 9. Social media is characterized by synchronous (real-time) and asynchronous interactions across social media platforms that enable a culture of participation.

V. Consumer Behavior as a Field of Study A. Where Do We Find Consumer Researchers? Just about anywhere, we find consumers.

B. Interdisciplinary Influences on the Study of Consumer Behavior – Many fields shape the field of consumer behavior. Table 1.1 provides an example of interdisciplinary research issues about magazine usage. Figure 1.3 lists the disciplines in consumer research.

C. Should Consumer Research Have an Academic or an Applied Focus?

It is still a debate. Some argue in favor of an applied focus that improves the effectiveness of marketing practice. Others argue for a focus on understanding consumption for its own sake.

D. Two Perspectives on Consumer Research 1. One general way to classify consumer research is in terms of the fundamental assumptions the researchers make about what they are studying and how to study it.

This set of beliefs is known as a paradigm. A paradigm shift may now be underway.

2. The dominant paradigm currently is called positivism (or sometimes called modernism). It emphasizes that human reason is supreme, and that there is a single, objective truth that can be discovered by science. Positivism encourages us to stress the function of objects, to celebrate technology, and to regard the world as a rational, ordered place with a clearly defined past, present, and future.

3. The emerging paradigm of interpretivism (or postmodernism) questions the previous assumptions. Proponents argue that there is too much emphasis on science and technology in our society, and that this ordered, rational view of consumers denies the complex social and cultural world in which we live. Others say positivism .

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puts too much emphasis on material well-being, and that this logical outlook is dominated by an ideology that stresses the homogeneous views of a culture dominated by white males.

4. Interpretivists instead stress the importance of symbolic, subjective experience and the idea that meaning is in the mind of the person because we live a world composed of a pastiche, or mixture of images.

Discussion Opportunity—Ask students to consider whether they are more of a “positivist” or an “interpretist.” Do not allow them to take the easy way out by saying “both.” All are to some extent.

II. Taking It from Here: The Plan of the Book The plan is simple—it goes from micro to macro. Each chapter provides a “snapshot” of consumers, but the lens used to take each picture gets successively wider.

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End-of-Chapter Support Material SUMMARY OF SPECIAL FEATURE BOXES 1.

Marketing Opportunity

BMW’s engineers and designers know they have to understand how drivers’ needs will change in the future. It developed electric car models and a car-sharing service.

2.

Marketing Pitfall

When disaster strikes, it can be an opportunity or a pitfall for marketers. American Apparel offended shoppers with its tweet about shopping during Hurricane Sandy but Duracell offered free batteries and won loyalty.

3.

Marketing Opportunity

Real life can create marketing opportunity as in the growth of spring break travel to Florida after the release of the book, Where the Boys Are. 4.

CB Ast I See It: Stefano Putoni-Erasmus, University of Rotterdam

Globalization is influencing consumer behavior by impacting diversity. There are two opposing trends in how globalization influences diversity. Globalization can lead to diversity within a country; however, it also leads to a decrease in diversity between countries. Globalization both increases and decreases diversity.

5.

Net Profit

User-generated content like the Mentos and Diet Coke videos is an important aspect of the Web 2.1 era.

6.

CB As I See It: Craig Thompson, University of Wisconsin-Madison

Consumers make choices on a daily basis, based on the evaluation of the respective attributes offered by each alternative. These choices help to present a desired self-image to others around them. Political consumerism is the theory that individuals attempt to change the social conditions that constrain everyday actions. Political consumerism is where consumers seek to consciously resist structural constraints through alternative consumption practices.

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REVIEW QUESTIONS 1-1. Provide a definition of consumer behavior.

It is the study of the processes involved when individuals or groups select, purchase, use, or dispose of products, services, ideas, or experiences to satisfy needs and desires.

(1 minute, Chapter Objective 1, AACSB: Application of Knowledge 1-2. What are demographics? Give three examples of demographic characteristics.

Demographics are statistics that measure observable aspects of a population, such as birthrate, age distribution, and income.

(1.5 minutes, Chapter Objective 2, AACSB: Application of Knowledge) 1-3. What is market segmentation? Give three examples of market segments.

The use of market segmentation strategies means targeting a brand only to specific groups of consumers rather than to everybody—even if it means that other consumers who do not belong to this target market are not attracted to that product. Examples may include product usage, demographics (e.g. age, sex, income), and psychographics (psychological and lifestyle characteristics).

(1.5 minutes, Chapter Objective 2, AACSB: Application of Knowledge) 1-4. What is role theory, and how does it help us to understand consumer behavior?

The perspective of role theory takes the view that much of consumer behavior resembles actions in a play. As in a play, each consumer has lines, props, and costumes necessary to put on a good performance. Because people act out many different roles, they sometimes alter their consumption decisions depending on the particular “play” they are in at the time. The criteria they use to evaluate products and services in one of their roles may be quite different from those used in another role.

(1.5 minutes, Chapter Objective 2, AACSB: Reflective Thinking) 1-5. What do we mean by an exchange?

A transaction in which two or more organizations or people give and receive something of value.

(1 minute, Chapter Objective 2, AACSB: Application of Knowledge) 1-6. Why is it important for businesses to learn about their heavy users?

Because heavy users account for a substantial proportion of revenues. They are the customers that are more likely to be loyal. These customers represent the best opportunity to cross-sell and up-sell.

(1.5 minutes, Chapter Objective 2, AACSB: Reflective Thinking) 1-7. What is “Big Data”?

Big data refers to the collection and analysis of extremely large datasets. For example, Macy’s used GPS phone signals from Macy’s parking lots on Black Friday to estimate whether the department store would meet its sales projections for that day.

(1 minute, Chapter Objective 5, AACSB: Information Technology) .

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1-8. What is popular culture, and how does this concept relate to marketing and consumer behavior?

Popular culture, consisting of the music, movies, sports, books, celebrities, and other forms of entertainment consumed by the mass market, is both a product of and an inspiration for marketers. Our lives are also affected in more far-reaching ways, ranging from how we acknowledge cultural events such as marriage, death, or holidays to how we view social issues such as air pollution, gambling, and addictions.

(1 minute, Chapter Objective 3, AACSB: Reflective Thinking) 1-9. What do we mean by the term global consumer culture?

A culture in which people around the world are united by their common devotion to brand name consumer goods, movie stars, celebrities, and leisure activities.

(1 minute, Chapter Objective 3, AACSB: Diverse and Multicultural Work Environments) 1-10. What is the difference between C2C and B2C e-commerce?

B2C is businesses conducting transactions with consumers. C2C is consumer-toconsumer business, made possible by websites like www.etsy.com, www.craigslist.com, and www.ebay.com.

(1.5 minutes, Chapter Objective 5, AACSB: Application of Knowledge) 1-11. Name two different disciplines that study consumer behavior. How would their approaches to the same issue differ?

Two disciplines that study consumer behavior are psychology and sociology.

Psychologists study consumer behavior from a mental / brain information processing perspective while sociologists study consumer behavior from a group behavior perspective.

(1.5 minutes, Chapter Objective 6, AACSB: Application of Knowledge) 1-12. This chapter states “people often buy products not for what they do but for what they mean. “ Explain the meaning of this statement and provide an example.

Role theory suggest that when people act out different roles in their lives, they also alter their consumption decisions depending of the particular” play” or “role” they are in at the time. These roles might include “up-and-coming executive,” “geek,” “hipster” or “big man on campus.” Products help users establish their identity in these roles, provide nostalgic attachments, offer interdependence and elicit emotional bonds such as love. One example of this is Peeps candy. These marshmallow products have no nutritional value but have a group of devotees that use Peeps in decorations, slide shows, and sculptures. The Peeps brand has created nostalgic attachment as this brand has an image or personality consistent with the underlying needs of the consumer.

(5 minutes, Chapter Objective 4, AACSB: Reflective Thinking)

1-13. What are the major differences between the positivist and interpretivist paradigms in consumer research? .

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A positivist approach to consumer behavior emphasizes that human reason is supreme and that there is a single, objective through that science can discover. This stresses functionality, technology and rationality. Interpretivism questions the assumptions of positivism. Interpretivist stress the importance of subjective experiences, and that meaning is in the mind of the individual. We develop meaning based on cultural, and there is no right or wrong answer.

(5 minutes, Chapter Objective 7, AACSB: Reflective Thinking)

CONSUMER BEHAVIOR CHALLENGE Discussion Questions 1-14. Name some products or services that your social group uses a lot. State whether you agree or disagree with the notion that these products help to form group bonds. Support your argument with examples from your list of products your group uses.

Discussion of this question is similar to that pertaining to the first question. In both cases, the focus is on whether consumption behavior has a wider meaning—that of group bonding or identification. The actual products used are not the most important aspect of this discussion.

Instead, the focus should be on consumption behavior as more than the satisfying of primary (basic/physiological) needs. It is assumed that most students will agree that consumption has meaning beyond satisfying primary needs. Differences will be found, however, in 1) the situations in which consumption takes on this additional meaning, 2) the products that do so, and 3) the form of the broadened meaning. Encourage students to examine the products that bring forth meaning, as well as their consideration as to why this phenomenon occurs.

(5 minutes, Chapter Objective 4, AACSB: Reflective Thinking) 1-15. What aspects of consumer behavior would interest a financial planner? A university administrator? A graphic arts designer? A social worker in a government agency? A nursing instructor?

The listing of the aspects of consumer behavior corresponding to these positions should reflect the particular aspects of each position. For example, a financial planner depends on consumers’ willingness to postpone consumption in order to save and invest money to have more later. A social worker must be concerned about people’s attitudes toward government, social work in general, and the role of government in people’s lives. What each of these positions share, and what should underlie the discussion, is their connection to the consumption process and the fact that consumers themselves will have different needs and wants associated with their consumption. Each of the listed parties would attempt to influence consumers by using a different aspect of consumption, and these differences need to be discussed and analyzed.

(7 minutes, Chapter Objectives 3 and 6, AACSB: Application of Knowledge and Reflective Thinking) 1-16. Critics of targeted marketing strategies argue that this practice is discriminatory and unfair, especially if such a strategy encourages a group of people to buy a product that may be injurious to them or that they cannot afford. For example, community leaders in largely minority neighborhoods have staged protests against billboards promoting beer or cigarettes in these areas. However, the Association of National Advertisers argues that banning .

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targeted marketing constitutes censorship and thus is a violation of the First Amendment.

What are your views regarding this issue?

It is important to guide discussion to the legitimate interests on both sides. In this situation, however, the discussion should also examine the legitimacy of each side’s basic point. For what groups should target marketing not be allowed? On the other hand, under what specific circumstances should target marketing be allowed? Is the argument that target marketing unduly influences those who cannot resist its appeal reasonable? Is the counterargument that banishing target marketing amounts to censorship and is unconstitutional equally specious? Discussion should initially focus on the validity of each argument and then evolve toward a compromise that will protect target-marketing efforts while recognizing the needs of society. (5 minutes, Chapter Objective 2, AACSB: Ethical Understanding and Reasoning) 1-17. The chapter discussed a study that compared and contrasted people who lead “happy” lives versus those with “meaningful” lives. How does this distinction relate to the way you decide to spend your time and money? How does it relate to consumer behavior more generally?

Students should be able to differentiate between a want and a need. The discussion should identify how meaningfulness relates to activities that express personality and impact others in a positive way. Discussion should identify those who pursue happiness over meaningfulness as being takers rather than givers, and that they are more likely to think in the present instead of the past or future. Those who pursue meaningfulness would indicate the opposite. Worry, stress, and anxiety might also be associated with those who pursue happiness. (5 minutes, Chapter Objective 4, AACSB: Reflective thinking and application of knowledge) 1-18. A book bemoans the new wave of consumer-generated content, labeling it “the cult of the amateur.” It compares the social networking phenomenon to the old story about the monkeys: If you put an infinite number of monkeys in a room with an infinite number of typewriters, eventually they will (by hitting keys randomly) reproduce all the major works of literature. In other words, the large majority of user-generated content is at about the same level, and the future of professionally produced, quality work is in doubt. Do you agree or disagree with this assertion?

Students who are members of a social networking community or those who actively blog, might strongly defend the practice and might be offended by the monkey reference. Even though they might agree that there are many sites with ramblings, rants and raves, they might also point out serious sites where user-generated content is thought provoking. They might also mention instances where blogs check facts when the traditional media fails to do so. An example of this was a blogger proving that documents used by CBS News to discredit President Bush were forgeries.

Some students might also mention that not all “professionally produced” work can be labeled as “quality” work. Either students or the instructor could provide examples. It might also be beneficial to briefly discuss what “quality” means, who judges quality, and if this is a classic bias against the “new” by the older generation who prefers the traditional.

(7 minutes, Chapter Objective 5, AACSB: Analytic Thinking) 1-19. Will the Web bring people closer together or drive each of us into our own private virtual worlds? Wired Americans are spending less time with friends and family, less time shopping in stores, and more time working at home after hours. More than one-third of consumers .

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who have access to the Internet report that they are online at least 5 hours a week. Also, 60 percent of Internet users say they have reduced their television viewing, and one-third say they spend less time reading newspapers(those that still remain, as many fold due to a lack of readership and advertising revenue). However, a study by the Pew Internet and American Life Project reported that more than half of users the group surveyed feel that e-mail actually strengthens family ties. Users reported far more off-line social contact than nonusers. These results argue that people spend more time than ever with others. It is just that they form strong relationships over the Internet instead of in person. But the author of the first survey disagrees. As he observes, “If I go home at 6:30 in the evening and spend the whole night sending e-mail and wake up the next morning, I still haven’t talked to my wife or kids or friends. When you spend your time on the Internet, you don’t hear a human voice and you never get a hug.”

A follow-up study found that it works both ways—extroverts tend to make even more friends on the Web, whereas introverts feel even more cut off from the rest of the world.

This has been termed the “rich get richer” model of Internet use.

What is your take on this issue? Is our wired world turning us into “digital hermits” or does it help us to expand our boundaries by interacting with other people whom we might not otherwise meet? What are the good and bad consequences of this profound change in how we interact with other people?

This is another question that does not have an objectively right or wrong answer. The goal is to make the student think about the pros and cons of computer-mediated interactions and to be able to critically examine the arguments on both sides. Look for examples where the student relates these issues to their implications for consumption behavior, including the role of virtual communities in the decision-making process and how communications and products have changed to adapt to digital natives. You may want to probe students to take an additional step to talk about how services have utilized virtual connections to encourage people to meet offline (e.g. Match.com/eHarmony.com; Meetup.com). For your own reference, the New York Times published an article on August 10, 2011 called “For the Plugged In, Too Many Choices,” by Stepanie Rosenbloom that talked about “digital fatigue” and the potential for alienation through social networking. Students may have observed the decline in civic clubs (e.g. Rotary, Free Masons, etc.) in the United States (these organizations are still growing in countries where industry is growing quickly, drawing people from rural areas to cities, like India and South Korea). Some suggest there is less need for offline community ties in the United States due to online connections through facebook and LinkedIn. (10 minutes, Chapter Objective 5, AACSB: Reflective Thinking) Apply 1-20. Talk to car owners and probe to see what (if any) relationships they have with their vehicles. Do these feelings correspond to the types of consumer/product attachments we discussed in this chapter? How are these relationships acted on? (Hint: see if any of the respondents their cars a nickname, or if they “decorate” them with personal items) To give you some additional insight, check out a YouTube video called I Love My Car! The types of relationships referred to in the text are the following: .

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• • • •

Self-concept attachment: The product helps to establish the user’s identity.

Nostalgic attachment: The product serves as a link with a past self.

Interdependence: The product is a part of the user’s daily routine.

Love: The product elicits emotional bonds of warmth, passion, or other strong emotion.

Student reports should attempt to classify their findings based on these relationships. They should also attempt to show how the consumption patterns that they engage in with their cars reflect such relationships.

(5 minutes, Chapter Objectives 1 and 2, AACSB: Analytic Thinking and Reflective Thinking) 1-21. The specific way we choose to satisfy a need depends on our unique history, learning experiences, and cultural environment. For example, two classmates may feel their stomachs rumble during a lunchtime lecture. If neither person has eaten since the night before, the strength of their respective needs (hunger) would be about the same. However, the ways each person goes about satisfying his need might be quite different. Conduct this exercise with classmates: “As you probably know, a prisoner who is sentenced to die traditionally gets to choose his or her ‘last meal’. If you had to do this (let’s hope not), describe your last meal in detail.” Compare the responses you get, especially among people from different ethnic or cultural backgrounds. What similitatires and differences emerge?

Student reports should attempt to classify their findings based on these relationships. They should also attempt to show choices vary by cultural background.

(5 minutes, Chapter Objectives 1 and 2, AACSB: Analytic Thinking and Reflective Thinking)

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CASE STUDY TEACHING NOTES Honda’s ASIMO Summary of Case Honda’s ASIMO is a robot. He’s not available for purchase yet, but already people are ready for features like Facial Recognition Technology. FRT can do many things relevant for marketers such as estimate your general physical characteristics and interface with devices using apps like Facedeal.

Suggestions for Presentation It is suggested that this case be presented with the content related to technology and consumer behavior () in the chapter.

Suggested Answers for Discussion Questions CS 1-1. What are the most likely consumer market segments for robots? Which consumer charactersitics would be important to determine these market segments? What types of roles do you envison robots playing for these consumers?

The focus of this response should be on how to match and illustrate the benefits of ASIMO to the needs of the target audiences. The discussion can follow matching benefits sought in segmentation to the benefits offered by ASIMO. (5 - 7 minutes, Chapter Objectives 3 and 5, AACSB: Analytic Thinking) CS 1-2. Reflect on the value of FRT as a marketing tool. Give one example that illustrates how this technology can be most effectively used by marketers?

FRT has value as a marketing tool as it can map out a biometric profile that is as unique as a fingerprint.

(10 - 12 minutes, Chapter Objectives 4 and 5, AACSB: Ethical Understanding and Reasoning Abilities and Analytic Skills) CS 1-3. Discuss the “creepiness” concerns that some consumers have about robots and FRT. How can marketers address or even overcome these issues?

The concerns of consumers are likely to vary. This discussion could enter into the realm of wants versus needs and privacy issues.

(10-12 minutes, Chapter Objectives 4 and 5, AACSB: Ethical Understanding and Reasoning Abilities and Analytical Skills)

Additional Support Material STUDENT PROJECTS Individual Projects .

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1.

Ask students about their involvement with social networking sites and/or blogs. Ask them to explain why they are using them. What benefits do they derive from them? Who are the target audiences for their information? Have them explain their concerns about privacy, if any.

Student responses about their involvement with social networking sites and blogs will vary, and can be used to generate discussion about how consumers influence one another through electronically mediated communications, to remind the class about the concepts(e.g. digital natives, virtual communities) and to connect how the web and the horizontal revolution are changing consumer behavior to students’ personal experiences.

(7 minutes, Chapter Objective 5, AACSB: Reflective Thinking)

2.

This assignment can really be fun for the class and the presenter. Have a student wear or bring to class a recent clothes purchase. Have them explain how his or her purchase decision was influenced by different economic, social, cultural, and/or psychological variables.

The individual responses to this activity will be as varied as the personalities of the students in your class, but it is a good opportunity to remind students about how consumers often consume products because of what they mean, not because of what they do. This assignment can also work well as a collage, where students use images of products to tell rest of the class about them (and may include products they currently use or aspire to use in the future). This project can also lead to the discussion of the connection of the products to the student’s self-concept/identity and provide the student with the opportunity to explore the economic, social, cultural and/or psychological variables that make the product desirable.

(5 minutes, Chapter Objective 2, AACSB: Reflective Thinking

3.

This activity can be done as an extension to or independent of assignment number 2.

Have students explain why they chose the clothes they are wearing to class. Probe on this one. Was there any implied symbolism? Do all students seem to be dressed in a similar fashion? Why does this occur? Can marketers learn from this? Do marketers strategically contribute to this?

This activity is likely to generate some discussion about how consumers use clothing to identify themselves as part of a group (or distinguish themselves as not part of a group).

You can give students the opportunity to make the connection between group influences and marketers’ attempts to segment their target audiences. You may also direct students to consider the role of popular culture in their clothing choices. This activity provides an opportunity remind students about the concept of economics of information, and to ask them how advertising and/or product placements contributed to their senses of style.

(5 minutes, Chapter Objectives 2 and 3, AACSB: Reflective Thinking and Analytic Skills)

4.

Assign students to identify at least five instances where a specific marketing tactic employed by an organization (for profit or non-profit) has had an impact on popular culture. Examples may include such things as an actual product, product icon, promotional campaign, celebrity endorsers, corporate sponsorship, product placement, or others. This impact may be short term (the public temporarily adopting catch-phrases such as Donald Trump’s “You’re fired!” or Budweiser’s “Whaaaaazup!”) or long term (the influence of anti-smoking campaigns in reducing the number of smokers). .

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This activity provides students with the opportunity to recognize that just as marketers adapt to changing consumer needs, which reflect the influence of movies, music, sports, books, celebrities, etc., marketers also influence popular culture through products, advertisements, product placements, and celebrity giveaways. Student examples may also be tied to the influence of popular culture on rituals (e.g. Sweet Sixteen parties, weddings, etc.) and social issues.

(5 minutes, Chapter Objective 3, AACSB: Reflective Thinking) 5.

Have students identify examples of consumer-product relationships in society or in their own lives. The text identifies four specific types: self-concept attachment, nostalgic attachment, interdependence, and love. Have students come up with an example of each of these.

Students should describe one example of each of the following relationships: • Self-concept attachment: The product helps to establish the user’s identity.

• Nostalgic attachment: The product serves as a link with a past self.

• Interdependence: The product is a part of the user’s daily routine.

• Love: The product elicits emotional bonds of warmth, passion, or other strong emotion.

This project will help students differentiate between the four types and relate each to their own personal experiences.

(5 minutes, Chapter Objective 2, AACSB: Reflective Thinking

6.

Ask students to consider their own consumption practices over the past decade. Have them list the ways that online consumption activities have replaced or modified their realworld consumption activities.

This activity asks students to reflect on their personal experiences with the web and how those experiences affected offline consumption activities. It is a good opportunity to remind students about the availability of niche products, virtual communities, consumer recommendations, and C2C commerce. It may also provide an opportunity to ask students about how their online consumption activities are tracked/monitored by marketers, and what value they receive in exchange for the loss of privacy.

(10 minutes, Chapter Objective 5, AACSB: Reflective Thinking

Group Projects 1.

Have groups select a product of interest (e.g., a car, mp3 player, vacation spot, movie, sporting event, etc.). Have each person in the group make a list of what they consider to be the product’s main attributes (both physical and psychological). Compare and contrast the attributes listed by the women and by the men to see how they may vary. Next, if there are any age or ethnic differences within the group, see if differences appear. Based on these differences formulate strategies for appealing to the various subgroups within your group.

The project gives students the opportunity to see whether preferences differ across demographic variables that marketers use to segment customers. The responses will vary depending on the product and the students. You can also ask students to consider how individual lifestyles affect the attributes of interest, which may help explain similarities across ethnic and age groups. Students are likely to think about the media they will use to appeal to different subgroups Encourage them to think retail distribution, the messages .

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they will use to communicate with their target audiences, the price, and the characteristics/features of the product they will use to appeal to the different subgroups.

This will demonstrate how knowledge of consumer needs and wants relates to market strategy.

(15-20 minutes, Chapter Objective 2, AACSB: Application of Knowledge and Communication Abilities) 2.

Have groups collect information on at least three companies that have recently expanded into countries where they have not previously marketed their products. What kind of success/failure have they met with? Has each had any kind of impact on the society or culture entered?

The responses and reasons for success/failure will vary. This project can be used to reinforce the effects of culture and group influences on consumer behavior, the demand to have a thorough understanding of consumer behavior of your target audience, and can be related to the question of whether marketers create needs.

(15-20 minutes, Chapter Objective 3, AACSB: Diverse and Multicultural Work Environments and Reflective Thinking

3.

Have groups of students find an example of a recent product, service, or program that was a failure. Business Week, U.S.A. Today, the Wall Street Journal, Fortune, Forbes or some other marketing publications are excellent sources. Have students explain to the class how knowledge of consumer behavior, or the lack of it, could have contributed to the success or failure of the effort.

Similar to #2, the responses and reasons for failure will vary. The project should reinforce the idea that marketers need to have a thorough understanding of consumer behavior of their target audiences to understand how to meet their needs and wants. It can be related to the question of whether marketers create needs. Look for students to “diagnose” the reasons for failure in a way that goes beyond the surface clues in the article. It may be a good opportunity for students to explore other sources at the same time to look for additional clues (e.g. Census data, economic indicators, Lifestyle Analyst, profiles of competitors, etc.).

(15-20 minutes, Chapter Objective 2, AACSB: Application of Knowledge)

eLAB Individual Assignments 1.

Visit www.facebook.com, www.myspace.com, or www.orkut.com and determine to whom they are trying to appeal. Are these sites appealing to the same target audience or to different segments? If the audience is the same, what is each site doing differently to market themselves? If the audience is different, who are they? Are their privacy policies raising any concerns for you?

This activity is similar to Group Activity #4, and provides students with an opportunity to think about market segmentation, positioning an offering based on the target audience’s needs, and privacy concerns on the Internet. Look for students to demonstrate understanding of market segmentation, why it is used, how it is used, and the trade-offs associated with collecting information about consumers. .

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(10-15 minutes, Chapter Objective 2, AACSB: Reflective Thinking) 2.

Go to www.rockstargames.com. Click on the link for “games.” Select three different video games marketed by this company. Discuss both sides of an ethical debate for each.

This activity provides students with an opportunity to think not only think about what they consider right and wrong, but also to analyze the issue from the opposite perspective.

Encourage students to try to support the debate from each side, rather than making one side obviously weaker so their preferred side is a clear winner. It is good practice for building arguments and thinking critically about issues.

(20 minutes, Chapter Objective 3, AACSB: Ethical Understanding and Reasoning Abilities)

3.

Go to www.aarp.org. The American Association of Retired Persons is one of the largest lobbying and citizen action groups going today. Projections indicate that, as our nation ages, this organization will only get larger and more influential. After visiting this website, list five ways the organization is trying to influence corporate attitudes toward the older consuming public. What type of networks is the organization trying to build?

How would database information from this group be useful to a marketer?

This activity provides students with an opportunity to get more familiar with the needs of a large and important demographic segment and shows an example of how one group is taking action to address those needs. It also provides an opportunity to revisit the concept of database marketing and why it is useful to marketers.

(10-15 minutes, Chapter Objective 2, AACSB: Application of Knowledge)

4.

Go to www.netsmartz.org. This youth-oriented website presents issues and potential products to teens. If you were the marketing manager for a new bottled water product that was seeking a national youth audience, plan a strategy for your new product introduction using this website as one of your primary promotional springboards. List what you would do, why you would do it, and what results you might expect. What does a website such as this teach you about consumer behavior?

Netsmartz.org is run by the National Center for Missing and Exploited Children and has different areas dedicated to parents, educators, law enforcement, teens, tweens and kids.

Look for students to identify how they would position the product and utilize the selected portion(s) of the website that reaches their target audience. This project provides an opportunity to explore the differences between the person who buys the product, the person who consumes the product, and the person who influences the purchase.

(10-15 minutes, Chapter Objectives 2 and 5, AACSB: Application of Knowledge and Reflective Thinking)

5.

Go to www.moveon.org. What is the main variable that this site uses to segment the American public? What is the resulting segment to which this site is attempting to appeal? Extensively, describe this segment in terms of demographic and psychographic variables. What issues seem to be raised on this site? If you were an advertiser, would it be a good idea to sponsor a message on this site? Explain.

Moveon.org is a civic action group that segments the American public based on political ideals. Opinions are one of the facets of psychographic segmentation (activities, interests, opinions). The website notes the organization is a non-partisan effort to give the public a voice in policymaking. However, the separate PAC by the same name raises .

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money to support Democrat candidates. Unlike other political action groups, its donors tend to give small donations via the web. Students may make inferences about the demographics and psychographics of the group’s audience based on the issues raised on the website, and the group’s use of the web as a primary communication vehicle. Student opinions of whether it would be a good idea to sponsor a message on the site may depend on these inferences, but students may also point out that site sponsorship by corporate interests contradicts the group’s mission to reduce corporate America’s influence over Washington. An advertiser for a social initiative may not be as susceptible to this challenge.

(15 minutes, Chapter Objective 3, AACSB: Application of Knowledge and Reflective Thinking) 6.

Visit www.alesyabags.com and identify the factors used to segment the company’s target audience. How does the company use social media to engage its target audience?

Given what you know about the target audience, do you feel Alesya Bags’ use of social media is effective or ineffective? Explain why.

Students should identify the company segments the target audience based on gender, age, occupation, income, and lifestyle. Students should also recognize the role of social media in the target segments’ lives and the role of engagement via social media tools in developing a lifestyle brand.

(10-15 minutes, Chapter Objective 2, AACSB: Reflective Thinking)

Group Assignment Go to www.casino.com. Take some time as a group to become familiar with the various sections of this site. What are the ways that this site has been designed to encourage new users to sign up, and existing users to increase their level of online gambling? Is this website encouraging addictive consumption (where consumer addiction is defined as physiological and/or psychological dependency on products or services)? Is this unethical? After having completed this portion of the assignment, visit www.ballygaming.com. What is the product being sold by this company? In what ways could this company be contributing to unethical behaviors?

Casino.com is likely to raise varied responses based on student opinions of gambling as entertainment and gambling as a societal threat. There may be different opinions within the group. This conversation can be tied back to the question of whether marketers create needs and can introduce a discussion about marketer responsibility for consumer addiction to gambling.

(20-25 minutes, Chapter Objective 3, AACSB: Application of Knowledge and Reflective Thinking)

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Chapter 2: CONSUMER AND SOCIAL WELL-BEING CHAPTER OBJECTIVES When students finish this chapter, students should understand why: 1. Ethical business is good business.

2. Marketers have an obligation to provide safe and functional products as part of their business activities.

3. Consumer behavior impacts directly on major public policy issues that confront our society.

4. Consumer behavior can be harmful to individuals and to society.

CHAPTER SUMMARY Ethical business is good business.

Business ethics are rules of conduct that guide actions in the marketplace; these are the standards against which most people in a culture judge what is right and what is wrong, good or bad.

Marketers must confront many ethical issues, especially ones that relate to how much they make consumers “want” things they don’t need or are not good for them. A related issue is materialism, which refers to the importance people attach to worldly possessions, and the role of business in encouraging this outlook.

Marketers have an obligation to provide safe and functional products as part of their business activities.

It is both ethically and financially smart to maximize customer satisfaction. In some cases, external bodies such as the government or industry associations regulate businesses to ensure that their products and advertising are safe, clear, and accurate. Consumer behavior researchers may play a role in this process and those who do transformative consumer research (TCR) may even work to bring about social change. Companies also play a significant role in addressing social conditions through their corporate social responsibility (CSR) practices and social marketing campaigns that promote positive behaviors.

Consumer behavior impacts directly on major public policy issues that confront our society.

Our relationships with companies and other organizations are complex and many issues that impact quality-of-life relate directly to marketing practices. These include the tradeoff between our privacy and the ability of companies to tailor their offerings to our individual needs. Other issues revolve around market access as many people are unable to navigate the marketplace due to disabilities, illiteracy, or other conditions. In addition, our fragile environment requires a commitment to sustainable business practices that attempt to maximize the triple bottom-line that emphasizes financial, social, and environmental benefits.

Consumer behavior can be harmful to individuals and to society. .

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Although textbooks often paint a picture of the consumer as a rational, informed decision-maker, in reality many consumer activities are harmful to individuals or to society. The “dark side” of consumer behavior includes terrorism, addiction, the use of people as products (consumed consumers), and theft or vandalism (anticonsumption).

CHAPTER OUTLINE I. Business Ethics and Consumer Rights A. Business ethics are rules of conduct that guide actions in the marketplace—the standards against which most people in a culture judge what is right and what is wrong, good, or bad.

1. There are various universal values and many culture-specific ones (which influence whether business practices like bribery are acceptable).

2. Some marketers violate consumer trust (using illegal mislabels on packages or using bait-and-switch selling).

3. Some marketers engage in practices that are legal but have detrimental effects on society. ***** Use Consumer Behavior Challenge #10 Here ***** B. Needs and Wants: Do Marketers Manipulate Consumers?

1. Consumer space is an environment where individuals dictate to companies the types of products they want and how, when, and where, or even if, they want to learn about them (a shift from marketer space where companies called the shots).

2. Do marketers create artificial needs? There are arguments to support both sides of this question. a. A need is a basic biological motive; a want represents one way that society has taught us to satisfy that need. b. A basic objective of marketing is to create awareness that needs exist, not to create needs.

C. Are Advertising and Marketing Necessary?

1. Products are designed to meet existing needs; advertising helps communicate their availability.

2. The economics of information perspective suggests advertising provides an important source of consumer information which consumers are willing to accept because it reduces the economic cost associated with searching for products. ***** Use Consumer Behavior Challenge #11 Here *****

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D. Do Marketers Promise Miracles?

1. Advertisers do not know enough about people to manipulate them.

2. The failure rate for new products ranges from 40 to 80 percent E. Materialism: Are You What You Own? 1. Materialism refers to the importance people attach to worldly possessions.

2. Materialists are more likely to value possessions for their status and appearancerelated meanings.

3. Materialists value the inherent qualities of what they buy. One related dimension is provenance. Provenance means shoppers are willing to pay more for an item when they know exactly where it comes from. Curation refers to the use of an expert who carefully chooses pieces to include in a collection of consumer products. Table 4.1 summarizes some of the similarities and differences between “old” and “new” materialism.

Discussion Opportunity—Ask: What is your opinion on materialism? Is it good or bad? Be careful how you answer this. How do marketers use materialism to their advantage? What is the alternative to materialism? Would this be good for our economy?

II. . Consumers’ Rights and Product Satisfaction Consumers have three options to pursue when they are dissatisfied with a product: 1) voice response, 2) private response, and 3) third-party response. Several factors influence which route we choose.

A. Market Regulation 1. Several federal agencies oversee consumer-related activities in the U.S. These include the Department of Agriculture, the Federal Trade Commission, the Food and Drug Administration, the Securities and Exchange Commission, and the Environmental Protection Agency. Table 2.1 presents consumer legislation that is designed to protect consumers and Table 2.2 lists major U.S. regulatory agencies.

2. the publication of books such as Rachel Carson’s Silent Spring in 1962, which attached the irresponsible use of pesticides, and Ralph Nader’s Unsafe at Any Speed in 1965, prompted these movements.

3. The Obama Administration issued voluntary guidelines that food products targeted to children ages 2-17 would have to provide a meaningful contribution to a healthy diet and would have to meet limits for harmful ingredients.

Discussion Opportunity—Ask students whether they feel advertising for foods that are high in sodium, saturated fat and added sugars contributes to child obesity. Do they believe the guidelines should be voluntary? Why or why not?

4. Corrective advertising refers to the use of advertising by a company to inform .

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consumers of messages it previously published that were wrong or misleading.

B. Consumerism 1. Adbusters is a nonprofit organization that discourages rampant commercialism and advocates for social activism. These organizations use culture jamming, a strategy aimed to disrupt efforts by the corporate world to dominate our cultural landscape.

Discussion Opportunity—Ask: Has cultural jamming ever affected you and your consumption behavior? Any of your friends? If so, why do you think the behavior occurred?

2. John F. Kennedy declared a “Declaration of Consumer Rights” in 1962. These include the right to safety, the right to be informed, the right to redress, and the right to choice.

3. Some consumer researchers are not only seeking to study consumer responses but to rectify what they see as pressing social problems in the marketplace. This is known as participatory action research (PAR) or Transformative Consumer Research (TCR).

C. Social Marketing and Corporate Social Responsibility (CSR) Social marketing uses marketing techniques normally employed to sell beer or detergent to encourage positive behaviors such as increased literacy and to discourage negative activities such as drunk driving. Many firms today try to integrate corporate social responsibility (CSR) into their business models. CSR describes processes that encourage the organization to make a positive impact on the various stakeholders in its community.

Cause marketing is a popular strategy that aligns a company or brand with a cause to generate business and societal benefits.

III. Major Policy Issues Relevant to Consumer Behavior A. Data Privacy and Identity Theft 1. One of the biggest issues marketers face relates to how much they can or should know about their customers. Technologies record much of our activities including our location if we carry a smart phone with GPS. Our digital actions may even have financial value because of an industry called real-time bidding, an electronic trading system that sells ad space on the Web pages people click on the moment they visit.

2. Identity theft occurs when someone steals your personal information and uses it without your permission. It is the most common consumer complaint according to the FTC. Phishing occurs when people receive fraudulent emails that ask them to supply account information. Consumers are also suspect to botnets that hijack computers without a trace.

3. Locational privacy is a related issue as GPS tracking technology identifies and records consumer locations.

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B. Market Access For many, market access is limited due to physical, mental, economic, or social barriers.

1. Disabilities affect access to stores both physical and online.

2. Food deserts are Census tracts where 33% or 500 people live more than a mile from a grocery store in an urban area or more than 10 miles away in a rural area.

3. Media literacy refers to a consumer’s ability to access, analyze, evaluate, and communicate information in a variety of forms, including print and non-print messages. Functional literacy refers to the ability to read sufficiently to carry out everyday tasks.

C. Sustainability and Environmental Stewardship 1. Sustainability is not just about “do-gooder” efforts that reduce a company’s carbon footprint; it also benefits companies financially. A triple bottom-line orientation refers to business strategies that strive to maximize return in three ways: • Financial • Social • Environmental 2. Cradle to cradle means that the organization aims for its products to be made from natural materials that are fully reusable or recyclable so that the company actually uses zero resources to make it.

3. Conscientious consumerism means that consumers are paying attention to sustainability efforts by companies.

D. Green Marketing and Greenwashing 1. As a response to consumer efforts, many firms have chosen to protect or enhance the natural environment as they go about their business activities. This practice is known as green marketing.

2. Even though consumers largely support green products, many people don’t actually buy green. This is in part due to the higher price of green products. It is also due to distrust because of greenwashing. Greenwashing occurs when companies make false or exaggerated claims about how environmentally friendly their products are.

3. Marketers point to a segment of consumers they call LOHAS – an acronym for “lifestyles of health and sustainability.” Table 2.4 shows that the LOHAS market divides into five different sectors.

E. Product Disposal How we get rid of stuff is also an important element of consumer behavior. Later cycling means that one consumer exchanges something she owns for something another person owns. There is an underground economy of products that are sold person to person rather than through traditional market systems. Trading or reselling products is called recommerce. .

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Discussion Opportunity— Many consumers mistrust green marketing claims because of a history of companies “greenwashing,” (positioning a product or service as environmentally friendly when it does not reduce harm to the environment, diverting attention from a company’s environmental wrongdoings, or overstating a product’s green benefits). Ask: Which companies do students associate with green marketing? Which companies are they skeptical of green marketing claims? Why?

IV. . The Dark Side of Consumer Behavior A. Consumer Terrorism Disruptions to our financial, electronic, and supply networks are possible through attacks such as bioterrorism and cyberterrorism.

B. Addictive Consumption Consumer addition is a physiological or psychological dependency on products or services.

1. Addiction to Technology. Consumers can also be addicted to technology. Social media addiction can be compared to a chemical dependency.

2. Technology Issues. Some other issues with technology include cyberbullying and phantom vibration syndrome.

C. Compulsive Consumption Compulsive consumption refers to repetitive and often excessive shopping performed to relieve tension or anxiety. Three common elements characterize negative or destructive consumer behaviors: 1) the behavior is not by choice, 2) the gratification of the behavior is short-lived, and 3) the person experiences strong feelings of regret or guilt.

D. Consumed Consumers Consumed consumers are people who are used or exploited for commercial gain.

Examples include prostitutes and organ, blood, and hair donors.

E. Illegal Acquisition and Product Use Analysts estimate that the cost of crimes that consumers commit against business totals more than $40 billion per year. Shrinkage is one such crime which refers to inventory and cash losses caused by shoplifting and employee theft. Counterfeiting is where companies or individuals sell fake versions of real products to customers.

F. Anticonsumption

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Anticonsumption ranges from relatively mild acts like spray-painting graffiti on buildings to serious incidences of product tampering.

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End-of-Chapter Support Material SUMMARY OF SPECIAL FEATURE BOXES 2-1.

CB As I See It: Ronald Hill, Villanova University Being “poor” has different implications in different nations, in terms of what is taken for granted, especially in developed Western nations. One study found that in developed national, the level of material yearning increased in middle and high school, but there were also opportunity for self-esteem development. Impoverished neighborhoods do not offer this development. Another study showed that those with more have more positive social comparisons than those with less. A third study showed that the ability to save resulted in greater feeling of well-being for those in poorer nations.

2-2. The Tangled Web Gripe sites enable consumers to complain about companies online.

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Marketing Pitfall Brands must ensure their messages are not harmful or inaccurate.

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Marketing Pitfall Slacktivism supports the idea that there are too many small and meaningless expressions of support for important causes, do to overexposure via technology.

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CB As I See It: Stacey Menzel Baker, Creighton University Consumer behavior researchers study the relationships among people possessions, places, brands, experiences, and other people. Relationships are important in creating, maintaining, and reconstructing our identities. The relationships with stores and marketplaces that bring us pain when they are gone also bring us a sense normalcy when they return.

2-6 The Tangled Web Because of the ability to use facial recognition and track keystrokes, technology has created serious privacy risks. Markets use access to personal information to created viewer-relevant advertising.

2-7 Marketing Opportunity When consumer make the decision to practice sustainability, they are much more likely to follow through on that decision.

2-8 The Tangled Web Yik Yak allows cyberbullying on college campuses when users can post a profile and remain anonymous. The site has encouraged violence and gang rape by posting “yaks.” .

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REVIEW 2-1. What are business ethics, and why is this an important topic?

Business ethics are rules of conduct that guide actions in the marketplace. These are the standards against which most people in a culture judge what is right or wrong, good or bad. However, the notions of right and wrong differ among people, organizations, and cultures. This is an important distinction as we learn to work with those of other cultures.

(2 minutes, Chapter Objective 1, AACSB: Reflective Thinking) 2-2. The economics of information perspective argues that advertising is important. Why? This view emphasizes the economic cost of the time spent searching for products.

Accordingly, advertising is a service for which consumers are willing to pay, because the information it provides reduces search time.

(2 minutes, Chapter Objective 1, AACSB: Reflective Thinking) 2-3. State two important criticisms of marketing and provide the pros and cons for each.

Some feel that marketers contribute to the moral breakdown of society when they promote hedonistic pleasure and encourage the pursuit of humanism at the expense of spirituality and the environment. The marketing system creates demand that only its products can satisfy. The argument against this thought is that the need is already there, and marketers simply recommend ways to satisfy it. Marketing creates awareness that the need exist; it does not create the need.

Another criticism of marketing is that it manipulates the masses. This includes online communications. Markets arbitrarily link products to desirable social attributes to foster a materialistic society. Marketers focus on the irrational value of the goods they symbolize. However, some feel that products meet existing needs, and marketing activities only help to communicate the availability of the good or service. The economic cost of time we would need search for products is diminished.

(5 minutes, Chapter Objective 1, AACSB: Reflective Thinking) 2-4. Give two examples of important legislation that relate to U.S. consumers.

The Pure Food and Drug Act in 1906, the Federal Meat Inspection Act in 1907, the Foreign Corrupt Practices Act in 1977 and the 2010 Dodd–Frank Wall Street Reform and Consumer Protection Act are examples given in the text.

(2 minutes, Chapter Objective 2, AACSB: Application of Knowledge) 2-5. Define social marketing, and give an example of this technique.

Social marketing uses marketing techniques normally employed to sell beer or detergent to encourage positive behaviors such as increased literacy and to discourage negative activities such as drunk driving.

(1.5 minutes, Chapter Objective 2, AACSB: Application of Knowledge) .

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What is the primary difference between transformative consumer research and other kinds of consumer research?

Transformative consumer research promotes research that includes the goal of helping people or brings about social change. This idea views consumers as collaborators who work to realize change, rather than as an issue that needs to be research. Other kinds of research promote research as a way to study an issue, not to promote change.

(2 minutes, Chapter Objective 2, AACSB: Reflective Thinking)

2-7. Why is market access an important aspect of consumer well-being? What are some important reasons why consumers can experience limited market access?

Market access is the consumer’s ability to find and purchase goods and services.

Access might be limited because of physical, mental, economic, or social barriers.

There are 11 million U.S. adults that have conditions that m make it difficult for them to leave home to shop. This can be minimized through the use of technology and other resources. (2 minutes, Chapter Objective 2, AACSB: Reflective Thinking) 2-8. What is greenwashing, and why is it a problem for marketers?

Greenwashing is the promotion of environmentally friendly products, but often, the claims are false or exaggerated. Studies show that almost one-fourth of U.S. consumers feel they have no way of knowing how true a claim might be, and one report shows that 95 percent of consumer companies that market products as “green” make misleading or inaccurate claims.

(2 minutes, Chapter Objective 3, AACSB: Reflective Thinking)

CONSUMER BEHAVIOR CHALLENGE Discuss 2-9. The Culture Jammers Manifesto proclaims opposition to the “mind-polluters”: “On the rubble of the old culture, we will build a new one with non-commercial hear and should. “ What’s your take on “culture jamming; do advertisers deserve to be parodied?

Students will have mixed views about this topic. Students should identify parody and culture jamming, and the goal of the process. Students should also identify the goal, which is to change the way information flows. Students should offer examples of why some American companies dismiss the concept, as well as some examples of why the concept should be taken seriously.

(20 minutes, Chapter Objective 2, AACSB: Reflective Thinking) 2-10. Should scientists who study consumer behavior remain impartial, or is it appropriate for them to become involved in the topics they research like those who adhere to the transformative consumer research perspective?

Students will have varied opinions on this topic. Students should be able to identify and discuss transformative consumer research and its goals of helping bring about social .

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change. Students should be able to compare this concept to more traditional types of research. Discussion should relate to corporate social marketing and indicate how research has furthered this process.

(20 minutes, Chapter Objective 2, AACSB: Reflective Thinking) 2-11. Because of higher competition and market saturation, marketers in industrialized countries try to develop third-world markets. Asian consumers alone spend $90 billion a year on cigarettes, and U.S. tobacco manufacturers push relentlessly into these markets. We find cigarette advertising, which often depicts glamorous Western models and settings, just about everywhere – on billboards, buses, storefronts, and clothing – and tobacco companies sponsor many major sports and cultural events. Some companies even hand out cigarettes and gifts in amusement areas, often to preteens.

Should governments allow these practices, even if the products may be harmful to their citizens or divert money that poor people should spend on essentials? If you were a trade or health official in a third-world country, what guidelines, if any, might you suggest to regulate the import of luxury goods from advanced economies?

Students will have a variety of views on this topic. Student should indicate regulations and laws in the U.S. that affect a company’s ability to market, and indicate how marketing is different in developing or third world nations. Students should discuss analyst prediction for growth in Europe and the U.S. as well as the expected huge growth in China and other Asian and developing countries. This response should also explain provenance, and the willingness to pay more for an item when consumers know exactly where it came from. Curation, the process of being an expert on a product should also be discussed.

(20 minutes, Chapter Objective 2, AACSB: Reflective Thinking) 2-12. The chapter discusses the practice of serial wardrobing, where people return an outfit after they wear it for a special occasion such as a formal. What do you think of this practice? Is it OK to use an expensive product once and then get your money back?

Students should explain how serial ward robing constitutes consumer theft and fraud.

Students should identify serial wardrobers as those who buy an outfit, wear it once, and return it. Students should also indicate other types of wardrobing fraud such as changing price, exchanging products for higher priced ones, or using fake or old receipts to return a product. The retail industry loses about $16 billion a year to these and other types of fraud.

(20 minutes, Chapter Objective 4, AACSB: Reflective Thinking)

2-13. “College students’ concerns about the environment and vegetarianism are just a passing fad: a way to look ‘cool.’ ” Do you agree?

Students will have mixed views about this subject. What they need to see is that a fad that lasts for some length of time becomes a value (or is at least tied to values). For example, .

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is the trend toward not smoking a value or a fad? The value might be healthy living or avoidance of what is now considered a nasty habit. The result is not smoking. Those who smoke might not only do it because they like it but as a way to be peer accepted or make a nonconformity statement (or to shock their parents and other authority figures). Ask students for their feelings about these subjects. How can the marketer capitalize on these “value” feelings? How do consumers reinforce their deep-seated values?

(20 minutes, Chapter Objective 4, AACSB: Reflective Thinking) 2-14. A case involving Wendy’s fast-food chain made national headlines when a woman claimed she had found a finger in her bowl of chili. The restaurants became the butt of jokes (some said they served nail clippers with their food instead of forks), and sales dropped dramatically at the company’s franchises. This forced layoffs and reduced hours for many employees – until the woman was arrested for fraud. Consumers commonly file lawsuits against companies to claim damages if a product or service didn’t work as expected. In some cases, the defendant just settles the suit to make it go away because it costs more to mount a defense than to just pay damages. Do we have too many frivolous lawsuits? Does our justice system adequately meet the needs of both consumers and companies in terms of how it awards damages?

Student responses will vary but the instructor can use this discussion to address major legislation related to consumer behavior. Legislation would include a discussion on the Department of Agriculture, the Federal Trade Commission, the Food and Drug Administration, the Securities and Exchange Commission, and the EPA. (20 minutes, Chapter Objective 3, AACSB: Reflective Thinking) 2-15. Nonprofit organizations routinely rely on generous corporate donations, and it is common to name facilities after benefactors. The Nationwide Children’s Hospital in Ohio is no exception; its name recognizes the insurance company’s $50 million donation. Now the hospital is adding the Abercrombie & Fitch Emergency Department and Trauma Center and there is the Limited Too & Justice Main Lobby. The Campaign for a Commercial-Free Childhood opposes this partnership. The group’s director commented, “Abercrombie & Fitch is really among the worst of corporate predators. A company with such cynical disregard for children’s well-being shouldn’t be able to claim the mantle of healing. . . . And, personally, I find it very concerning that they named their hospital after an insurance company.” What do you think? Is this over the line, or does it matter where the money comes from so long as the result is beneficial?

Students will vary in their response to this challenge as both sides present important points. Abercrombie recognizes the positive publicity, which will be generated from such a donation, and charities need funding. At the same time, the center may feel that it is selling out to accept money from an organization, which behaves at times as though it lacks concern for children.

(5 minutes, Chapter Objective 1, AACSB: Ethical Understanding and Reasoning Abilities) 2-16. From time to time advertisers use dark humor to get their messages across, as when a lonely calorie, repairman, or robot considers suicide. Or, an ad may imply that a shoppers are “mentally ill” if they pay retail prices. Are these appeals a legitimate way to communicate a message, and if so under what circumstances? .

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Such appeals are meant to be humorous rather than fear or guilt based. Humor appeals are legitimate. The issue is whether this form of humor is in good taste and a good choice for the brand in question.

(3 minutes, Chapter Objective 1, AACSB: Ethical Understanding and Reasoning Abilities)

Apply 2-17. Will consumers trade lower prices for less privacy? Car owners now can let insurance companies monitor their driving using a new technology in exchange for lower rates.

Customers who sign up for Progressive’s TripSense program get a device the size of a Tic Tac box to plug into their cars. The device will track speed and how many miles are driven at what times of day. Every few months, customers unplug the device from the car, plug it into a computer, download the data, and send them to the company. Depending on results, discounts will range from 5 to 25 percent. In Great Britain, a major insurer is testing a program called Pay as You Drive. Volunteers will get a device the size of a Palm computer installed in their cars. The gadget will use global positioning satellite technology to track where the car goes, constantly sending information back to the insurance company. Cars that spend more time in safer areas will qualify for bigger discounts. Of course, the potential downside to these efforts is that the insurance companies may be able to collect data on where you have driven, how long you stayed in one location, and so on. Conduct a poll of 10 drivers of various ages where you describe these programs and ask respondents if they would participate to receive a discount on their insurance premiums. What reasons do they give pro and con?

This question of exchanging privacy for lower prices (or convenience, or any of a number of other benefits) can be applied in many contexts these days, particularly in e-commerce. As the student reports are discussed, the instructor can relate this issue to various topics. These include value (what benefits are people gaining and what cost are they “paying”?), ethics (what are the implications of companies having such a depth of information on consumers?), public policy (should there be attempts to regulate such business activities?), and demographic segmentation. Probe students as to what types of trade-offs they have made (providing personal, credit card, bank account, and other information in order to conduct business online).

(10 minutes, Chapter Objective 3, AACSB: Ethical Understanding and Reasoning Abilities) 2-18. Many college students “share” music by downloading clips from the Internet. Interview at least five people who have downloaded at least one song or movie without paying for it. Do they feel they are stealing? What explanations do they offer for this behavior? Try to identify any common themes because of these interviews. If you were devising an ad campaign to discourage free downloading, how might you use what you have learned to create a convincing message?

Obviously, ethical issues of right and wrong should emerge here. These issues should reflect the ethical behavior of the consumer (is it wrong to download for free?), as well as that of the corporations (are they ripping customers off by charging too much?). Reports should .

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also revolve around “dark side” issues. Specifically, is this activity stealing? Is it on the same level as shoplifting? Certainly, the explanations given will fall into the category of justification. Thus, from the marketer’s perspective, the suggested ad campaign should be designed in a way to persuade consumers that their justified behavior is wrong.

(5-10 minutes, Chapter Objective 2, AACSB: Ethical Understanding and Reasoning Abilities)

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CASE STUDY TEACHING NOTES Chapter 2 Case Study: Marketing Responsibility: Patagonia and P&G’s Always Redefine What It Means to Be Transparent and Authentic Summary of Case Marketing faces challenges and criticism on many fronts. As identified in Chapter 2 questions directed at the marketing field include: • Does marketing create materialism? Does it lead to confusion between needs and wants?

• Is it ethical to market products that may have a negative impact on consumers’ health?

• Do marketers mislead consumers or perpetuate stereotypes with their marketing messages?

• Does marketing lead to an invasion of computer privacy?

• Do companies and brands misuse natural resources for products and packaging? Do they engage in greenwashing?

• Do companies take advantage of questionable labor practices in their quest to keep costs and prices down?

Three companies that have recently been in the spotlight about their work to change perceptions about the role of marketing are Panera Bread, Patagonia, and Proctor & Gamble with its’ Always brand.

Patagonia: Patagonia, an apparel and sporting goods company, has long been regarded as cutting-edge when it comes to environmental and social responsibility. In fact, it is an accredited and founding member of the Fair Labor Association. Now Patagonia is taking on a difficult task of trying to be even more transparent about its’ supply chain and related labor practices in an industry knows for its abuses of workers.

In “Your Clothes Are Made With Exploited Labor,”” since 2007 Patagonia has worked diligently, along with Verite, a nongovernmental organization that works on labor issues, to make improvements in the practices of the company’s first-tier suppliers. There are the suppliers with whom Patagonia works directly to product its’ apparel. Through these efforts it was able to reduce the number of first-tier suppliers from 108 to 75, which improved the company’s ability to have more control over how these companies treat workers.

However, in 2011 Patagonia’s own extensive audits uncovered new supply chain problems with human trafficking, forced labor, and exploitation. They are now trying to go beyond the gains made in their previous work with the first-tier suppliers. Their new focus is on suppliers buried more subtly in the complicated apparel supply chains: mills and suppliers of raw materials.

Patagonia has asked Verite to help with additional audits. They have also increased their overall .

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corporate social responsibility effort. In 2013 they invited industry peers for a discussion of forced labor issues in the apparel industry, unfortunately only 7 of the 40 invited companies chose to participate.

Patagonia’s COO Doug Freeman commented, “We think people will be disappointed at ongoing issues in Patagonia’s supply chain, but feel that our transparency will pay off. We want to be really honest and dive deeply into this issue, breaking trails for the rest of the industry.” Clearly they have a lot at stake because their branding identity is so closely tied to their leadership in social responsibility.

According to Gillian White, “Patagonia’s admission stands out in that it comes from a brand considered a leader in the movement of ethical production.” However, the good news as she describes it is that “Patagonia’s name continually comes up as one of the few brands that seek to take the high road by choice rather than by necessity. By comparison, many companies aren’t prepared or proactive when it comes to rooting out forced labor at all levels” And Dan Viederman, CEO of Verite, confirms that “there are few, if any, brands that have taken up the mantle of eradicating trafficking, at any level, without first being prodded by potentially embarrassing and illegal findings.” Patagonia appears to be one of those few.

For now, Patagonia continues the difficult struggle to monitor and actively work to improve conditions throughout every level of its supply chain. They remain determined to set the bar high and to live up to their mission statement: Build the best product, cause no unnecessary harm, use business to inspire and implement solutions to the environment crisis.

P&G’s Always P&G’s Always feminine care campaign, “Like a Girl,” has generated a great deal of attention in the marketplace recent: 58 million views on YouTube and the first feminine care product Super Bowl ad. In addition, the campaign has won a number of prestigious awards, including being the sole winner in the 2015 Effie Awards GoodWorks Brand category. The award was created to recognize marketers using their platform for good through purpose-driven marketing campaigns.

At the Cannes Lions International Festival of Creativity, considered the Academy Awards for advertising, the campaign won a Glass Lion prize and the Grand Prix award in the PR category.

The Glass Lion prize is a new category, introduced in 2015, to honor campaigns that address issues related to gender inequality and prejudice.

P&G is working to target women with more realistic and empowering messages. The campaign focuses on what young women, boys, and girls think it means to do something “like a girl.” This is an especially important question given the fact that research has documented a drop in self-esteem as girls grow into young women. The ads have connected well with women and sparked a great deal of conversation, much of it driven by the hashtag #LikeAGirl. The campaign’s message is all about changing the like-a-girl phrase from an insult into something that empowers and inspires.

Allison Arden points to a comment about the campaign made by Ken Wheaton in an Advertising Age column. Wheaton said, “It’s an eye-opener-which is something you don’t often get in advertising of any kind. It made me-a 21st century, non-PC male born and raised in the South— .

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reconsider my own word choices.” Other experts praised the purpose-driven marketing campaign for its ability to identify a new insight and purpose of its own, create a compelling message that will be meaningful over an extended period of time, and understand the importance of unusual media placements that put the message in front of audience in a way that made a statement.

Suggested Discussion Questions CS2-1. Do you believe that consumers consider a brand’s supply chain ethics when they purchase apparel? Do consumers bear any responsibility for the ways in which laborers in the apparel industry are treated? Would you be willing to pay a premium for a brand that was transparent about their efforts to ensure that laborers are paid a fair wage and treated decently?

CS2-2. In Allison Ardens Advertising Age article about the Like-a-Girl campaign, she talks about the need for purpose driven marketing campaigns to feel authentic. To what extent has the Like-aGirl campaign achieved this goal? What are the unique marketing challenges for a feminine care product overall?

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Additional Support Material STUDENT PROJECTS Individual Projects Have students explain what it means to be a green consumer. They could report on what they have done to be “green” and how their behaviors have changed. Have they tried to influence anybody else to go “green” and how?

The chapter introduces the idea of green marketing, but student perceptions of green consumers are likely to be based on outside experiences, including their own efforts to be more environmentally responsible, which will vary. Some students may view green consumers as the small subset of consumers who willingly make sacrifices to protect the environment. Others may characterize green consumers as idealistic tree-huggers.

Research indicates most consumers fall somewhere on a spectrum from green to brown based on their environmental values and their beliefs in their ability to make a difference.

The question about their attempts to influence others can be related to the idea of consumption communities and group influences on consumption behavior.

(5 minutes, Chapter Objective 5, AACSB: Reflective Thinking) Each group should locate an example of a company that is heavily involved in social or green marketing. Make a report on the activities of the company. Compare this company to a direct competitor that is not so extensively involved in such activities. What are the advantages/disadvantages that the social/green approach has over the other?

Student responses should reflect an understanding of what social or green marketing is.

Some students may confuse social marketing with marketing via social media, so it is important to identify differences between the two concepts. The comparison with the competitor should consider the way the company uses or does not use their social/green marketing efforts to position their offerings. If possible (it will depend on the company/industry), students should analyze how social/green marketing efforts relate to the company’s bottom line, consumer attitudes toward the company, and brand loyalty.

(20 minutes, Chapter Objective 5, AACSB: Analytic Skills)

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Chapter 4: Consumer and Social Well Being

eLAB 1.

Visit a website that includes a quiz or test of materialism (ex. http://www.expertrating.com/quizzes/Materialism-Test.asp or find it at www.Quizilla.com) and take the test to evaluate how materialistic you are.

Students are likely to get different responses, depending on the importance of possessions to the student. They may also have opinions about the accuracy of the results (for themselves or for their classmates).

(20 minutes, Chapter Objective 1, AACSB: Reflective Thinking)

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Go to www.moveon.org. What is the main variable that this site uses to segment the American public? What is the resulting segment to which this site is attempting to appeal? Extensively, describe this segment in terms of demographic and psychographic variables. What issues seem to be raised on this site? If you were an advertiser, would it be a good idea to sponsor a message on this site? Explain.

Moveon.org is a civic action group that segments the American public based on political ideals. Opinions are one of the facets of psychographic segmentation (activities, interests, opinions). The website notes the organization is a non-partisan effort to give the public a voice in policymaking. However, the separate PAC by the same name raises money to support Democrat candidates. Unlike other political action groups, its donors tend to give small donations via the web. Students may make inferences about the demographics and psychographics of the group’s audience based on the issues raised on the website, and the group’s use of the web as a primary communication vehicle. Student opinions of whether it would be a good idea to sponsor a message on the site may depend on these inferences, but students may also point out that site sponsorship by corporate interests contradicts the group’s mission to reduce corporate America’s influence over Washington. An advertiser for a social initiative may not be as susceptible to this challenge.

(15 minutes, Chapter Objective 5, AACSB: Analytic Skills and Reflective Thinking) Go to www.benjerry.com. Ben & Jerry’s Ice Cream is famous for a well-rounded mission statement and care and concern for the environment. What is their mission? What indications are there about the organization’s commitment to the environment? What values does the company try to express? How might this expression help the organization market products?

Ben & Jerry’s mission statement can be found under activism (follow the link here: http://www.benjerry.com/activism/mission-statement/). The company publishes a Social and Environmental Assessment Report each year (follow the link here: http://www.benjerry.com/company/sear/). Students may relate the company’s values to the growing LOHAS segment.

(25 minutes, Chapter Objective 3, AACSB: Reflective Thinking)

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Go to www.wholefoods.com. Take some time to become familiar with the website.

Describe this company and the products that they offer. Select specific examples of products that seem to target the LOHAS values segment. Are the products that might .

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Section 1: Consumers in the Marketplace

appeal to values other than those described by LOHAS? LOHAS is an acronym for “lifestyles of health and sustainability.” Marketers are responding to the needs of this segment with eco-friendly products and programs. Students may observe Whole Foods seafood labeling initiative and their efforts to reduce seafood that is not sustainable. Students may become aware of wellness programs Whole Foods rolled out in select markets, which include nutrition programs, social dinners and partnerships with exercise facilities/yoga centers in exchange for a membership fee.

Students should also recognize that people might buy products that appeal to LOHAS for reasons other than health and sustainability.

(20 minutes, Chapter Objective 3, AACSB: Reflective Thinking)

Copyright © 2015 Pearson Education, Inc. publishing as Prentice Hall

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Chapter 3: PERCEPTION CHAPTER OBJECTIVES After reading this chapter, students should understand why: 1. The design of a product today is a key driver of its success or failure.

2. Products and commercial messages often appeal to our senses, but because of the profusion of these messages, we don’t notice most of them.

3. Perception is a three-stage process that translates raw stimuli into meaning.

4. Subliminal advertising is a controversial—but largely ineffective—way to talk to consumers.

5. We interpret the stimuli to which we do pay attention according to learned patterns and expectations.

6. The field of semiotics helps us to understand how marketers use symbols to create meaning.

CHAPTER SUMMARY After reading this chapter, students should understand why: The design of a product today is a key driver of its success or failure.

In recent years, the sensory experiences we receive from products and services have become a high priority when we choose among competing options. Consumers increasingly want to buy things that will give them hedonic value in addition to functional value. They often believe that most brands perform similarly, so they weigh a product’s aesthetic qualities heavily when they select a brand.

Products and commercial messages often appeal to our senses, but because of the profusion of these messages, we don’t notice most of them.

Marketing stimuli have important sensory qualities. We rely on colors, odors, sounds, tastes, and even the “feel” of products when we evaluate them. Not all sensations successfully make their way through the perceptual process. Many stimuli compete for our attention, and we do not notice or accurately interpret the majority of them.

Perception is a three-stage process that translates raw stimuli into meaning.

Perception is the process by which physical sensations, such as sights, sounds, and smells, are selected, organized, and interpreted. The eventual interpretation of a stimulus allows it to be assigned meaning. A perceptual map is a widely used marketing tool that evaluates the relative standing of competing brands along relevant dimensions.

Subliminal advertising is a controversial—but largely ineffective—way to talk to consumers.

So-called subliminal persuasion and related techniques that expose people to visual and aural .

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messages below the sensory threshold are controversial. Although evidence that subliminal persuasion is effective is virtually nonexistent, many consumers continue to believe that advertisers use this technique. Some of the factors that determine which stimuli (above the threshold level) are perceived include the amount of exposure to the stimulus, how much attention it generates, and how it is interpreted. In an increasingly crowded stimulus environment, advertising clutter occurs when too many marketing-related messages compete for attention.

We interpret the stimuli to which we do pay attention according to learned patterns and expectations.

We do not attend to a stimulus in isolation. We classify and organize it according to principles of perceptual organization. A Gestalt, or overall pattern, guides these principles. Specific grouping principles include closure, similarity, and figure-ground relationships. The final step in the process of perception is interpretation. Symbols help us make sense of the world by providing us with an interpretation of a stimulus that others often share. The degree to which the symbolism is consistent with our previous experience affects the meaning we assign to related objects.

The field of semiotics helps us to understand how marketers use symbols to create meaning.

Marketers try to communicate with consumers by creating relationships between their products or services and desired attributes. A semiotic analysis involves the correspondence between stimuli and the meaning of signs. The intended meaning may be literal (e.g., an icon such as a street sign with a picture of children playing). However, it may be indexical if it relies on shared characteristics (e.g., the red in a stop sign means danger). Meaning also can be conveyed by a symbol in which an image is given meaning by convention or by agreement of members of a society (e.g., stop signs are octagonal, whereas yield signs are triangular).

Marketer-created associations often take on lives of their own as consumers begin to believe that hype is, in fact, real. We call this condition hyperreality.

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CHAPTER OUTLINE I. Sensation A. Sensation refers to the immediate response of our sensory receptors (eyes, ears, nose, mouth, fingers) to such basic stimuli as light, color, sound, odors, and textures.

B. Perception is the process by which these sensations are selected, organized, and interpreted. The study of perception, then, focuses on what we add to these raw sensations to give them meaning. External stimuli, or sensory inputs, can be received by our brains on a number of channels.

• The inputs picked up by our five senses constitute the raw data that begin the perceptual process.

• External stimuli can trigger memories from the past.

• The unique sensory quality can help differentiate a product from the competition.

• The resulting responses are an important part of hedonic consumption (the multisensory, fantasy, and emotional aspects of consumers’ interactions with products).

In the era of sensory marketing, companies pay extra attention to the impact of sensations on product experiences. A sensory signature is the sensory impression a brand leaves in people’s minds.

C. Vision Marketers communicate on the visual channel through a product’s color, size, and styling and rely on visual elements in advertising, store design, and packaging. Colors can create feelings of arousal, stimulation, relaxation, and so on. a.

Red can create feelings of arousal and stimulate appetite, red backgrounds perform better when consumers have to remember details, and women in red are rated as more attractive by men than those who wear blue. b.

Blue can create more relaxing feelings, consumers do better at imaginative tasks when they are presented on blue backgrounds, and products presented against blue backdrops are liked better than products shown against red backdrops. c.

Black is associated with power and mourning. d.

Some reactions are learned through but others are not. Women are drawn toward brighter tones, perhaps because females see color better than males. Older people prefer white and bright tones, perhaps because colors look duller to older people.

Hispanics prefer brighter colors, perhaps because of intense lighting conditions in Latin America. Some cultures do not have words that correspond to colors available in other cultures. e.

Color (and the choice of color palette) is a key issue in package design. *****Use Table 3-1 Marketing Application of Color Here*****

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Some color combinations come to be so strongly associated with a corporation that they become known as the company’s trade dress, and the company may even be granted exclusive use of these colors.

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Discussion Opportunity—Ask: What colors can you think of that are uniquely associated with a particular company or a product? Give at least three illustrations. Have you noticed any confusing similarities with these companies or products?

D. Dollars and Scents Odors can stir emotions or create a calming feeling. They can invoke memories or relieve stress. Fragrance cues are processed by the limbic system, the most primitive part of the brain and the place where immediate emotions are experienced. Recent developments in the use of fragrance include scented clothes, scented stores, scented cars and planes, scented household products, and scented advertisements.

Discussion Opportunity—Ask students to consider their most favorite and least favorite scents.

Before class, consider your own as well. Then, engage the class in a discussion about whether or not such scents affect product purchase or avoidance.

II. A. Sound Sound can affect people’s feelings and behaviors. Audio watermarking is a term to describe when producers weave a sound/motif into a piece of music that acts like an earworm we compulsively hum. Sound symbolism is the process by which the way a word sounds influences our assumptions about what it describes and attributes like its size. Consumers are more likely to recognize brand names that begin with a hard consonant (K or P). Phonemes (vowel and consonant sounds) are associated with perceptions of large and small size.

Discussion Opportunity—Have students close their eyes and picture themselves shopping at a mall (you might give them cues to help this visualization along). As they are doing this, tell them that they should consider that the store is completely silent. After a few seconds, have them share how this affected their experience. Then ask: What are other ways marketers might use sound to stimulate your purchasing?

B. Touch Touch has been shown to be a factor in sale interactions. People are stimulated or relaxed by sensations that reach the skin. Some view touch like a primal language, one we learn well before writing and speech. Touch or haptic senses appear to moderate the relationship between product experience and judgment confidence; i.e., people are more sure about what they perceive when they can touch it. The Japanese practice, Kansei engineering, is a philosophy that translates customers’ feelings into design elements.

C. Taste Taste is influenced by biological factors (taste receptors) and cultural factors (the image and values associated with food influence how we experience taste).

Discussion Opportunity—Ask students the following: What is your favorite “new” taste? Give an illustration. How did you discover this new taste? What stimulus influenced you the most to try this “new” taste? How could marketers use this information? .

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III. The Stages of Perception As shown in Figure 3.1, the perceptual process is made up of three stages: ***** Use Figure 3.1 Here-Perceptual Process ***** • Exposure • Attention • Interpretation A. Stage 1: Exposure 1. Exposure occurs when a stimulus comes within the range of someone’s sensory receptors. The science that focuses on how the physical environment is integrated into our personal, subjective world is known as psychophysics.

2. When we define the lowest intensity of a stimulus that can be registered on a sensory channel, we speak of a threshold for that receptor.

3. The absolute threshold refers to the minimum amount of stimulation that can be detected on a sensory channel (the sound emitted by a dog whistle is beyond our auditory absolute threshold, for example).

Use Consumer Behavior Challenge Discuss #11 Discussion Opportunity—Ask students to consider how the absolute threshold is an important consideration in designing marketing stimulation. Then have them give illustrations.

4. The differential threshold refers to the ability of a sensory system to detect changes or differences between two stimuli. a. The minimum difference that can be detected between two stimuli is known as the j.n.d. or just noticeable difference (e.g., marketers might want to make sure that a consumer notices that merchandise has been discounted). b. A consumer’s ability to detect a difference between two stimuli is relative. A whispered conversation will not be noticed on a busy street. c. Weber’s Law demonstrates that the stronger the initial stimulus, the greater the change must be for it to be noticed. Cereal boxes need to be vastly different sizes for consumers to notice. Similarly, most retailers believe that a price discount must be at least 20 percent for consumers to notice or to react to it.

Discussion Opportunity—Ask the class to write down the price of the following goods on a piece of paper: (a) a gallon of 2% milk, (b) a Big Mac, (c) a pair of top-of-the-line Nike tennis shoes, and (d) a Chevrolet Corvette. Then see if they can figure out the differential threshold they have for these goods. (See how much price would have to change before they would actually know it.)

Ask them why it is different depending on the price of the product in question.

IV. Subliminal Perception A. Subliminal Perception is perception that is below the threshold level. It occurs when the stimulus is below the level of the consumer’s awareness.

B. Embeds are tiny figures inserted into magazine ads via high-speed photography .

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or airbrushing that are supposed to exert strong but unconscious influences on readers.

Discussion Opportunity—Find an example of what you perceive to be a subliminal message.

Explain your rationale to the class and show the product or message.

C. Does subliminal perception work? Within the marketing context, most agree the answer is “probably not.” Effective messages must be very specifically tailored to individuals, rather than the mass messages required by advertising. Other discouraging factors are: • Individuals have wide differences in their threshold levels.

• Advertisers cannot control many important variables (such as viewing distance from the television screen).

• Viewers must give their absolute attention to the screen—most do not.

• Even if the advertiser induces the desired effect, it works only at a general level. *****Use Review #5 Here*****

Discussion Opportunity—Bring in a small can of Jolly Green Giant mushrooms. At one time, the mushrooms on the front of the can seemed to spell “SEX.” See if students can find their own examples of embeds. What do they think of this technique? Under what circumstances would “subliminal stimulation” be of benefit to society?

D. Stage 2: Attention Attention refers to the extent to which processing activity is devoted to a particular stimulus.

1. Consumers are often in a state of sensory overload or are exposed to far more information than they are capable or willing to process. Today, the average adult is exposed to about 3,500 pieces of advertising information every single day.

2. As of 2010, more than half of teens report that they engage in multitasking, or processing information from more than one medium at a time.

3. How do Marketers Get Our Attention? a. Networks try to engage viewers with original content during commercial breaks. b. Rich media advertisements online use movement to get viewer attention (e.g.

LowerMyBills.com silhouetted dancers).

Discussion Opportunity—Ask: What do you think are the characteristics of the best banner ads?

Give an illustration. c. Teaser ads start a story on television and ask you to go to the website for the rest of the ad. d. Doing something novel/unexpected. e. Perceptual selection means that people attend to only small portion of stimuli to which they are exposed. Personal and stimulus factors help to decide which .

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stimuli will be received and which will be avoided. f. Personal Selection Factors reflect a consumer’s experience, the result of acquiring and processing stimulation over time, which influences how much exposure to a particular stimulus a person accepts. g. Perceptual filters include perceptual vigilance (consumers are more likely to be aware of stimuli that relate to their current needs) and perceptual defense (consumers may not process or distort the meaning of a threatening stimulus).

Discussion Opportunity—Ask students to think of examples when they have used perceptual vigilance and perceptual defense. Think of examples and circumstances when advertisers consciously are able to overcome these effects in consumers. Identify the techniques that might be used to break through these barriers. h. Adaptation, the degree to which consumers continue to notice a stimulus over time, is another personal selection factor. The intensity (less intense), duration (lengthy), discrimination (simple), exposure (frequent), and relevance (irrelevant) of stimuli affect (increase) the likelihood of adaptation. i. Stimulus selection factors, or the characteristics of the stimulus itself, also affect what we notice and what we ignore. i.

We are more likely to notice stimuli that differ from those around them (e.g. messages that create contrast). ii.

Altering size, color, position, or novelty can create contrast.

Discussion Opportunity—Bring four magazine ads, one that illustrates each of the four contrast methods demonstrated in the chapter and discuss in class.

E. V. Stage 3: Interpretation Interpretation refers to the meaning that we assign to sensory stimuli. Two people can see the same event but their interpretation can be completely different.

1. Consumers assign meaning to stimuli based on the schema, or set of beliefs, to which the stimulus is assigned.

2. Priming is a process where certain properties of a stimulus typically will evoke a schema that leads us to evaluate the stimulus in terms of other stimuli we have encountered that are believed to be similar.

3. Identifying and evoking the correct schema is crucial to many marketing decisions, because this determines what criteria will be used to evaluate the product, package, or message.

4. Package schematics may influence consumer feelings about the contents of a package for better or worse.

Discussion Opportunity—Ask: What might be the schema for (a) a tuxedo, (b) a hair dryer, or (c) a calculator to be used in school?

5. Stimulus organization occurs as we relate incoming sensations to those already in memory, based fundamental organizational principles.

6. These principles are based on Gestalt psychology—meaning is derived from totality of a set of stimuli. In German, gestalt means whole, pattern, or configuration. Principles include:

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· The closure principle—people tend to perceive an incomplete picture as complete. We fill in the blanks. · The principle of similarity—consumers tend to group objects that share similar physical characteristics. · The figure-ground principle—one part of a stimulus will dominate (the figure) while other parts recede into the backdrop (the ground).

Discussion Opportunity—Ask: When you walk through a room when Wheel of Fortune is on, do you find yourself stopping to solve the puzzle? When you hear “Less filling . . .” what do you think of? Give illustrations that demonstrate how advertisers can use or must be aware of (a) the closure principle, (b) the principle of similarity, and (c) the figure-ground principle.

VI.Semiotics: The Meaning of Meaning A. Semiotics is the field that examines the correspondence between signs and symbols and how we assign meanings. From a semiotic perspective, every marketing message has three basic components: • The object that is the focus of the message (e.g. Marlboro cigarettes).

• The sign is the sensory imagery that represents the intended meanings of the object (e.g. the Marlboro cowboy).

• The interpretant is the meaning derived (e.g. rugged, individualistic, American).

B. Signs are related to objects in one of three ways: • An icon is a sign that resembles the product in some way (e.g. Ford Mustang).

• An index is a sign that is connected to a product because they share some property (pine tree on Spic & Span, shared property of fresh scent).

• A symbol is a sign that is related to a product through either conventional or agreed-upon associations (Dreyfus Fund lion represents fearlessness/strength).

A. Hyperreality occurs when advertisers create new relationships between objects and interpretants by inventing new connections between products and benefits (e.g., equating Marlboro cigarettes with the American frontier spirit). Reverse product placement (where fictional products that appear in shows become popular in the real world) is an example of hyperreality.

B. Perceptual positioning is important because our evaluation of a product is the result of what it means rather than what it does. Our perceptions of this meaning are the basis for the product’s market position. Perceptions of a brand consist of functional attributes (e.g., its features, its price, and so on) and symbolic attributes (its image, and what we think it says about us). Positioning strategy is a fundamental part of a company’s marketing efforts as it uses elements of the marketing mix to influence the consumer’s interpretation of its meaning. There are many dimensions that can be used to establish a brand’s position: • Lifestyle (e.g. Grey Poupon has a higher class condiment) • Price leadership (e.g. L’Oreal sells Plenitude in discount stores) • Attributes (e.g. Bounty paper towels are “the quicker picker upper) .

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• • • • •

Product class (e.g. Spyder Eclipse is a sporty convertible) Competitors (e.g. Northwestern Insurance is “the quiet company”) Occasions (e.g. Wrigley’s gum as an alternative to smoking) Users (e.g. Levi’s Dockers target men 20s-40s) Quality (e.g. Ford “Quality is job 1)

***** Use Consumer Behavior Challenge Discuss #12 Here ***** Review #8 Discussion Opportunity—Ask students to think of a case where a product has been positioned recently (i.e., new product introduction or re-positioning of an existing product). How was it positioned? What new market was pursued? How did you find out about this position or how did you discover the position?

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End-of-Chapter Support Material SUMMARY OF SPECIAL FEATURE BOXES 1.

Net Profit Augmented reality is a reference to media that superimposes digital lays of data, images, or video over a physical object, much like in a 3D movie.

2.

CB As I See It; Malaika Brengman, Vrije Universiteit Brussel, Belgium Ambient cues in our surroundings, such as light, color, and sound, influence consumer behavior. Perception is formed not only through our eyes, but in our brain, and affects our thoughts and feelings.

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Marketing Opportunity The proliferation of touchscreens on devices is an outgrowth of the natural user interface philosophy of computer design, which incorporates human movements that are intuitive.

4.

Marketing Opportunity Some companies try to hide price increases by decreasing package size. However, when the economy is strong, marketers promote original package size with terms such as “jumbo”.

5.

Marketing Opportunity People who use a DVR are more likely to fast-forward through ads that are not interesting. Ads that start with a captivating story are more likely to hold attention.

6.

CB As I See It: Michel Wedel., University of Maryland Marketers use the new field of automated attention analysis, the automated recording of how long people look at images, words, people, places and products, and how the body physically reacts to stimulus. Marketers use this data to better tailor products to individual consumer’s momentary interests and experiences.

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REVIEW 3-1.

Define hedonic consumption and provide an example.

Hedonic consumption is the multi-sensory, fantasy, and emotional aspects of consumers’ interactions with products. The Owens-Corning Fiberglass Corporation was the first company to trademark a color when it used bright pink for its insulation material and adopted the Pink Panther cartoon character as its spokes-character. Harley-Davidson actually tried to trademark the distinctive sound made by a “hog” revving up.

(3 minutes, Chapter Objective 1, AACSB: Application of Knowledge)

3-2.

How does the sense of touch influence consumers’ reactions to products?

Moods are stimulated or relaxed based on sensations reaching the skin, whether from a luxurious massage or the bite of a winter wind. Touch has even been shown to be a factor in sales interactions (holding an item makes a consumer feel attached to it; touch can increase tips/coupon redemption). We are more sure about what we perceive when we can touch it.

(3 minutes, Chapter Objective 2, AACSB: Reflective Thinking)

3-3.

Identify and describe the three stages of perception.

Exposure occurs when a stimulus comes within the range of someone’s sensory receptors. Attention refers to the extent to which processing activity is devoted to a particular stimulus. Interpretation refers to the meaning that we assign to sensory stimuli.

(3 minutes, Chapter Objective 3, AACSB: Application of Knowledge)

3-4.

What is the difference between an absolute threshold and a differential threshold?

The absolute threshold refers to the minimum amount of stimulation that can be detected on a given sensory channel. The differential threshold refers to the ability of a sensory system to detect changes or differences between two stimuli.

(1 minute, Chapter Objective 3, AACSB: Application of Knowledge)

3-5.

Does subliminal perception work? Why or why not?

Some research by clinical psychologists suggests that people can be influenced by subliminal messages under very specific conditions, though it is doubtful that these techniques would be of much use in most marketing contexts. Effective messages must be very specifically tailored to individuals, rather than the mass messages required by advertising.

(2 minutes, Chapter Objective 4, AACSB: Reflective Thinking)

3-6.

Describe two factors that can lead to stimulus adaptation.

Five factors can lead to stimulus adaptation: • Intensity: Less-intense stimuli (e.g., soft sounds or dim colors) habituate because they have less sensory impact.

• Duration: Stimuli that require relatively lengthy exposure in order to be processed tend to habituate because they require a long attention span.

• Discrimination: Simple stimuli tend to habituate because they do not require attention to detail. .

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•

Exposure: Frequently encountered stimuli tend to habituate as the rate of exposure increases.

• Relevance: Stimuli that are irrelevant or unimportant will habituate because they fail to attract attention.

(2 minutes, Chapter Objective 4, AACSB: Reflective Thinking) 3-7.

“The whole is greater than the sum of its parts.” Explain this statement.

Gestalt roughly means whole, pattern, or configuration, and this perspective is best summarized by the saying “the whole is greater than the sum of its parts.”

(3 minutes, Chapter Objective 5, AACSB: Reflective Thinking)

3-8. List the three semiotic components of a marketing message, giving an example of each.

The object is the product that is the focus of the message (e.g., Marlboro cigarettes). The sign is the sensory image that represents the intended meanings of the object (e.g., the Marlboro cowboy). The interpretant is the meaning derived (e.g., rugged, individualistic, American).

(3 minutes, Chapter Objective 6, AACSB: Application of Knowledge) 3-9.

What do we mean by the concept of augmented reality? Give an example that is not discussed in the chapter. How does this concept differ from virtual reality?

Augmented reality refers to media that superimposed one or more digital layers of data, images, or video over a physical object. Virtual reality integrates the physical senses with digital information. Unlike augmented reality that delivers a combination of both sensory experiences, virtual reality provides a totally immersive experience that transports the user into an entirely separate 3D environment. One example of augmented reality not discussed in the text is used by Google when showing routes to destinations.

(5 minutes, Chapter Objective 6, AACSB: Application of Knowledge)

3-10. What is a positioning strategy? What are some ways marketers can position their products?

A positioning strategy is a fundamental part of a company’s marketing efforts as it uses elements of the marketing mix (i.e., product design, price, distribution, and marketing communications) to influence the consumer’s interpretation of its meaning. Marketers can use many dimensions to carve out a brand’s position in the marketplace. These include: • Lifestyle: Grey Poupon mustard is a “higher-class” condiment.

• Price leadership: L’Oreal’s Noisôme brand face cream is sold in upscale beauty shops, whereas its Plenitude brand is available for one-sixth the price in discount stores—even though both are based on the same chemical formula.

• Attributes: Bounty paper towels are “the quicker picker upper.”

• Product class: The Mazda Miata is a sporty convertible.

• Competitors: Northwestern Insurance is “the quiet company.”

• Occasions: Wrigley’s gum is an alternative at times when smoking is not permitted.

• Users: Levi’s Dockers are targeted primarily to men in their 20s to 40s.

• Quality: At Ford, “Quality is job 1.”

(5 minutes, Chapter Objective 6, AACSB: Reflective Thinking) .

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CONSUMER BEHAVIOR CHALLENGE DISCUSS 3-11. Assuming that some forms of subliminal persuasion may have the desired effect of influencing consumers, do you think the use of these techniques is ethical? Explain your answer.

Many students will consider the use of subliminal persuasion to be unethical.

Accordingly, a discussion could focus on why subliminal messages are undesirable. An interesting issue to raise may be how, or even if, subliminal persuasion differs from other advertising that consumers are exposed to every day. Once these differences have been noted, the discussion could turn toward analyzing the reasons why individuals react negatively to subliminal persuasion. Students who believe the use of these techniques is ethical should be encouraged to develop their arguments so that those representing each side of the argument might see the opposing view. Regardless of the position adopted by the majority of students, be prepared to stimulate discussion by developing an argument in favor of the use of subliminal messages. This argument could center on the idea that subliminal persuasion might result in less “clutter.” Arguing for its effectiveness, the amount of advertising could decrease overall.

(10 minutes, Chapter Objective 4, AACSB: Ethical Understanding and Reasoning Abilities,) 3-12. The slogan for the movie Godzilla was “Size does matter.” Should this be the slogan for the United States as well? Many marketers seem to believe so. The average serving size for a fountain drink has gone from 12 ounces to 20 ounces. An industry consultant explains that the 32-ounce Big Gulp is so popular because “people like something large in their hands. The larger the better.” Some cities (most noteably New York) have tried to ban sales of sugary drinks greater than 24 ounces but so far unsuccessfully. Hardee’s Monster Burger, complete with two beef patties and five pieces of bacon, weighs in at 63 grams of fat and more than 1,000 calories. The standard for TV sets used to be 19 inches; now it is 32 inches and growing. Hulking SUVs have replaced tiny sports cars as the status vehicle of the new millennium. What’s up with our fascination with bigness: Is this a uniquely U.S. preference? Do you believe that “bigger is better”? Is this a sound marketing strategy?

This question comprises multiple questions. The first, “What’s up with our fascination with bigness?” is very general and should spark some general comments or discussion. If anything specific is to come from this particular question, students should be directed to theorize as to “why” people in the United States prefer bigger sizes. The second question, “Is this a uniquely American preference?” can only really be addressed when students have a concept of product size in other countries. Thus, foreign students and students who have lived or studied abroad will be a good resource here. Another option if assigning this question as an at-home project is to have students research product sizes in other countries to make comparisons. It might be helpful if you give a few specific products for them to research, such as soft drinks, automobiles, and televisions. The third question, “Do you believe that ‘bigger is better’?” should be directed toward whether or not larger sizes benefit the consumer. The final question examines whether super-sized products benefit the marketer. (Possible At-Home Project Idea) (10 minutes, Chapter Objective 6, AACSB: Reflective Thinking) .

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3-13.

Augmented reality applications may reach the level of sophistication where we observe almost everything through the screen of our smartphones in order to receive an “enhanced” experience. Do you view this as a positive development or a problem?

Augmented reality can add value to a consumer’s experience by allowing consumers to apply an additional layer of data/images to their existing views, which can deepen the consumer’s understanding of the product/product features. Marketers can use this additional layer to provide customized products and/or promotional offers. However, AR can also serve as a distraction from the real life sensory experience and may result in information overload. Some students may mention privacy concerns, as the provider of the AR experience can track information about their preferences, or because ultimately AR technology may allow others (including sellers) to recognize and find information about them as they walk down the street or into a store. It may also lead to unwelcome offers (spam) from marketers.

(10 minutes, Chapter Objective 6, AACSB: Reflective Thinking and Ethical Understanding and Reasoning Skills)

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The chapter notes that marketers may elect to shrink the amount of product it sells and maintain the same price rather than raise the price. Is this ethical?

This question needs to be split into two parts: 1) whether marketers have the right to charge the same for less product and 2) whether the marketer is responsible to inform the consumer of the price to quantity ratio or whether the consumer is responsible to judge value on his or her own.

(10 minutes, Chapter Objective 5, AACSB: Analytic Skills)

3-15. Define a schema and provide an example of how this concept is relevant to marketing.

A schema is a set of belief that we use to assign meaning to something. It is critical that marketing decisions are based on what criteria consumers will use to evaluate a product or message. For example, we assume that products that ae lower down with a frame weigh more than products that appear higher in a frame, based on our concept of gravity. Schema also helps to develop a brand personality.

(10 minutes, Chapter Objective 5, AACSB: Analytic Skills)

APPLY 3-16. Interview three to five male and three to five female friends about their perceptions of both men’s and women’s fragrances. Construct a perceptual map for each set of products. Based on your map of perfumes, do you see any areas that are not adequately served by current offerings? What (if any) gender differences did you obtain regarding both the relevant dimensions used by raters and the placement of specific brands along these dimensions?

Have the students start this project by listing a number of descriptive words that are or could be used when positioning perfumes in the market place. Have them ask the respondents to position various perfumes on the map according to their impressions of the perfumes selected. For the part of the question about areas that are not adequately served by the current offerings, students should identify “gaps” in the map and determine .

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whether filling the gap will add value to the target consumers. Students may also want to create a separate perceptual map by gender to help analyze the differences. Since perceptual mapping is not explicitly covered in the chapter, this is an opportunity for instructors to connect this content to that covered in another class such as advertising.

(Possible Field Project Idea) (20 minutes, Chapter Objective 3, AACSB: Application of Knowledge) 3-17.

Using magazines archived in the library, track the packaging of a specific brand over time. Find an example of gradual changes in package design that may have been below the j.n.d.

You might give a few hints here. For example, Aunt Jemima, the Morton Salt Girl, and Betty Crocker are trademarks that changed over time .d can be found in ads. Package changes include Ivory Soap, Kellogg’s Rice Krispies, and Campbell Soup. Students can simply examine automobile ads to see how styles of a particular car have changed over the years—the body is the car’s package. (Possible Field Project Idea) This question needs to be assigned with appropriate time to complete the work. The examples found may mirror the changes in design for the Pepsi logo.

(20 minutes, Chapter Objective 3, AACSB: Reflective Thinking)

3-18.

Visit a set of Web sites for one type of product (e.g., personal computers, perfumes, laundry detergents, or athletic shoes) and analyze the colors and other design principles employed. Which sites “work” and which don’t? Why? Look through a current magazine and select one ad that captures your attention over the others. Explain why this ad attracts you.

See if the students will notice how similar many of the products and brands are in terms of shape, weight, color, and size as depicted on the websites. A good way to approach this project is to pick a mainstream product such as an Apple computer (because of its bright colors). Be sure to have students state what they mean by “it will work” (a success) and how this was measured. Have one or two students go online to demonstrate how they approached this project. (Possible At-Home Project Idea) After students have indicated what ad caught their attention, probe to see if there are any other reasons. This is a good opportunity to remind students about what ads are likely to get their attention because of personal factors and stimulus factors (contrast and novelty are discussed in #5). Ask the class if any other aspects of the ad struck them. (Possible Field Project Idea) (20 minutes, Chapter Objective 5, AACSB: Analytical Thinking)

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Find ads that utilize the techniques of contrast and novelty. Give your opinion of the effectiveness of each ad and whether the technique is likely to be appropriate for the consumers the ad targets.

Opinions will vary here. Some people like novelty in most everything, while others want people to be more serious. You should look for students to identify different ways marketers create a contrast, and for students to recognize how contrast (including novelty) is used to get their attention and overcome advertising clutter. (Possible Field Project Idea) (15 minutes, Chapter Objective 3, AACSB: Reflective Thinking)

3-20.

Assume that you are a consultant for a marketer who wants to design a package for a new .

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premium chocolate bar targeted to an affluent market. What recommendations would you provide in terms of such package elements as color, symbolism, and graphic design?

Give reasons for your suggestions.

Answer will vary here. Some terms that will be used are luxury, best, and ultimate. Color will vary from purple to gold.

(10 minutes, Chapter Objective 3, AACSB: Reflective Thinking)

CASE STUDY TEACHING NOTES Chapter 3 Case Study: The Brave New World of Subway AdvertisingSummary of Case Various agencies around the world have pioneered a technology that allows for static images placed in subway tunnels to appear as full-motion commercials. This represents one of many developments in recent years to break through ad clutter to capture consumers’ attention with a novel type of advertising in a place that consumers do not expect it. The ad medium is rolling out in subway tunnels of major cities worldwide. The most notable part of this new development is that public reaction has been overwhelmingly positive. Transit officials, agency representatives, and corporate advertisers alike have been given kudos for turning dark and dreary tunnels into something entertaining for commuters.

Suggestions for Presentation This case could be assigned as an out-of-class or in-class activity. As an in-class activity, it might be more effective to have the class read it, then break them into small groups to discuss the questions. This is because a good response to the questions would require a consideration of various chapter concepts. The small group discussion could then be followed up with a large group review.

The case allows for some application to the sections on exposure (Which of the five senses does this ad type appeal to most? What are the implications of this for advertisers?) and interpretation (How does placement of an ad in this context affect positioning? How does the nature of different target segments of subway riders affect interpretation?). Thus, this case can be used to illustrate the entire process of perception as explained in the chapter.

This case allows for the psychological processes of perception to be linked to real-world marketing implications. One item of interest not mentioned in the case that may be brought up during discussion is how this unique appeal to the perception processes of consumers has created value for multiple constituencies: • The consumers—the positive reception indicates that the ads have entertainment value during an otherwise boring commute.

• The media agencies—these agencies are new ventures carving out a multi-million dollar industry. The cost of subway ads ranges from $35,000 a month to $250,000 a month depending on the route.

• The advertisers—there is no shortage of promotional choices for corporations and non- .

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•

profit organizations. However, subway tunnel advertising gives marketers one of the few options that breaks through ad clutter in such a way that the consumer wants to see the ad, not to avoid it.

The transit agencies—most metropolitan transit agencies are struggling with ever tightening budgets and with the balance of fare prices and demand. Many are therefore searching for additional revenue streams such as concessions or advertising. Although instation and in-train advertising has been around since the early 1900s, subway tunnel agencies are forecasting that a single transit company (which would receive between 25 percent and 60 percent of the revenues) could earn as much as $200 million over 5 years.

Suggested Answers For Discussion Questions CS 3.1 Based on the principles of attention presented in this chapter, explain why riders receive these ads so positively. Be sure to consider the possible stimulus selection factors that apply.

This case is suited for illustrating various aspects of the perceptual process, including sensation, exposure, attention, and interpretation. However, the concepts that best explain why this new advertising medium should initially be successful are the stimulus selection factors of position and novelty that contribute to attention. With respect to position, subway ads come into full view, right outside the windows of subway trains where many riders are likely to be gazing. The concept of novelty exerts that stimuli that appear in unexpected places tend to grab attention. Certainly, these ads should at least initially be unexpected on the dark walls of subway tunnels. These things alone will contribute to higher than normal levels of attention, which should have some effect on memory retention. In addition, Digital Underground Media copies innovative technology similar to that of a childhood flip book making subway tunnels a valuable showcase for ads. Ads take away from the boredom of the ride.

(20 minutes, Chapter Objective 3, AACSB: Reflective Thinking) CS 3.2 It has been shown that consumers can habituate to a stimulus. Is there anything the ads’ creators should know about adaptation and its potential impact on the success of these ads over time?

Some estimates show that more than 92 percent of consumers remember the advertised product, whereas only 13 percent have the same level of recall when they see an ad on television. Additionally, Submedia claims that 87 percent of subway riders look forward to seeing the next subway and that the ads make the ride more enjoyable. This has the potential for significant income for subways.

(20 minutes, Chapter Objective 3, AACSB: Reflective Thinking) CS 3-3. As you consider the companies that have used tunnel advertising, are there brands or products that would not be a good fit for this medium? Be prepared to justify your response with examples.

Answers may vary by students. Examples may include brands or products that use ads that are visually clutters or contain several words. The speed of the subway will prevent detail or excessive words from being internalized by riders.

(20 minutes, Chapter Objective 3, AACSB: Reflective Thinking)

Additional Support Material .

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STUDENT PROJECTS Individual Projects 1.

Visit a department store through its perfume/cologne/cosmetics section. Do the scents have enough of an appeal to motivate buying? Does it appear that each of these is appealing to the sense of smell in a strategic manner?

For most shoppers, perfumes, colognes and cosmetics may be an impulse purchase. The products are important to the department stores because they tend to have high margins.

In fact, students should have difficulty remembering discounts associated with these products – companies are more likely to use a gift with purchase as an enticement because they do not want to deteriorate their brands’ images. Department stores often position these products near the main entrance to entice shoppers to “sample” products that were not on their lists. Frequently, the individuals who sell the products in these sections work for, and receive special training from, the companies they represent (as opposed to the department store). From a sensory perspective, the companies often use special lighting and attractive images, including attractive salespeople, in addition to the scents, to help attract additional attention to the area and position their offerings.

(10 minutes, Chapter Objective 2, AACSB: Reflective Thinking) 2.

Ask students to find three ads that contain symbolism. Examine the symbols and discuss the meaning the symbols convey. Encourage the student to identify the different types of signs used in the ads and the product qualities being communicated by each.

Additionally, find a symbol that might not or should not be used in advertising in the cultural context of America. Why would you not utilize it?

The three types of signs discussed in the chapter are icons (signs that resemble products), indexes (signs connected to products because they share a property with the product), and symbols (signs related to the product through conventional or agreed-upon associations). You may ask students to find an ad that represents each of these three types of signs to help reinforce the differences between them. Just as the examples will vary, so will the product qualities being communicated by each type of sign. Students will also find different examples of symbols that might not or should not be used in the cultural context of America. Look for students to identify why it would not be culturally acceptable, and use the exercise as an opportunity to connect their examples to the concept that our reactions to stimuli are often a function of our cultural backgrounds.

(30 minutes, Chapter Objective 6, AACSB: Reflective Thinking) 3.

What are the symbols of “green marketing”? Students need to review then and opine whether or not they are effective.

On the most basic level, companies’ uses of the color green, and its associations with environmental protection and the widely recognized symbol for recycling are likely to come up. However, the discussion is likely to go beyond the recycling symbol and the use of the color green because the use of symbols in green marketing (identified in chapter one as marketing practices that promote a firm’s efforts to protect or enhance the natural environment as they go about their business activities) is a hot topic that may stimulate debate among students. Some companies use symbols associated with well-recognized environmental organizations. However, students may recognize that there are also an .

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overwhelming number of green marketing symbols associated with green marketing that were created by individual firms that may be confusing to consumers because they lack meaningful and verifiable criteria for what makes the product eligible to be associated with the symbol (e.g. CBS EcoAds). To help students prepare their opinions about whether or not the symbols are effective, you may want to direct them toward the FTC’s Green Guides.

(20 minutes, Chapter Objective 6, AACSB: Application of Knowledge) 4.

Here is a field project that students always like. Have students (you might have only one or a few students do this as a special or alternative assignment) photocopy or print a collection of brand/product symbols (an alternative would be to have students create a PowerPoint presentation with images inserted to be projected in the classroom for all to see). Then have this student quiz fellow classmates to see if they can recognize the product or company. This will show students how effective symbols are and how much involuntary learning has taken place in their life. You might give a reward to the student who had the most correct responses.

Student examples and recognition of the symbols will vary. You can connect the exercise to the concepts of perceptual vigilance and talk about the cultural meaning associated with the symbols. For a twist on the exercise, you may ask students to find international symbols for brands that are available in the United States to discuss how and why they are different.

(30 minutes, Chapter Objective 6, AACSB: Reflective Thinking, Communication Abilities) 5.

Here is a tough assignment for an undergraduate. Ask students to spend an afternoon watching a popular soap opera or an evening watching a favorite television show. Ask them to be particularly observant of the various products and services that are used as props during the show. Do these products or services have any symbolic value? How would viewer perception be different if alternative brands or even generic brands had been used? To what extent are the props shown or mentioned? Are they used to help develop the plot? How? You can relate this project back to the idea that consumers often use products for what they mean instead of what they do. Props and set design are an important part of character development because they can help quickly create an image and a background for the character. Similarly, consumers use products to help communicate something about themselves or their identities. Students may also recognize that product placements are used frequently in today’s media to break through the clutter associated with other advertising and to overcome challenges associated with consumers fastforwarding through ads using their DVRs. In some cases, these products may be

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mentioned as part of the story line (e.g. an episode of Friends that has a story line about an apothecary table from Pottery Barn; Toyota’s discussion of product attributes/demonstration of safety features/self parking cars during the story line of Bones, etc.).

(75 minutes, Chapter Objective 6, AACSB: Reflective Thinking) 6.

Have students visit a grocery store and pick out five products. They should identify how each appeal to the five senses. How are they the same? How are they different? To what extent do any of them appear to be strategically designed to appeal to the five senses?

This project is a good way to reinforce the five senses and how marketers use appeals to each. Due to the popularity of sensory marketing as a way to differentiate products, students will be able to find a wide variety of products that appeal to the five senses. It is important to look for students to identify similarities and differences in the use of the appeals, and how the appeals relate to strategy, as the analytical aspect of this exercise.

(30 minutes, Chapter Objective 2, AACSB: Reflective Thinking, Analytic Skills 7.

While viewing one hour of television, what types of companies focus the most on factors that might affect “perceptual vigilance” in their advertisements? Have students write about examples of instances when they have used or experienced “perceptual vigilance” and “perceptual defense.” Have them share their experiences with the class.

This exercise is similar to the suggested discussion topic associated with perceptual vigilance, which is when consumers are more likely to be aware of stimuli that relate to their current needs. Marketers may try to connect their products with current needs (e.g. clothing retailers and mass discount stores talking about how the products can be used for back to school) or use the stimulus techniques (attention getting devices) designed to overcome perceptual barriers. Students may be more comfortable identifying examples in which other people have engaged in perceptual defense, since it may be difficult to identify or remember examples where they chose to avoid or distort a stimulus that was unpleasant to them.

(75 minutes, Chapter Objective 4, AACSB: Reflective Thinking) 8.

As part of your class preparation, devise an experiment that can be done in class to demonstrate perceptual selection. You might even review the psychology and consumer behavior literature for ideas.

This activity is something you can prepare or something you can ask a student to prepare. There are YouTube videos (e.g. the one with people passing a basketball where a gorilla walks across the room) and examples of ads in presentations that are posted on SlideShare that may provide you (or students) with a head start. A Google search will lead to thousands of examples. That said, sometimes the ads that appeal to the instructor or an individual student has never been noticed by others in the class because they do not participate in the activity, have a cat, etc.

(30 minutes, Chapter Objective 4, AACSB: Reflective Thinking) 9.

Examples of hyperreality are becoming increasingly common in our society. Have each student locate (either through their own observations or through reviewing articles in the popular and trade press) an example of hyperreality. Is the example chosen one in .

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which the marketer strategically facilitated the “hyperreal” phenomenon, or did the transition occur independent of the marketer? How does the chosen example contribute to the relationship between the product and the consumer?

Hyperreality occurs when advertisers create new relationships between objects and interpretants by inventing new connections between products and benefits. Students may identify reverse product placements in their examples of hyperreality. Encourage students to answer each part of the question. In particular, look for students to go beyond identifying hyperreal examples to the analysis of the relationship between the product and the consumer.

(30 minutes, Chapter Objective 6, AACSB: Reflective Thinking) Group Projects 1.

Develop a print and/or video ad for a product/brand that includes as many of the sensory stimuli as possible in order to convey the environmental message.

Students will require some time to prepare their ads. Remind them to think about the one message they want to get across and to think about how they can use the stimuli to help break through the clutter. Print ads are generally easier to prepare, but many students have video functionality on their cell phones and share videos online, so finding equipment may not be as challenging as it used to be. Video will allow students with the opportunity to include auditory stimuli, while a print ad may provide students with the opportunity to appeal to the sense of touch.

(120 minutes, Chapter Objective 2, AACSB: Reflective Thinking) Collect a variety of packages of children’s and adults’ breakfast cereals. How different are the j.n.d strategies for each market? Catalog various j.n.d strategies utilized and state whether they are likely to be effective for any other products. If your group were marketing the cereal, what would you have done differently?

Students may want to go beyond the current packages available on the shelves to look for historic images of packages, which are readily available online. Frosted Flakes and Lucky Charms are popular examples that have changed over time. Students should look not only at the colors and words used on the packaging but also at how marketers draw attention (or choose not to draw attention) to product changes like package size, the addition of nutrients, and promotional offers.

(90 minutes, Chapter Objective 3, AACSB: Reflective Thinking) 2.

3.

Have student groups find three examples of brands or companies that have made changes to their products (i.e., retail chain re-designing their stores, a new logo, etc.). Have them discuss how the concept of “just noticeable difference” might affect consumer perceptions of these changes. Are the changes something that the marketers wanted to be noticed?

Students should recognize that marketers want some changes to go unnoticed (e.g. smaller package sizes, less oz. per package for the same price resulting in an increase in price) while marketers want other changes to be noticed (product improvements, logo redesigns, lower unit pricing). The exercise helps draw additional attention to the trend

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where food inflation is hidden by smaller (sometimes marketed as healthier or more environmentally friendly) packages, which students may find interesting. Students may enjoy playing “detective” to find variations in products they may not have noticed in the past.

(60 minutes, Chapter Objective 3, AACSB: Reflective Thinking)

eLAB Individual Assignments 1.

Visit www.globalgreen.org. What are some of the sensory cues they are utilizing in order to attract your attention to various subjects/topics and ads?

The most obvious response will be the use of visual cues. Color, size of headlines, font style, and use of motion may be mentioned among the visual cues. Students may try to connect the use of color to what they learned about color in the chapter. The website also offers videos, which engage users with sight and sound. Since the website is a destination and the Internet is a lean forward medium, it is likely that consumers who go to globalgreen.org are motivated to pay attention to the messages (or they would not visit the website).

(20 minutes, Chapter Objective 2, AACSB: Reflective Thinking) 2.

Go to www.tvguide.com. On the opening Web page, how many ads (including pop-ups) do you notice? Compare and contrast the approach of each ad to exposure, attention, and interpretation. Comment on how the consumer goes through these steps when being exposed to each ad. Provide an illustration of your description.

Student responses will vary. In some cases, most of the advertising space on the website (top, side and bottom) will be occupied by a single sponsor. Student responses should differentiate between the parts of the process that occur - exposure, attention and interpretation - and should note personal and stimulus factors that affect the perception process at each stage.

(20 minutes, Chapter Objective 3, AACSB: Reflective Thinking) 3.

Go to www.toyota.com/prius. Prius has focused its promotional efforts on the Internet and other non-traditional media. Is this website a good way to promote a car? In terms of concepts of perception, why or why not?

Students will have different opinions about whether the website is a good way to promote a car, so look for ways they support their opinions with the concepts of perception. For example, students may talk about perceptual vigilance, the website’s ability to create a sensory experience, and how Toyota uses the website to shape consumer perceptions in order to position the Prius.

(20 minutes, Chapter Objective 3, AACSB: Reflective Thinking)

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Go to www.leapfrog.com or www.pbskids.org. These sites are designed to facilitate .

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learning amongst children. Compare and contrast these sites for sensory stimulation, attention value, and ability to promote a sale of the product. How are semiotics used on these sites?

Students should recognize that the websites have different goals – leapfrog.com sells educational toys, and pbskid.org promotes (sells) educational programs (using games and videos). The target audience for the two websites varies as well. PBSkids.org is more visually oriented and has audio cues when you scroll over the items, which may be helpful for young users who cannot read (who are included in the target audience for many of the programs). On the other hand, leapfrog.com sells products, so although it also has a separate community for parents, parents are probably the main target audience for the site. In terms of semiotics, students may answer this part of the question by identifying the object, sign and interpretant of the marketing messages on each site.

For example, they may identify the books at leapfrog.com as the object, the leapfrog as the sign, and the interpretant as the ability to jump ahead/make progress (leapfrog) using the object. Alternatively, the students may identify icons, indices, and/or symbols on each website.

(30 minutes, Chapter Objective 6, AACSB: Reflective Thinking) 5.

Go to www.bose.com. Bose promises that once you listen to their Quiet Comfort 3 headphones you will never be satisfied with another comparable unit. Determine the competitive advantages and disadvantages of the Quiet Comfort 3. How does the company use sensory stimulation to promote the product? What key words can be used to evoke a response from consumers? Is the Bose approach effective? Explain.

Students should take the time to read the copy and watch the video about the Bose Quiet Comfort 3 headphones and form opinions about Bose’s approach. Look for students to explain why they feel the Bose approach is/is not effective in a way that relates back to the content from the chapter (e.g. creating contrast, perceptual positioning). Students should also identify the keywords the company currently uses and evaluate their effectiveness. If they feel the keywords are not effective, students should come up with their own keywords. The fact that the headphones cancel out noise makes hearing an important sense related to the promotion of the product.

(20 minutes, Chapter Objective 2, AACSB: Application of Knowledge) Group Assignments 1.

Go to www.crutchfield.com. Spend some time becoming familiar with this website. The group should evaluate the Crutchfield’s strategy. What is it? What do you think will be the long-term result of the strategy you just described? How is the organization using exposure, attention, and interpretation to its benefit? What does the group think will be the secrets of success for Crutchfield? The seeds of failure? Which symbols should be used to ensure success? Which should be avoided?

Crutchfield.com sells electronics online. When the group reviews the company’s strategy, they should consider whom the company targets, how they position their offerings, and how the elements of the marketing mix are used to support this positioning.

(One element you may want to point students toward in the marketing mix is the service that goes along with the product dimension.) To analyze the potential long-term results,

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students may find it helpful to examine each of these aspects in light of the market and the competition. This analysis should be the foundation for their recommendations regarding symbols.

(30 minutes, Chapter Objective 6, AACSB: Application of Knowledge) 2.

Go to www.apple.com. Your group assignment is to analyze how Apple used color and design to differentiate the iPod line from other mp3 players. Give illustrations of what was done. Was this a good strategy? What target markets were pursued? How did Apple use exposure, attention, and interpretation to their advantage? What are the criticisms about the iPod line? Can color and design overcome these criticisms? Is Apple using some of these same strategies for its iPhone brand?

The iPod and the iPhone are found on different sections of the website. For the first part, students should identify the use of the visual appeals and iPod’s use of color to differentiate its mp3 players. Some students may remember the iPod campaign, which showed silhouettes of iPod users, with the distinctive ear buds, against backgrounds of various bold colors. Students may connect the campaign to their understanding of contrast, a way to get consumers’ attentions. Colors were also used to help distinguish the brand’s personality and aid in the interpretation process. It will be covered later, but as products get into the growth stage of the product life cycle, companies are more likely to come up with different variations of the product to satisfy increased consumer demand and distinguish the offerings from increased competition. Early criticisms about battery life may have been addressed by a consumer’s willingness to purchase a newer iPod, available in additional colors/designs with increased memory/functionality. On the other hand, the iPhone is available in white and black. Apple has chosen to differentiate the iPhone from other smart phones based on functionality (the fact that it has retina display high resolution screens and provides a built in iPod with iTunes). However, students may recognize that consumers can distinguish their iPhone from other iPhones visually with accessories (from third parties) like skins, by customizing their display, and by customizing their applications, even though these add-ons are not unique to iPhones.

(20 minutes, Chapter Objective 2, AACSB: Application of Knowledge)

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Chapter 4: LEARNING AND MEMORY CHAPTER OBJECTIVES When students finish this chapter, they should understand why: 1.

2.

3.

4.

5.

6.

7.

8.

9.

It is important to understand how consumers learn about products and services.

Conditioning results in learning.

Learned associations with brands generalize to other products.

There is a difference between classical and instrumental conditioning, and both processes help consumers learn about products.

We learn about products by observing others’ behavior.

Our brains process information about brands to retain them in memory.

The other products we associate with an individual product influence how we will remember it.

Products help us to retrieve memories from our past.

Marketers measure our memories about products and ads.

CHAPTER SUMMARY It is important to understand how consumers learn about products and services.

Learning is a change in behavior that experience causes. Learning can occur through simple associations between a stimulus and a response or via a complex series of cognitive activities.

Conditioning results in learning.

Behavioral learning theories assume that learning occurs because of responses to external events.

Classical conditioning occurs when a stimulus that naturally elicits a response (an unconditioned stimulus) is paired with another stimulus that does not initially elicit this response. Over time, the second stimulus (the conditioned stimulus) elicits the response even in the absence of the first.

Learned associations with brands generalize to other products.

This response can also extend to other, similar stimuli in a process we call stimulus generalization. This process is the basis for such marketing strategies as licensing and family branding, where a consumer’s positive associations with a product transfer to other contexts.

There is a difference between classical and instrumental conditioning, and both processes help consumers learn about products.

Operant, or instrumental, conditioning occurs as the person learns to perform behaviors that produce positive outcomes and avoid those that result in negative outcomes. Whereas classical conditioning involves the pairing of two stimuli, instrumental learning occurs when reinforcement occurs following a response to a stimulus. Reinforcement is positive if a reward .

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follows a response. It is negative if the person avoids a negative outcome by not performing a response. Punishment occurs when an unpleasant event follows a response. Extinction of the behavior will occur if reinforcement no longer occurs.

We learn about products by observing others’ behavior.

Cognitive learning occurs as the result of mental processes. For example, observational learning occurs when the consumer performs a behavior because of seeing someone else performing it and being rewarded for it.

Our brains process information about brands to retain them in memory.

Memory is the storage of learned information. The way we encode information when we perceive it determines how we will store it in memory. The memory systems we call sensory memory, short-term memory, and long-term memory each play a role in retaining and processing information from the outside world.

The other products we associate with an individual product influence how we will remember it.

We do not store information in isolation; we incorporate it into knowledge structure where our brains associate it with other related data. The location of product information in associative networks, and the level of abstraction at which it is coded, help to determine when and how we will activate this information later. Some factors that influence the likelihood of retrieval include the level of familiarity with an item, its salience (or prominence) in memory, and whether the information was presented in pictorial or written form.

Marketers measure our memories about products and ads.

We can use either recognition or recall techniques to measure memory for product information.

Consumers are more likely to recognize an advertisement if it is presented to them than they are to recall one without being given any cues. However, neither recognition nor recall automatically or reliably translates into product preferences or purchases.

Products help us to retrieve memories from our past.

Products also play a role as memory markers; consumers use them to retrieve memories about past experiences (autobiographical memories), and we often value them because they are able to do this. This function also encourages the use of nostalgia in marketing strategies.

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CHAPTER OUTLINE I.

How Do We Learn?

Learning is a relatively permanent change in behavior that is caused by experience. A consumer can learn from direct experience or vicariously by observing events that affect others.

A. We can learn without even trying—just observing brand names on shelves. This casual, unintentional acquisition of knowledge is called incidental learning.

Discussion Opportunity—Present the class with illustrations of learning vicariously and incidental learning in a consumer context. In reference to each of your illustrations, ask students what strategies marketers have used or might use to foster such learning.

B. Theories of learning include those that focus on simple stimulus response connections (behavioral theories) to those that regard consumers as complex-problem solvers who learn abstract rules and concepts when they observe what others say and do (cognitive theories)

II.

Behavioral Learning Theories Behavioral learning theories assume that learning takes place as the result of responses to external events. Two major approaches to learning represent this view: classical conditioning and instrumental conditioning.

A. Classical conditioning occurs when a stimulus that elicits a response is paired with another stimulus that initially does not elicit a response on its own. Over time, this second stimulus causes a similar response because it is associated with the first stimulus.

1. This phenomenon was first demonstrated by Ivan Pavlov’s “dog experiments” when doing research on digestion in animals. a. Pavlov induced classical conditioning learning by pairing a neutral stimulus (a bell) with a stimulus known to cause a salivation response in dogs (he squirted dried meat powder into their mouths). b. The powder was an unconditioned stimulus (UCS) because it was naturally capable of causing the response. c. Over time, the bell became a conditioned stimulus (CS); it did not initially cause salivation, but the dogs learned to associate the bell with the meat powder and began to salivate at the sound of the bell only. d. The drooling of these canine consumers over a sound, now linked to feeding time, was a conditioned response (CR). e. This basic form of classical conditioning demonstrated by Pavlov primarily applies to responses controlled by the autonomic and nervous systems.

2. Classical conditioning can have similar effects for more complex reactions (such as in automatically using a credit card for purchases).

3. Conditioning effects are more likely to occur after the conditioned stimuli (CS) and unconditioned stimuli (UCS) have been paired a number of times (repetition). .

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***** Use End of Chapter Review #1 Here ***** 4. Repetition increases the strength of stimulus-response associations and prevents their decay.

5. Conditioning will not occur or will take longer if the CS is only occasionally paired with the UCS, which results in extinction (when the effects of conditioning diminish/disappear) 6. Stimulus generalization refers to the tendency of stimuli similar to a CS to evoke similar, conditioned responses. a. Pavlov’s dogs might respond to sounds similar to a bell (such as keys jangling). b. People also react to other, similar stimuli in much the same way they responded to the original stimulus, a generalization known as the halo effect (e.g. private label brands).

Discussion Opportunity—Ask students to think of some examples where a private label brand “piggy-backed” on a national manufacturer’s brand. How did they try to make the product appear similar so the associations with the national brand would transfer to the “me-too” brand? Ask the students whether they feel this is ethical and to support their opinions.

7. Stimulus discrimination occurs when a stimulus similar to a CS is not followed by an UCS. When this stimulus happen, reactions are weakened and disappear.

Manufacturers of well-established brands urge consumers not to buy “cheap imitations.”

Discussion Opportunity—Ask students the following: Can you think of some products that have similar packaging? Similar shapes? Similar names? To what extent do these examples represent stimulus generalization? In each case, which brand is the primary brand and which brand is the “me too” brand? Assuming the strategy was intentional, did it work? How can a marketer achieve stimulus discrimination?

III. Marketing Applications of Repetition A. Many marketing strategies focus on the establishment of associations between stimuli and responses. Examples include distinctive brand image, and linkage between a product and an underlying need.

B. Brand equity is a brand that has a strong positive association in a consumer’s memory and commands a lot of loyalty as a result. Repetition can be valuable (product associations can become extinct if not reinforced). Too much repetition, however, results in advertising wear-out (when consumers become so used to hearing or seeing a marketing stimulus that they no longer pay attention to it).D. Advertisements often pair a product with a positive stimulus to create a desirable association. The order in which the conditioned stimulus and the unconditioned stimulus are presented can affect the likelihood that learning will occur: presenting unconditioned stimulus before the conditioned stimulus (backward conditioning) is not effective.

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1. The process of stimulus generalization is often central to branding and packaging decisions that attempt to capitalize on consumers’ positive associations with an existing brand or company name. Strategies include: a. Family branding (using a company name/positive corporate image to sell product lines like Campbell’s, Heinz, GE) b. Product line extensions (adding related products to an established brand like Dole, Mr. Clean, Tide) c. Licensing (renting a well-known brand to a company that makes a different type of products like Jamba Juice, Zippo) d. Look-alike packaging (when a generic/private-label brand uses packaging that is similar to the national manufacturer’s brand). The Lanham Act protects against consumer confusion (protecting consumers from logos, product designs or packages that are so similar a typical shopper might mistake one for another). ***** Use Consumer Behavior Challenge #21 Here ***** Discussion Opportunity—Ask students to give examples of brands that they perceive have equity over other brands. As with equity of other assets (such as real estate), can an exact monetary value be placed on brand equity?

Discussion Opportunity—Have students apply the concept of stimulus generalization to real examples of family branding or product line extensions. Have them come up with examples where the stimulus was successfully generalized and examples where it was not.

IV. Instrumental conditioning (or operant conditioning) occurs as the individual learns to perform behaviors that produce positive outcomes and to avoid those that yield negative outcomes. This approach is closely associated with B.F. Skinner.

A. Although responses in classical conditioning are involuntary and simple, those in instrumental conditioning are made deliberately to obtain a goal and may be more complex.

B. Desired behavior is learned in a process called shaping, which rewards our intermediate actions.

C. Instrumental learning occurs because of a reward received following the desired behavior.

Discussion Opportunity—Have students brainstorm a list of examples of instrumental conditioning in marketing. Ask: Which do you think has more application to marketing— classical or instrumental conditioning?

Discussion Opportunity—Relate the concept of instrumental conditioning to the Internet and eCommerce through a specific example. Have students point out why they think this example is an application of instrumental conditioning.

D. Instrumental learning occurs in one of three ways: .

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1. Positive reinforcement a reward results in a response and appropriate behavior is learned (a woman wearing perfume and receiving a compliment).

2. Negative reinforcement the absence of a reward results in a response and appropriate behavior is learned (a woman sitting at home alone because she is not wearing a certain perfume).

3. Punishment occurs when an unpleasant response follows a behavior. We learn the hard way not to repeat these behaviors (a woman being ridiculed for wearing the wrong perfume).

4. When a positive outcome is no longer received, extinction is likely to occur and the learned stimulus-response connection will not be maintained. *****Use End of Chapter Review #5 Here ***** Discussion Opportunity—What are some products that promise “good things will happen” if you buy their products? Can you think of products that tell you that you will be “punished” if you do not buy them? Can you think of products where you are told that you will be “punished” if you do buy them or use them? How would this be possible?

E. An important factor in instrumental conditioning is the set of rules by which appropriate reinforcements are given for a behavior. Several reinforcement schedules are possible: 1. Fixed-interval reinforcement (a reward is issued in response to a behavior after a specified period of time, e.g. seasonal sales) 2. Variable-interval reinforcement (when the reward is issued in response to a behavior is varied, e.g. secret shoppers) 3. Fixed-ratio reinforcement (the reinforcement occurs after a fixed number of responses, e.g. grocery store reward when you collect 50 register receipts) 4. Variable-ratio reinforcement (the reinforcement occurs after a varied number of responses, e.g. slot machines) Discussion Opportunity—Provide an example of each of the previously mentioned reinforcement schedules. Ask students: Which of these examples do you think is the most effective and why?

Under what conditions can each of these reinforcement schedules be effectively applied?

F. Marketing Applications of Instrumental Conditioning Principles 1. Principles of instrumental conditioning are at work when a consumer is rewarded or punished for a purchase decision. Most companies reinforce consumption.

2. A popular technique called frequency marketing reinforces regular purchases by giving them prizes with values that increase along with the amount purchased (e.g. frequent flyer miles).

3. A fast growing strategy is called gamification, which turns routine actions into experience as it adds gaming elements to tasks that might otherwise be boring.

G. Gamification turns routine actions into experiences that closely resemble online video environments.

1. Endowed progress effect indicated that consumers strive to achieve goals and are more motivated when they keep working toward a goal.

2. Foursquare supports increasing store and brand loyalty by electing app users as “mayor” of a location. .

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3. Social marketing is a concept that includes awarding “badges” when users complete a goal.

4. Technology allows for the tracking of performance including on the job and can be used to rate and compare employee performance.

H. Cognitive learning theory approaches stress the importance of internal mental processes. This perspective views people as problem solvers who actively use information from the world around them to master their environment.

Discussion Opportunity—Provide an example of cognitive learning theory. How does this theory apply to learning on the Internet? Learning about a new brand extension? Learning how to use a newly purchased complex product?

I. Is Learning Conscious or Not? 1.Proponents of cognitive learning argue that behavioral learning effects are a function of mental activity that suggests a response will follow a stimulus.

1.There is also evidence for the existence of non-conscious procedural knowledge— we move toward familiar patterns (automatic responses).

2.We have a tendency to respond to the stimulus in terms of existing categories we have learned, often cued by a trigger feature (a stimulus that cues us toward a particular pattern) that activates a reaction.

V. Observational Learning Observational learning occurs when people watch the actions of others and note the reinforcements they receive for their behaviors—learning occurs because of vicarious learning rather than direct experience. Memories are stored for later use.

A. Imitating the behavior of others is called modeling.

B. Four conditions must be met for modeling to occur (see Figure 6.2): 1. The consumer’s attention must be directed to a model that is desirable to emulate for reasons of attractiveness, competence, status, or similarity.

2. The consumer must remember what is said or done by the model.

3. The consumer must convert this information into actions.

4. The consumer must be motivated to perform these actions. *****Use Figure 4.2 Here ***** Discussion Opportunity—How have marketers applied the concept of observational learning to facilitate consumer learning on the Internet? To facilitate consumer learning of software programs through animated tutorials?

C. Marketing Applications of Cognitive Learning Principles 1.Consumers’ ability to learn vicariously has helped marketers.

2.Consumers seem to enjoy using “models” as role models and for guidance in purchasing.

3.The degree to which a person emulates someone else depends on the model’s social attractiveness (based on physical appearance, expertise, similarity to evaluator).

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Discussion Opportunity—Ask students to come up with examples of celebrity endorsers.

Then, have them analyze each endorser according to the principle of observational learning.

Have them think of some “models” that companies probably will not hire again. Why is it, in some cases, that a company can use a somewhat negative model (like basketball player Allen Iverson) and still have success?

D. We learn to be consumers through consumer socialization, the process where we acquire skills, knowledge, and attitudes relevant to our relationship with the marketplace.

1. Parents instill their own values about consumption in their children and attempt to control the contact children have with information sources such as television and the internet.

2. About 90 percent of children under the age of 5 in the United States use the Internet at least once a week. This allows marketers to push products at children at a very young age.

3. Marketers segment children based on stages of cognitive development, their ability to learn concepts of increasing complexity. a. Children under the age of 6 are said to have limited storage-and retrieval skills. b. Children between the ages of 6 and 12 use storage-and-retrieval skills primarily when cued to do so by others. c. Children 12 years of age and older regularly use strategic employ storage-and-retrieval processes.

4. Children differ in the message comprehension skills, resulting in regulation by the Federal Trade Commission that helps protect children from marketplace influences.

VI. Memory Memory is a process of acquiring information and storing it over time so that it will be available when needed.

A. The contemporary, information-processing approach to memory assumes the mind is like a computer – data is input, processed, and output for later use in revised form.

1. In the encoding stage, information is entered in a way the system will recognize.

2. In the storage stage, this knowledge is integrated with what is already in memory and “warehoused” until needed.

3. During retrieval, the person accesses the desired information.

4. During the consumer decision-making process, we combine internal memory (what we retrieve) with external memory (e.g. product details on packages).

B. The way we encode (mentally program) information helps to determine how we will represent it in memory.

1. Types of Meaning a. A consumer may process a stimulus simply in terms of its sensory meaning (such as its color or shape). b. Semantic meaning refers to symbolic associations, such as the idea that rich people drink champagne or that fashionable men wear earrings.

2. Episodic memories are events that are personally relevant. a. Flashbulb memories are those that are especially vivid (such as memories of where you were when you heard Osama bin Laden had been killed).

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b. One method of conveying product information is through a narrative or story.

Much of what an individual acquires about social information is received through the narrative or story; therefore, it is a useful marketing technique for transmitting information.

Discussion Opportunity—Can you give an illustration of each of the forms of meaning or memory just discussed (sensory meaning, semantic meaning, episodic memory, and flashbulb memories)? How could these forms of memory be used to motivate purchases?

3. Memory Systems: There are three distinct memory systems: sensory memory, short- term memory (STM), and long-term memory (LTM). Figure 6.5 summarizes the interrelationships among these memory systems. *****Use Figure 4.5 Here ***** 4. Sensory memory stores information we receive from our senses. This storage is temporary (it only lasts a couple of seconds).

5. If information is retained for further processing, it passes through an attentional gate and transfers to short-term memory (STM).

6. STM (working memory) also stores information for a limited period, and its capacity is limited as it only holds information we are currently processing. a. The information can be stored either acoustically (in terms of how it sounds). b. The information can be stored semantically (in terms of what it means). c. Memory generally stores information by combining small pieces in a process known as chunking. d. A chunk is a configuration that is familiar to the person and can be manipulated as a unit. e. An example would be a brand name, which summarizes a great deal of detailed information.

C. Long-term memory is the system that allows us to retain information for a long period.

1. A cognitive process called elaborative rehearsal allows information to move from short-term memory to long-term memory.

2. Marketers may help the elaborative rehearsal process when they devise catchy slogans or jingles that consumer repeat on their own. ***** Use Consumer Behavior Challenge #23 Here ***** Discussion Opportunity—Consider the following ways to demonstrate the memory functions to the students: 1) Point out a noise that might be audible from outside the classroom (e.g., lawnmower, cars, construction) after it happens. Ask how many remember hearing it. Those that do not remember hearing it never made the jump from sensory memory to short- or long-term memory; 2) Use a phrase very clearly and audibly at the beginning of the class. Then, once you get to this point in the lecture, ask each student to write out the phrase. Because you stated it clearly, the phrase almost certainly made it into the short-term memory. The degree of correctness of each student’s statement, however, will show the difference between short-term and long-term memory. Ask students how these forms of memory (sensory, short-term, and longterm) should be taken into consideration by marketers. .

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VII. Associative Networks How Our Memories Store Information A. The traditional view (multiple-store) is that the short-term memory and long-term memory are separate systems.

B. Recent work says they may be interdependent (activation models of memory) so it takes more effort (deep processing) for information will probably be placed in longterm memory.

C. Activation models propose that an incoming piece of information is stored in an associative network that contains many bits of related information organized according to some set of relationships that is shaped by our own unique experiences. ***** Use Individual Project Idea #6 Here ***** D. These storage units are known as knowledge structures (think of them as spider webs full of pieces of data).

1. This information is placed into nodes that are connected by associative links within these structures.

2. Pieces of information that are seen as similar in some way are grouped together under a category.

3. Preference categories are known as evoked sets. The task of the marketer is to position itself as a category member and to provide cues that facilitate its placement in the proper category. *****Use Figure 4.6 Here ***** Discussion Opportunity—Briefly work with students to construct an example of an associative network for a product or brand of their choosing. Illustrate the network for the class to see as it is being constructed. Refer back to this network as you teach the following concepts of spreading activation and schemas.

E. Consumers go through a process of spreading activation as they shift back and forth between levels of meaning. Memory traces are sent out and linked to related nodes.

They could be: 1. Brand-specific (memory stored in terms of brand claims) 2. Ad-specific (memory stored in terms of medium or content of ad) 3. Brand identification (memory stored in terms of brand name) 4. Product category (memory stored in terms of how the product works/where it should be used) 5. Evaluative reactions (memory stored as positive or negative emotions) F. Knowledge is coded at different levels of abstraction and complexity.

1. Meaning concepts get stored as individual nodes.

2. A proposition (or belief) links two nodes together to form a more complex meaning, which can serve as a single chunk of information.

3. Propositions are integrated into a schema (a cognitive framework that is .

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developed through experience). We encode information more readily that is consistent with an existing schema.

4. One type of schema is a script (a sequence of events an individual expects).

For example, service scripts guide our behavior in commercial settings (e.g. dentist).

Discussion Opportunity—Have students give examples of scripts that they typically go through when purchasing a routine product. Why would a marketer want or not want consumers to develop such scripts?

VIII. How We Measure Consumers’ Recall of Marketing Messages A. Retrieval is the process whereby information is accessed from long-term memory.

B. Differences in retrieval ability among people can be attributed to individual cognitive, physiological, and situational factors.

C. Recall is enhanced when we pay more attention to the message in the first place, which may give an advantage to a pioneering brand (the first brand to enter a market) relative to a follower brand because we are more likely to remember the pioneering brand’s information.

D. The spacing effect describes the tendency for us to recall printed material more effectively when the advertiser repeats the target item periodically rather than presenting it repeatedly in a short time period.

E. A viewing environment with continuous activity and spectacular ad formats increase recall.

F. What Makes Us Forget?

1. In a process of decay, where memories fade with the passage of time, the structural changes in the brain produced by learning simply go away.

2. Forgetting also occurs due to interference; as additional information is learned, it displaces the earlier information. a. Consumers may forget stimulus-response associations if they learn new responses to the same or similar stimuli (retroactive interference). b. Prior learning can interfere with new learning through a process known as proactive interference.

Discussion Opportunity—Illustrate the forgetting concepts decay and interference. Have students identify types of information that a marketer might want to have consumers forget through both decay and interference. Have them do the same with information that marketers would not want consumers to forget. How can marketers combat the forgetting process?

3. The process of state-dependent retrieval explains that we are better able to access information if our internal state (e.g. mood, arousal level) is the same at the time of recall as when we learned the information.

4. As a rule, when we are already familiar with something, we are more likely to recall messages about it. However, when consumers are highly familiar with a brand or advertisement, automaticity may result in inferior learning/recall (the consumer does not pay attention to the message because they do not believe the additional effort will increase their knowledge).

5. We also observe a highlighting effect, where the order in which consumers learn about brands determines the strength of association between these brands and their .

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attributes (e.g. strong associations of common attributes with early learned brands and unique attributes with late-learned brands).

6. The salience of a brand refers to its prominence or level of activation in memory. a. Almost any technique that increases the novelty of a stimulus also improves recall (the result is the von Restorff Effect). b. Mystery ads (where the ad does not identify the brand until the end) are more effective if we want to build associations between the product category and the brand (like relatively unknown brands). c. The intensity and type of emotions experienced at the time also affect the way we recall later. i.We recall mixed emotions (those with positive and negative components) differently than unipolar emotions (emotions that are either wholly positive or wholly negative). ii. Unipolar emotions become more polarized over time (good things are recalled as even better; bad things as even worse).

7. The viewing context also affects recall. a. It helps when the marketing message is consistent with the theme or events in the program. b. Hybrid ads include a program tie-in to improve recall.

G. Visual memory tends to be stronger than verbal memory. Although pictorial ads may enhance recall, they do not necessarily improve comprehension.

H. Products as Memory Markers.

1. The pictures we take of ourselves using products and services can serve as powerful retrieval cues.

2. Our cherished possessions (especially furniture, visual art, photos) and foods can jog memories about sensory experiences, friends and loved ones, and breaking away from parents/partners.

3. Cherished possessions are said to have mnemonic qualities when they serve as a form of external memory that prompt us to retrieve episodic memories.

4. A stimulus may evoke a weakened response even years after we first perceived it.

This is called spontaneous recovery.

Discussion Opportunity—Ask students to identify what types of things are nostalgic to them.

How could an advertiser appeal to this side of them and other college-age individuals? Identify recent nostalgia campaigns and present them as illustrations.

I. Measuring Memory: Recognition Versus Recall 1. Two basic measures of impact are recognition and recall.

2. In a typical recognition test, researchers show ads to subjects one at a time and ask if they have seen them before.

3. Free recall tests ask consumers to independently think of what they have seen without being prompted for this information first.

4. Recognition scores are usually better than recall scores because recognition is a simpler process and the consumer has more retrieval cues available.

5. Recall tends to be more important in situations where consumers do not have product data at their disposals and need to rely on memory to generate the information, whereas recognition is important in a shopping context where consumers are exposed to lots of stimuli and need to recognize a package. .

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6. Analysts have questioned whether existing measures accurately assess these dimensions, in part because the results from the measuring instrument may not be what we intended to measure or subjects may give the answer they believe the experimenter wants to hear (response bias).

7. People are prone to forgetting information or retaining inaccurate memories. a. Omitting means leaving facts out. b. Averaging means the tendency to normalize memories by not reporting extreme cases. c. Telescoping refers to an inaccurate recall of time. d. The illusion of truth effect refers to telling people that a consumer claim is false, which can make them to misremember it as true because repetition of the claim increases familiarity but respondents do not remember the context where the claim is debunked.

8. Recall and recognition measures may not accurately capture the impact of feeling ads, which arouse emotions to develop brands over time vs. conveying concrete product benefits.

9. Recall does not translate into preference for the product.

Discussion Opportunity—As an illustration between recognition and recall, conduct this exercise to show students that they can recognize information without really recalling specifics.

Show examples of various corporate symbols (brand symbols or celebrity endorsers) that students might recognize. Ask them which brands are represented by each (recognition). Then, ask them to give specific slogans, information, or other specifics related to each (recall).

Discussion Opportunity—What is something hard for you to remember (in a personal sense and in a consumer behavior or product sense)? Why do you think this happens? What do you think would be a good strategy to attempt to overcome this problem?

IX. Bittersweet Memories: The Marketing Power of Nostalgia A. Marketers may resurrect popular characters and stories from days gone by with the hope that the consumers’ fond memories will motivate them to revisit the past.

1. Nostalgia describes a bittersweet emotion where we view the past with both sadness and longing.

2. A retro brand is an updated version of a brand from a historical period.

3. A nostalgia index measures the critical ages during which our preferences are likely to form and endure over time.

*****Use Consumer Behavior Challenge #24 Here *****

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End-of-Chapter Support Material SUMMARY OF SPECIAL FEATURE BOXES 1.

Marketing Opportunity Events we experience when we are young often have a lasting influence on our preferences as we get older, 2.

The Tangled Web People get attached to favorite logos and social media provides a way for consumers to give feedback. Gap found this out when it changed its logo in 2010. Fans took to social media to criticize the new logo. Before long, Gap announced on its Facebook page that the old logo would return.

3.

Marketing Opportunity Luxury car maker Bentley lends it name and image to many types of products. Porsche Design has opened it retail stores to sell luggage, bikes, desk pieces, and couture clothing, all with the goal of extending the Porsche driving experience.

4.

Marketing Opportunity Media helps socialize children in to gender roles and sexual identity for consumer behavior.

5.

CB As I See It: Paul Connell, Stony Brook University Children learn many of the skills needed to be consumers as they age. . When children are exposed to ads before they have learned the purpose of advertising, childhood have effects that are long lasting. There are stronger emotional connections to elements featured in the advertising, such as brand characters, resulting in less critical evaluation of products.

6.

Marketing Opportunity Marketers try to give brands vivid names that conjure up an image or story. This can influence consumer evaluations of the brand.

7.

CB As I See It: John Lynch, University of Colorado-Boulder Consumers respond to resource scarcity by retrieving from memory alternative ways to spend a resource, evaluating opportunity costs. When consumers perceive little constraints, neither efficiency nor priority plans are considered. When there is moderate constraint, both plans are considered. When consumers have significant constraint, priority plans are generated faster and more frequently.

8.

The Tangled Web Sites such as Facebook are a great way to store memories, but there is little control over who can access those memories. Newer technologies are allowing memories to be shared, then removed from the site.

9.

Marketing Opportunity .

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As people age, their memory retrieval ability becomes inferior. Online games such as Sudoku and Brain Box helps to keep memory retrieval systems sharp.

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REVIEW QUESTIONS 4-1.

What is the difference between an unconditioned stimulus and a conditioned stimulus?

Ivan Pavlov, a Russian physiologist doing research on digestion in animals, first demonstrated this phenomenon in dogs. Pavlov induced classically conditioned learning by pairing a neutral stimulus (a bell) with a stimulus known to cause a salivation response in dogs (he squirted dried meat powder into their mouths). The powder was an unconditioned stimulus (UCS) because it was naturally capable of causing the response.

Over time, the bell became a conditioned stimulus (CS); it did not initially cause salivation, but the dogs learned to associate the bell with the meat powder and began to salivate at the sound of the bell only.

(5 minutes, Chapter Objective 2, AACSB: Application of Knowledge)

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Give an example of a halo effect in marketing.

People react to other, similar stimuli in much the same way they responded to the original stimulus; this generalization is called a halo effect. A drugstore’s bottle of private brand mouthwash deliberately packaged to resemble Listerine mouthwash may evoke a similar response among consumers, who assume that this “me-too” product shares other characteristics of the original.

(5 minutes, Chapter Objective 2, AACSB: Reflective Thinking)

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How can marketers use repetition to increase the likelihood that consumers will learn about their brand?

Many classic advertising campaigns consist of product slogans that have been repeated so many times that they are etched in consumers’ minds. Conditioning will not occur or will take longer if the CS is only occasionally paired with the UCS. One result of this lack of association may be extinction that occurs when effects of prior conditioning reduce and finally disappear. This can occur, for example, when a product is overexposed in the marketplace so that its original allure is lost.

(5 minutes, Chapter Objectives 2, 3 and 9, AACSB: Reflective Thinking)

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Why is it not necessarily a good idea to advertise a product in a commercial where a really popular song plays in the background?

A popular song might also be heard in many situations in which the product is not present. When the unconditioned stimulus appears in the absence of the conditioned stimulus, it can lead to extinction of the effect of conditioning.

(5 minutes, Chapter Objective 2, AACSB: Reflective Thinking)

4-5.

What is the difference between classical conditioning and instrumental conditioning?

Classical conditioning occurs when a stimulus that elicits a response is paired with another stimulus that initially does not elicit a response on its own. Over time, this second stimulus causes a similar response because it is associated with the first stimulus.

Instrumental conditioning, also known as operant conditioning, occurs as the individual learns to perform behaviors that produce positive outcomes and to avoid those that yield negative outcomes.

(5 minutes, Chapter Objective 4, AACSB: Reflective Thinking)

4-6.

What is the major difference between behavioral and cognitive theories of learning? .

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In contrast to behavioral theories of learning, cognitive learning theory approaches stress the importance of internal mental processes. This perspective views people as problem solvers who actively use information from the world around them to master their environment. Supporters of this view also stress the role of creativity and insight during the learning process.

(5 minutes, Chapter Objective 5, AACSB: Reflective Thinking) 4-7.

Name the three stages of information processing as we commit information about products to memory.

Encoding, storage, and retrieval.

(5 minutes, Chapter Objective 6,AACSB: Reflective Thinking -)

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What is external memory and why is it important to marketers?

During the consumer decision-making process, this internal memory is combined with external memory that includes all of the product details on packages and other marketing stimuli that permit brand alternatives to be identified and evaluated.

(5 minutes, Chapter Objective 5, AACSB: Reflective Thinking

4-9.

Give an example of an episodic memory.

Episodic memories relate to events that are personally relevant. As a result, a person’s motivation to retain these memories will likely be strong. Couples often have “their song” that reminds them of their first date or wedding or some remember the first time they went on a date or what happened at their high school prom.

(5 minutes, Chapter Objective 5, AACSB: Reflective Thinking)

4-10. Why do U.S. phone numbers have seven digits?

Initially, researchers believed that STM was capable of processing between five and nine chunks of information at a time, and for this reason they designed phone numbers to have seven digits.

(5 minutes, Chapter Objective 6, AACSB: Reflective Thinking) 4-11. List the three types of memory, and explain how they work together.

Sensory memory permits storage of the information we receive from our senses. This storage is temporary; it lasts a couple of seconds at most. Short-term memory (STM) also stores information for a limited period, and it has limited capacity. Similar to a computer, this system can be regarded as working memory; it holds the information we are currently processing. Long-term memory (LTM) is the system that allows us to retain information for a long period. Elaborative rehearsal is required in order for information to enter into long-term memory from short-term memory. This process involves thinking about the meaning of a stimulus and relating it to other information already in memory.

(10 minutes, Chapter Objective 6, AACSB: Reflective Thinking)

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4-12. How is associative memory like a spider web?

Knowledge structures can be thought of as complex spider webs filled with pieces of data. This information is placed into nodes connected by associative links within these structures. Pieces of information that are seen as similar in some way are chunked together under some more abstract category. New, incoming information is interpreted to be consistent with the structure already in place.

(10 minutes, Chapter Objective 7, AACSB: Reflective Thinking) 4-13. How does the likelihood that a person wants to use an ATM machine relate to a schema?

The desire to follow a script or schema helps to explain why such service innovations as automatic bank machines, self-service gas stations, or “scan-your-own” grocery checkouts have met with resistance by some consumers, who have trouble adapting to a new sequence of events.

(5 minutes, Chapter Objective 7, AACSB: Reflective Thinking) 4-14. Why does a pioneering brand have a memory advantage over follower brands?

Some evidence indicates that information about a pioneering brand (the first brand to enter a market) is more easily retrieved from memory than follower brands because the first product’s introduction is likely to be distinctive and, for the time being, no competitors divert the consumer’s attention.

(10 minutes, Chapter Objective 7, AACSB: Analytic Skills) 4-15. If a consumer is familiar with a product, advertising for it can work both ways by either enhancing or diminishing recall. Why? As a rule, prior familiarity with an item enhances its recall. This is one of the basic goals of marketers who are trying to create and maintain awareness of their products. The more experience a consumer has with a product, the better use he or she is able to make of product information. However, there is a possible fly in the ointment: As noted earlier in the chapter, some evidence indicates that extreme familiarity can result in inferior learning and recall. When consumers are highly familiar with a brand or an advertisement, they may attend to fewer attributes because they do not believe that any additional effort will yield a gain in knowledge.

(5 minutes, Chapter Objective 7, AACSB: Reflective Thinking) 4-16. Define nostalgia, and tell why it is such a widely used advertising strategy.

We can describe nostalgia as a bittersweet emotion; the past is viewed with both sadness and longing. References to “the good old days” are increasingly common, as advertisers call up memories of youth—and hope these feelings will translate to what they are selling today.

(5 minutes, Chapter Objective 9, AACSB: Reflective Thinking) 4-17. Name the two basic measures of memory and describe how they differ from one another.

Two basic measures of impact are recognition and recall. In the typical recognition test, subjects are shown ads one at a time and asked if they have seen them before. In contrast, free recall tests ask consumers to independently think of what they have seen without .

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being prompted for this information first—obviously this task requires greater effort on the part of respondents.

(15 minutes, Chapter Objective 9, AACSB: Reflective Thinking) 4-18. List three problems with measures of memory for advertising.

Response biases, memory lapses, and memory for facts versus feelings.

(5 minutes, Chapter Objective 9, AACSB: Reflective Thinking) 4-19. How do different types of reinforcement enhance learning? How does the strategy of frequency marketing relate to conditioning?

Businesses can shape behavior when they gradually reinforce actions with rewards.

Instrumental conditioning occurs when behavior produce positive outcome and we learn to avoid those behaviors that do not produce desired outcomes. Shaping is a reinforcement tool that rewards intermediate actions. Positive reinforcement strengthens the response and we learn appropriate behavior. Negative reinforcement also strengthens the response as we learn to avoid a certain behavior. Punishment is an unpleasant event that follows an action. When a person no longer receives a desired outcome for an action, they will eventually quit performing the action. Frequency marketing rewards regular purchasers with prizes as they spend more. This positive reinforcement encourages consumers to spend more, and increase reward levels.

(5 minutes, Chapter Objective 4, AACSB: Reflective Thinking) 4-20. How does learning new information make it more likely that we’ll forget things we’ve already learned?

Decay causes a structural change in how we learn and remember. Forgetting also occurs because of interference. When we learn new information, it displaces previous information. Because we store information in memory as nodes that link to one another, we are more likely to retrieve a meaning concept that is connected by a larger number of links. As we learn new information, a stimulus loses its effectiveness in retrieving old responses.

(5 minutes, Chapter Objective 7, AACSB: Reflective Thinking)

CONSUMER BEHAVIOR CHALLENGE DISCUSS 4-21. To hasten kids’ introduction to social media, a team of Finnish designers invented a blocksorting toy that also works like Twitter. It allows preverbal kids to grab colorful blocks with icons for sleeping, eating, or brushing their teeth; the kids then fit them into slots to indicate what they’re up to. The device then transmits the “status update” to light up the corresponding block-shape on the same toy in another household. Should very young children be introduced to social media this way?

Answers will vary, some students will think social media is good for young children, while others will think it is bad for young children’s educational growth. .

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4-22. In his book Blink: The Power of Thinking without Thinking, author Malcolm Gladwell argues that hallowed marketing research techniques like focus groups aren’t effective because we usually react to products quickly and without much conscious thought so it’s better just to solicit consumers’ first impressions rather than getting them to think at length about why they buy. What is your position on this issue?

There are various concepts that students may apply to support both sides of this argument. Both classical conditioning and behavioral instrumental conditioning would support the idea that we make consumer decisions quickly and without much thought.

However, cognitive learning theory approaches stress the importance of internal mental processes. This perspective views people as problem solvers who actively use information from the world around them to master their environment.

(10 minutes, Chapter Objectives 2, 4 and 9, AACSB: Analytic Skills) 4-23.

Even food can facilitate recall: One study looked at how favorite recipes stimulate memories of the past. When the researchers asked informants to list three of their favorite recipes and to talk about these choices, they found that people tended to link them with memories of past events, such as childhood memories, family holidays, milestone events (such as dishes they only make on special holidays, liked corned beef and cabbage of St. Patrick’s Day), heirlooms (recipes handed down across generations), and the passing of time (e.g., only eating blueberry cobbler in the summer). Indeed, one of the most famous literary references is from the classic (3,000 page!) novel Remembrance of Things Past by Marcel Proust. The narrator dips a pastry (a “madeleine”) into his tea, and this action unleashes a flood of memories that drive the rest of the book. How might marketers try to tie these powerful food-related memories to branding strategies?

Students will think of their own memories and how senses can impact their own memories.

(10 minutes, Chapter Objectives 2, 4 and 9, AACSB: Analytic Skills)

4-24. Some die-hard fans were not pleased when the Rolling Stones sold the tune “Start Me Up” for about $4 million to Microsoft that wanted the classic song to promote its Windows 95 launch. The Beach Boys sold “Good Vibrations” to Cadbury Schweppes for its Sunkist soft drink, Steppenwolf offered its “Born to be Wild” to plug the Mercury Cougar, and even Bob Dylan sold “The Times They Are A-Changin’” to Coopers & Lybrand (now called PriceWaterhouseCoopers). Other rock legends have refused to play the commercial game, including Bruce Springsteen, the Grateful Dead, Led Zeppelin, Fleetwood Mac, R.E.M., and U2. According to U2’s manager, “Rock ‘n’ roll is the last vestige of independence. It is undignified to put that creative effort and hard work to the disposal of a soft drink or beer or car.” Singer Neil Young is especially adamant about not selling out; in his song “This Note’s For You,” he croons, “Ain’t singing for Pepsi, ain’t singing for Coke, I don’t sing for nobody, makes me look like a joke.” What is your take on this issue? How do you react when one of your favorite songs turns up in a commercial? Is this use of nostalgia an effective way to market a product? Why or why not?

Student responses on this issue will range from support to opposition of artists selling songs for commercial application. Their reasons for either will also vary. Some will like hearing familiar songs in commercial jingles because it grabs their attention, is more relevant to them, or prompts them to recall fond memories. Some will express support simply because it is the artists’ prerogative to sell what is theirs. Others will oppose this .

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practice for reasons similar to those expressed by the artists mentioned. It is likely that among business and marketing students, however, most will find nothing wrong with the commercial application of popular songs. Responses should reflect the concept that nostalgia in marketing can be effective because it can prompt positive emotions in consumers.

(15 minutes, Chapter Objectives 2 and 9, AACSB: Analytic Skills) APPLY 4-25. Devise a “product jingle memory test.” Compile a list of brands that are or have been associated with memorable jingles, such as Chiquita Banana, Alka-Seltzer, McDonald’s or even webuyanycar.com. Read this list to friends, and see how many jingles are remembered. You may be surprised at the level of recall.

Students should be able to generate a large number of product jingles for this “memory test.” Most of these will be highly advertised products that students have been exposed to recently. It might be surprising to note that many of the advertised products are not targeted at the student/consumer, and yet they will have high levels of recall for the jingles. As the instructor, you may want to develop your own list of older jingles (many of which the students will not remember) that students will find interesting, such as those based on older, popular songs (i.e., “I’d like to buy the world a Coke”).

(75 minutes, Chapter Objective 1, AACSB: Reflective Thinking) 4-26. A physician borrowed a page from product marketers when she asked their advice to help persuade people in the developing world to wash their hands habitually with soap.

Diseases and disorders caused by dirty hands—like diarrhea—kill a child somewhere in the world about every 15 seconds, and about half those deaths could be prevented with the regular use of soap. The project adapted techniques that major marketers use to encourage habitual product usage of items such as skin moisturizers, disinfecting wipes, air fresheners, water purifiers, toothpaste, and vitamins. For example, beer commercials often depict a group of guys together, because research shows that being with a group of friends tends to trigger habitual drinking! The researchers found that when people in Ghana experienced a feeling of disgust, this was a cue to wash their hands. However, as in many developing countries, toilets are actually a symbol of cleanliness because they have replaced pit latrines. So, an advertising campaign included messages that reminded people of the germs they could still pick up even in modern bathrooms— mothers and children walked out of restrooms with a glowing purple pigment on their hands that contaminated everything they touched. These images in turn triggered the habit of hand washing and the project resulted in a significant increase in the number of consumers who washed their hands with soap. How can other organizations that work to improve public health, the environment, or other social issues harness our knowledge about consumer learning and habitual behavior to create or reenergize positive habits?

This would make an excellent take-home assignment with discussion following during a later class. Consider assigning specific organizations or public health initiatives to students to contemplate how to apply marketing persuasion principles. Students should recognize the application of instrumental conditioning. Focus student work on schemas and priming. These are likely areas that will apply to public initiatives.

(45 minutes, Chapter Objective 4, AACSB: Reflective Thinking) .

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4-27. Identify some important characteristics for a product with a well-known brand name.

Based on these attributes, generate a list of possible brand extension or licensing opportunities, as well as some others that consumers would not be likely to accept.

Of course, the list of characteristics will depend on the product chosen. Generally, it will include distinctive aspects of products. For example, BIC has successfully extended the brand many times over in different product categories. In addition, the existing brand name benefited from the characteristics consumers associate with the name BIC—namely cheap, plastic, and disposable. Their attempts in the perfume and panty hose categories, however, were disasters. Because brand extension is based on the transfer of some positive product characteristics (either physical or emotional) to the new product, the list students generate should lend itself to identification of that “something” that would enable an extension to be successful.

(45 minutes, Chapter Objective 2, AACSB: Reflective Thinking) 4-28. Collect some pictures of “classic” products that have high nostalgia value. Show these pictures to others and allow them to free associate. Analyze the types of memories that are evoked, and think about how a marketer might employ these associations in a product’s promotional strategy.

Consumers’ responses to “classic” product pictures should prove interesting to students.

They should be encouraged to evaluate the types of meaning associated with products and asked to determine the relative effectiveness of various messages for different target consumer groups. The real emphasis, however, should be placed on students’ recommendations for translating the special meaning of these products for consumers into effective promotional messages.

(15 minutes, Chapter Objective 9, AACSB: Analytic Skills)

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CASE STUDY TEACHING NOTES Chapter 4 Case Study: Do Avatars Dream About Virtual Sheep?

Summary of Case In the years since virtual worlds came into being, marketers have been working to understand how the time people spend in virtual worlds influences the way they learn about brands and whether it impacts their relationship with the brand in the real world.

Suggestions for Presentation Organizations and educators are continuing to explore the impact of avatars and virtual worlds. You may wish to ask the class what virtual worlds they use and why.

Suggested Answers for Discussion Questions CS 4-1. How might classical conditioning operate for a consumer who visits a new tutoring Web site and is greeted by the Web site’s avatar who resembles Albert Einstein?

Einstein is associated with intelligence, so a consumer will feel that the website will make them smarter.

(10 minutes, Chapter Objective 7, AACSB: Application of Knowledge) CS 4-2. How might instrumental conditioning influence a consumer who purchases a new outfit for his avatar in a virtual world?

The new outfit will make them feel better about themselves.

(10 minutes, Chapter Objective 7, AACSB: Reflective Thinking) CS 4-3. Do consumers build associative networks from their avatar’s experience? If so, the associations from their avatar experience by any different from other shopping experiences? How would these networks impact the consumer’s ability to organize and retrieve information that they have learned?

Avatar’s will create different shopping experiences and the consumer will be able to retrieve information easier based on the association with the avatar.

(10 minutes, Chapter Objective 7, AACSB: Reflective Thinking)

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Additional Support Material STUDENT PROJECTS Individual Projects 1.

Ask students to visit a grocery store or a similar retail setting and discretely observe the behavior of individual shoppers and groups of shoppers for an extended period. Have them record any behaviors that they witness that could be examples of the following concepts: vicarious learning, incidental learning, classical conditioning, and instrumental conditioning. Have students present their findings to the class or discuss them in groups.

Some of these learning examples may be challenging to observe directly. Students may need to draw on their own exposure to marketing communications and make inferences about why consumers are behaving as they are. Vicarious learning examples should reference the idea that the consumer learned by watching someone else’s behavior and whether s/he received positive or negative reinforcement for that behavior. Incidental learning examples should reference the idea that the consumer learned about the product without necessarily having an interest in the product or product category. Classical conditioning examples will probably be the easiest to observe because the applications of stimulus generalization and the repetition of likeable spokes-characters or endorsers as cues are likely to be present. Instrumental conditioning examples may include frequency rewards or gifts with purchase.

(45 minutes, Chapter Objectives 1 2, 4 and 5, AACSB: Application of Knowledge Have students recall their first act of “green” consumption. Ask them to list the product involved and the sequence of actions they took. Ask them why they remembered it and how significant that was to their subsequent behaviors.

This individual project can be modified to reflect a number of consumption acts. If you choose to use green consumption, it provides an opportunity to tie the exercise to the concept of green marketing (chapter 1) and perceptions (chapter 2). To relate the project to the current chapter, help students identify how the consumption event is associated with other nodes in their minds and ask them to reflect specifically on how repetition or rehearsal may have strengthened the associations to help them recall the specific event.

(45 minutes, Chapter Objective 7, AACSB: Reflective Thinking) 2.

3.

Ask students to narrate the sequence of events that led to their first access and registration at a social networking site (www.facebook.com, www.myspace.com, www.orkut.com or others). Have them list some of the positive and negative reinforcements they have encountered at the site since they joined.

The exercise reinforces applications of instrumental conditioning of the consumer decision-making process, which will be explored in greater depth later in the text. It is important to note whether students distinguish between positive reinforcement (the presence of a reward in exchange for their behavior) and negative reinforcement

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(avoiding a negative outcome or the absence of a reward). In the context of Facebook, students may feel rewarded when someone likes their status. Students may also join or participate to avoid feeling left out or lonely because they do not see updates from others.

(25 minutes, Chapter Objective 4, AACSB: Reflective Thinking) Have students devise their own classical conditioning experiments involving a “green” product such as organic milk or similar products. Let them utilize UCS, CS, and CR. Look for students to identify the part of their experiment that is the unconditioned stimulus (UCS), which generates the desired response on its own; the conditioned stimulus (CS), which generates the response because of its association with the unconditioned stimulus; and the (desired) conditioned response (CR) that should ultimately be associated with the conditioned stimulus.

(30 minutes, Chapter Objective 2, AACSB: Reflective Thinking) 4.

5.

Many brands attempt to capitalize on positive associations that consumers have for competing brands by copying certain characteristics. Have students identify an example of this and relate it to the halo effect.

Students are likely to bring examples of private label or generic brands that try to leverage similar packaging to capitalize on consumers’ positive associations with national brands.

(15 minutes, Chapter Objective 2, AACSB: Reflective Thinking) 6.

Ask students to write their favorite brand name. They should then draw an associative network around the brand that includes three attributes/features, three benefits, three competitors, attributes, and benefits for the competing brands, etc. They can be allowed to add personal opinions and feelings about the brand to the network.

The exercise should help students visualize the web of connections between nodes that characterize the associative network theory of memory. You can tie the exercise to further exploration of the concept of the evoked set (since they identify competitors).

Since they start with brand identification, ask them to identify when the related nodes are brand-specific (claims), ad specific, product category specific, or related to evaluative reactions (positive or negative emotions).

(20 minutes, Chapter Objective 7, AACSB: Reflective Thinking) Have students create their schema for “made in the U.S.,” “made in Japan,” and “made in Germany” cars. What features and attributes would they include in each of the schemas?

Student associations with each schema will vary. Look for students to recognize that a schema is a cognitive framework that is developed through experience. Remind students that it is easier for consumers to encode information that is consistent with an existing schema than it is to encode information that is incongruent with our expectations based on experiences.

(20 minutes, Chapter Objective 7, AACSB: Reflective Thinking) 7.

8.

Assign students to locate a print advertisement that is a clear example of a marketer employing the concepts of stimulus generalization or stimulus discrimination. Have students present the ads to the class. .

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For stimulus generalization, students may select private label/generic brands that are packaged to look like the national counterpart, examples of companies that use family branding, product line extensions, or brands that license a brand name. For stimulus discrimination, students are likely to find examples where a national brand clarifies what distinguishes its brand from private label/generic competitors, and/or urges consumers not to settle for cheap imitations.

(20 minutes, Chapter Objective 2, AACSB: Reflective Thinking and Communication Abilities) 9.

Have students identify an example of both positive reinforcement and negative reinforcement in a marketing context. As students present their findings in class, have the class discuss how effective each example is at establishing the desired or intended behavior.

Examples will vary. In addition to looking for students to differentiate between positive and negative reinforcement, also look for evidence that they understand the difference between negative reinforcement and punishment.

(30 minutes, Chapter Objective 4, AACSB: Reflective Thinking and Communication Abilities) 10.

Ask students to observe their friends, roommates, and co-workers for an extended period to identify an incidence of modeling as it relates to a celebrity. Have them note how the four conditions of modeling are met. Is the celebrity a brand endorser? How might their behavior be positive/negative for the marketers of the brands(s) that the celebrity endorses?

The four conditions the student should include in his/her response include: • The consumer’s attention must be directed to a model that is desirable to emulate for reasons of attractiveness, competence, status, or similarity.

• The consumer must remember what is said or done by the model.

• The consumer must convert this information into actions.

• The consumer must be motivated to perform these actions.

When celebrities are paid endorsers of a product, students may respond differently than if the celebrity appears to wear or use a product without being compensated. However, many students recognize that celebrities are given products in the hopes they will use them and influence others to use them. When you speak about negative effects of celebrity behaviors, students may think of Tiger Woods. You may also bring up the publicity stunt from Abercrombie & Fitch where they announced they would pay cast members of MTV’s show Jersey Shore not to wear their apparel because they did not want to be associated with the cast members’ images (Summer 2011).

(90 minutes, Chapter Objective 5, AACSB: Reflective Thinking and Communication Abilities) 11.

Have students think of specific examples where their sensory, short-term, and long-term memory have been activated by marketing information.

Sensory memory is activated when consumers are exposed to marketing stimuli. If the information passes through an attentional gate, it can be stored acoustically or semantically for a short period in short-term memory. To make it to long-term memory,

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students should recognize marketing efforts to increase the likelihood of rehearsal (e.g. repetitions, catchy slogans/jingles).

(15 minutes, Chapter Objective 6, AACSB: Reflective Thinking) 12.

Ask each student to complete the following assignment based on a popular national brand: Collect as many pieces of promotional material (ads, direct mail, etc.) as possible for the brand. Based on this promotional evidence, identify any bits of information that marketers intend to be associated with the brand. Create an associative network for the brand, integrating the documented nodes of information with other nodes.

This project gives students the opportunity to create a model from marketing stimuli instead of their memories, which may give them a different perspective on what the brand marketers are trying to communicate. It may provide an interesting discussion to compare what the student recalled on his/her own about the brand to what the marketing materials are trying to communicate, and why there are differences. Students will need time (1-2 weeks) to collect the marketing materials for the brand. Students will most likely identify nodes associated with brand claims, the ads, and the product category.

(75 minutes, Chapter Objective 7, AACSB: Reflective Thinking) 13.

Assign each student to ask three friends to list as many brands as they can remember for a product class of their choosing. Have them ask each friend questions about each brand on the list to get a better idea of why each might have been recalled. Then, have them identify whether familiarity, salience, or other factors influencing recall were present.

Were there differences between the first brands recalled and the others?

In general, familiarity with a brand, the salience/importance of the brand, and the novelty associated with the presentation of the brand are likely to enhance its recall. The exercise provides students with an opportunity to analyze the role of each factor for their friends, which should help reinforce how these factors affect recall.

(45 minutes, Chapter Objective 9, AACSB: Analytic Skills) 14.

Have students identify what they think are strategic efforts by marketers to cause the consumer to forget about competitor information by interfering with new information of their own.

Marketers may use similar ad backgrounds and/or claims to try to shift associations from a competitive brand to their brand. High levels of repetition may be used to increase the likelihood that a new association is formed that replaces the existing association.

Marketers may also provide information about different brand claims with the idea that remembering the new information may displace the original information about the competitive brand claims.

(25 minutes, Chapter Objective 7, AACSB: Reflective Thinking)

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Group Projects 1.

Create a long list of brand slogans from the past 10 or more years—e.g., Ford, where quality is job one; I want my MTV; Always Coca-Cola; Pizza-pizza (Little Caesar’s); BMW: the ultimate driving machine. Divide the class into teams or simply in half. Read the brand slogans one at a time, omitting the brand name. Award points to the first team to correctly identify the brand associated with each slogan. Afterward, point out how memory was strong, even for older slogans (some may be able to identify slogans from when they were very young children). Discuss why this is the case according to the principles of memory in the chapter.

Students should recognize that they are retrieving brand information from long-term memory. They may note differences are cognitive, physiological and situational factors that helped them retrieve (or caused them to forget) the slogans. Depending on the brands selected, they also may recognize stronger memories for pioneering brands and the effects of the brand spacing out repeated messages.

(20-30 minutes, Chapter Objectives 7 and 9, AACSB: Reflective Thinking 2.

Match the brand name to the slogan in class. Provide a list of 10 or 20 brand names along with as many slogans and have groups match them. As a homework assignment, they can then be asked to assume the role of an advertising agency and try to develop better (or humorous) slogans for these products. These can be presented in class and students can vote on the best slogans that were developed.

This is a fun exercise, and can help reinforce the idea that salience and novelty contribute to recall. The homework assignment is an opportunity for students to flex their creative muscles and the competitive aspect may be enjoyable for the students.

(20-30 minutes, Chapter Objectives 7 and 9, AACSB: Reflective Thinking 3.

Have student groups design an experiment that would demonstrate the occurrence of either classical conditioning or instrumental conditioning. Have them conduct their experiment on members of the class.

Individual project idea #4 asks an individual student to design an experiment to demonstrate the occurrence of classical conditioning. If students select classical conditioning, ask them to identify the part of their experiment that is the unconditioned stimulus (UCS), which generates the desired response on its own; the conditioned stimulus (CS), which generates the response because of its association with the unconditioned stimulus; and the (desired) conditioned response (CR) that should ultimately be associated with the conditioned stimulus. For instrumental conditioning, ask them to identify the behavior, the reward, and the desired consumer response.

(45 minutes, Chapter Objectives 2 and 4, AACSB: Reflective Thinking) 4.

Have student groups visit a grocery store. How are marketers taking advantage of consumer ability to “chunk” information through strategies used on packaging?

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Brand names (which represent a chunk of information about the brand), images and product descriptors on labels (e.g. natural, which represents a chunk of associations with the word) are likely to show up in student responses.

(30 minutes, Chapter Objective 7, AACSB: Reflective Thinking,) 5.

Ask groups of students to design an experiment to test the process of state-dependent retrieval. Have them conduct the experiment on ten individuals, five in a mood-congruent condition and five in a mood-incongruent condition. Have the groups present their experiments and findings to the class.

Students may use films or candy to alter moods, and should maintain a common recall task across the two groups so the mood congruency is the only manipulated variable.

(90 minutes, Chapter Objective 7, AACSB: Analytic Skills and Communication Abilities) 6.

Have student groups create a list of things that make them nostalgic. Then, during a period of a few days, have each of them identify ways that marketers of products targeted toward them have focused on any of these elements of nostalgia. Can they identify any nostalgia brands that are focused at their feelings of nostalgia? Have them share their findings with group members.

Student responses should reflect their understanding that nostalgia describes a bittersweet emotion where we view the past with both sadness and longing. Student examples are likely to include music, food and beverages, which are often salient to students. Nostalgia brands may include retro brands (e.g. the Snoopy Sno Cone Machine that was recently reintroduced by Sababa Toys).

(20-30 minutes, Chapter Objective 9, AACSB: Reflective Thinking)

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eLAB Individual Assignments 1.

Go to www.BEaREP.com. Tens of thousands of new products are introduced every year.

Due to various barriers to entry, the vast majority of new products fail. One company has an approach that will help new products gain exposure. What is the approach taken by BEaREP.com? Which learning theory in this chapter can be directly applied to this approach? Considering this learning theory, how might the BEaREP.com approach work or not work?

BEaREP.com utilizes a network of consumers who communicate with retailers on behalf of manufacturers. Consumers are rewarded by the company (Wizard Industries/Sample Rewards) when the retailer orders the product from the manufacturer. The idea that consumers are rewarded in response to an action is consistent with instrumental conditioning, which is one of the behavioral learning theories discussed in the chapter.

For the approach to work, the reward must be attainable and meaningful (have value) to consumers.

(15 minutes, Chapter Objective 4, AACSB: Reflective Thinking) 2.

Go to www.levis.com. Levis Strauss is a brand that is 150 years old. However, the long dominant player in the jeans and apparel industry has struggled in recent years to regain market share that it has lost to brands that are more youthful. Visit their website and discuss what strategies the company appears to be using to attract Generation Y (30 million plus individuals born between 1986 and 2002). What forms of learning is the company attempting to use to reacquire a youthful audience? Be specific in your description and provide illustrations of your ideas from the website to support chapter concepts.

Levis.com promotes its products with appeals to individualism, innovation/progress, achievement and social activism. They use social media (blogs, Facebook, twitter, and mobile updates) to communicate with and connect to their target audience. They may use rewards to motivate some behaviors (e.g. free shipping for a purchase > $100; sign up for email and we’ll give you a code for free shipping) and they use attractive models to display their apparel. Students may categorize the use of attractive model as an effort to encourage observational learning or they may categorize it as an application of classical conditioning, since the marketer may anticipate positive feelings toward the model will transfer to the apparel s/he is wearing. Students may also identify a second application of classical conditioning: the efforts toward social activism may generate goodwill that transfers to Levis.

(25 minutes, Chapter Objective 4, AACSB: Reflective Thinking,) 3.

Go to www.gogorillamedia.com. Become familiar with the advertising product offerings from this company. What previously useless space is this company turning into valuable advertising space? What advertisers might be most interested in the various types of ad space options? How would each affect learning and memory? What memory processes would be most critical to the success of the different ad options? .

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The URL directs students to a blog for an agency that specializes in non-traditional media, including guerrilla marketing. Different ad space options may help firms break through advertising clutter, which will increase the likelihood of exposure. Exposure is a key to familiarity. Novel stimuli are also more likely to be recalled. This includes novel presentations of messages, like those offered by non-traditional media. Students can reference Figure 6.3, which summarizes the memory process.

(20 minutes, Chapter Objective 5, AACSB: Reflective Thinking) Group Assignments 1.

Go to www.mitchellandness.com. Many companies have incorporated an element of nostalgia into their strategies to help boost sales. However, this company’s product line relies entirely on nostalgia. Mitchell and Ness has achieved substantial success with a line of throwback sports apparel. As a group, create a profile for the market(s) you think this company is targeting. Explain how nostalgia is the cornerstone of this company’s success and how this principle works by applying learning and memory processes. Based on your analysis, design a print ad that emphasizes the “nostalgia” theme for this company’s products.

The profile will likely include demographic (gender, income, age) and psychographic (sports fans) variables. Look for students to relate the needs of this target audience to the concept of nostalgia – looking back with sadness and longing on the “good old days”. These marketers are trying to associate a product with fond memories, which is an application of classical conditioning. The resulting creative should consider the target audience and may attempt to activate associations with the good old days.

(20 minutes, Chapter Objective 9, AACSB: Analytic Skills)

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Chapter 5: MOTIVATION AND AFFECT CHAPTER OBJECTIVES When you finish reading this chapter, you will understand why: 1. Products can satisfy a range of consumer needs.

2. Consumers experience different kinds of motivational conflicts that can impact their purchase decisions.

3. Consumers experience a range of affective responses to products and marketing messages.

4. The way we evaluate and choose a product depends on our degree of involvement with the product, the marketing message, or the purchase situation.

CHAPTER SUMMARY Products can satisfy a range of consumer needs.

Marketers try to satisfy consumer needs, but the reasons people purchase any product can vary widely. The identification of consumer motives is an important step to ensure that a product will satisfy appropriate needs. Traditional approaches to consumer behavior focus on the abilities of products to satisfy rational needs (utilitarian motives), but hedonic motives (such as the need for exploration or for fun) also play a key role in many purchase decisions.

Maslow’s hierarchy of needs demonstrates that the same product can satisfy different needs.

Consumers experience different kinds of motivational conflicts that can impact their purchase decisions.

Motivation refers to the processes that lead people to behave as they do. It occurs when a need is aroused that the consumer wishes to satisfy. A goal has valence, which means that it can be positive or negative. We direct our behavior towards goals we value positively, we are motivated to approach the goal and seek products to reach it. However, we may also be motivated to avoid a negative outcome rather than achieve a positive outcome.

Consumer experience a range of affective responses to products and marketing messages.

Affective responses can be mild (evaluations), moderate (moods), or strong (emotions).

Marketers often try to elicit a positive emotional response via advertising or other communication channels so that consumers form a bond (or lovemark) with their offering. A lot of the content on social media reflects affective responses that people post, so these platforms are a rich source of information for marketers to gauge how consumers feel about their brands.

The way we evaluate and choose a product depends on our degree of involvement with the product, the marketing message, or the purchase situation.

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Product involvement can range from very low where consumers make purchase decisions based on inertia, to high, where they form strong bonds with favorite brands (cult products). Marketing strategists also need to consider consumers’ extent of engagement with the messages about their products and the environments in which consumption of these products occur.

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CHAPTER OUTLINE I. The Motivation Process: Why Ask Why? A. Motivation refers to the processes that lead people to behave as they do. It occurs when a need is aroused that the consumer wishes to satisfy.

B. Needs can be: 1. Utilitarian—a desire to achieve some functional or practical benefit.

2. Hedonic—an experiential need, involving emotional responses or fantasies.

C. The desired end state is the consumer’s goal. Marketers try to create products and services that will provide the desired benefits and permit the consumer to reduce tension between a desired state and an actual state.

D. The magnitude of tension a need creates (or degree of arousal), which determines the urgency the consumer feels to reduce it, is called a drive.

E. Personal and cultural factors combine to create a want. This is one manifestation of a need. Once a goal is attained, tension is reduced and the motivation recedes.

F. Motivation can be described in terms of: 1. Its strength (the pull it exerts on the consumer) 2. Its direction (the particular way a consumer attempts to reduce it/tension) Discussion Opportunity—Ask: Pretend you are to explain motivation to a friend. What would you say? What examples would you use? (Do the same substituting goal, drive, and want.)

Discussion Opportunity—Bring in examples of magazine ads that demonstrate an attempt to activate (a) a utilitarian need or (b) a hedonic need.

G. Motivational Strength 1. The degree to which a person is willing to expend energy to reach one goal as opposed to another reflects his or her underlying motivation to attain that goal.

2. Early work on motivation ascribed behavior to instinct (innate patterns of behavior that are universal in a species), but this view is largely discredited because it is hard to prove without a circular explanation (tautology).

3. Drive theory focuses on biological needs that produce unpleasant states of arousal. a. Goal-oriented behavior attempts to reduce or eliminate an unpleasant state and return homeostasis, or a balanced state. b. Some consumer behaviors, like delaying gratification, run counter to predictions of drive theory.

4. Expectancy theory suggests that behavior is largely pulled by expectations of achieving desirable outcomes—positive incentives—rather than pushed from within.

We choose products because we expect the choice to have positive consequences.

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Discussion Opportunity—Ask: Can you think of purchase situations that illustrate drive theory and expectancy theory? Which one of the theories do you think is superior?

Discussion Opportunity—If a car of tourists drives into an unfamiliar town at meal time and stops at McDonald’s instead of an equally attractive and price-competitive JOE’S Eats, which of the two theories (expectancy or drive) would probably be at work? How would JOE’S combat this?

H. Motivational Direction Needs versus Wants 1. We are born with a need for certain elements necessary to maintain life such as food, water, air, and shelter (biogenic needs).

2. Psychogenic needs include needs for status, power, and affiliation, and reflect the priorities of a culture.

3. Utilitarian needs emphasize objective, tangible attributes of a product (e.g. fat, calories, protein in a cheeseburger).

4. Hedonic needs are subjective and experiential. The product may be viewed for excitement, self-confidence, or fantasy.

5. Productivity orientation refers to continual striving to use time constructively.

Discussion Opportunity—Ask: What is a product or service you could purchase to fulfill a psychogenic need? Utilitarian need? Hedonic need? How would a marketer advertise to you with respect to fulfilling these needs? How would you know that you had fulfilled the need?

6. Motivation and Emotion a. Motivation is largely driven by affect (raw emotion). b. We are driven to heighten positive emotions to reduce negative feelings. c. Marketing activities try to alter mood and link products or services to affect. d. Social media platforms provide an outlet for consumers to share emotions. Some marketers monitor and try to improve these emotions. e. Sentiment analysis (opinion mining) collects and analyzes words people use when they describe a product/company and creates a word-phrase dictionary (library) to code the data to paint a picture of how people are talking about the product.

Discussion Opportunity—ToneCheck is a sentiment analysis program that reports on emotions it detects in people’s emails. How can this practice help marketers provide value to consumers?

Is this ethical? Why or why not?

II. Motivational conflicts A. A goal has valence, which means that it can be positive or negative.

1. We are motivated to approach goals we value positively.

2. We are motivated to avoid negative outcomes.

B. Figure 4.1 shows there are three general types of conflicts we should understand.

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*****Use Figure 5.1 Here ***** Discussion Opportunity—Give an illustration of when motives conflict with one another in purchasing situations. Ask: Can anyone think of another example of when motives conflict?

1. Approach-approach conflict—a person must choose between two desirable alternatives such as choosing between two favorite brands of automobiles.

1. The theory of cognitive dissonance is based on the premise that people have a need for order and consistency in their lives and that a state of tension is created when beliefs or behaviors conflict with one another.

2. A state of dissonance exists when there is a psychological inconsistency between two or more beliefs or behaviors.

3. People attempt to reduce dissonance, sometimes by rationalizing their choice by finding flaws in the alternative they did not choose.

Discussion Opportunity—Ask: How could a marketer use the theory of cognitive dissonance to their advantage? What do you think of Miller’s classic “Tastes Great, Less Filling” campaign?

2. Approach-avoidance conflict—many products or services we desire have negative consequences attached to them. An example wanting Twinkies but feeling like a glutton.

3. Avoidance-avoidance conflict—a choice between two undesirable alternatives such as having to spend more on an older car or buy a newer more expensive car.

Discussion Opportunity—Give an illustration of each of the three major forms of conflict. You might even find examples of advertisements that demonstrate the three conflict situations. Ask: How can marketers use these conflicts to their advantage?

C. How Do We Classify Consumer Needs?

1. Henry Murray’s classification of twenty psychogenic needs, such as the need for autonomy (being independent), defendance (defending the self against criticism) and play (engaging in pleasurable activities) are the basis for personality tests like the Thematic Apperception Test (TAT).

2. Other motivational approaches focus on specific needs and their ramifications for behavior.

3. Individuals with a high need for achievement strongly value personal accomplishment.

4. Individuals with a high need for affiliation want to be in the company of other people (e.g. participate in team sports, frequent bars) a. Individuals with a high need for power want to control their environment and master their surroundings.

5. Individuals with a high need for uniqueness want to assert their individual identities and seek products that bring out the individual’s distinctive qualities.

D. Abraham Maslow’s Hierarchy of Needs suggests the order of development in a hierarchy of biogenic and psychogenic needs is fixed – we need to attain a level before we activate the need for the next level.

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1. It is difficult to achieve ultimate goals like justice and beauty. Most consumers have to be satisfied with glimpses of self-actualized states, or peak experiences.

2. Issues with applying the hierarchy: a. Oversimplification of consumer needs.

E. Hierarchy too culture-bound (assumptions apply to Western culture). iii. The levels of needs are Physiological, Safety, Belonging, Ego Needs, and Self-Actualization (see Figure 5.2) At each level, the person seeks different product benefits.

F. Social media and web-based companies can help satisfy different levels of needs.

III. Affect 1. Types of Affective Responses A. Evaluations are valenced (positive or negative) reactions to events and objects that are not accompanied by high levels of physiological arousal.

B. Moods involve temporary positive or negative affective state accompanied by moderate levels of arousal.

C. Emotions such as happiness, anger, and fear tend to be more intense and often relate to a specific triggering event such as receiving an awesome gift.

D. Helping others as a way to resolve one’s own negative moods is knows as negative state relief 2. Mood A. Mood congruency refers to the idea that our judgements tend to shape our moods.

B. Envy is a negative emotion associated with the desire to reduce the gap between one self and someone who is supervisor on some dimension.

C. Guilt is defined as “an individual’s unpleasant emotional state associated with possible objections to his or her actions, inaction, circumstances, or intentions.”

D. Embarrassment is an emotion driven by a concern for what others think about us.

*****Use Figure 5.2 Here ***** *****Use Consumer Behavior Challenge Here ***** Discuss #5 Discussion Opportunity—(a) Tell the class about a product you could buy that could fit into all five levels of Maslow’s hierarchy of needs; (b) Bring an advertisement to class that demonstrates each one of the needs (you may have to bring five ads).

3. Positive Affect A. Happiness is a mental stare of well-being characterized by positive emotions.

1. We are wired to engage in material accumulation, the instinct to earn or have more than we can consume.

2. Often, the experience is more important than the material acquisition.

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4. Negative Affect A. Disgust evolved as a method to protect us from contamination. Disgust exerts a powerful effect on our judgement.

B. Envy is a negative emotion associated with the desire to reduce the gap between what you and someone who is superior in one dimension.

C. Guilt is an unpleasant emotional state associated with potential objections to one’s actions, inactions, or circumstances.

D. Embarrassment is driven by a concern for what others think about us or our situation.

IV. Consumer Involvement 1. Consumer involvement is “a person’s perceived relevance of the object based on their inherent needs, values, and interests.”

A. Objects can be products, brands, advertisements or purchase situations.

B. The more you feel knowing more about a product will help you achieve a goal, the more you’ll be motivated to pay attention to information about it. *****Use Figure 5.3 Here ***** Discussion Opportunity—Ask: Who can give me an example of involvement with a product category or brand? How can marketers use involvement to construct advertising campaigns?

C. Levels of Involvement: From Inertia to Passion a. The type of information processing that will occur depends upon the consumer’s level of involvement, which can be conceived as a continuum. i. Simple processing—only basic features of a message are considered. ii. Elaboration—information is linked to one’s preexisting knowledge systems. b. Inertia characterizes consumption at the low end of involvement. i. In inertia, decisions are made out of habit because the consumer lacks the information to consider alternatives. ii. On the other end of the continuum, decisions can be very passionate and carry great meaning for a person. c. In consumer situations of high involvement, the consumer enters a flow state, which has these qualities: i. A sense of playfulness ii. A feeling of being in control iii. Concentration and highly focused attention iv. Mental enjoyment of the activity for its own sake v. A distorted sense of time vi. A match between the challenge at hand and one’s skills d. Cult products command fierce consumer loyalty, devotion, even worship.

*****Use Consumer Behavior Challenge Here ***** .

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Discuss #4 Discussion Opportunity—Ask the class to think of a time when they purchased something based on the concept of inertia or passion. Have students share what they thought of.

D. The Many Faces of Involvement a. Product involvement refers to the consumer’s level of interest in a particular product. Product decisions are likely to be highly involving if the consumer believes there is a perceived risk. Figure 5.4 lists five kinds of risk. * Monetary risk * Functional risk * Physical risk * Social risk * Psychological risk *****Use Table 5.1 Here ***** Discussion Opportunity—Create a handout using the consumer involvement scale in Table 5.1 to measure involvement of two or three different products. Have the students quickly respond to the scale and total their scores. Ask for general ranges of scores for each product or have specific students share their scores. Encourage students to discuss the results and whether or not they accurately describe how they feel about each product.

E. Message-response involvement (advertising involvement) refers to the consumer’s interest in processing marketing communications. i. Television is a low-involvement medium because the viewer is passive/exerts little control. ii. Print is a high-involvement medium because the reader controls whether s/he moves on to the next page or actively processes the information. iii. Well made ads and other messages can result in narrative transportation (people become immersed in the story-line). iv. Marketers use the following techniques to increase motivation to process information: v. Appeal to hedonic needs (sensory appeals) vi. Use novel stimuli (unusual cinematography, sudden silences, unexpected movements) vii. Use prominent stimuli (loud music, fast action) viii. Include celebrity endorsers ix. Provide value customers appreciate x.

Let customers make the messages (consumer-generated content can improve message-response involvement) xi. Invent new media platforms to grab consumer attention xii. Create spectacles (performances) where the message is a form of entertainment. Flashmobs (staged performances where hundreds of people

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dance or sing that are often videotaped and posted online) are a type of spectacle.

V. Purchase situation involvement refers to differences that may occur when buying the same object for different contexts.

A. Personalizing messages to shoppers at the time of purchase can increase purchase situation involvement.

B. Social games (multi-player, competitive, goal-oriented activities with defined rules of engagement and online connectivity) tend to heighten purchase situation involvement.

1. Brands can use social games to motivate behavior.

2. Transactional advertising rewards players with virtual goods (for use in the game), currency (used to advance the game), or codes (to unlock prizes/exclusive experiences) if they respond to a request.

Discussion Opportunity—Illustrate each of the “faces of involvement.” How would marketers make appeals in each of these areas?

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End-of-Chapter Support Material

SUMMARY OF SPECIAL FEATURE BOXES 1. CB As I See It; Michael Tuan Pham, Columbia University The decision making process has been described as a cognitive and rational process.

However, this does not capture the important role that feelings and emotions play in the consumers’ decisions and behaviors. Feelings and emotions matter in the decision making process. Distinct emotions such as pleasant, unpleasant, good, bad, pride etc. move consumers in different directions.

2. The Tangled Web Studies show that the longer people stay on Facebook, the worse they feel. This is attributed to feelings of wasting your life and results in bad feelings.

3. The Tangled Web Facebook got in to trouble when they admitted to adjusting news feeds without user knowledge. This was done as an experiment to see if posts influenced what Facebook user posted.

4. Marketing Opportunity Gamification offers a way to dramatically increase involvement, especially for activities that can benefit from motivation, such as financial literacy. The program Money Smart attracted more than 40,000 users in a year.

5. Marketing Opportunity The opportunity to personalize a product increases involvement because the item reflects our unique preferences. The IKEA effect is the concept that building a product such as a bookshelf also increases price.

6. CB As I See It; Debora Thompson, Georgetown University The co-creation of marketing with consumers is expected to significantly increase consumer engagement with a brand. While marketers should continue to engage consumers and benefit from their creativity, they should be careful about how they publicize this fact to the population at large.

7. Net Profit

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The Nielsen research company found a strong relationship with the number of messages on Twitter during the same segments on show, when they aired live. Nielsen found Twitter to be an accurate indicator of the overall audience’s interest in a show, right down to a specific scene.

8. Net Profit E-sports is the concept of watching other people play videogames, and has attracted thousands of fans.

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REVIEW QUESTIONS 5-1.

What is motivation and why is this idea so important to marketers?

Motivation refers to the processes that lead people to behave as they do. It occurs when a need is aroused that the consumer wishes to satisfy. Once a need has been activated, a state of tension exists that drives the consumer to attempt to reduce or eliminate the need.

Marketers try to create products and services that will provide the desired benefits and permit the consumer to reduce this tension.(5 minutes, Chapter Objective 1, AACSB: Reflective Thinking)

5-2.

Describe three types of motivational conflicts, citing an example of each from current marketing campaigns.

In an approach–approach conflict, a person must choose between two desirable alternatives. A student might be torn between going home for the holidays and going on a skiing trip with friends. Many of the products and services we desire have negative consequences attached to them as well. We may feel guilty or ostentatious when buying a status-laden product such as a fur coat, or we might feel like a glutton when contemplating a tempting package of Twinkies. An approach–avoidance conflict exists when we desire a goal but wish to avoid it at the same time. Sometimes consumers find themselves “caught between a rock and a hard place.” They may face a choice with two undesirable alternatives, for instance, the option of either throwing more money into an old car or buying a new one. Marketers frequently address an avoidance–avoidance conflict with messages that stress the unforeseen benefits of choosing one option (e.g., by emphasizing special credit plans to ease the pain of car payments).(10 minutes, Chapter Objective 1, AACSB: Reflective Thinking,)

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Explain the difference between a need and a want.

The specific way a need is satisfied depends on the individual’s unique history, learning experiences, and cultural environment. A want is the particular form of consumption used to satisfy a need. For example, two classmates may feel their stomachs rumbling during a lunchtime lecture. If neither person has eaten since the night before, the strength of their respective needs (hunger) would be about the same. However, the ways each person goes about satisfying this need might be quite different.(5-7 minutes, Chapter Objective 1, AACSB: Reflective Thinking)

5-4.

What is cognitive dissonance?

The theory of cognitive dissonance is based on the premise that people have a need for order and consistency in their lives and that a state of tension is created when beliefs or behaviors conflict with one another. The conflict that arises when choosing between two alternatives may be resolved through a process of cognitive dissonance reduction, where people are motivated to reduce this inconsistency (or dissonance) and thus eliminate unpleasant tension.(5 minutes, Chapter Objective 1, AACSB: Reflective Thinking)

5-5.

Name the levels in Maslow’s Hierarchy and give an example of a marketing appeal that is focused at each level.

• Physiological: ads that promise to provide a cure for hunger or thirst fall in this

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category • Safety: insurance companies, security companies and social marketing campaigns often focus on safety • Social: alcohol companies, fragrance companies, and oral hygiene companies often focus on social/belonging (as do dating websites) • Esteem: luxury goods, educational institutions, and athletic footwear/apparel manufacturers often focus on esteem • Self-actualization: spiritual organizations, some charities and the military focus on self-actualization You can also ask students to come up with their own examples for a single product to extend this exercise (see Application Exercise 1).(25 minutes, Chapter Objective 1, AACSB: Reflective Thinking)

5-6.

List three types of perceived risk and give an example of each?

Perceived risk means that a person believes there may be negative consequences if he or she chooses the wrong option. One type of risk is monetary risk. An example might be buying a lower priced product that also has a lower quality instead of a more expensive product with a better reputation for quality. Social risk affects self-esteem and selfconfidence. An example of a social risk would be in choosing one brand of headphones or cell phone over another, more popular brand. Psychological risks are based on affiliation and status. On type of psychological risk might be in the purchase of an expensive luxury automobile. (5 minutes, Chapter Objective 4, AACSB: Reflective Thinking)

5-7.

What is the difference between a mood and an emotion?

Moods involve temporary positive or negative affective states accompanied by moderate levels of arousal. Moods tends to be diffuse and not necessarily linked to a particular event (e.g. you might have just “woken up on the wrong side of the bed this morning”). Emotions such as happiness, anger, and fear tend to be more intense and often relate to a specific triggering event such as receiving an awesome gift.(5 minutes, Chapter Objective 3, AACSB: Reflective Thinking)

5-8.

What is mood congruency and how to advertisers use it?

Mood congruency refers to the idea that our judgments tend to be shaped by our moods.

For example, consumers judge the same products more positively when they are in a positive as opposed to a negative mood. This is why advertisers attempt to place their ads after humorous TV programming or create uplifting ad messages that put viewers in a good mood. Similarly, retailers work hard to make shoppers happy by playing “up” background music and encouraging staff to be friendly.(5 minutes, Chapter Objective 3, AACSB: Reflective Thinking)

5-9.

What is consumer involvement? How does this concept relate to motivation?

We can define involvement as “a person’s perceived relevance of the object based on their inherent needs, values, and interests.” The word object is used in the generic sense.

It refers to a product (or a brand), an advertisement, or a purchase situation. Consumers can find involvement in all these objects. Involvement increases consumer motivation to

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process information about the object.(10 minutes, Chapter Objective 2, AACSB: Reflective Thinking) 5-10. What are some strategies marketers can use to increase consumers’ involvement with their products?

• Appeal to the consumers’ hedonic needs. For example, ads using sensory appeals generate higher levels of attention.

• Use novel stimuli, such as unusual cinematography, sudden silences, or unexpected movements in commercials.

• Use prominent stimuli, such as loud music and fast action, to capture attention in commercials. In print formats, larger ads increase attention. In addition, viewers look longer at colored pictures as opposed to black and white.

• Include celebrity endorsers to generate higher interest in commercials.

• Provide value customers appreciate.

• Let customers make the messages (user-generated content).

• Invent new media platforms to grab consumer attention.

Create spectacles/performances where the message is a form of entertainment.(25 minutes, Chapter Objective 2, AACSB: Reflective Thinking)

CONSUMER BEHAVIOR CHALLENGE DISCUSS 5-11. Does money buy happiness? Why or why not?

Happiness is a mental state of well-being characterized by positive emotions. What makes us happy? Although many of us believe owning more shiny material goods is the key to happiness, research says otherwise. Several studies have reported that a greater emphasis on acquiring things actually links to lower levels of happiness. Younger people are more likely to associate happiness with excitement, whereas older people are more likely to associate this state with feelings of calm and peacefulness.(5 minutes, Chapter Objective 3, AACSB: Reflective Thinking) 5-12. Many consumers today seem to be obsessed with monitoring their emotions. They post about their feelings, track their sleep patterns, and fret about how often they’re “liked” on social media. Should happiness be quantified?

Student responses will vary. Students should include a discussion on the difference between happiness and material accumulation. The discussion should also include things marketers do to make us happy, and what they do that results in a negative effect. Types of negative affects including disgust, envy, guilt, and embarrassment should also be identified. (15 minutes, Chapter Objective 3, AACSB: Reflective Thinking) 5-13. What happens when advertising is embarrassing? A laxative product recently sponsored an Overnight Relief Sweepstakes with a slogan to suggest how the brand is supposed to work: “Enter today. Win tomorrow.” It’s become fairly commonplace in the United States to encounter ads for “unmentionables” like toilet paper, condoms, tampons, and .

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erectile dysfunction medications such as Viagra and Cialis. Is nothing sacred? Should “sensitive” products be advertised in public?

Student responses will vary. Students should define embarrassment as an emotion driven by a concern for what others think about us. To be embarrassed, we must be aware of, and care about, the audience that evaluates us. Students should explain that consumers get creative as they try to reduce embarrassment; they might try to hide a sensitive product among others in a shopping basket or choose a cashier who looks “more friendly” when they check out.

(15 minutes, Chapter Objective 3, AACSB: Reflective Thinking) 5-14. A group of psychologists argued that we need to revise Maslow’s Hierarchy of Needs.

They propose we should delete “self-actualization” from the pinnacle and replace it with “parenting.” Right below this peak, they added “mate retention” and “mate acquisition.”

They claim that too many people see Maslow’s triangle as “aspirational” – a description of what fulfilled individuals “should” do – rather than as an explanation of how human motivation actually works. Their perspective is evolutionary; if the only purpose of art, music, and literature is self-fulfillment, now does that contribute to the survival of the species? One of the proponents of this view observes, “If you are a good poet or a good musician, there is a reproductive payoff; women are attracted to men with these abilities.

What a man is saying when he is playing his guitar up there is ‘look at my good genes.’”

What do you think – do our motivations to buy, have, and be ultimately come down to survival of our gene pool?

Survival of the gene pool was typically designated to the bottom of the triangle as a physiological need, along with food and water. The positioning at the bottom of the triangle suggests the reproductive process is fundamental or part of the foundation, not something people aspire to do once they have accomplished everything else. That said, studies in biology suggest animals (in general) are less likely to reproduce when food and water resources are scarce. Students may have different opinions about when the desire to reproduce has the potential to drive consumer behavior. (15 minutes, Chapter Objective 1, AACSB: Reflective Thinking)

5-15. The chapter discusses a study that says our moods actually get worse when we spend a lot of time on Facebook because we feel like we’re wasting our time. Do you agree?

Responses will vary by student. Students should define mood as a temporary positive or negative affective state accompanied by moderate levels of arousal. Students should address why our moods get worse the longer we stay on Facebook. (15 minutes, Chapter Objective 3, AACSB: Reflective Thinking) APPLY 5-16. Our online behaviors also can satisfy needs at different levels of Maslow’s Hierarchy of Needs, especially when we participate in social networks such as Facebook. Web-based companies can build loyalty if they keep these needs in mind when they design their offerings:

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•

We satisfy physiological needs when we use the Web to research topics such as nutrition or medical questions.

• The Web enables users to pool information and satisfy safety needs when they call attention to bad practices, flawed products, or even dangerous predators.

• Profile pages on Facebook let users define themselves as individuals.

• Online communities, blogs, and social networks provide recognition and achievement to those who cultivate a reputation for being especially helpful or expert in some subject.

• Users can seek help from others and connect with people who have similar tastes and interests.

• Access to invitation-only communities provides status.

• Spiritually based online communities can provide guidance to troubled people.

Interview people you know about their motivations to participate in social media. Ask them to provide a list of the platforms they access most, then for each probe about their reasons to visit these. What needs do these sites appear to satisfy? How might these insights help you to devise ideas for new social media products?

Student responses will vary based on the users interviewed and types of social media used. Responses should recognize how social media fills needs and helps to create an identity for the user. (2 hours, Chapter Objectives 2 and 3, AACSB: Reflective Thinking) 5-17. Interview members of a celebrity fan club. Describe their level of involvement with the “product,” and devise some marketing strategies to reach this group.

Student responses to this exercise might consider a variety of celebrities—movie stars, musicians, and politicians—living and dead. They might be asked to consider the Elvis Presley fan club phenomenon in terms of the tremendous marketing opportunities that have derived from tours of his home in Memphis (Graceland), his personal property displayed in “museums” (guitars, clothing, music awards, etc.), his “signature” hairstyle and sideburns, other actors’ and musicians’ remakes of his movies and songs, television programs, Elvis parades, books, postage stamps, etc. The quickest way to do this project is to “go online” to a “favorite site.” Most of the recognized search engines (e.g., Yahoo!) will have ways for you to reach the celebrity sites. (Possible Field Project Idea)(30 minutes, Chapter Objective 2, AACSB: Reflective Thinking) 5-18. The chapter notes that marketers continue to push the envelope to create spectacles that will increase consumer involvement with their messages: • A British show broadcast a group of skydivers who performed a dangerous jump to create a human formation in the air that spelled out the letters H, O, N, D, and A. • Honda built a musical road in Lancaster, PA; grooves in the cement create a series of pitches that play the William Tell Overture when a car drives over them.

• A New York campaign for Jameson Irish Whiskey projects an ad onto a wall—an operator scans the street for pedestrians who fit the brand’s profile and inserts live text messages directed at them into the display.

• To promote the 25th anniversary of the Michael Jackson album Thriller, which featured zombies dancing in a music video of the title song, Sony BMG staged a performance in the London Underground. A group of “passengers” suddenly burst into a zombie-like dance

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before they disappeared into the crowd, and this videotaped scene was posted online. The video inspired similar performances in other countries, and within a week more than a million people had downloaded these films. In a similar stunt for T-Mobile, several hundred commuters at the Liverpool rail station broke into a dance; more than 15 million people watched the performance on YouTube in the following weeks. These (not so) spontaneous flashmobs have become increasingly common.

Can you top these? Imagine that a client hires you to launch a new energy drink. Propose a spectacle you could engineer that would attract potential customers to learn more about your product.

Student responses to this question will vary considerably. They might include popular music, celebrities, or trends including dance moves, and activities. Concepts from the text such as mood, happiness, positive affects etc. might also be discussed.

(30 minutes, Chapter Objective 2, AACSB: Reflective Thinking)

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CASE STUDY TEACHING NOTES Chapter 5Case Study: Has The Death Of The Watch Been Greatly Exaggerated? Apple Gets Into The Game.

Summary of Case It used to be that putting on a watch was just a standard part of getting dressed in the morning.

How could you hope to move successfully throughout your day, making it to appointments on time, if you weren’t wearing a watch on your wrist to let you know what time it is? Today, however, we’re surrounded by technology devices at work, home, and even away from home that readily displays the time of day.

Suggested Answers for Discussion Questions CS 5.1.Discuss the possible reasons to buy a watch today. Connect each motivation you identify with an appropriate motivational theory from the chapter.

Watches can be purchased for esteem needs (Maslow), perceived risk, or could be a cult product.

(15 minutes, Chapter Objective 2, AACSB: Reflective Thinking) CS 5.2.What does Apple really believe will motivate consumers to purchase the Apple Watch?

Are there different motivations at the low versus high (luxury version) price point?

Apple products are considered a cult product. Consumers will buy the Apple Watch for different reasons from basic time to esteem needs.

(15 minutes, Chapter Objective 3, AACSB: Reflective Thinking) CS 5.3. How do marketers of watches use marketing and advertising to motivate consumers to buy them? Give specific examples.

Some watches are just watches like Timex, but other watches mean luxury, like Rolex.

(10 minutes, Chapter Objective 3, AACSB: Reflective Thinking)

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Additional Support Material STUDENT PROJECTS Individual Projects 1.

Ask students if they have provided opinions regarding products or brands on any website.

If yes, have them share it with the class. If not, let them visit a site to provide opinions about their most recent significant purchase. They can also go to www.epinions.com and provide their input.

Students may have gone to an individual retailer’s website or a website that collects consumer opinions. This is related to the idea of involvement because consumers are more likely to provide opinions about a product if they have a high level of involvement.

(15 minutes, Chapter Objective 2, AACSB: Reflective Thinking) 2.

Have students think of examples of products or services that each of them has purchased that fit the three types of motivational conflicts found in Figure 4.1.

Approach-approach conflict—a person must choose between two desirable alternatives Example: choosing between two favorite brands of automobiles.

Approach-avoidance conflict—many products or services we desire have negative consequences attached to them; example: wanting Twinkies but feeling like a glutton.

Avoidance-avoidance conflict—a choice between two undesirable alternatives; example: spend more to repair an older car or buy a newer more expensive car.

(15 minutes, Chapter Objective 1, AACSB: Reflective Thinking) 3.

Find a student who is not too shy to do this one. Ask the student to search for unconscious motives by asking six people if they are wearing perfume or cologne. Make sure they keep asking until at least three people say, “Yes.” Then have them ask the respondents, “Why do you wear cologne?” Ask three of those who said they were not wearing cologne, “Why not?” Ask the three who said, “No” if they wore any the last time they had a date. Share their responses with the class and evaluate them. Can the class uncover any hidden motivations?

Look for students to understand what motivation is. Some people may be forthcoming about the needs that they are trying to satisfy by using cologne, which may or may not be related to dating. Students may make inferences about hidden motivations that are not correct.

(45 minutes, Chapter Objective 1, AACSB: Analytic Skills) 4.

Ask students to come up with a list of products or services that people primarily buy because they want to “belong.” Have them explain why they listed the particular items.

Then, have them explain how individuals in solitude might also consume each of the items that they listed. Are there viable needs that consumers have for consuming these products both in the company of others as well as by themselves?

Social needs or a need to belong is often used as part of the marketing appeal for beverages (e.g. alcoholic beverages), fragrances, oral hygiene products, and

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entertainment products, among others. Traditional students may think of the marketing associated with student organizations, including sororities/fraternities. For the second part of the question, the students’ responses will depend on the product selected and the cultural norms associated with the consumption of the product.

(20 minutes, Chapter Objective 1, AACSB: Reflective Thinking) 5.

Have each student extensively describe a consumption situation that reflects each of the following: need for affiliation, need for power, and need for uniqueness.

Consumption situations that reflect a need for affiliation usually put the consumer in the company of other people and make him/her feel like part of something.

Bars/clubs/sporting events may be among the examples. Consumption situations that reflect a need for power usually put the consumer in control and give the consumer and opportunity to develop mastery over his/her surroundings. Automotive products (e.g. tires, engine additives, vehicles) and technology products often appeal to the need for power. Consumption situations that reflect a need for uniqueness include products that bring out the individual’s distinctive qualities and/or make the individual feel special.

Apparel often falls in this category, particularly when the consumer is shopping for a special event.

(20 minutes, Chapter Objective 1, AACSB: Reflective Thinking) 6.

Have students find advertisements that attempt to persuade consumers to think of products as objects that satisfy one of the motives described in this chapter. Have them identify and classify that motive.

Students may think broadly of hedonic or utilitarian motives. Hedonic motives are driven by a desire to experience excitement or fantasy. Utilitarian motives are driven by a rational or functional need. They may also speak about motives that are aroused by biogenic (food, water, air, shelter) or psychogenic needs (status, power, affiliation), or by need for affiliation/power/uniqueness. Look for students to reflect their understanding of the category of underlying needs they select.

(30 minutes, Chapter Objective 1, AACSB: Reflective Thinking) Ask students to find a print ad that appeals to each level of Maslow’s hierarchy. In class, have different students show their ads and explain why their ads appeal to each level. Ask why they think the firm selected this particular appeal. Is there overlap between levels? Is this good or bad?

Student examples should include an ad that appeals to physiological, safety, social, esteem and self-actualization needs. Student explanations should reflect their understanding of each of these levels in the hierarchy. Student opinions about the overlap between levels and whether it is good or bad are likely to vary. Encourage students to think about whether it is good or bad in light of what they read regarding criticisms of Maslow’s hierarchy in the chapter.

(20 minutes, Chapter Objective 1, AACSB: Reflective Thinking) 7.

8.

Have individual students construct an example of the means-end chain model for a specific product or brand. Explain the thought process used.

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Look for students to create a chain that links specific product attributes to terminal values via intermediate steps. Refer students to figure 4.4 for an example. Look for students to reflect their understanding that products provide a means to a desired end.

(30 minutes, Chapter Objective 3, AACSB: Reflective Thinking) 9.

Have students think of some product or service they have purchased recently. Then have them respond to the consumer involvement scale in Table 4.1. Is their involvement with this product best described as product involvement, message-response involvement, or purchase situation involvement? Why? Student responses will vary depending on the purchase made, but look for students to reflect their understanding of the type of involvement they use to describe the situation by explaining why the type of involvement they selected is the most descriptive of their purchase situation. Some students may feel high levels of more than one kind of involvement characterized the purchase. If so, encourage students to explain why that is the case, which should help reinforce the differences between the different types of involvement.

(20 minutes, Chapter Objective 2, AACSB: Reflective Thinking) 10.

Have each student list what he or she perceives to be the five most important values themselves. To their parents. How do these values transfer to purchase decisions? How would marketers find out about their values?

It is often interesting to discuss how the students’ important values overlap with and differ from their perceptions of their parents’ values. It provides the opportunity to reinforce the idea that the relative ranking of values is culturally defined and the role of socialization agents outside of the family (e.g. teachers, friends). Look for student understanding of the values when they discuss how they affect purchase decisions. This process will require more thought if students select, for example, a cultural value as opposed to a product-oriented value. Research techniques to learn about values may include syndicated studies, surveys (Hofstede’s scale, the Rokeach Value Survey, List of Values scale), or depth interviews (Means-End Chain model).

(25 minutes, Chapter Objective 3, AACSB: Reflective Thinking,) Group Projects 1.

Assign groups of students to observe a table of people eating in either a restaurant or cafeteria setting. See if they can identify any of the major motives at work. Have them report on their conclusions. (Hint: Watch the respondents’ behavior while they eat and during their conversation. Perhaps students might like to videotape part of the meal—five minutes maximum).

Most students will be able to distinguish between people who are there for the entertainment or enjoyment of the experience (hedonic motives) from those who are simply there to satisfy their hunger (utilitarian motives). Students may also use Maslow’s hierarchy to classify motives. Some students may find this fun, particularly if they like to people watch and make up stories about who the people are and what they are doing.

Other students may not feel comfortable watching others. If not, you may want to

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provide an alternative assignment. Students may have the ability to videotape on their phones.

(90 minutes, Chapter Objective 1, AACSB: Analytic Skills) 2.

Have groups of students come up with three examples of a truly mass-customized product. For each, have them give extensive reasons as to why consumers might choose the mass-customized version of a product over the “off-the-rack” version.

Student examples may include M&M’s (www.mymms.com is mentioned in the text), Dell computers, make-up/perfume companies, blue jeans companies, NikeID and Chuck Taylor Converse sneakers, credit card companies that allow you to put a photo you select on your credit card, etc. Reasons why consumers might choose a mass-customized version of the product may be a function of the way they will use the product (a product that is designed for them is more likely to meet the consumers’ needs/wants) and may relate to the need for uniqueness.

(20 minutes, Chapter Objective 2, AACSB: Reflective Thinking) 3.

Have the class keep a diary of their consumer decisions for a two-day period. (Make sure they include both actual purchases and conscious decisions not to buy.) At the end of the period, have them review their diaries and classify their apparent motives. (Maslow’s scheme may be useful here.) During this process, were they more aware of ads? Have students discuss their diaries in groups.

If you guide students toward Maslow’s hierarchy of needs, you should look for their responses to be characterized based on physiological, safety, social, esteem and selfactualization needs. Since this is a suggested group project, it may be enlightening to ask students to compare their motives for the same product category. The last question, regarding awareness of ads, can be related to the content in Chapter 2 on perceptual vigilance.

(90 minutes, Chapter Objective 1, AACSB: Reflective Thinking,) Have the class go to a shopping center or mall and observe others’ behavior. What conclusions can they make about motives, involvement, and values after having made the observation?

This group assignment is similar to the first group assignment, but takes place in a different context. It may be easier to observe multiple shoppers in a mall than in a restaurant. You can direct students to characterize shoppers based on their demographics to see if there is any pattern, what the students perceive motivates different shoppers in this context. Values may be difficult to observe, but students may be likely to observe materialism.

(90 minutes, Chapter Objectives 1-3, AACSB: Reflective Thinking) 4.

5.

In a project related to #4, have groups of students visit a shopping mall or a superstore.

Have them evaluate the retail environment for ways that both the retailer and product manufacturers try to increase consumer involvement (refer to text if necessary for strategies to increase involvement).

Students may observe shoppers who seem highly involved in a product category or purchase situation. They should recognize sales promotions and customized

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communication strategies are designed to increase consumer involvement. They may also observe strategies used to increase involvement in the in-store messages (e.g. endcap displays, shelf-talkers, digital signage).

(60 minutes, Chapter Objective 2, AACSB: Reflective Thinking)

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eLAB Individual Assignments 1.

Visit a website that includes a quiz or test of materialism (ex. http://www.expertrating.com/quizzes/Materialism-Test.asp or find it at www.Quizilla.com) and take the test to evaluate how materialistic you are.

Students are likely to get different responses, depending on the importance of possessions to the student. They may also have opinions about the accuracy of the results (for themselves or for their classmates).

(20-25 minutes, Chapter Objective 4, AACSB: Reflective Thinking) Go to www.benjerry.com. Ben & Jerry’s Ice Cream is famous for a well-rounded mission statement and care and concern for the environment. What is their mission? What indications are there about the organization’s commitment to the environment? What values does the company try to express? How might this expression help the organization market products?

Ben & Jerry’s mission statement can be found under activism (follow the link here: http://www.benjerry.com/activism/mission-statement/). The company publishes a Social and Environmental Assessment Report each year (follow the link here: http://www.benjerry.com/company/sear/). Students may relate the company’s values to the growing LOHAS segment.

(25 minutes, Chapter Objective 3, AACSB: Reflective Thinking) 2.

3.

Go to www.wholefoods.com. Take some time to become familiar with the website.

Describe this company and the products that they offer. Select specific examples of products that seem to target the LOHAS values segment. Are the products that might appeal to values other than those described by LOHAS? LOHAS is an acronym for “lifestyles of health and sustainability.” Marketers are responding to the needs of this segment with eco-friendly products and programs.

Students may observe Whole Foods seafood labeling initiative and their efforts to reduce seafood that is not sustainable. Students may become aware of wellness programs Whole Foods rolled out in select markets, which include nutrition programs, social dinners and partnerships with exercise facilities/yoga centers in exchange for a membership fee.

Students should also recognize that people might buy products that appeal to LOHAS for reasons other than health and sustainability.

(20 minutes, Chapter Objective 3, AACSB: Reflective Thinking) 4.

Go to www.burton.com. Burton Snowboards are very popular with Gen Y. How does this website attempt to motivate consumers to try the sport and the Burton products? Be specific with the description of strategies that Burton uses. Do you think the Burton approach is effective? Explain. This project can also be done with Nike.com.

The website uses video to show people trying the sport, collects information to learn about consumer needs and provide advice to make the sport less intimidating to newcomers, offers a community of users, and provides access to people who want to

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learn how to snowboard. Student opinions on whether the Burton approach is effective may vary.

(15 minutes, Chapter Objective 1, AACSB: Reflective Thinking) 5.

Go to http://shop.vans.com. Find the link for creating your own custom pair of Vans shoes. Go through the process and print an example of your shoes to take in to class and share. Describe the experience. Did the experience contribute to the level of involvement in shopping for such a product?

Vans Customs offers consumers the opportunity to choose from four different types of sneakers. After the consumer selects a size and gender, the site offers consumers the ability to customize the design (with templates where the consumer can start). The site provides an example of mass customization (personalization of products and services for individual customers at a mass-production price), which is noted to increase product involvement in the chapter.

(20 minutes, Chapter Objective 2, AACSB: Reflective Thinking) 6.

Go to www.specialized.com. Specialized Bicycles is one of the leading manufacturers and marketers of all types of bikes. Browse their website. Give a brief description of their different product lines. How does Specialized motivate consumers to get into biking?

What might Specialized do to improve the “motivation” aspect of their site (you might want to compare it to the Burton Snowboard site discussed previously)?

Specialized offers mountain bikes, road bikes, multi use bikes, dirt/park/street bikes, bikes for kids, and equipment for bikes. Specialized shows images of people enjoying their products and provides information about champions. The site also provides an opportunity for consumers to engage in a community and interactive tools to help decision-making. Specialized may offer a call to action or provide access to training events for beginners.

(20 minutes, Chapter Objective 1, AACSB: Reflective Thinking) Group Assignments 1.

Visit a motivation website such as www.GetMotivation.com or www.Motivation123.com. Many of these sites target personal motivation but are there techniques that marketers can learn in order to motivate consumers to buy a product/service or buy into a type of lifestyle? Write a report and present.

Students should identify specific techniques related to the content of the website they select. The students may have different ideas about how the content on the websites relates to the suggested content. Look for students to provide support for their opinions.

(45 minutes, Chapter Objective 1, AACSB: Reflective Thinking) 2.

Go to www.strategicinsights.com. Your group should explore the VALS, VALS2, and iVALS methods discussed on the website. Describe each of the methods. Pick one of the methods for further research. Have each group member take the VALS test online. What were the results? Comment on these methods as a means to explore consumer values.

Devise an experiment by which VALS studies could be used to explore consumer values.

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The test can be found at http://www.strategicbusinessinsights.com/vals/presurvey.shtml.

Students should report on how they feel the values identified in the test relate the innovativeness, source of motivation, and resources. Students may compare responses from different segments, as identified in VALS, as the experiment. You can extend this project by asking students to describe a marketing strategy for a product aimed at a specific VALS segment.

(60 minutes, Chapter Objective 3, AACSB: Reflective Thinking) 3.

Go to www.burningman.com. Become familiar with the purpose of this festival. As a group, discuss the extent to which it is possible to achieve the purposes set forth by this organization. Discuss the irony of this.

Burning man is a festival dedicated to self-reliance, self-expression, art, and community.

The ten principles are found here: http://www.burningman.com/whatisburningman/about_burningman/principles.html. The festival touts individual expression/self-reliance at the same time as it espouses the value of the community.

(30 minutes, Chapter Objective 3, AACSB: Reflective Thinking)

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Chapter 6: THE SELF: Mind, Gender, and Body CHAPTER OBJECTIVES When students finish this chapter, they should understand why: 1. The self-concept strongly influences consumer behavior.

2. Products often define a person’s self-concept.

3. Gender identity is an important component of a consumer’s self-concept.

4. The way we think about our bodies (and the way our culture tells us we should think) is a key component of self-esteem.

5. Every culture dictates certain types of body decoration or mutilation.

CHAPTER SUMMARY The self-concept strongly influences consumer behavior.

Consumers’ self-concepts are reflections of their attitudes toward themselves. Whether these attitudes are positive or negative, they will help to guide many purchase decisions; we can use products to bolster self-esteem or to “reward” the self.

Products often define a person’s self-concept.

We choose many products because we think that they are similar to our personalities. The symbolic interactionist perspective of the self implies that each of us actually has many selves, and we require a different set of products as props to play each role. We view many things other than the body as part of who we are. People use valued objects, cars, homes, and even attachments to sports teams or national monuments to define the self, when they incorporate these into the extended self.

Gender idenity is an important component of a consumer’s self-concept.

Sex-roles, or a society’s conceptions about masculinity and femininity, exert a powerful influence on our expectations about the brands we should consume.

Advertising plays an important role because it portrays idealized expectations about gender identity.

The way we think about our bodies (and the way our culture tells us we should think) is a key component of self-esteem.

A person’s conception of his or her body also provides feedback to self-image. A culture communicates specific ideals of beauty, and consumers go to great lengths to attain these. Many consumer activities involve manipulating the body, whether through dieting, cosmetic surgery, .

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piercing, or tattooing. Sometimes these activities are carried to an extreme because people try too hard to live up to cultural ideals. One common manifestation is eating disorders, diseases in which women in particular become obsessed with thinness.

Every culture dictates certain types of body decoration or mutilation.

Body decoration or mutilation may serve such functions as separating group members from nonmembers, marking the individual’s status or rank within a social organization or within a gender category or even providing a sense of security or good luck.

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Chapter 6: The Self

CHAPTER OUTLINE I. The Self?

The self-concept strongly influences consumer behavior. Many products, from cars to cologne, are bought because the person is trying to highlight or hide some aspect of the self. Feelings about the self shape consumption practices as consumers try to meet society’s expectations about how a male or female should look or act.

A. Does the Self Exist?

1. The idea that each human life is unique rather than part of a group was developed in late medieval times.

2. Expression of self is more popular in the Western cultures. Eastern cultures tend to emphasize the importance of collective self (interdependence, identity derived from a social group/relationships with others), while Western cultures emphasize the separateness of each individual.

3. The self is seen by Western and Eastern cultures as being divided into the inner, private self and outer, public self.

4. A Confucian perspective stresses the importance of “face” (others’ perceptions of the self and maintaining one’s desired status in their eyes). One dimension of face is mien-tzu (reputation achieved through success and ostentation).

Discussion Opportunity—Give an example of “face” in an Eastern culture. Relate this example to products, services, or promotion.

B. Self-Concept 1. The self-concept summarizes the beliefs a person holds about his or her attributes and how he or she evaluates these qualities.

2. Self-concept is a very complex structure. Components of the self-concept include: • Content—such as facial attractiveness versus mental aptitude.

• Positivity—such as self-esteem.

• Intensity, stability over time, and • Accuracy—the degree to which one’s self-assessment corresponds to reality.

Discussion Opportunity—Have each student evaluate themselves as to their self-concept by listing all beliefs they hold about themselves (including attributes such as personality characteristics, strengths, weaknesses, talents, roles, affiliations, etc.). Then have them select the ten most important attributes and rank order them. Have them take a good look at the ten items.

Ask the students to close their eyes and picture themselves according to the ten attributes. After a few seconds, instruct them to erase the most important attribute from their self-concept and continue (eyes closed) to picture them without it. After a few seconds, repeat this with the second most important attribute, then the third most, then the fourth most. At the point that you feel the objective has been accomplished, have everyone open his or her eyes. Encourage students to share their feelings about this exercise at each phase. Was it difficult to “erase” attributes from the self-concept? Why? What happened when the first attribute was erased?

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3. Self-esteem refers to the positivity of a person’s self-concept. Those with low selfesteem do not think they will perform well and will try to avoid embarrassment or failure, or rejection.

4. Marketers can influence a consumer’s level of self-esteem. Social comparison is the process where a person tries to evaluate his or her self by comparing it to the people depicted in artificial images (such as ads in a magazine). This form of comparison appears to be a basic human tendency. *****Use Consumer Behavior Challenge Here ***** Discuss #6-11 Discussion Opportunity—Find some examples of ads that promote self-esteem and show them in class.

5. Consumers may use badges (e.g. bumper stickers, Foursquare badges, pins on Gowalla) to bolster self-esteem/show evidence of their achievements. (They may use geospatial platforms through smartphones to identify physical locations.)

6. The ideal self is a person’s conception of how he or she would like to be.

7. The actual self refers to our more realistic appraisal of the qualities we have and don’t have.

8. Consumers often engage in the process of impression management where they work hard to manage what others think of them by strategically choosing clothing and other cues that will put them in a good light. a. Islamic men in Egypt increasingly have a zebibah (Arabic for raisin; dark circle of callused skin between hairline and eyebrows from pressing forehead to the ground during daily prayers), since some add prayers to make the bump more pronounced/broadcast piousness. b. People also practice impression management when they exaggerate positive qualities on Facebook or dating sites.

Discussion Opportunity—Have students make columns on a sheet of notepaper. Have them write down attributes in each column describing their ideal self and their actual self. Have some students share the differences and similarities that they found. *****Use Review 6-4 Here *****

C. Fantasy: Bridging the Gap Between the Selves 1. Although most people experience a discrepancy between their real and ideal selves, for some consumers this gap is larger than for others. These people are good targets for fantasy appeals.

2. A fantasy or daydream is a self-induced shift in consciousness that is sometimes a way of compensating for a lack of external stimulation or of escaping from problems in the real world.

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Chapter 6: The Self

Discussion Opportunities—Ask: How do advertisers appeal to our fantasies? Can you give some examples?

Discussion Opportunity—Describe a fantasy you have had. What role did advertisers or marketers play in expanding this fantasy (if they did)? Explain.

3. Each of us is really made up of multiple selves. We have as many selves as we do social roles. This causes us to prefer different products and services in different situations.

4. The self has different components or role identities. a. Some of the identities are more central than some identities (e.g., husband, boss, mother, student). b. Others might be dominant in certain situations (e.g., dancer, gearhead, advocate for the homeless). c. A study of Iranian people living in the U.K. revealed something the authors termed the torn self, where respondents struggle to retain an authentic culture while enjoying Western freedom. d. Marketers want to ensure the appropriate role identity is active before s/he pitches products consumers need to play a role.

D. Virtual Identity 1. The tremendous growth of real-time, interactive virtual worlds allows people to assume virtual identities in cyberspace. a. People use virtual identities to interact in computer-mediated environments (CMEs) like Sims, Second Life, Webkinz, Habbo Hotel, etc. b. People choose their avatars (visual identities) ranging from realistic versions of themselves to tricked-out versions with exaggerated physical features or winged dragons or superheroes.

2. The sociological tradition of symbolic interactionism stresses that relationships with other people play a large part in forming the self. a. This perspective suggests we exist in a symbolic environment. b. Each of us interprets our identity and this assessment evolves each time we encounter a new situation/new people. c. We tend to pattern our behavior on the perceived expectations of others in a form of self-fulfilling prophecy (by acting the way others expect us to act).

3. The looking glass self is the process of imagining the reactions of others toward us (also known as “taking the role of the other”).

Discussion Opportunity—Ask: How many multiple selves do you have? When was an instance when your “looking-glass self” was operating? Explain.

4. Self-consciousness, an awareness of self and concern for one’s public image that can result in feelings of awkwardness, varies by individual and by situation. a. Consumers who score high on a scale of public self-consciousness express more interest in clothing and cosmetics than those who score lower.

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b.

High self-monitors are more attuned to how they present themselves in social environments. *****Use Review 6-6 Here *****

Discussion Opportunity—What was one of your most embarrassing moments? If the circumstances were different, would you have been less self-conscious?

Discussion Opportunity—Give an illustration where you were engaged in self-monitoring.

E. Consumption and Self-Concept 1. When consumers alter some aspect of their selves to advertise for a branded product (i.e., being paid by a company to tattoo their logo) this is called Identity marketing.

2. A consumer’s possessions place her into a social role, which helps to answer the question, “Who am I now?”

3. People use an individual’s consumption behaviors to help them make judgments about that person’s social identity.

4. We are attached to an object when we rely on it to maintain our self-concept. Objects act as security blankets by reinforcing our identities, especially in unfamiliar situations.

Discussion Opportunity—Ask students if there has ever been a time when an object was a security blanket for them. Explain how this occurred.

5. Symbolic self-completion theory predicts that people who have an incomplete selfdefinition tend to complete this identity by acquiring and displaying symbols associated with it (e.g., men and may use “macho” products like cars and cigarettes as a social crutch to bolster their developing masculinity).

6. The contribution of possessions to self-identity is apparent when we lose treasured objects.

Discussion Opportunity—Ask: Have you ever lost (or had destroyed) an object that, because it was lost or destroyed, affected your self-concept? Explain.

7. Self/product congruence suggests that consumers demonstrate consistency between their values and the things they buy. a. Self-image congruence models predict that products will be chosen when their attributes match some aspect of the self. b. These models assume a process of cognitive matching between product attributes and the consumer self-image. c. Although research results are mixed, the ideal self appears to be more relevant than the actual self appears as a comparison standard for highly expressive social products.

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Chapter 6: The Self

Discussion Opportunity—Give an example of self-image congruence when you have purchased something. Explain.

II The Extended Self The extended self includes considering external objects as part of us (e.g. props and settings consumers use to define their social roles).

Discussion Opportunity—Ask students to brainstorm a small list of objects that they consider being part of their extended self. What do these objects have to do with their self-expression? How would an advertiser appeal to their extended self?

8. Four levels of extended self have been described: 1) Individual level—you are what you wear.

2) Family level—includes your house and furniture.

3) Community level—includes your neighborhood and hometown.

4) Group level—includes your religion, flag, sports team, etc.

Discussion Opportunities—Give an illustration of the four different forms of extended self. How might marketers or advertisers use these forms?

III. Gender Identity Sexual identity is a very important component of a consumer’s self-concept. We tend to conform to culture’s expectations (sex roles) about how those of our gender should act dress or speak; these expectations, however, change.

Discussion Opportunity—Ask: Have you ever made a purchase (or failed to make a purchase) because of gender issues? Explain your example. *****Use Consumer Behavior Challenge Here ***** Discuss #13 A. Gender Differences in Socialization 1. A society’s assumptions about the proper roles of men and women are communicated in terms of the ideal behaviors that are stressed for each gender during gender socialization by commercial sources, parents and friends. a. In many societies, males are controlled by agentic goals that stress self-assertion and mastery. b. Females are taught to value communal goals, such as affiliation and the fostering of harmonious relations.

Discussion Opportunity—Identify goals that you think are uniquely male and female. How can marketers exploit these goals and the associated needs?

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Discussion Opportunity—Find a magazine ad that demonstrates agentic goals and one that demonstrates communal goals. To which gender are these ads directed? In what publication did the ads appear? In your opinion, was there a conscious attempt to segment?

2. Gender Versus Sexual Identity a. Gender role identity is a state of mind as well as body. b. A person’s biological gender does not totally determine whether he or she will exhibit sex-typed traits (characteristics that are stereotypically associated with one sex or the other).

1. Masculinity and femininity are not biological characteristics.

2. Characteristics of gender role change from one culture to another.

3. Bromance is affection between straight male friends.

3. Many products are sex typed; they take on masculine or feminine attributes.

Marketers often perpetuate this typing.

4. Androgyny refers to the possession of both masculine and feminine traits. a. Sex-typed people are stereotypically masculine or feminine; androgynous people do not have a clearly defined orientation. b. Masculinity and femininity are not opposite ends of the same dimension. c. Differences in sex-role orientation can influence how we respond to marketing stimuli.

5. Gender-bending products are traditionally sex-typed items adapted to the opposite gender (e.g. Febreze as the Official Air Freshener of the N.F.L.).

Discussion Opportunity—Ask: Why do you suppose we have boys’ and girls’ toys? Is society or marketing responsible for this?

Discussion Opportunity—Ask: Are there any role reversal products that you prefer (such as more feminine lotion—for a male—or a more masculine scent such as in perfume—for a female)? When might role reversal be present (single males having to cook and clean an apartment, therefore paying attention to ads about these products or a female having to wear more masculine business suits)? How do you feel about this?

B. Female Sex Roles 1. Sex roles constant evolve, and there may be contradictory messages about appropriate behavior.

2. Contemporary Young Mainstream Female Achievers (CYMEA) play different roles in different contexts (e.g. feminine as a mother or partner, masculine as businesswoman) Discussion Opportunity—What stereotypes of women do you feel are no longer true? How are marketers attempting to appeal to the “new” woman?

C. Male Sex Roles 1. Masculinism is devoted to the study of the male image and cultural meanings of masculinity.

2. Men receive mixed messages about how they are supposed to behave and feel. .

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Chapter 6: The Self

3. Men are trying to make sense out of three different models of masculinity: a. Breadwinner – focused on success; celebrates respectability, civic virtues, pursuit of material success, and organized achievement b. Rebel – emphasizes rebellion, independence, adventure and potency c. Man-of-action hero – synthesis that draws from the better of the other two models

Discussion Opportunity—Ask: Can you think of any ads where they have females performing acts that were predominately male roles in the past? Can you think of an ad in which the male is a sex object? (You might want to locate examples of each and bring them in to share with the class after they have responded.)

E. Gay, Lesbian, Bisexual, and Transgender (GLBT) Consumers 1. The proportion of the population that is GLBT is difficult to determine and efforts to measure this group have been controversial.

2. The GLBT market is at least as large, if not larger, than the Asian American population (currently at about 12 million people) and consumers in this market spend $250-$350 billion a year.

3. Gay relationships are increasingly mainstream in most parts of the United States. A Gallup survey in 2014 found that 55% of Americans favor same-sex marriage, where as 8 out of 10 young adults support it.

Discussion Opportunity—Name popular movies or television shows where gay or lesbian actors or actresses are a central theme. Watch the show and note the products that are advertised during these shows. In your opinion, was this a way to reach this particular market segment?

Explain.

IV. The Body A. A person’s physical appearance is a large part of his or her self-concept.

B. Body image refers to a consumer’s subjective evaluation of his or her physical self.

C. Marketers try to create a gap between the real and idea self to motivate consumers to buy products that will narrow that gap.

D. A person’s feelings about his or her body can be described in terms of body cathexis.

Cathexis refers to the emotional significance of some object or idea to a person, and some parts of the body are more central to self-concept than are others. *****Use Exhibit 6.14 Dove Here***** Discussion Opportunity—According to the text, which parts of the body are consumers usually the most satisfied? The least satisfied? How might marketers use this information?

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E. An ideal of beauty is a particular model, or exemplar, of appearance. Examples of ideals are physical features, clothing styles, cosmetics, hairstyles, skin tone, and body type.

Discussion Opportunity—Ask the Women: Write down on a piece of paper what your ideal man looks like. Ask the Men: Write down on a piece of paper what your ideal woman looks like.

Discuss the results with the class. (This often leads to a wild discussion. Relate the findings to “ideals of beauty” as used by our society.)

F. Is beauty universal?

1. The “what is beautiful is good” stereotype describes the assumption that attractive people are smarter, more interesting and more competent.

2. Recent research indicates that preferences for some physical features over others are “wired in” genetically, and that these reactions tend to be the same among people around the world.

3. Male and female preferences may be triggered physiologically by hormonal changes.

4. The Western ideal of beauty is about big round eyes, tiny waists, large breasts, blond hair and blue eyes. It has been adopted internationally by younger generations internationally. Older generations have diverse ideals of beauty. *****Use Consumer Behavior Challenge Here ***** Discuss #6-4 5. Ideals of beauty, and the products used to attain those ideals, vary across periods.

6. These changes have resulted in a realignment of sexual dimorphic markers—those aspects of the body that distinguish between the sexes.

7. Is the ideal getting real? Some brands appeal to women by pointing out that the average woman is not a supermodel.

8. There are also ideals for male beauty, which tend to include a strong, muscular physique.

Discussion Opportunity—Ask: What body “ideals” are “in” at present for both men and women? Why are these features deemed “beautiful”? How do advertisers use this? What happens to people who do not have these traits?

G. Working on the Body - Because many consumers are motivated to match up to some ideal of appearance, they often go to great lengths to change aspects of their physical selves.

1. Fattism: As reflected in the expression “you can never be too thin or too rich,” our society has an obsession with weight.

2. Many have elected to have cosmetic surgery to change a poor body image. *****Use Consumer Behavior Challenges Here ***** Discuss Review #6-5 and #6-7

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Chapter 6: The Self

Discussion Opportunity—What do you think of the “thin is in” concept? (Notice the differences between the responses of males and females.) Ask students if they have ever known anyone with any of the disorders mentioned in the chapter, and (if so) ask them to relate the story to the class.

What would this have to do with marketing? Is there a link?

3. Body decoration and mutilation is in the news on a rather regular basis. Decorating or mutilating one’s self is not a new concept. It may, in fact, serve several purposes: • To separate group members from nonmembers • To place the individual in the social organization • To place the person in a gender category • To enhance sex-role identification • To indicate desired social conduct • To indicate high status or rank • To provide a sense of security Discussion Opportunity—Ask: How many of you have some type of body decoration? Ask individuals what form they have. Have them explain why they do this? Are there any marketing or consumption connections? Explain.

4. Tattoos—both temporary and permanent—are a popular form of body adornment, perhaps because a tattoo is a risk-free way to express an adventurous side of the self.

5. Body piercing (decorating the body with various kinds of metallic inserts) has evolved from a practice associated with some fringe groups to become a popular fashion statement.

Discussion Opportunity—Discuss tattooing and body piercing with the class. How many have done it? Why? What type of statement was being made? How might marketers and advertisers use these trends in their promotions? What do you think the long-term trend will be?

H. Body Image Distortions 1. Researchers link distorted body image to eating disorders.

2. Consumers may sacrifice their health to gain a desirable body image.

3. Psychiatrists report increasing cases of body dysmorphic disorder (an obsession with perceived flaws in appearance) among young females and males.

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End-of-Chapter Support Material

SUMMARY OF SPECIAL FEATURE BOXES 1.

Net Profit Technology has allowed users to post video, created microfame or nanofame – a few seconds of attention from fans.

2.

Marketing Pitfall Corporate recruiters are less likely to consider a candidate that is dressed inappropriately or who does not protect his/her image on social media sites.

3.

Marketing Pitfall A judge allowed Renault to go forward with its plan to name its new electric car the Zoe Renault in spite of the complaints from consumers who have the name Zoe who fear sexualized ridicule.

4.

The Tangled Web Cell phones with cameras make the new phenomenon known as sexting possible. Users take and send nude or semi-nude pictures of themselves. Employers use services such as Reputation.com to scour the internet for inappropriate pictures.

5.

Marketing Opportunity Identity marketing uses consumers who alter some aspect of their selves to advertise for a brand.

6.

CB as I See It: Derek Rucker, Northwestern University Products can signal identity. A psychological threat shapes the type of products one desire, a process called compensatory consumption.

7.

Net Profit Technology can be used to increase consumer’s self-esteem through rewards such as badges, and allow the display of physical locations using geospatial platforms.

8.

The Tangled Web

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Chapter 6: The Self

Users have developed strong emotional ties to Facebook, making it very difficult to quit using the site.

9.

Marketing Pitfall Restaurant chains have successfully attracted diners with busty servers in short shorts, leading to the industry phenomenon called breastaurants.

10.

Marketing Opportunity Same-sex marriages have created a new, lucrative market in the wedding industry.

11.

The Tangled Web Group dieting is a growing problem as consumers visit blogs devoted to excessive weight loss.

12.

Marketing Pitfall The ideals of beauty, including to tan or not to tan, changes based on culture. In the U.S., tanning is equated with health and leisure, even though instances of cancer attributed to tanning has increased.

13.

REVIEW

6-1.

List three dimensions that describe the self-concepts.

1.

Content—facial attractiveness versus mental aptitude; 2.

Positivity or negativity—self-esteem; and 3.

Intensity, stability over time, and accuracy—the degree to which one’s selfassessment corresponds to reality.

(5 minutes, Chapter Objective 1, AACSB: Reflective Thinking)

6-2.

Compare and contrast the real versus the ideal self. List three products for which a person is likely to use each type of self as a reference point when he or she considers a purchase.

The ideal self is a person’s conception of how he or she would like to be, whereas the actual self refers to our more realistic appraisal of the qualities we have and don’t have.

Product choices will vary, but products associated with the ideal self are more likely to be expressive.

(5 minutes, Chapter Objective 1, AACSB: Reflective Thinking,)

6-3.

How might the “digital self” differ from a consumer’s self-concept in the real world, and why is this difference potentially important to marketers?

Technology allows user to modify profile photos on online sites. Many users create identities in the form of an avatar when playing online games. While our physical bodies don’t change, we are becoming more what we post than what we really are. Respondents in one study placed more value on digital items that effect physical identities. We can

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also use our digital self to try products such as make-up, hairstyles, and clothing, before actually trying the product. This is an important opportunity for marketers because consumers can quickly and easily see how the product would alter appearances, without the risk of actually buying the product.

(5 minutes, chapter Objective 2, AACSB: Reflecting Thinking) 6-4.

Have ideals of beauty in the United States changed over the last 50 years? If so, how?

A study of almost 50 years of Playboy centerfolds shows that the women have become less shapely and more androgynous since Marilyn Monroe graced the first edition with a voluptuous hourglass figure of 37–23–36. However, a magazine spokesman comments, “As time has gone on and women have become more athletic, more in the business world and more inclined to put themselves through fitness regimes, their bodies have changed, and we reflect that as well. But I would think that no one with eyes to see would consider playmates to be androgynous.”

(10 minutes, Chapter Objective 4, AACSB: Reflective Thinking)

6-5.

What is fattism?

Fattism is an obsession with weight.

(5 minutes, Chapter Objective 5, AACSB: Reflective Thinking,) What does “the looking glass self” mean? How do feelings about the self influence what we buy?

This process of imagining the reactions of others toward us is known as “taking the role of the other,” or the looking glass self. According to this view, our desire to define ourselves operates as a sort of psychological sonar: We take readings of our own identity by “bouncing” signals off others and trying to project what impression they have of us.

(5 minutes, Chapter Objective 1, AACSB: Reflective Thinking)

6-6.

6-7.

How do Eastern and Western cultures differ in terms of how people think about the self?

The emphasis on the unique nature of the self is much greater in Western societies. Many Eastern cultures instead stress the importance of a collective self, where a person derives his identity in large measure from his social group. Both Eastern and Western cultures see the self as divided into an inner, private self, and an outer, public self. However, where they differ is in terms of which part is seen as the “real you”—the West tends to subscribe to an independent construal of the self that emphasizes the inherent separateness of each individual.

(5 minutes, Chapter Objective 1, AACSB: Multicultural and Diversity Understanding)

6-8.

How did tattoos originate?

Tattoos have a long history of association with people who are social outcasts. For example, the faces and arms of criminals in sixth-century Japan were tattooed as a means of identifying them, as were Massachusetts prison inmates in the nineteenth century and concentration camp internees in the twentieth century. Marginal groups, such as bikers or Japanese yakuze (gang members) often use these emblems to express group identity and solidarity.

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Chapter 6: The Self

(5 minutes, Chapter Objective 6, AACSB: Reflective Thinking)

DISCUSS 6-9.

At the end of the day, are you what you buy?

Student responses will differ based on opinion. Students may discuss the self-image congruence models that suggest we choose products when their attributes match some aspect of the self. Emotional connects can make consumers defensive of their favorite brands if they see negative information about those brands. Cognitive matching between product attributes and self-image should also be considered. Ideas such as the reflected self and self-concept can be used to support the student’s opinions.

(10 minutes, Chapter Objective 1, AACSB : Reflective Thinking)

6-10. Are you what you post online?

Students will have different responses based on opinions. A discussion on digital self and the ability to modify profile photos will help support the idea of impression management.

Some students may include a discussion about the use of avatars. The discussion might include thoughts about social media sites such as Facebook, using online posts to create an impression, and how marketers use postings, Students might also discuss how online postings are changing our ideals of beauty and self-expression.

(10 minutes, Chapter Objective 2, AACSB: Reflective Thinking) 6-11. Shopping for back-to-school "basics" used to mean T-shirts, jeans, socks and some notebooks. Now, many parents have a new item to add to the list: tattoos. About 45% of parents polled say that hair highlights, teeth whitening, even tattoos are among the items they will buy their kids to go back to school. What (if any) age is appropriate for kids to get these grownup additions?

Students will have different opinions about the appropriate age for each of these three items. Some students may bring up the show “Toddlers in Tiaras”, where pre-school girls are often consumers of highlights and teeth whitening. Look for students to support their opinions with references to consumer socialization and what the use of the product means in relationship to the consumer’s self-concept.

(15 minutes, Chapter Objective 6, AACSB: Reflective Thinking) 6-12. “Breastaurants” represent a popular category of dining establishments. Is it ethical to hire women as waitresses because they have certain physical characteristics? Is it ethical to exclude others (including men) from these jobs if they don’t?

Student opinions will vary but will likely include information about Hoots or other chains that attract diners with servers in short shorts and tight or small tops. The discussion should focus on sex-typed products and how they reflect stereotypical masculine or feminine attributes, and how products are associated with one gender or another.

(10 minutes, Chapter Objective 4, AACSB: Reflective Thinking)

6-13 One consequence of the continual evolution of sex roles is that men are concerned as never before with their appearance. Men spend $7.7 billion on grooming products

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globally each year. A wave of male cleansers, moisturizers, sunscreens, depilatories, and body sprays washes up on U.S. shores, largely from European marketers. L’Oréal Paris reports that men’s skincare products are now its fastest-growing sector. In Europe, 24 percent of men younger than age 30 use skincare products— and 80 percent of young Korean men do. Even some cosmetics products, like foundation and eyeliner, are catching on in some segments, though men aren’t comfortable owning up to using them.

In fact, a British makeup product looks like a ballpoint pen so men can apply it secretly at the office. Over the past decade, the media paid a lot of attention to so called “metrosexuals”: straight males who are interested in fashion, home design, gourmet cooking, and personal care products. How widespread is this phenomenon? Do you see men in your age group focusing on these interests? Should marketers change how they think of male sex roles today?

Student responses will vary and include information based on their own life experiences.

An identification of sex-typed products should be made, and how marketers are challenging the stereotype. Men receive mixed messages about how they are supposed to behave and feel. One study found that men try to make sense out of three models of masculinity: the breadwinner, rebel, and man-of-action hero. Products are becoming more androgynous, and the orientation is not clearly defines. Study respondents did not link androgynous lifestyles to sexual orientation. The result of androgyny is the promotion of fender-bending products.

(6 minutes, Chapter Objective 3, AACSB: Reflective Thinking) 6-14. Some activists object to Axe’s male-focused marketing because they claim it demeans women. In contrast, Dove’s “Natural Beauty” campaign gets kudos because it promotes more realistic expectations for girls. Guess what? The same company – Unilever – owns both Axe and Dove. Is it hypocritical for a big company to sponsor positive messages about women in one of its divisions while it sends a different message in another?

Student responses to this will vary. Some will see the behavior as hypocritical and others will say it is just a matter of segmentation and targeting based on an understanding of the target audience. When Unilever consolidated brands, they try to capture universal values – for Dove it was real beauty and for Unilever it was something they termed “bom chicka wah wah” – which could otherwise be characterized as appealing to men using the promise of sex. Two videos may help show the contrast in the strategies between the two brands: http://www.youtube.com/watch?v=9zKfF40jeCA is the Onslaught video from Dove; http://www.youtube.com/watch?v=SwDEF-w4rJk is a parody on the Onslaught video that shows Axe images. Recently, South Africa decided to pull the Fallen Angels ad from Axe because of a complaint.

(20 minutes, Chapter Objective 3, AACSB: Reflective Thinking and Ethical Understanding and Reasoning Abilities) 6-15 The mainstream media have sent a clear message for the last several years: It’s cool to be slutty. Role models like Paris Hilton, Lindsay Lohan, Britney Spears, and even Bratz dolls convey standards about how far preteens and teens should go when they broadcast their sexuality. Now, as these messages seem to go over the top (at least in the eyes of some concerned parents), we start to see early signs of a backlash because some who subscribe to the “modest movement” advocate a return to styles that leave almost

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Chapter 6: The Self

everything to the imagination. At the Pure-Fashion Web site, girls get style tips recommending skirts and dresses that fall no more than four fingers above the knee and no tank tops without a sweater or jacket over them; the ModestApparel site proclaims, “because a modest woman is a beautiful woman. Is our culture moving from a celebration of “girls gone wild” to “girls gone mild?”

Responses will vary based on students opinion. The idea that how we dress is an opportunity for impression management. Self-esteem, or the positivity of a person’s selfconcept is reflected in how they dress, as consumers seek to avoid embarrassment, failure, or rejection. The idea of social comparison might also be included as a way to evaluate appearance by comparing it to the people depicted in artificial images.

Responses will also consider the ideal self to the actual self, and how we engage in the process of impression management.

(20 minutes, Chapter Objective 1, AACSB: Reflective Thinking) 6-16

The clothing chain H&M features computer-generated models on its Web site. The company drew criticism for presenting only picture-perfect people; for example, the Norwegian Broadcasting Corporation accused the chain of “creating unrealistic physical ideals.” A company spokesman defended the move by explaining that these unreal bodies would ensure that the garments remain the focus of online shoppers’ attention. In contrast, the teen-oriented magazine Seventeen pledged to always feature “real girls” in its pages. This change was in response to an online petition that gathered nearly 85,000 signatures in just 4 days. The 14-yearold reader who posted the petition stated, “For the sake of all the struggling girls all over America, who read Seventeen and think these fake images are what they should be, I’m stepping up. I know how hurtful these photoshopped images can be.” What do you think of this argument—does the use of only “perfect” bodies create a problem for real shoppers?

Student’s responses will vary but cover similar issues. Body image refers to a consumer’ subjective evaluation of his or her physical self. Our evaluations don’t necessarily correspond to what those around us see. Whether the perceptions are accurate is not the point, because our insecurities weigh us down whether they’re justified or not. Some marketers exploit consumer’s tendencies to distort their body images when the prey on insecurities about appearance. Even social media impacts how we feel about our bodies.

Our satisfaction with the physical image we present to others depends on how closely we think the image corresponds to the ideal our culture values. An ideal of beauty is a particular model of appearance, and may include physical features, clothing styles, hairstyles, skin tone, and body type. Our desire to match up to these ideas drives a lot of our purchase decisions. However, beauty is not universal. Marketers and mass media play a large role in determining which forms of beauty we consider desirable. When we don’t measure up, it lowers our self-esteem, and can possible diminish the effectiveness of an ad because of negative feeling. Our culture communicates standards of beauty virtually everywhere. An increase of body image distortion is occurring among females.

These psychological disorders cause consumers to believe that the body is bigger or smaller than others see it. This results in eating disorders and other life issues for real shoppers.

(20 minutes, Chapter Objective 4, AACSB: Reflective Thinking)

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APPLY 6-17. If our possessions do indeed come to be a part of us, how do we bring ourselves to part with these precious items? Researchers find that people often take steps to distance themselves from a favored object before they get rid of it. Strategies they identified include taking pictures and videos of the objects; moving them into an out-of-the way location such as a garage or an attic; or washing, ironing, and wrapping the item.

Interview people you know who have disposed if a product that was important to them— for example, a well-used car or a favorite sweatshirt that finally had too many holes to keep. What steps did they take to “divest” themselves of this attachment (such as removing personal items from a car before selling it, etc.).

Answers will vary, some students will talk about giving these products to charity, others will discuss how they are just not needed anymore.

(30 minutes, Chapter Objective 1, AACSB: Reflective Thinking) 6-18. Construct a “consumption biography” of a friend or family member. Make a list and/or photograph his or her most favorite possessions and see if you or others can describe this person’s personality just from the information provided by this catalog.

Students might like to bring in a short videotape of the types of products the subject owns.

This is usually a fun exercise, as students love to guess who the subject is. Usually, of course, they can pinpoint the person and come close to describing the person’s personality. (Possible Individual Field Project) (45 minutes, Chapter Objective 2, AACSB: Reflective Thinking 6-19. Interview victims of burglaries or people who have lost personal property in floods, hurricanes, or other natural disasters. How do they go about reconstructing their possessions, and what effect did the loss appear to have on them? Similarly, poll your class: If their house or apartment was on fire and they could only take one possession with them as they evacuate, what would this be?

This project may be somewhat difficult to do if no losses have occurred. An alternative is to have students watch news broadcasts and record their impressions of the responses and demeanor of the interviewed subjects. Given the recent El Nino effect on the lives of many U.S. citizens, there will be many stories about losses and difficulties encountered. How does a marketer deal with these situations? See if the students can find marketing responses that seem admirable and unacceptable.

(75 minutes, Chapter Objective 2, AACSB: Reflective Thinking) 6-20. Find examples of self-esteem advertising. Evaluate the probable effectiveness of these appeals. Is it true that “Flattery gets you everywhere?”

Most major magazines contain a variety of this type of advertisement. To make the project more interesting, however, probe deeper. Go to mothers’ magazines and business magazines and see how self-esteem advertising appeals are used. Are they different from the fashion magazines and sports magazines? An additional question can be raised about this form of advertising for different market segment groups. For example, how is selfesteem advertising done for teens (a group that may suffer from lack of self-esteem) or minority ethnic groups (which might also suffer from low self-esteem)?

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(30 minutes, Chapter Objective 1, AACSB: Reflective Thinking 6-21. Watch a set of ads featuring men and women on television. Try to imagine the characters with reversed roles (i.e., the male parts played by women and vice versa) Can you see any differences in assumptions about sex-typed behavior?

Students will have fun with this challenge though it will be a revelation to some. An example of an ad that has women and men playing their traditional roles is a Duncan Hines cake mix commercial. The commercial shows the wife/mother making a cake.

When the cake is ready, the father/husband and children are smiling and happy. The ad then says, “Nothin’ says lovin’ like a cake from the oven.” If one switches the roles of the man and woman, the ad somehow would not correspond to our image of having a cake baked by someone who loves us. Most of the time we will want to see ads that reflect a reality, as we normally perceive it. (Possible Field Project Idea) (30 minutes, Chapter Objective 3, AACSB: Reflective Thinking) 6-22. How do people you know feel about their cars? Interview some of them about the “relationship” they have. Do they decorate their cars? Do they have nicknames for them?

And, check out a video on YouTube called “I Love My Car” to really see how deep these relationships can go.

Student answer will vary and should include a lively discussion about their relationship with their cars, and other important possessions.

(30 minutes, Chapter Objective 3, AACSB: Reflective Thinking) 6-23. Many advertisers routinely purchase stock photography when they need an image of a certain kind of person to insert in an ad. Many photos of women reflect common stereotypes, ranging from the crisp businesswoman who wears a suit and glasses and holds a briefcase to the smiling mother who pours milk into cereal bowls for her kids at breakfast. Sheryl Sandberg, the Facebook executive who is an advocate for women in business, started an organization called Lean In to promote leadership. Lean In has now partnered with Getty Images, one of the biggest stock photography companies, to offer an image collection that represents women differently. The new collection depicts women as surgeons, painters, bakers, soldiers, and hunters. There are girls riding skateboards and women lifting weights. Look through a sample of current magazines and collect images of women. To what extent do they represent a range of roles? Categorize these images according to the type of product advertised and the situation that photo depicts (e.g. multitasking women holding a tablet and a baby, happy homemaker, etc.). Based on what you find what message do our media give us about gender roles today?

Media continues to use stereotypical roles including females and the elderly.

(30 minutes, Chapter Objective 1, AACSB: Reflective Thinking)

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CASE STUDY TEACHING NOTES Chapter 5 Case Study: Riding the Plus-Size Wave Summary of Case This case features the well-known plus-size company, Lane Bryant. Although the company has been around since 1900, they are riding a wave of success that is based on changing weights, body types, and perceptions of beauty. A key element in the strategy of Lane Bryant is the way that they are positioning plus-sized women in society. With new product lines and promotional campaigns, they are sending the message that it’s not only okay to be a plus-size, but that women in this category can be as in-style as anyone.

Suggestions for Presentation There is quite a bit of information in the text on the ideals of beauty and how perceptions of such are changing around the world. While many countries throughout the world are adopting what has been the Western ideal for quite some time, western countries are seeing a shift in what is considered acceptable among men and women. The Marketing Opportunity special feature focusing on women’s body types can complement this case.

Suggested Answers for Discussion Questions CS 6-1. Explain the success that Lane Bryant is currently experiencing in relation to selfconcept, self-esteem, and self-consciousness.

Look for students to understand the following concepts The self-concept: What are the beliefs that women have about their own qualities and traits and how they evaluate such?

Self-esteem: What is the nature of the positivity of plus-sized women with respect to their self-concepts?

Self-consciousness: How aware are plus-sized women of how they appear to others and how they fit in relative to other women?

(15 minutes, Chapter Objective 1, AACSB: Reflective Thinking) CS 6-2. Discuss the real-world changes that appear to be occurring with respect to media images of women. What are the reasons for this? Find two recent articles or examples that illustrate these changes.

This might go two directions. The western standard is characterized by the Playboy study that is highlighted in the chapter showing the trend over the last fifty years has been toward women being thinner and thinner, less voluptuous. However, information contained in the Marketing Opportunity special feature (as mentioned above) provides a counterpoint to this ideal. The reality is that the average size and weight of women in the

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United States has been increasing. Dove’s “Real Beauty” campaign has been the most famous to take on the supermodel stereotypes that the media has perpetuated for so long.

However, the information contained in this case also is evidence of such.

(10 minutes, Chapter Objective 4, AACSB: Reflective Thinking) CS 6-3. How do you reconcile the greater degree of acceptance of plus-sized women with the parallel emphasis our society continues to place on thinness (as evidenced by the billions we spend on diet products, exercise, and so on)? Given the health problems associated with obesity (heart disease, diabetes, etc.) should the industry continue to encourage this acceptance? What role is social media playing in this issue?

For Lane Bryant, it is not a matter of encouraging acceptance of obesity or emphasizing thinness as an ideal. The issue is to meet the needs of plus-sized women. As for society, there are always ideals and people who do not meet the ideals. This is not something that can be easily reconciled. However, we might follow the European Parliament’s statement on advocating for realistic beauty images. Its statement is non-binding but sends a clear message.

(20 minutes, Chapter Objectives 4 and 5, AACSB: Reflective Thinking)

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Additional Support Material

STUDENT PROJECTS Individual Projects 1.

If possible, ask students to contact the gay and lesbian student club on campus. Select a sample from both genders and ask them about how they view products marketed to their segment. Do they see a difference between what is targeted at them vs. what is targeted at the “straight” segments? Is stereotyping still prevalent? Have them provide examples.

Look for students to provide authentic responses from both genders. The responses are likely to vary depending on the person who is asked. Students can compare their responses in class and analyze the reasons for the differences.

(30 minutes, Chapter Objective 3, AACSB: Reflective Thinking) 2.

Ask a student to bring to class two brands within the same product category that project different images to the consumer. Have the student discuss the projected images by comparing and contrasting the two different brands. What techniques did the marketer use to project these images? Is the self-concept of the buyer important? Explain.

Students may select products that appeal to different lifestyles or different genders. Look for students to identify characteristics of the brand, perhaps by noting the communications, packaging, distribution, pricing strategy, that help it establish and association with the specified image. The student can speculate about whether the marketer is attempting to fill a gap in the buyer’s self-concept. The student should support his/her opinion with an explanation of why s/he believes it is the case.

(20 minutes, Chapter Objective 2, AACSB: Analytic Skills) 3.

Ask students to interview the managers of two retail-clothing stores. See if they can discover the degree to which the managers believe that consumer personalities and selfimages are important to the marketing and promotional activities of their store. Ask the students if they are in agreement with the managers’ comments.

Again, the responses are likely to vary depending on the person who is asked. Students can compare their responses in class and analyze the reasons for the differences, considering the type of retail store, the price points and level of service offered, and the gender(s) served by the store.

(20 minutes, Chapter Objective 2, AACSB: Reflective Thinking) 4.

Have male students and female students (separately) interview three women and three men whom they think are just about the right weight for their height and bone structure (instruct students to tell respondents that their responses are completely confidential). The students should ask the respondents if they think of themselves as overweight, underweight, or about right. Then, see if they can determine how the subjects reached their conclusions. Next, ask the subjects if they are doing anything to manage their

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weight. If possible, have students ask the respondents what their weight and height are.

Discuss how the students seem to feel about their weight.

Subjects may reference ideals associated with the media and other sources of socialization. You may want to ask students to include questions about the subject’s cultural background to see if they can identify any differences based on culture. The stigma associated with weight may prevent some respondents from wanting to share some of this information, especially with members of the opposite sex, which provides a challenge but also provides something else to discuss in class.

(60 minutes, Chapter Objective 4 and 5, AACSB: Reflective Thinking 5.

Have students find media examples of men exhibiting agentic as well as communal goals.

Have them do the same for women. How much did they find that each gender tended to adhere to the societal expectation?

Students should recognize that agentic goals stress assertiveness and mastery, while communal goals stress affiliation and relationships. For the second part, students should analyze whether it was more difficult to identify ads the opposite gender role (malecommunal; female- agentic) and what the portrayals in the ads they selected indicate about societal expectations.

(45 minutes, Chapter Objective 3, AACSB: Reflective Thinking) 6.

Ask your students to compile a list of ten household chores. Then have each student interview two married couples (one newlywed and the other seasoned) to determine who usually performs that chore—the husband or the wife. If possible, have the students ask the subject when their spouse is not around. Do they agree? Have students share their findings with the class.

Students may observe more consistency among the seasoned couple than the newlywed couple, but it really depends on whom they speak. Students should look for evidence that the roles have changed or that the roles have not changed with the length of the marriage.

(75 minutes, Chapter Objective 3, AACSB: Reflective Thinking) 7.

Assign students to collect advertisements that would tell a stranger something about their self-concept (and image). Have them put these ads on a poster board and bring them to class. Display the poster boards in class and see if the class can match the boards to the correct students.

Students like this assignment because it allows them to use creativity to tell a story about themselves using products and images. It also provides students with an opportunity to get to know one another better as they match the collages to the student.

(30 minutes, Chapter Objective 2, AACSB: Reflective Thinking) 8.

Have students consider the ethical consequences of the products and promotional campaigns produced by both the fashion industry and the fast-food industry. Have them develop their thoughts as a written assignment. Have them share their responses in class before turning the assignment in.

Student opinions will vary. Look for students to support their opinions with information from the chapter.

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(45 minutes, Chapter Objective 5, AACSB: Ethical Understanding and Reasoning Ability) 9.

Assign students to collect five ads that show male or female models exhibiting tattoos or body piercing (they may want to consult tattoo-related magazines or they may print ads from the Internet). Comment on the reason for the display. Did the model match the product to be sold? Do people that do not have tattoos or body piercing relate well to the ad? How could you determine this?

The chapter notes that tattoos and piercings have become more mainstream. However, tattoos are still associated with rebellion and risk taking. Students should identify whether the image associated with the tattooed/pierced model is congruent with the image of the product.

(30 minutes, Chapter Objective 6, AACSB: Reflective Thinking) 10.

Students should visit a website for cosmetic surgeons. Have them find testimonials from actual patients that describe the reasons why they obtained the augmentations that they did.

In addition to reporting about the testimonials, ask students to analyze the reasons why the consumers obtained the augmentation and relate the reasons to the concept of selfconcept.

(20 minutes, Chapter Objectives 4 and 5, AACSB: Reflective Thinking) 11.

Within a 10-mile radius of the campus where the students are taking this class, have students put together a list of the tattoo parlors. Have them call each and find out how long they have been in business. Have them visit a few of the parlors that have been around the longest and interview the owner as to how many shops there were 10 years ago. Have the students then construct a list of the tattoo shops at that point in time.

Students should draw conclusions based on this comparison.

Students should notice an increase in the number of tattoo parlors. They may want to ask the owners of the parlors that have been around the longest how the clientele has changed (lifestyle, number of tattoos, volume of clients) as they form their conclusions.

(90 minutes, Chapter Objective 3, AACSB: Analytic Skills)

Group Projects 1.

Ask groups to interview other students on campus and determine the type of behaviors and activities they are engaged in to appeal to others they meet both on and off campus.

Do they change their appearance depending on the person or persons they are meeting with? If they do, how and why? If they do not, why not?

When students think of others they meet on campus, they may think about particular groups (e.g. sorority/fraternity members, members of a sport team) or individuals (fellow students in a business class, parents of roommates, professors). If they do not, they may be prompted to do so. When students think of others they meet off campus, they may think of employers, students from other schools, patrons at an establishment where s/he works, etc. It is likely that students will recognize that we often change our appearance based on our audience and expectations/social norms.

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(120 minutes, Chapter Objective 2, AACSB: Reflective Thinking) 2.

Have each student interview four people (one each in their 20s, 30s, 40s, and 50s) to determine how important appearance is on the job. Then have students form groups in class to discuss their findings. In addition, have them discuss their own opinions on this issue as well as whether or not they feel an employee’s appearance should be considered in performance evaluations. See if their attitudes change when the employee must deal directly with customers. This activity is also interesting when you ask the subjects about the proper appearance in church or at an important social function.

The type of job the interviewee holds and the individual’s cultural background may have a greater impact on their perception that appearance is important than the age group they belong. You can bring up the Abercrombie & Fitch mystery-shopping example, where the mystery shopper rates the “model’s” attractiveness and those that do not meet the standards are given jobs in the stock room or have their hours cut. You can also bring up the saying that one should “dress for the job you want.” Students are likely to have different opinions about the importance of appearance in customer-facing positions, church and social functions.

(120 minutes, Chapter Objective 4, AACSB: Reflective Thinking) 3.

Have student groups devise a list of traditional male traits with respect to personal care and hygiene. Then, have them visit a cosmetics section of a major department store and interview salespeople with respect to the nature of their male customers. What are they buying, how are they using it? Then, have the groups compare their interview findings with their list of traditional characteristics.

Traditional male traits regarding personal care and hygiene might reflect ideas that suggest it is not masculine to preen or peacock. However, the increase in male consumption of tanning, teeth whitening, skin care and even make-up products suggest an increased concern for personal appearance and a willingness to act on it. This may be a function of high divorce rates (resulting in men who want to have an improved appearance to start dating again) and women who are part of the work force who put less emphasis on how much money a potential spouse makes and more emphasis on his appearance.

(45 minutes, Chapter Objective 3, AACSB: Reflective Thinking) 4.

Have each group design a role-playing scenario that deals with one of the following situations: (a) A 40-year-old male suddenly announces to his wife that he plans to get a tattoo. (b) A couple, both 40 years old, discusses with their teenage son or daughter whether tattooing or body piercing would be appropriate. How can arguments be avoided? (c) A female loan officer in a bank has decided to have her nose pierced.

Look for students to adopt the stereotypical characteristics of the individual in the situation they choose to role-play. Students involved in the role-play and student observers may comment on the meaning behind the tattoos and the piercings, and on whether it is culturally acceptable for individuals with different roles to express themselves in this way.

(30 minutes, Chapter Objective 6, AACSB: Reflective Thinking)

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eLAB Individual Assignments 1.

Go to www.victoriassecret.com. How does this famous website use enhancement of the self to attract consumers? Would you expect males to visit the site as well as females?

How could the site make it easier for males to purchase from the site (remember, males make up a significant portion of sales in the organization’s retail stores)? Is sizing easy on this site? How could it be improved?

Victoria’s Secret may create a gap between the actual self and the ideal self for women in their target audience who visit the website. They sell the idea that their products can help women fill this gap by making them “sexy” or “angels.” The brand promise to men is similar – it is an idealized version of his partner. The site could make sizing easier (e.g. offering visuals for sizing), which may help broaden the site’s appeal to male consumers.

(20 minutes, Chapter Objective 2 and 3, AACSB: Reflective Thinking) 2.

Go to www.tattoo.com. Need a tattoo? Ever thought about getting one? Well, this website might just get you started in that direction. After reviewing the site, what are your impressions about tattooing? How is a self-concept involved in this process? What might cause you to get a tattoo if you do not already have one? Pretend that you are going to get a tattoo—which one of the designs would you choose? Download it (or copy it).

Bring it to class; show your choice; explain why it is really “you.” Have fun with this one.

Tattoo.com is a site where you can submit your tattoo idea for a free artist’s rendering or explore existing tattoos for inspiration. Students should recognize that tattoos could be used by consumers to make statements about themselves. Tattoos are often associated with adventures or rebellion and venturesomeness. Ask students to explain why they selected the designs they did.

(15 minutes, Chapter Objective 6, AACSB: Reflective Thinking) 3.

Go to www.dailymakeover.com. Take the free demo. Upload a picture of yourself, perform a makeover that you feel genuinely suits you. Print a copy of the picture and bring it in to share with others who do the same. Evaluate the results in the context of the self-concept.

When students talk about the self-concept in this example, probe for them to do so in the context of content, positivity, intensity and stability over time and accuracy. Ask students to comment on the aspects other members of the class wanted to change the most, and how a marketer might learn from the exercise.

(30 minutes, Chapter Objective 1, AACSB: Reflective Thinking)

Group Assignments

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1.

As a group, visit several social networking sites. How are members at various sites expressing themselves? What kinds of information are they providing? What does that tell the reader about them? Are there differences between the various sites’ members and their expressions?

Students are likely to observe differences between men and women in terms of what and how often each gender shares. You may tie this assignment back to the question of employers looking at information about potential employees on Facebook.

(30 minutes, Chapter Objective 1, AACSB: Reflective Thinking) 2.

Go to www.bodypiercing.com. This interesting site presents a wealth of information about body piercing. What marketing efforts are used to attract potential users? What other products were advertised? What intrigued you the most about the website? What can you tell about the demographics of the visitors to this website? How did you determine this? Did the website interest you in getting “pierced”? Explain. How did your group react to the information on the site?

Body piercing sells different types of adornments for piercings. The website uses gifts to attract potential users. It also uses and affiliate marketing program to promote the site (where another site could earn a percentage of the sale if it refers someone the bodypiercing.com and the individual purchases something. When students refer to demographics, they should consider age, gender, education, household income, etc.

Look for students to provide justification for the demographics.

(45 minutes, Chapter Objective 6, AACSB: Reflective Thinking)

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Chapter 7: Personality, Lifestyles, and Values CHAPTER OBJECTIVES When students finish this chapter they should understand why: 1. A consumer’s personality influences the way he or she responds to marketing stimuli, but efforts to use this information in marketing contexts meet with mixed results.

2. Brands have personalities.

3. A lifestyle defines a pattern of consumption that reflects a person’s choices of how to spend his or her time and money, and these choices are essential to define consumer identity.

4. It can be more useful to identify patterns of consumption than knowing about individual purchases when organizations craft a lifestyle marketing strategy.

5. Psychographics go beyond simple demographics to help marketers understand and reach different consumer segments.

6. Underlying values often drive consumer motivations.

CHAPTER SUMMARY A consumer’s personality influences the way he or she responds to marketing stimuli, but efforts to use this information in marketing contexts meet with mixed results. The concept of personality refers to a person’s unique psychological makeup and how it consistently influences the way a person responds to her environment. Marketing strategies based on personality differences have met with mixed success, partly because of the way researchers have measured and applied these differences in personality traits to consumption contexts. Some analysts try to understand underlying differences in small samples of consumers by employing techniques based on Freudian psychology and variations of this perspective, whereas others have tried to assess these dimensions more objectively in large samples using sophisticated, quantitative techniques.

Brands have personalities. A brand’s personality is the set of traits people attribute to a product as if it were person. Consumers assign personality qualities to all sorts of inanimate products.

Like our relationships with other people, these designations can change over time; therefore, marketers need to be vigilant about maintaining the brand personality they want consumers to perceive. Forging a desirable brand personality often is key to building brand loyalty.

Brands have personalities. A brand personality is the set of traits people attribute to a product as if it were a person. Consumers assign personality qualities to all sorts of inanimate products.

Like our relationships with other people, these designations can change over time; therefore, marketers need to be vigilant about maintaining the brand personality they want consumers to perceive. Forging a desirable brand personality often is key to building brand loyalty.

A lifestyle defines a pattern of consumption that reflects a person’s choices of how to spend his or her time and money, and these choices are essential to define consumer identity.

Copyright © 2017 Pearson Education 7-1

A consumer’s lifestyle refers to the ways she chooses to spend time and money and how her consumption choices reflect these values and tastes. Lifestyle research is useful to track societal consumption preferences and to position specific products and services to different segments.

Marketers segment based on lifestyle differences; they often group consumers in terms of their AIOs (activities, interests, and opinions).

It can be more useful to identify patterns of consumption than knowing about individual purchases when organizations craft a lifestyle marketing strategy.

We associate interrelated sets of products and activities with social roles to form consumption constellations. People often purchase a product or service because they associate it with a constellation that, in turn, they link to a lifestyle they find desirable. Geodemography involves a set of techniques that use geographical and demographic data to identify clusters of consumers with similar psychographic characteristics.

Psychographics go beyond simple demographics to help marketers understand and reach different consumer segments.

Psychographic techniques classify consumers in terms of psychological, subjective variables in addition to observable characteristics (demographics). Marketers have developed systems to identify consumer “types” and to differentiate them in terms of their brand or product preferences, media usage, leisure time activities, and attitudes toward broad issues such as politics and religion.

Underlying values often drive consumer’s motivations.

Products take on meaning because a person thinks the products will help him or her to achieve some goal that is linked to a value, such as individuality or freedom. A set of core values characterizes each culture, to which most of its members adhere.

CHAPTER OUTLINE I. Personality A. Personality refers to a person’s unique psychological makeup and how it consistently influences the way a person responds to his or her environment.

1. There has been debate about whether the concept of personality is valid since it changes with situations and circumstances.

2. Underlying characteristics are part of what defines behavior, but situational factors often play a large role as well.

Discussion Opportunity—Explain your own personality. Are you consistent or inconsistent with respect to this identified personality? Give examples. Ask some students to do the same.

Discussion Opportunity—Have students collect a series of pictures from ads in magazines that would display their personality. Everyone should post these pictures on a sheet of poster board and display them around the room. Each student should explain his or her ideas of himself or herself. Does the class agree with the assessment? How well do you really know one another?

Copyright © 2017 Pearson Education 7-2

B. Consumer Behavior on the Couch: Freudian Theory 1. Sigmund Freud developed the idea that much of one’s adult personality stems from a fundamental conflict between a person’s desire to gratify her physical needs and the necessity to function as a responsible member of society.

2. Freudian Systems separate the mind into three parts: a. The id (which is entirely oriented toward immediate gratification). i.

It operates on the pleasure principle (behavior guided by the primary desire to maximize pleasure and avoid pain). ii.

The id is selfish. iii. The id is illogical (it acts without regard to consequences). b. The superego (which is the counterweight to the id). i.

It is a person’s conscience. ii.

It internalizes society’s rules and it works to prevent the id from seeking selfish gratification. c. The ego (which is the system that mediates between the id and the superego). i.

The ego tries to balance these two opposing forces according to the reality principle, whereby it finds ways to gratify the id that will be acceptable to the outside world. ii.

Much of this battle occurs in the unconscious mind.

3. Consumer researchers adapted Freud’s ideas because they highlight the importance of unconscious motives that guide purchase decisions. Thus, consumers cannot necessarily tell us their true motivation when they choose a product.

4. The Freudian perspective raises the possibility that the ego relies on symbolism in products to compromise between the id and the superego. The product represents a consumer’s true goal, which is socially unacceptable or unattainable.

Discussion Opportunity—Ask: What are some products that make their appeals primarily to the id? What are some products that make their appeals to the superego (bring in examples if you can)? Do products make an appeal to the ego? If so, how? Describe a mediation experience where the ego functioned.

Discussion Opportunity—Bring evidence of symbolism (which might be considered to be Freudian) that you have found in magazine advertisements.

5.

Freudian applications in marketing often relate to a product’s sexual symbolism. a. Some analysts speculate products can substitute for sexual gratification. b. Male-oriented symbols, or phallic symbols, are designed to appeal to women.

Discussion Opportunity—Ask: Why is the Freudian school often associated with sex and sexuality? What ramification does this hold for marketing? Does sex sell? According to Freud, why or why not?

6. The first attempts to apply Freudian ideas to understand the deeper meanings of products and advertisements were made in the 1950s and were known as motivational research.

Copyright © 2017 Pearson Education 7-3

a. This research focused on interpretations of unconscious motives. b. This form of research relies on depth interviews (several hours long, based on assumption that respondent cannot immediately articulate latent/underlying motives) with individual consumers. c. Ernest Dichter pioneered this depth interview and used them to study 230 products. *****Use Table 7.1 Here ***** d. Criticisms of motivational research: i.

It gives marketers the power to manipulate consumers. ii.

The technique lacked rigor and validity because interpretations subjective. e. Benefits of motivational research: i.

Less expensive than large-scale quantitative survey data ii.

Ability to aid marketing communications by allowing companies access to knowledge that helps them appeal to deep-seated needs iii. Some findings intuitively plausible C. Neo-Freudian Theories 1. Neo-Freudian (influenced by Freud) researchers felt that an individual’s personality was more influenced by how he or she handled relationships with others than by unresolved sexual conflicts. Famous advocates of this thought-path (Neo-Freudians) included Karen Horney and Carl Jung.

2. Karen Horney proposed that people could be described as moving toward others (compliant), away from others (detached), or against others (aggressive).

3. Alfred Adler proposed that a prime motivation is to overcome feelings of inferiority relative to others.

4. Harry Stack Sullivan focused on how personality evolves to reduce anxiety in social relationships.

5. Carl Jung developed analytical psychology. a. He believed people were shaped by the cumulative experiences of past generations. b. Central to his ideas was the collective unconscious (a storehouse of memories inherited from our ancestral past). c. Shared memories create archetypes—universally shared ideas and behavior patterns. These memories would be about birth, death, and the devil (as shown in myths, stories, and dreams). d. Advertising messages often include archetypes. Young & Rubicam uses the archetype approach in its BrandAsset Archetypes model that Figure 6.1 depicts. *****Use Figure 7.1 Here ***** Discussion Opportunity—See if you can find illustrations of Karen Horney and Carl Jung’s theories in contemporary advertising. Indicate why you think the ads apply. Show examples if possible.

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D. Trait Theory 1. One approach to personality is to focus on the quantitative measurement of personality traits or identifiable characteristics that define a person.

2. Common traits include: a. Extroversion (socially outgoing) and introversion (quiet and reserved) b. Innovativeness (degree to which a person likes to try new things) c. Materialism (amount of emphasis a person places on acquiring and owning products) d. Self-consciousness (degree to which a person deliberately monitors and controls the image of the self that he or she projects to others) e. Need for cognition (degree to which a person likes to think about things and by extension expends the necessary effort to process brand information) f. Frugality (frugal people deny short-term purchasing whims in favor of resourcefully using what they own) Discussion Opportunity—Ask: What traits define you as a person? Give examples.

3. Call centers and media researchers find value in matching personality traits to representatives/television shows.

4. Problems with Trait Theory a. Many of the scales are not sufficiently valid or reliable. b. Personality tests are often developed only for specific populations. c. Tests may not be administered under the best conditions. d. Researchers make changes in the research instruments to adapt them to their own situations. e. Many trait scales are only intended to measure gross, overall tendencies. f. Many of the scales are not well planned or thought out.

5. Big Five Personality Traits a. Openness to experience: The degree to which a person is open to new ways. b. Conscientiousness: The level of organization and structure a person needs. c. Extroversion: How well a person tolerates stimulation from people. d. Agreeableness: The degree to which we defer to other people. e. Neuroticism (emotional instability): How well a person copes with stress.

II. Brand Personality A. Products, like consumers, have personalities. A brand personality is the set of traits people attribute to a product as if it were a person.

1. Examples of personality dimensions include old fashioned, wholesome, traditional, and lively, among others.

2. Forging a successful brand personality is key to building brand loyalty but it is often difficult. a. Consumers can detect if a brand is not living up to its claims and is inauthentic. b. When consumers then share this opinion online by mocking the real brand, it is called the “Doppelganger brand image” – one that looks like the original but is in fact a critique of it.

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c. Our feelings about a brand’s personality are part of brand equity, which refers to the extent to which a consumer holds strong, favorable and unique associations with a brand in memory and is willing to pay more for the branded version of a product than for a non-branded version.

3. The creation and communication of a distinctive brand personality is one of the primary ways marketers can make a product stand out from the competition and inspire years of loyalty to it.

4. Personality analysis helps marketers identify a brand’s weaknesses that have little to do with functional qualities.

5. Animism (whereby inanimate objects are given qualities that make them somehow alive) is an old practice that is comparable to assigning human traits to brands.

Consumers tend to anthropomorphize objects, in other words give them human characteristics. *****Use Table 7.2 Here; Use Consumer Behavior Challenge Here ***** Discuss #7.6 Discussion Opportunity—Ask students if they can think of products that seem “to come alive.”

Have them describe how the marketer or advertiser creates this illusion. What type of impact does this have on the consumer? What are the dangers of animism?

IV. Product Complementarity and Co-BrandingStrategies A. Lifestyle: Who We Are, What We Do 1. Lifestyle refers to a pattern of consumption reflecting a person’s choices of how he or she spends time and money. It is (in an economic sense) how one elects to allocate income.

2. A lifestyle marketing perspective recognizes that people sort themselves into groups on the basis of the things they like to do, how they like to spend their leisure time, and how they choose to spend their disposable income.

3. Other terms used to describe lifestyle are taste public, consumer group, symbolic community, and status culture.

Discussion Opportunity—Ask: What are some different lifestyles that people about your age (those attending and not attending college) tend to follow? What are the differences between your lifestyle and someone who is a returning student (or a normal undergraduate if you are a returning student)? A graduate student?

B. Product Complementarity and Co-Branding Strategies 1. People, products, and settings combine to express a consumption style. The adoption of a lifestyle-marketing perspective implies that we must look at patterns of behavior to understand consumers. *****Use Figure 7.3 Here *****

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1. Co-branding strategies are used by marketers to combine products that appeal to similar patterns of behavior.

2. Product complementarity occurs when the symbolic meanings of different products are related to each other. These products, termed consumption constellations, are used by consumers to define, communicate, and perform social roles.

V. Psychographics A. Psychographics involves the use of psychological, sociological, and anthropological factors to determine how the market is segmented by the propensity of groups within the market and their reasons to make a particular decision about a product, person, ideology, or otherwise hold an attitude or use a medium.

B. How do perform a psychographic analysis?

Psychographic studies take several forms including lifestyle profiles, product-specific profiles, general lifestyle segmentation, and product-specific segmentation studies.

C. AIOs 1. Most contemporary psychographic research attempts to group consumers according to some combination of three categories of variables: activities, interests, and opinions.

2. Table 7.6 lists lifestyle dimensions which can be used in psychographic profiling.

3. Marketers use the results of psychographic studies to do things such as: • Define the target market • Position the product • Better communicate product attributes • Develop product strategy • Market social and political issues 4. The best known lifestyle segmentation system is the Values and Lifestyles System (VALS2). Figure 7.4 illustrates VALS2. VALS segments are grouped according to resources and self-orientation. Self-orientation is either based on ideals, achievement, and self-expression. The results include the following types: • Innovators • Thinkers • Achievers • Experiencers • Believers • Strivers • Makers • Strugglers VI. Values A. A value is a belief that some condition is preferable to its opposite.

1. Two people can believe the same behaviors but their underlying belief systems may be quite different.

2. Consumers often seek out those that have similar belief systems to their own.

Discussion Topic: Give illustration of how people with similar values band together. How is this shown in advertising? Give an illustration.

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VI. Every culture has a set of values that it imparts to its members. Core values do change over time. In many cases, values are universal.

A. The process of learning the beliefs and behaviors in one’s own culture is called enculturation.

B. Learning the value systems and beliefs of other cultures is acculturation.

C. Crescive norms are subtle, and are learned as we interact with others.

1. A custom is a norm that controls basic behaviors 2. A more is a custom with a strong moral overtone 3. A convention is a norm that regulates how we conduct our daily lives.

Values are linked to consumer behavior. Consumption-specific values and product-specific values affect the importance people in different cultures place on possessions.

A. The Rokeach Value survey identifies nine consumer segments based on the values that affect consumption behavior.

1. The list of values (LOV) identify nine consumer segments based on the values that affection consumption behavior.

2. The means-end chain model assumes people indirectly tie product attributes to terminal values. Laddering identifies associations between specific attributes and general consequences.

3. Syndicated surveys are used to track changes in values.

End-of-Chapter Support Material SUMMARY OF SPECIAL FEATURE BOXES 1.

Marketing Opportunity

If you know the personality type of the person you are speaking with, you can modify your own communication style to work more effectively with that person.

2.

Net Profit

Messages and products that allow a consumer to promote their uniqueness appeal to some more than others. Product personalization allows buyers to customize an item to personal taste.

3.

Marketing Pitfall

Colleges have brand personalities. Anomaly attempted an advertising campaign for ESPN based on their notion of the personality at the universities, which was cancelled.

4.

CB As I See It: Nira Munichor, Hebrew University of Jerusalem

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Like people, brands have personality, even arrogance. Consumers who have negative selfevaluations feel better when they resist buying brands they perceive as arrogant.

5.

Marketing Pitfall

Regional airline USAir was rebranded after 9 months and $40 million dollars of research to US Airways.

6.

The Tangled Web

The competitive nature of e-sports has increased the use of swatting, the act of calling police departments to report incidences at celebrity’s homes.

7.

Marketing Opportunity

There is an increase in the trend of cosplay, a form of performance art in which participants wear elaborate costumes that represent a virtual world avatar or other fictional character.

8.

Marketing Opportunity

Not all products that are successful in one country are successful in other countries. Consumer preferences are based on beliefs about the ability of a product to replace a time-tested way of solving an issue.

9.

CB As I See It: Giana Eckhardt, Royal Holloway University of London

The Sharing Economy promotes resource sharing for consumers who don’t want to own, but need access to goods and services on occasion, such as a car from Uber, or play to stay from Airbnb.

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REVIEW 7-1.

How does Freud’s work on the the unconscious mind relate to marketing practice?

Freud believed that much of our personality stems from the desire to satisfy physical needs and the need to be a responsible member of society. The id directs a person towards pleasure and can be used by marketers to increase desire for a good or service.

The superego tempers this urge. According to the reality principle, the ego will try to gratify the id in a way the outside world will find acceptable. Marketers promote products as a means of gratification. In particular, it highlights the potential importance of unconscious motives that guide our purchases. The implication is that consumers cannot necessarily tell us their true motivation when they choose products, even if we can devise a sensitive way to ask them directly. The Freudian perspective also raises the possibility that the ego relies on the symbolism in products to compromise between the demands of the id and the prohibitions of the superego. People channel their unacceptable desire into acceptable outlets when they use products that signify these underlying desires. This is the connection between product symbolism and motivation: The product stands for, or represents, a consumer’s true goal, which is socially unacceptable or unattainable. By acquiring the product, the person vicariously experiences the forbidden fruit.

(10 minutes, Chapter Objective 1, AACSB: Reflective Thinking)

7-2.

Core values evolve over time. What do you think are the three to five core calues that best descrive U.S. Americans today?

Student reposnses will vary as the list of core values can be long. Students should understand that core values uniquely define a culture and nclude values such as freedom, youthfulness, materialism, and activity.

(5 minutes, Chapter Objective 6, AACSB: Reflective Thinking)

7-3.

What is the basic philospophy behind a lifestyle marketing strategy?

A lifestyle marketing perspective recognizes that people sort themselves into groups on the basis of the things they like to do, how they like to spend their leisure time, and how they choose to spend their disposable income.

(5 minutes, Chapter Objective 4, AACSB: Reflective Thinking)

7-4.

How can marketers stay on top of changes in lifesyle trends?

Marketers use psychographics to group customers based on some type of variable, such as activities, interests, or opinions. Many research companies and advertising agencies develop a lifestyle sermentation typology. These incorporate psycological and demopgraphic data to divide adults into groups. These groups indicate what a consumer might be passionate about, such as social issues, achievement, or branding. Based on the needs of the group, marketing can be changed to promote what is most important to that consumer group.

(5 minutes, Chapter Objective 5, AACSB: Reflective Thinking)

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CONSUMBER BEHAVIOR CHALLENGE DISCUSS 7-5. One way to clearly see the impact of shifting cultural values on consumption is to look at the increasing emphasis on the importance of health and wellness. In recent years, topperforming new food/beverage products featured items with natural or organic ingredients, such as Chobani yogurt and Nature’s Pride bread. Where is this trend going—is it just temporary or does it reflect a more permanent change in how U.S. Americans look at what they eat and drink?

A value is a belief that some condition is preferable to its opposite, for example, organic food is believed to be better for you than processed food. Consumers purchase products because they believe these products will help them attain a value related goal, such as improved health. These purchases support the consumer’s value system and core values that define them as consumers. The media acts to reinforce these values, thereby ensuring an ongoing trend in healthier food choices. Acculturation occurs when we share knowledge with others to promote the same goals. The use of natural and organic ingredients is a trend that is becoming more permanent as labeling guidelines and laws are established to better identify natural and organic foods, (5 minutes, Chapter Objective 6, AACSB: Reflective Thinking)

7-6. Is there such a thing as personality? If so, how might you intergrate knowledge about consumer’s personality traits into a marketing strategy?

Responses will differ based on the student’s views. Personality influences the way a consumer responds to stimuli, and marketing efforts capitalize on this with mixed results.

Personality is how we respond to the environemnt. However, there are studies that find people do not have stable personalities, and that this is just a way to categorize people.

Others studies show that personality is stabilized by the age of 30. We know that people do not act consistantly in all situations. A marketer can capitalize on the unstable personality by highlighting the benefits of buying a product to fit in with peers. A marketer might capitalize on a more mature personality by indicating the same goals.

(5 minutes, Chpater Objective 1, AACSB: Reflective Thinking) 7-7. The Great Recession is over, so things ar elooking up for many consumers. Still, is frugality the “new normal” or will many of us revert to the free-spending dys before the bubble burst in 2008?

Stundent responses will vary based on their opinion. Students should know that personality focuses on the quantitiative measurement of personality traits, those identifiable characteristics that define a person. Frugality is one such trait. Consumers avoided short term purchasing whims and chose instead to resourcefully use what they already owned.

Analyst predict that more us us will continue to be frugal even when the economy improves.

A recent sruvey of college students in the U.S. shows that frugal consumers are less materialisic and less invoved in brands compared to others. Frugal consumers are also less likely to be concerned about other’s opinions regarding what they buy.

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(7 minutes, Chapter Objective 1, AACSB: Reflective Thinking)

7-8. Is it accuracte to claim that sustainability is now a core value for U.S. Americans? Why or why not?

Responses will differ based on students opinions. Students should understand that a general set of core values uniquely define a culture, and core values evolve over time.

Some analyst feel our focus on physical objects is shifting towards consumption of experiences instead. Consumers in the U.S. are increasingly valueing sustainability and rewarding companies that are environmentally friendly.

(5 minutes, Chapter Objective 5, AACSB: Reflective Thinking)

APPLY 7-9 Identify ome of your favorite brands. If each “came to life” as a person, what kind of person would he or she be? Describe the brand personality of each – on what basis do you infer these traits?

The first thing students will have to do to answer this question is to establish the ten personality dimensions. They are free to construct these as they choose; however, the material in the chapter offers some suggestions. The differences will be the result of differences observed. It will be easier for them if they choose products from a brand category with which they are familiar. (Many times students will know more about the brand than what is shown in the advertisement.) Be sure the students demonstrate “how” personalities relate to the advertising and packaging used by the marketer to differentiate these products.

(10 minutes Chapter Objective 1, AACSB: Reflective Thinking)

7-10 Starbucks is solidly established as a go-to location for coffee, tea, and pastries but to grow the company needs to expand its offerings so that customers spend more of their time (and money) there. The chain is experimenting with a new concept, Starbuck Evenings, where after 4:00 each afternoon the store flips to a different menu that includes wine, beer, small plates like truffle mac and cheese, sandwiches, and salads. Is Starbucks too entrenched in our “coffeehouse lifestyle” or does the chain have room to expand? What recommendations would you make to Starbucks to help the company expand its lifestyle marketing strategy?

Responses will vary by students and be based on expansion strategies. Students should consider demographics and psychographics. Students should also address the success of the current menu options that include breakfast and lunch options. Culture is also a consideration that should be taken in to account when responding to this.

(10 minutes Chapter Objective 5, AACSB: Reflective Thinking)

7-11 Using media that target college students, construct a consumption constellation for this social role. What set of products, activities, and interests tend to appear in advertisements depicting “typical” college students? How realistic is this constellation?

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Answers will vary but will include text books, dorm life, sports, professors, etc. Most students will think that these factors are realistic.

(15 minutes, Chapter Objective 2, AACSB: Analytic Skills) 7-12 Extreme sports. YouTube. Pinterest. Veganism. Can you predict what will be “hot” in the near future? Identify a lifestyle trend that is just surfacing in your universe. Describe this trend in detail, and justify your prediction. What specific styles or products relate to this trend?

Do it yourself (DIY), solutions, recipes and crafts.

(30 minutes, Chapter Objective 2, AACSB: Reflective Thinking,)

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CASE STUDY TEACHING NOTES Chapter 7 Case Study: Parrot Heads Unite Summary of Case This case spotlights the phenomenon of Jimmy Buffett fans and their fanatical behavior. Known as Parrot Heads, fans travel long distances to see the artist perform and tailgate for hours before an event. Buffett fans take Buffett-themed vacations; have Buffett-themed rooms, homes, RVs, boats, weddings, etc.

Suggestions for Presentation This material can be used to illustrate how reference groups also have status symbols.

Suggested Answers for Discussion Questions CS7-1. Discuss how Jimmy Buffett fans and the Parrot Heads in Paradise clubs connect with your understanding of the role of consumer identity and lifestyle marketing. Are there particular personality or lifestyle characteristics that Parrot Heads share?

Student answers may vary but will include a discussion on consumer identity and lifestyle marketing, and draw references from the case study. Personality or lifestyle characteristics of Parrot heads might include Hawaiian shirts, parrot hats, tailgating, charitable volunteerism.

(5 minutes, Chapter Objective 5, AACSB: Reflective Thinking) CS7-2. Describe the brand personality for Margaritaville. How does it compare with other brand personalities with which you’re familiar? What has led to the long-term success this brand franchise has experienced? Why have some experts come to consider it a “cult brand”?

Cult brands motivate an almost “magical participation with their customers, helping them to embrace a certain way of being.” Parrot Heads are drawn to the Margaritaville lifestyle based on Maslow’s B-values of aliveness and playfulness. They draw energy from the experiences individually, and want to share it with others. Parrot Heads are rewarded for their engagement is “brand” activities such as volunteerism when they earn tickets choices, and seating preferences. Other brand personalities discussed by students will vary based on their experiences.

(10 minutes, Chapter Objective 4, AACSB: Reflective Thinking)

CS7-3. What kind of opportunities does the existence of the Buffet community present to marketers? Develop a list of specific marketing and promotional tactics they might use to reach this target market.

Student answers may vary but should incorporate ideas related to relating to the Parrot Head lifestyle.

Copyright © 2017 Pearson Education 7-14

(10 minutes, Chapter Objective 4, AACSB: Diverse and Multicultural Work Environments)

Additional Support Material

STUDENT PROJECTS Individual Projects

1.

Have students collect print advertisements that portray some of the aspects of Freudian principles in action. Do they seem effective? Is the message lost in the execution?

Students are likely to select ads that portray phallic symbols, the id, the superego, or conflicts between the two. Students may get confused about the Freudian ego and select ads that feature characters that have a “big ego," so be sure the students know the difference.

(30 minutes, Chapter Objective 1, AACSB: Reflective Thinking) 2.

Ask students to examine advertisements and determine which appear to be Freudian or Neo-Freudian in nature. How is this determined? What were the messages in the advertisements?

Freudian ads are likely to be about sexual conflicts, while Neo-Freudian ads are likely to be about relationships. Students may gravitate toward ads with archetypes for the NeoFreudian examples.

(20 minutes, Chapter Objective 1, AACSB: Reflective Thinking) 3.

Have each student develop a description of his or her own pleasure principle as it relates to consumption. In other words, how is their pleasure maximized and pain minimized when they buy certain types of products? What are the things that marketers do to appeal to this?

Students are likely to select products that provide immediate gratification. Marketers may appeal to consumer emotions and promote the experience of pleasure in the communications for the product. The recent advertising campaign, “What Happens in Vegas Stays in Vegas”, promises pleasure without consequences.

(10 minutes, Chapter Objective 1, AACSB: Reflective Thinking) 4.

Have students select an ad or series of ads from a well-known campaign. Based on the ad, how have archetypes been formed among consumers?

Archetypes are universally shared ideas and behavior patterns. These memories would be about birth, death, and the devil (as shown in myths, stories, and dreams). Students may refer to Table 6.1.

(30 minutes, Chapter Objective 1, AACSB: Reflective Thinking,)

Copyright © 2017 Pearson Education 7-15

5.

Have each student characterize three different people that they associate with (friends, coworkers, classmates, family members, etc.) based on traits (trait theory). Each of the three should be distinct. How could an advertiser use this information?

Traits include extroversion (socially outgoing) and introversion (quiet and reserved); innovativeness (degree to which a person likes to try new things); materialism (amount of emphasis a person places on acquiring and owning products); self-consciousness (degree to which a person deliberately monitors and controls the image of the self that he or she projects to others); need for cognition (degree to which a person likes to think about things and by extension expends the necessary effort to process brand information); and frugality (frugal people deny short-term purchasing whims in favor of resourcefully using what they own).

(15 minutes, Chapter Objective 1, AACSB: Reflective Thinking) 6.

Ask students to list three products that seem to have personalities. Describe the personalities. What types of people buy these products? Is there a match between the consumer’s personality and that of the brand or product?

Examples of personality dimensions include old fashioned, wholesome, traditional, and lively. Depending on the products, the personalities may match the consumer’s or not. If not, remind students that a consumer may select a product with a different personality if s/he desires to have more of that personality trait.

(20 minutes, Chapter Objective 1, AACSB: Reflective Thinking) 7.

Have students select a product category. Then, have them develop a simple survey asking respondents how much they would be willing to pay for: 1) a generic version of the product, 2) a minor brand in the market, and 3) the market leading brand. Have them distribute this to ten individuals. Have them tally the results as a demonstration of brand equity.

Students should find that people are willing to pay the least for the generic version and the most for the market-leading brand. With ten responses, you also may have one individual that affects the overall averages.

(60 minutes, Chapter Objective 1, AACSB: Reflective Thinking,) 8.

This chapter mentions that psychographic analyses can be used by politicians to market themselves. What are some of the marketing strategies and techniques used by politicians in recent elections? Did the candidates design special appeals to attract the attention of special target markets? What communication strategies were used? Discuss your observations with the class.

Student responses will depend on the most recent election and whether they select a local or national candidate race. In the 2008 presidential election, President Obama bought commercial time on MTV, Comedy Central, and VH1. He advertised using mobile advertising and banners, as well as on Facebook. He purchased virtual billboards in video games. He used these strategies to reach the younger demographic based on their interests and activities.

(20 minutes, Chapter Objective 2, AACSB: Reflective Thinking,)

Copyright © 2017 Pearson Education 7-16

9.Ask students to find at least two manufacturer’s ads for the same type of product (e.g., clothing, food product, personal care product, etc.) that they think are aimed at different social classes. How do these ads differ?

Look for students to relate the elements of the advertisement, including the social environment, the furnishings in the background, the colors used, etc. to other consumption behaviors of each social class.

(20 minutes, Chapter Objective 3, AACSB: Reflective Thinking) 1.

10. Ask a student to bring in an ad in which the brand being marketed was at one time a status symbol, but fell out of fashion for a time (e.g., Cadillac, Parker Pen, Izod-Lacoste, etc.). Have the student discuss whether the ad still attempts to create that perception.

What new product, if any, has replaced the featured product as a status symbol?

For a status symbol to distinguish a customer and show s/he has “made it,” it must be exclusive in some way. Cadillac, for example, hurt its image as a status symbol when it introduced lower priced models and offered inexpensive leases, making the brand more available to those with less money. That, coupled with the fact that it only retained appeal to an older audience that did not want the increasingly desirable foreign luxury cars, hurt its ability to continue to communicate status.

(25 minutes, Chapter Objective 3, AACSB: Reflective Thinking

11. Have a student interview one or more salespeople from one of the following product categories: new or used cars, stereo equipment, clothing, insurance, or real estate. Ask the student to determine the social classes or status of their customers. Does the student recommend that the sales approach will vary depending on the customer’s social class?

The chapter notes some of the differences in how social class members shop. The student’s recommendation may be based on the salesperson’s perceptions of these differences and the students evaluation of whether capitalizing on the differences is ethical.

(45 minutes, Chapter Objective 3, AACSB: Ethical Understanding and Reasoning Abilities) 12. Ask students to think of a specific lifestyle (your own, your parent’s, your aspirations, etc.) and then make a list of products and services that are linked in the consumer’s mind to that specific lifestyle. (Hint: You might decorate your living room, design a wardrobe, think of options for a car, etc.)

Student responses will vary. It may be helpful to narrow down the specific task, perhaps using the hints to select one area where the lifestyle might be reflected.

(30 minutes, Chapter Objective 5, AACSB: Reflective Thinking) Group Projects

1.

Have students develop print or video advertisements that apply Freudian and Trait theory principles for products or services that target college students. Have them explain if their advertisements will work effectively. Ask them to test the advertisements with other students that are not in the consumer behavior class.

Copyright © 2017 Pearson Education 7-17

Students should identify how they have applied Freudian and trait theory principles in their response about whether the advertisements will work effectively. This exercise will provide students with the opportunity to think critically about the application of these theories.

(180 minutes, Chapter Objectives 1 and 2, AACSB: Reflective Thinking and Communication Abilities,) 2.

Let students call the local newspaper and ask about advertising inserts that are specific to a certain area of the city/town. If they do have such a service, are the ads different?

How are they different? Do they match the PRIZM for the area?

This activity is likely to be more meaningful in locations where the local newspaper serves a large metropolitan area. The instructor should learn if the newspaper provides this service before presenting the assignment because if the newspaper does not, the assignment will be less meaningful.

(30 minutes, Chapter Objective 2, AACSB: Reflective Thinking,) 3.

Using AIO segmentation, have groups of students design a new advertising campaign for a chain of restaurants targeting young professional college graduates. Have them explain the process they went through.

Students should include activities, interests and opinions, and may refer to Table 6.3.

Look for students to relate the message in the advertising campaign to their understanding of the segment based on these three dimensions.

(120 minutes, Chapter Objective 2, AACSB: Reflective Thinking)

4. Assign groups of students to go to an airport (or other location where they will find lots of foot traffic) to people watch. Have them classify as many people as possible according to social class based on the appearance and behaviors of individuals. Have the class as a whole discuss their results. What lessons can be learned from this?

It will be challenging for consumers to determine social class based on the appearance of individuals. Further, some social classes are not likely to be represented at the airport.

Students may rely on status symbols and distinguish people based on behaviors, like whether they travel business class or first class. International airports will add another layer of complexity to trying to determine the social class of individuals since status symbols in other countries are different from those in the United States. ( 90 minutes, Chapter Objective 3, AACSB: Reflective Thinking) 5. Student groups should identify three examples of lifestyle marketing on the Internet.

Have members of the group demonstrate at least one of these sites in class. Show how the site uses lifestyles to the organization’s advantage.

Students should select websites that appeal to people with common leisure activities and discretionary spending habits. Many sites are aimed at a specific lifestyle so they can attract a certain type of advertiser. The exercise can also be done with blogs.

(15 minutes, Chapter Objective 5, AACSB: Reflective Thinking)

Copyright © 2017 Pearson Education 7-18

Copyright © 2017 Pearson Education 7-19

eLAB Individual Assignments

1.

Go to www.scion.com. Explore the site and describe in detail the personality of this brand.

Scion used to have an advertising campaign that attempted to match the receiver’s personality with one of the vehicles. Students can read about the vehicles and the press releases/news about the vehicles to describe the brand’s personality.

(15 minutes, Chapter Objective 1, AACSB: Reflective Thinking,) 2.

Go to www.bebe.com. Analyze the product offerings for this company based on the id and the superego. Do people who buy this brand do so based on one or the other? Explain how the ego may create balance.

Bebe.com is a website for a women’s clothing retailer. Students will probably associate the fashions offered by the retailer with the id. However, the website also includes information about bebe’s support of a foundation at times, which students may see as an effort to balance the hedonic aspects promoted on the rest of the website.

(20 minutes, Chapter Objective 1, AACSB: Reflective Thinking) 3.

First, print out the VALS types along with their descriptions. Hand them to the students and have them select the type they think they are. After noting their choices, have them visit http://www.strategicbusinessinsights.com/vals/presurvey.shtml and take the survey to determine who they really are. Is the self-selection different from the results of the survey? If yes, why do they feel they are different from what the survey states? Can the differences be reconciled?

This exercise should deepen student engagement with the VALS types, which should increase their understanding of the VALS framework. They may also evaluate the measurement used to categorize consumers on the framework.

(30 minutes, Chapter Objective 2, AACSB: Reflective Thinking)

4. Go to www.burtsbees.com. How does this site use lifestyle marketing to its advantage? What lifestyle would be most associated with the products shown on this site?

After reading the history of the founders, how were the founders able to project their own lifestyles into the products produced by the company? How could the company expand its sales into other lifestyle segments?

Burt’s Bees sells natural products. Its products are likely to appeal to people whom value natural products and the environment. Its founders include their story on the website and on the packaging for some of the products. Look for students to talk about expansion into other lifestyle segments in ways that does not alienate the current lifestyle segment.

(15 minutes, Chapter Objective 5, AACSB: Reflective Thinking Group Assignments

Copyright © 2017 Pearson Education 7-20

1.

Visit both www.macaronigrill.com and www.dennys.com. Have your group analyze the approaches that both of these websites have taken to appeal to their target markets. What elements and cues in these websites reflect the principles contained in this chapter on social status?

Both companies appeal to the masses, but Macaroni Grill appeals to a slightly higher social class. Denny’s tends to focus on the quantity of food at a low price point, while Macaroni Grill tends to focus on the quality of the food. The colors and layout used on each site are in line with their different positions.

(20 minutes, Chapter Objective 3, AACSB: Reflective Thinking) 2.

Visit http://www.strategicbusinessinsights.com/vals/presurvey.shtml and complete the VALS survey. Have your group discuss the questions posed to sort you into categories. Do the questions assess important attributes for marketers to understand consumer groups? What other information about lifestyle would you want to know?

Develop your own questionnaire.

Teams will have different answers but this is a good exercise for encouraging them to consider measurement of constructs as well as the needs of marketers for high-quality and insightful information.

(20 minutes, Chapter Objective 6, AACSB: Reflective Thinking)

3.

Have students go to http://www.strategicbusinessinsights.com/vals/presurvey.shtml.

Have each of them take the survey and print out the page with the results. They should also print the list of VALS classifications and description. Then, have them discuss the outcomes in groups. Specifically, they should discuss whether they feel that the results are characteristic of them.

This exercise is similar to the individual eLab #3, but includes the step where they discuss the outcomes in groups.

(60 minutes, Chapter Objective 2, AACSB: Reflective Thinking)

Copyright © 2017 Pearson Education 7-21

Chapter 8: ATTITUDES AND PERSUASIVE COMMUNICATIONS CHAPTER OBJECTIVES When students have finished reading this chapter, they should understand why: 1. It is important for consumer researchers to understand the nature and power of attitudes.

2. Attitudes are more complex than they first appear.

3. We form attitudes in several ways.

4. A need to maintain consistency among all our attitudinal components often motivates us to alter one or more of them.

5. Attitude models identify specific components and combine them to predict a consumer’s overall attitude toward a product or brand.

6. The communications model identifies several important components for marketers when they try to change consumers’ attitudes toward products and services.

7. The consumer who processes a message is not the passive receiver of information marketers once believed him or her to be.

8. Several factors influence the effectiveness of a message source.

9. The way a marketer structures his message determines how persuasive it will be.

10. Many modern marketers are reality engineers.

11. Audience characteristics help to determine whether the nature of the source or the message itself will be relatively more effective.

CHAPTER SUMMARY It is important for consumer researchers to understand the nature and power of attitudes.

An attitude is a predisposition to evaluate an object or product positively or negatively. We form attitudes toward products and services that often determine whether we will purchase them or not.

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Attitudes are more complex than they first appear.

Three components make up an attitude: beliefs, affect, and behavioral intentions.

We form attitudes several ways.

Attitude researchers traditionally assumed that we learn attitudes in a fixed sequence: First, we form beliefs (cognitions) about an attitude object, then we evaluate that object (affect), and then we take some action (behavior). Depending on the consumer’s level of involvement and the circumstances, though, his attitudes can result from other hierarchies of effects as well. A key to attitude formation is the function the attitude holds for the consumer (e.g., is it utilitarian or ego defensive?).

A need to maintain consistency among all of our attitudinal components often motivates us to alter one or more of them.

One organizing principle of attitude formation is the importance of consistency among attitudinal components—that is, we alter some parts of an attitude to be in line with others. Such theoretical approaches to attitudes as cognitive dissonance theory, self-perception theory, and balance theory stress the vital role of our need for consistency.

Attitude models to identify specific components and combine them to predict a consumer’s overall attitude toward a product or brand.

Multiattribute attitude models underscore the complexity of attitudes: They specify that we identify and combine a set of beliefs and evaluations to predict an overall attitude. Researchers integrate factors such as subjective norms and the specificity of attitude scales into attitude measures to improve predictability.

The communications model identifies several important components for marketers when they try to change consumers’ attitudes toward products and services.

Persuasion refers to an attempt to change consumers’ attitudes. The communications model specifies the elements marketers need to transmit meaning. These include a source, a message, a medium, a receiver, and feedback.

The consumer who processes a message is not necessarily the passive receiver of information marketers once believed him or her to be.

The traditional view of communications regards the perceiver as a passive element in the process. New developments in interactive communications highlight the need to consider the active roles a consumer plays when he or she obtains product information and builds a relationship with a company. Advocates of permission marketing argue that it is more effective to send messages to consumers who have already indicated an interest in learning about a product than trying to hit people “cold” with these solicitations.

Several factors influence the effectiveness of a message source.

Two important characteristics that determine the effectiveness of a source are its attractiveness and credibility. Although celebrities often serve this purpose, their credibility is not always as strong as marketers hope. Marketing messages that consumers perceive as buzz (those that are authentic and consumer generated) tend to be more effective than those categorized as hype (those that are inauthentic, biased, and company generated).

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The way a marketer structures his or her message determines how persuasive it will be.

Some elements of a message that help to determine its effectiveness include the following: The marketer conveys the message in words or pictures; the message employs an emotional or a rational appeal; how often it’s repeated; whether it draws a conclusion; whether it presents both sides of the argument; and whether the message includes fear, humor, or sexual references.

Advertising messages often incorporate elements from art or literature, such as dramas, lectures, metaphors, allegories, and resonance.

Many marketers are reality engineers Reality engineering occurs when marketers appropriate elements of popular culture to use in their promotional strategies. These elements include sensory and spatial aspects of everyday existence, whether in the form of products that appear in movies, scents pumped into offices and stores, billboards, theme parks, or video monitors attached to shopping carts.

Audience characteristics help to determine whether the nature of the source or the message itself will be relatively more effective.

The relative influence of the source versus the message depends on the receiver’s level of involvement with the communication. The elaboration likelihood model (ELM) specifies that source effects are more likely to sway a less-involved consumer, whereas a more-involved consumer will be more likely to attend to and process components of the actual message.

CHAPTER OUTLINE I. The Power of Attitudes A. An attitude is a lasting, general evaluation of people (including oneself), objects, advertisements, or issues.

1. Anything that one has an attitude toward is called an attitude object (Ao).

2. An attitude is lasting – it tends to endure over time and is general – it applies to more than a momentary event.

Discussion Opportunity—Ask the class to brainstorm all the ways the term attitude is used in our society. List them on the board.

3. The functional theory of attitudes was initially developed by psychologist Daniel Katz to explain how attitudes facilitate social behavior. The following attitude functions were identified by Katz: a. Utilitarian function—based on reward and punishment; straightforward product benefits. b. Value-expressive function—goes to the consumer’s central values or selfconcept. c. Ego-defensive function—protects the person from external threats or internal feelings. d. Knowledge function—the need for order, meaning, and structure.

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Discussion Opportunity—Ask students to bring in advertisements that display each of the attitude functions.

II. The ABC Model of Attitudes A. An attitude has three components: affect, behavior, and cognition.

1. Affect refers to the way a consumer feels about an attitude object.

2. Behavior involves the person’s intentions to do something with regard to an attitude object (this intention always results in behavior).

3. Cognition refers to the beliefs a consumer has about an attitude object.

B. The ABC model emphasizes the interrelationships among knowing, feeling and doing.

Discussion Opportunity—Construct an example to illustrate each of the components of the ABC model of attitudes.

Discussion Opportunity—Ask: Which of the three components of the ABC model of attitudes do you believe is the most common explanation of attitudes? Why? C. Hierarchies of Effects 1. Attitude researchers have developed the concept of a hierarchy of effects to explain the relative impact of the three components of attitudes.

Discussion Opportunity—Ask: As far as you are concerned, which of the ABCs (in the hierarchy of effects model) do you believe has the strongest influence over you when you want to buy a CD player? When you take a special friend out to lunch? When you take this same friend out to dinner? When you buy a soft drink? When you turn on the radio and the Rush Limbaugh or Howard Stern program is on? Explain your reasoning in each case.

2. The three hierarchies are: • The standard learning hierarchy—Think→ Feel → Do: (CAB) this is a problemsolving process, so it assumes the consumer is highly involved, motivated to seek out information, weigh alternatives and come to a thoughtful decision.

• The low-involvement hierarchy—Do → Feel → Think: (BAC) consumer acts on limited knowledge and forms an evaluation after she buys the product.

• The experiential hierarchy—Feel → Do → Think: (ABC) consumer acts based on emotional reactions. (this is correct in the diagram right now but incorrect in the text of the chapter, where it says Feel → Think → Do) *****Use Figure 8.1 Here***** Discussion Opportunity—Give an illustration of the three different hierarchy of effect models.

Ask students how each of them apply to consumer behavior?

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Discussion Opportunity—Ask: How can the three different hierarchy of effects models be applied to e-commerce and shopping on the Internet? Give illustrations of how marketers might use this information to make better decisions.

III. How Do We Form Attitudes?

A. Attitudes can form through: 1. Classical conditioning—e.g. pairing an attitude object (brand name) with a jingle.

2. Instrumental conditioning—use of the attitude object is reinforced.

3. Leaning through complex cognitive processes—e.g. one learns what to do in social situations by modeling the behavior of friends and media endorsers.

Discussion Opportunity—Pick one area and demonstrate how you think you learned an attitude.

Give examples to illustrate. How could a marketer have influenced you?

B. All Attitudes Are Not Created Equal 1. Consumers vary in their commitment to an attitude; the degree of commitment is related to their level of involvement with the attitude object.

2. There are three levels of commitment: a. Compliance means that we form an attitude because it helps us to gain rewards or avoid punishment; this type of commitment requires the lowest level of involvement. b. Identification occurs when we form an attitude to conform to another person or group’s expectations (e.g. imitating the behavior or desirable models). c. Internalization means that deep-seated attitudes have become part of our value system.

Discussion Opportunity—Give an illustration of how attitudes were formed by you in each of the three ways (levels of commitment). Which were the stronger attitudes? Which were eventually replaced?

IV. The Consistency Principle A. According to the principle of cognitive consistency, consumers value harmony among their thoughts, feelings, and behaviors, and they are motivated to maintain uniformity among these elements. People will change thoughts, feelings or behaviors to remain consistent with prior experiences.

B. The theory of cognitive dissonance states that when a person is confronted with inconsistencies among attitudes or behaviors, he or she will take some action to resolve this “dissonance,” perhaps by changing an attitude or modifying a behavior. People seek to reduce dissonant behavior or feelings.

1. The theory focuses on situations in which two cognitive elements clash. A cognitive element can be something a person believes about himself, a behavior he performs, or an observation about his surroundings.

2. The magnitude of dissonance depends on the importance and number of dissonant elements, so dissonance is more likely in high involvement situations where there is more pressure to reduce inconsistencies. .

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3. Eliminating, adding, or changing elements can reduce dissonance.

4. Dissonance theory can help to explain why evaluations of a product tend to increase after we buy the product (in response to post purchase dissonance).

5. Marketers can provide customers with additional reinforcement after they purchase to help customers justify the decisions after the fact.

Discussion Opportunity—Ask students to demonstrate when the principle of cognitive consistency has occurred in their purchase decisions. Repeat the question for the theory of cognitive dissonance. Ask them if they ever catch themselves reading ads (e.g., for a car) for products that they have already purchased?

Discussion Opportunity—Find an advertisement that illustrates the theory of cognitive dissonance and the principle of cognitive consistency. Show them to the class and ask how the advertisers use these theories in their ads. How effective is each ad?

C. Self-Perception Theory 1. Self-perception theory provides an alternative explanation of dissonance effects. It assumes that people use observations of their own behavior to determine what their attitudes are. We maintain consistency as we infer we have a positive attitude toward an object if we bought/consumed it in the past.

2. Self-perception theory helps to explain the effectiveness of a strategy called the footin-the-door technique. This technique explains that people are more likely to comply with a big request if they agree to a smaller one.

3. Recent research suggests when consumers are asked to make a series of cognitively demanding choices, they deplete resources needed to monitor behavior and opt for easier decisions. This may result in a consumer saying yes to a salesperson instead of looking for reasons to say no.

Discussion Opportunity—Ask: Think of an illustration when someone has used the foot-in-thedoor approach on you. Did you buy the product? Why or why not?

D. Social Judgment Theory 1. Social judgment theory stipulates that (like self-perception theory) people assimilate information in light of what they know or feel. The initial attitude acts as a frame of reference, and new information is categorized in terms of this existing standard.

2. People find information to be acceptable or unacceptable. They form latitudes of acceptance and rejection around an attitude standard.

3. Messages that fall within the latitude of acceptance tend to be seen as more consistent with one’s position than they actually are (the assimilation effect), and messages within the latitude of rejection tend to be seen even farther from one’s own position than they actually are (the contrast effect).

Discussion Opportunity—Create a demonstration that illustrates the latitudes of acceptance and rejection for some product category as evidenced by your attitudes toward the object. Ask students if they can think of marketing activities that illustrate the topic.

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Discussion Opportunity—Have students apply the concept of latitudes of acceptance and rejection to shopping on the Internet. Have them explain what they did and why the concept might apply.

E. Balance theory 1. Balance theory considers relations among elements a person might perceive as belonging together. A person alters attitudes to ensure these relationships remain consistent/balanced.

2. This perspective includes triads. Each contains: a. A person and his or her perceptions. b. An attitude object. c. Some other person or object.

3. Elements are linked by a unit relation (we think the person is connected to an attitude object; like a belief) or a sentiment relation (a person expresses liking or disliking for an attitude object).

4. Perceptions (under balance theory) are either positive or negative. Perceptions are altered to make them consistent. When we have balanced perceptions, attitudes are stable. *****Use Figure 8.2 Here***** Discussion Opportunity—Ask students to think of a consumer behavior situation where balance theory would seem to be operating.

V. Attitude Models Attitude models specify and explore the different elements that affect attitudes.

A. Multi-attribute attitude models assume a consumer’s attitude toward an attitude object depends on the beliefs she has about several of its attributes, which can be identified and used to derive a measure of overall attitude.

1. Basic multi-attribute models specify attributes (characteristics of the Ao), beliefs (cognitions about the specific Ao), and importance weights (the relative priority of an attribute to the consumer).

Discussion Opportunity—Create a brief illustration of a basic multi-attribute model. Explain your reasoning.

2. The Fishbein Model is the most influential multi -attribute model and measures three components of attitude: salient beliefs (beliefs about the object a person considers during evaluation); object-attribute linkages (probability that a particular object has an important attribute); and evaluation of each of the important attributes. Attitudes are equal to the sum of the beliefs about each attribute multiplied times the importance of each attribute.

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*****Use Table 8.1 Here ***** 3.

Strategic applications of the multi-attribute model would include: a. Capitalize on relative advantage. b. Strengthen perceived product/attribute linkages. c. Add a new attribute. d. Influence competitors’ ratings.

Discussion Opportunity—Create an illustration to apply to the Fishbein model. Then, using the material and formula from the chapter, have the students work through this application.

B. Do Attitudes Predict Behavior?

A person’s attitude is not a very good predictor of behavior.

1. The Extended Fishbein model is called the theory of reasoned action. Additions include: a. Intentions versus behavior—strongly held attitudes are distinguished from weakly held attitudes; past behavior is a better predictor of future behavior than intentions. b. Social pressure—others have a strong influence on behavior, including what we think others would like us to do. Subjective norms account for the effects of what we believe other people think we should do. They have two factors: 2. Intensity of normative belief that others believe we should take or not take some action.

3. The motivation to comply with that belief (the degree to which the consumer takes others’ anticipated reactions into account when she evaluates a purchase). c. Attitude toward buying—attitude toward the act of buying (Aact) focuses on perceived consequences of purchase.

Discussion Opportunity—Ask: Who are some people who tend to have a strong influence on your behavior? Can you think of anyone whose behavior you have influenced? What was the result?

Discussion Opportunity—Ask: Can you think of something you bought that you really did not want to buy? Do you know why you bought it anyway?

4. There are certain obstacles to predicting behavior (the improved Fishbein model): a. It was designed to deal with actual behavior—not outcomes of behavior. b. Some outcomes are beyond the consumer’s control. c. Behavior is not always intentional (impulsive actions; situation changes, novelty seeking). d. Measures of attitudes do not always correspond with the behavior they are supposed to predict. It is very important to match the level of specificity between the attitude and the behavioral intention. e. A problem can exist with respect to the time frame of the attitude measure.

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f. Direct personal experience is stronger than indirect exposure (through an advertisement). The problem of personal experiences versus receiving information such as advertising (attitude accessibility perspective). g. There are also cultural roadblocks, which limit the universality of the theory of reasoned action.

1. Some acts are not voluntary, and the model predicts the performance of a voluntary act.

2. The relative impact of subjective norms may vary across cultures.

3. The model presupposes consumers are thinking ahead, while not all cultures subscribe to the linear perspective on time.

4. Some (more fatalistic) cultures do not believe the consumer controls his/her actions.

C. Trying to Consume 1. The multiple pathway anchoring and adjustment model (MPAA) emphasizes multiple pathways to attitude formation, including outside-in and inside-out pathways.

2. There is another way of looking at consumers’ goals and trying to attain them. The theory of trying states that the criterion of behavior is the reasoned action model that should be replaced with trying to reach a goal. It recognizes barriers that might arise. *****Use Figure 8.3 Here ***** D. How Do Marketers Change Attitudes?

E. Persuasion involves an active attempt to change attitudes.

F. Some psychological principles that function in the persuasion process are: 1. Reciprocity – we are more likely to give if we receive.

2. Scarcity – items are more attractive when they are not available.

3. Authority – we believe authoritative sources more readily than non-authoritative sources.

4. Consistency – people try not to contradict themselves in terms of what they say and do about an issue.

5. Liking – we agree with those we like/admire.

6. Consensus - We consider what others do before we decide what to do.

Discussion Opportunity—Have the class think of an attitude that one or both of their parents have. Ask them to think of a way that they could persuade them to change the attitude.

G. Tactical Communications Options - To craft persuasive messages that might change attitudes, a number of questions must be answered: 1. Who is featured in the ad that seeks to change an attitude? Given the circumstances, who would be best?

2. How should the message be constructed?

3. What media should be used to transmit the message?

4. What characteristics of the target market might influence the ad’s acceptance?

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VI. The Elements of Communication A. Marketers and advertisers have traditionally relied on the communications model to understand how marketing messages can change consumers’ attitudes by thinking in terms of the communications model that specifies that a number of elements are necessary for communications to be achieved.

B. The basic model can be perceived as having five parts: 1. The source—where the communication originates.

2. This meaning must be put in the form of a message.

3. The message must be transmitted via a medium.

4. One or more receivers then decode the message.

5. Feedback must be received by the source. *****Use Figure 8.4 Here******* Discussion Opportunity—Provide an illustration of the communications model described in the chapter. What are the strengths and weaknesses of this model? How can the source be a better communicator?

C. An Updated View: Interactive Communications 1. In permission marketing, consumers agree to allow marketers to send them promotional information.

2. The traditional broadcasting, where the information is transferred and then repeated before the buyer buys, is outdated with the advent of narrowcasting (finely tuning messages to suite very small groups of receivers).

3. Consumers are partners in the communications process. *****Use Figure 8.5 Here ***** Discussion Opportunity—Ask students to think of examples of how they are passive and active in information acquisition. Ask how they interact with the media to receive information.

Discussion Opportunity—Ask: How are you attempting to control your own Web or Internet environment?

D. New Message Formats 1. M-commerce (mobile commerce) involves wireless devices including smartphones, PDAs, iPods, and tablets such as iPads.

2. Social media applications include Facebook, Twitter and LinkedIn. 3. Blogging and vlogging (video blogging) is where people post messages to the Web in diary form.

4. Podcasting—You can create your own radio show that people can listen to either on their computers or iPods.

5. Virtual worlds—Immersive 3-D digital environments (e.g., Second Life).

6. Twitter—Postings limited to 140 characters. .

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7. Widgets—Small programs that users can download onto their desktops, or embed in their blogs or profile pages, that import some form of live content.

8. Transmedia formats – new platforms mix to allow consumers to express themselves and participate in campaigns. a. Transmedia storytelling includes blogs, websites, email, graffiti messages b. Alternate reality games are one type of transmedia storytelling where thousands of people participate in a fictional story or competition to solve a mystery.

VIII. The Source 1. Regardless of how a message is received, the same words uttered or written by different people can have very different effects, also known as source effects.

2. Under most conditions, the source of a message can have a big impact on the likelihood the message will be accepted.

3. Two very important source characteristics are credibility and attractiveness.

4. A match between the needs of the recipient and the rewards the source offers increases the recipient’s motivation to process the message (e.g. attractive source effective for receiver who is sensitive about social acceptance).

5. Source credibility refers to a source’s perceived expertise, objectivity, or trustworthiness. a. Sincerity is important when a company tries to publicize its corporate social responsibility (CSR) activities that benefit the community. b. Expert or celebrity endorsements can affect stock returns and can help differentiate similar products. c. Negative sources can also change attitudes because people forget the negative source (sleeper effect).

Discussion Opportunity—Ask students to think of a specific illustration of the sleeper effect. d. Credibility can be enhanced if the source’s qualifications are perceived as somehow relevant to the product being endorsed. e. A consumer’s beliefs about a product’s attributes will weaken if s/he perceives that the source is biased. i.

Knowledge bias – source’s knowledge is not accurate ii.

Reporting bias – source has the required knowledge but is not willing to convey it accurately Discussion Opportunity—Ask: What celebrity sources do you perceive as being most credible? Is this in specific product or service categories or across the board?

6. Source attractiveness refers to the source’s perceived social value. a. This quality can emanate from the person’s physical appearance, personality, social status, or similarity to the receiver (we like to listen to people who are like us). b. A halo effect often occurs when persons of high rank on one dimension are assumed to excel on others as well.

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Discussion Opportunity—Ask students to give an example of the “halo effect.” c. The social adaptation perspective assumes that the perceiver will more heavily weight information seen to be instrumental in forming an attitude.

7. Star Power: Celebrities as Communications Sources a. Celebrities embody cultural meanings (e.g. status, social class, gender, age, personality) to the general society. b. The advertiser chooses a celebrity who embodies the desired meaning the product should convey so the meaning transfers from the manufacturer to the consumer via the star.

Discussion Opportunity—Ask students to give an example of a celebrity that they perceive to be an illustration of the match-up hypothesis.

Discussion Opportunity—As a means of contrasting credibility with attractiveness, ask students to give examples of products where they would want to make sure their source is credible; examples where their source is attractive.

8. Nonhuman Endorsers a. At times, the image of celebrity endorsers can damage the image of a company or brand. For this reason, companies may seek animated characters or fictitious mascots as endorsers. b. Spokescharacters (e.g. Pillsbury Doughboy, Chester the Cheetah) can boost viewers’ recall of ad claims and increase brand attitudes. c. A more current trend sees companies utilizing endorsers in the form of an avatar, or cyber-character that can be changed in real time is cost effective, can handle multiple customers at one time, and is not limited by geography.

Discussion Opportunity—Ask: Can you think of company spokespersons that fit the company or the product image? Who do not fit? What should the company do about this? Give an example of a celebrity whose image has really hurt a company’s marketing effort.

Discussion Opportunity—Ask: Name an avatar that a company currently uses in association with a product, service, or website.

E. The Message 1. The single most important feature of the message is whether the communication stresses a unique attribute or benefit of the product.

2. Some messages are offensive or annoying, including those: a. That show a sensitive product and emphasize its usage b. With a contrived or over-dramatized situation c. That put down a person in terms of appearance, knowledge or sophistication d. That threaten an important relationship

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e. That show physical discomfort f. That create tension via an argument or antagonistic character g. That portray an unattractive or unsympathetic character h. That include a sexually suggestive scene i. That have poor casting or execution 3. How the message is said is important as well as what is said.

4. When creating a message, marketers must address these questions: a. Should she convey the message in words or pictures? b. How often should she repeat the message? c. Should it draw a conclusion or should this be left up to the listener? d. Should it present both sides of an argument? e. Should it explicitly compare the product to competitors? f. Should it include a blatant sexual appeal? g. Should it arouse negative emotions such as fear? h. How concrete or vivid should the arguments and imagery be? i. Should it be funny? *****Use Table 8.2 Here ***** 5. How do we send the message? a. Advertisers often rely on vivid illustrations or photography because visuals are very effective, especially at influencing emotional responses. b. A picture is not always as effective as text when it communicates facts. Verbal ads affect ratings on the utilitarian aspects of a product whereas the visual ads affect aesthetic evaluations. c. Verbal elements are more effective when an accompanying picture reinforces them, especially if they frame the illustration (the message in the picture strongly relates to the copy). Framing is easier with an accompanying image. d. Visual images allow the receiver to chunk information at the time of encoding. e. Verbal messages are best for high-involvement situations and visual messages for low involvement. f. Vivid images tend to activate mental imagery and strongly embed in memory; abstract stimuli inhibit mental imagery. g. Concrete discussion of product attributes in ad copy influence the importance of the attribute because it draws more attention. h. Repetition can lead to liking because people like things that are more familiar to them (mere exposure) or it can cause habituation such that the consumer no longer pays attention to the stimulus because of fatigue or boredom. i. The two-factory theory explains the fine line between boredom and familiarity. It proposes that two separate psychological processes operate when we repeatedly show an ad to a viewer. Figure 7.6 depicts the pattern. Overcome by: 1. Limiting exposure per repetition (15 second ads) 2. Varying content of ads over time (different versions of same theme) *****Use Figure 8.6 Here *****

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Discussion Opportunity—Ask students to think of examples when words, pictures, and both would be the best suggestions for influencing attitudes.

6. How do we structure the argument? a. The way the argument is presented is important. b. The supportive argument is one sided and most often used. c. Two-sided messages give positive and negative information. This seems most effective when the audience is well educated. d. Refutational arguments raise a negative issue and then dismiss it. They enhance source credibility because of the reduced chance of reporting bias.

Skeptical people may be more receptive to a balanced argument.

Discussion Opportunity—Ask students to give an illustration of a supportive argument, a twosided argument, and a refutational argument. Find an example of each in a print media form. e. Should the argument draw conclusions? The response to this depends on the consumer’s motivation to process the ad and the complexity of the arguments. f. Comparative advertising compares two specifically named products and seems to be effective for products that have a positive brand image, but may be lower in believability and stir up source derogation (consumer may doubt the credibility of a biased presentation).

7. New Message Format: The Social Media Revolution a. M-commerce, or mobile commerce, can be used as a new way to transmit information in both text and picture form, and social media applications are now used globally. b. Transmedia storytelling is a strategy that typically includes communications media that range from Web sites, blogs, and email to recorded phone calls and even graffiti messages in public spaces. c.

I. Reality Engineering occurs when marketers appropriate elements of pop culture and uses them as promotional vehicles.

1. Guerilla Marketing)use promotional strategies that use unconventional means to encourage word of mouth about products.

2. Product Placement is the insertion of a real product into fictional movies, TV shows, books, and plays

Discussion Opportunity- Ask students to list real products that they have identified in a movie or T.V. show Use consumer behavior chapter 13 here 3. Advergaming is when online games merge with interactive advertisements that let companies target specific types of consumers

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4. Plinking is the act embedding a product or service link in a video

Discussion Opportunity—Ask: What do you think of comparative advertising? Are the arguments more believable? Do you ever find yourself defending the “against product”?

J. Types of Message Appeals 1. Emotional appeals try to bond the consumer with the product.

2. The effectiveness of appeals to the head vs. heart depends on the nature of the product and the type of relationship consumers have with it. a. Recall of ad content tends to be better for thinking ads than feeling ads b. Conventional measures of ad effectiveness may not be effective to measure cumulative effects of emotional ads; feeling reactions are not as easy to articulate as thinking reactions 3. Sex appeals include various levels of erotic suggestions. a. Female nudity generates negative feelings and tension among female consumers; it generates positive reactions among men. Men dislike nude males; females respond well to undressed males that are not nude and like sexual themes in the context of a committed relationship. b. Erotic content draws attention but can be counterproductive, making consumers less likely to buy the product or distracting attention from other ad contents. c. Sex appeals as an attention-getting device are more effective when the product is related to sex.

4. Humorous appeals can get attention, but may not affect recall or product attitudes. a. Funny ads can provide a distraction. b. Funny ads can inhibit counterarguing (where the consumer thinks about reasons s/he disagrees). c. Humor is more effective when the ad clearly identifies the brand and the funny material does not overwhelm the message. d. Subtle humor that does not make fun of the consumer and is appropriate to the product image is best.

5. Fear appeals emphasize negative consequences that occur unless the consumer changes a behavior or an attitude and are most effective when the advertisers use only a moderate threat and when the ad presents a solution to the problem.

Discussion Opportunity—Ask students to think of situations when a rational appeal works best and when an emotional appeal works best. What is the effectiveness dependent on?

K. The Message as Art Form: Metaphors Be with You 1. Many ads take the form of an allegory (a story told about an abstract trait or concept that has been personified as a person, animal, or vegetable).

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2. A metaphor involves placing two dissimilar objects into a close relationship such that “A is B,” whereas a simile compares two objects, “A is like B.” Metaphors allow the marketer to activate meaningful images and apply them to everyday events.

3. Resonance is another literary device that is frequently used in advertising to form a presentation that combines play on words with a relevant picture. *****Use Table 8.3 Here; Use Consumer Behavior Challenge Here ***** Apply #8-10 Discussion Opportunity—Give an illustration or bring in an ad that displays a metaphor or resonance in advertising.

4. Advertisers can structure commercials like other art forms, including structures as a drama or a lecture.

5. In transformational advertising, the customer associates the experience of product usage with some subjective sensation.

Discussion Opportunity—Find an ad where a story is being told. Show or read it to the class.

Ask: Do you ever catch yourself reading an ad just to see how the story ends?

Discussion Opportunity—Give an illustration of transformational advertising. Ask the class to evaluate how well the ad applies the technique.

L. The Source Versus the Message: Sell the Steak or the Sizzle?

1. The elaboration likelihood model (ELM) assumes that once a consumer receives a message, he or she begins to process it. Depending on the personal relevance of this information, one of two routes to persuasion will be followed. a. Under conditions of high involvement, a consumer takes the central route to persuasion.

In the central route to processing, the consumer will determine if the message is relevant.

The person will engage in cognitive processing to evaluate the arguments presented and generate either positive (supporting) responses or negative responses (counterarguments). b. Under conditions of low involvement where the consumer is not motivated to think about the argument, a peripheral route is taken. The consumer uses other cues in deciding on the suitability of the message. *****Use Figure 8.7 Here ***** Discussion Opportunity—Illustrate the elaboration likelihood model by bringing in a series of print ads that illustrate either the central route or the peripheral route. Show them to the class and ask the class to identify which route is more dominant. Also, ask students to point out cognitive cues and peripheral cues in either type of ad.

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Discussion Opportunity—Ask: If you were the producer of a product that was being examined by the consumer in a peripheral way, what strategies could you suggest for dealing with this? In what instances would this not be bad for the producer?

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End-of-Chapter Support Material SUMMARY OF SPECIAL FEATURE BOXES 1.

Marketing Opportunity Consumers like to publicize their connections with successful people or organizations. It is called basking in reflected glory. As a result, many colleges with strong athletic organizations reap huge revenues by licensing their school’s name and logo.

2.

CB As I See It: Jennifer Escalas, Vanderbilt University Marketers spend a lot of time and money developing a unique image for their brands.

Celebrity endorsement is one way for marketers to connect symbolic meanings to the image of their brands. Celebrities often personify various characteristics that are useful to the consumer such as being stylish, rugged, smart, sexy, successful, or even rebellious.

3.

Marketing Pitfall There is an inconsistency between attitude and behavior in terms of major public health problems The CVS chain aggressively reminds people to fill their prescriptions with texts, e-mails, and phone calls.

4.

The Tangled Web Sock puppeting refers to a company executive or agent posing as someone else to tout the organization in social media communities. Paid influencer programs are also called sock puppeting. These are essentially sponsored conversations. The FTC updated its truth-in-advertising policy to require paid communicators to disclose their relationship to the audience.

5.

Marketing Pitfall Western actors like George Clooney resist many television commercials in the U.S. but endorse products in Japan. Visit japander.com to see such commercials.

6.

Net Profit Sites like Pandora track user preference. They then work to refine playlists and how often they should repeat songs, developing variations based on time of day, location of the listener and other variables.

7.

CB As I See It: Pierre Chandon, INSEAD, France Government regulators and food companies can work together to encourage consumers to spend more for less food, and be happy about doing so. This can be done by improving the perception of portion and package size, and focusing on sensory pleasures of food.

8.

Net Profit The band Nine Inch Nails used transmedia storytelling to promote their new album. This including offering clues that lead to the ability to win prizes.

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9.

Marketing Pitfall A series of ads created by Grey Germany were supposed to be funny, but were upsetting to some people. The campaign suggested that is more people used condoms, the world might not have experienced people such as Adolf Hitler.

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REVIEW 8-1.

How can an attitude play an ego-defensive function?

Either attitudes we form to protect ourselves from external threats or internal feelings perform an ego-defensive function. An early marketing study indicated that housewives in the 1950s resisted the use of instant coffee because it threatened their conception of themselves as capable homemakers.

(5 minutes, Chapter Objective 1, AACSB: Reflective Thinking)

8-2.

Describe the ABC model of attitudes.

Most researchers agree that an attitude has three components: affect, behavior, and cognition. Affect refers to the way a consumer feels about an attitude object. Behavior involves the person’s intentions to do something with regard to an attitude object (but, as we will discuss at a later point, an intention does not always result in an actual behavior). Cognition refers to the beliefs a consumer has about an attitude object. We can remember these three components of an attitude as the ABC model of attitudes.

(10 minutes, Chapter Objective 2, AACSB: Reflective Thinking)

8-3.

List the three hierarchies of attitudes, and describe the major differences among them.

The three hierarchies are: 1) the Standard Learning Hierarchy (beliefs/affect/behavior), 2) the Low-Involvement Hierarchy (beliefs/behavior/affect), and 3) the Experiential Hierarchy (affect/behavior/beliefs). The differences are in the order the consumer processes information, evaluate feelings and experiences the product. The standard learning hierarchy is most likely to be used in high involvement purchase situations, while the experiential hierarchy is more likely to be associated with impulse purchases.

(15 minutes, Chapter Objective 2, AACSB: Reflective Thinking)

8-4.

How do levels of commitment to an attitude influence the likelihood it will become part of the way we think about a product in the long-term?

Consumers vary in their commitment to an attitude; the degree of commitment is related to their level of involvement with the attitude object. Consumers are more likely to consider brands that engender strong positive attitudes.

(10 minutes, Chapter Objective 3, AACSB: Reflective Thinking)

8-5.

We sometimes enhance our attitude toward a product after we buy it. How does the theory of cognitive dissonance explain this change?

The theory of cognitive dissonance states that when a person is confronted with inconsistencies among attitudes or behaviors, he or she will take some action to resolve this “dissonance,” perhaps by changing an attitude or modifying a behavior. The theory has important ramifications for attitudes, because people are often confronted with situations in which there is some conflict between their attitudes and behaviors. Thus, if a person encounters negative information about a product after purchasing it, they may discount that information and focus on positive information that would reaffirm their reasons for having purchased.

(15 minutes, Chapter Objective 4, AACSB: Reflective Thinking)

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8-6.

What is the foot-in-the-door technique? How does self-perception theory relate to this effect?

Self-perception theory helps to explain the effectiveness of a sales strategy called the foot-in-the-door technique that is based on the observation that a consumer is more likely to comply with a request if he or she has first agreed to comply with a smaller request.

This relates to self-perception theory because the consumer examines his/her behavior to determine what his/her attitudes are. If the consumer has said yes to a small request, s/he may assume that his/her attitude is favorable and comply with a bigger request.

(14 minutes, Chapter Objective 4, AACSB: Reflective Thinking)

8-7.

What are latitudes of acceptance and rejection? How does a consumer’s level of involvement with a product affect his latitude of acceptance?

People form latitudes of acceptance and rejection around an attitude standard. Ideas that fall within latitude will be favorably received, but those falling outside of this zone will not be favorably received.

(10 minutes, Chapter Objective 4, AACSB: Reflective Thinking)

8-8.

According to balance theory, how can we tell if a triad is balanced or unbalanced? How can consumers restore balance to an unbalanced triad?

Components of a triad can be either positive or negative. More importantly, people alter these components in order to make relations among them consistent. The theory specifies that people desire relations among elements in a triad to be harmonious, or balanced. If they are not, a state of tension will result until somehow the person changes his perceptions and restores balance.

(10 minutes, Chapter Objective 4, AACSB: Reflective Thinking)

8-9.

Describe a multiattribute attitude model, listing its key components.

A multiattribute model assumes that a consumer’s attitude (evaluation) toward an attitude object (Ao) depends upon the beliefs he or she has about several or many attributes of the object and the importance of those attributes. The use of a multi-attribute model implies that identifying these specific beliefs and combining them to derive a measure of the consumer’s overall attitude can predict an attitude toward a product or brand.

(5 minutes, Chapter Objective 5, AACSB: Reflective Thinking)

8-10. “Do as I say, not as I do.” How does this statement relate to attitude models?

Many studies have obtained a very low correlation between a person’s reported attitude toward something and his or her actual behavior toward it. Some researchers have been so discouraged that they have questioned whether attitudes are of any use at all in understanding behavior.

(5 minutes, Chapter Objective 5, AACSB: Reflective Thinking) 8-11. What is a subjective norm, and how does it influence our attitudes?

The value of SN is arrived at by including two factors: (1) the intensity of a normative belief (NB) that others believe an action should be taken or not taken, and (2) the

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motivation to comply (MC) with that belief (i.e., the degree to which the consumer takes others’ anticipated reactions into account when evaluating a course of action or a purchase). It influences attitudes because consumers are likely to be more comfortable with attitudes that are consistent with subjective norms.

(10 minutes, Chapter Objective 5, AACSB: Reflective Thinking) 8-12. What are three obstacles to predicting behavior even if we know a person’s attitudes?

Some outcomes are beyond the consumer’s control; behavior is not always intentional (impulsive actions; situation changes, novelty seeking); the measures of attitudes may not be specific enough to behavioral intentions; the time frame when the attitude was measured may have been too far removed from the behavior; personal experience may be more powerful than attitudes formed from advertising; and cultural roadblocks (e.g. involuntary acts, the impact of subjective norms, non-linear perspectives on time, fatalistic cultures) may interfere.

(105 minutes, Chapter Objective 5, AACSB: Reflective Thinking) 8-13. Describe the Theory of Reasoned Action. Why might it not be equally valuable when it is applied to non-Western cultures?

The theory of reasoned action has primarily been applied in Western settings. Certain assumptions inherent in the model may not necessarily apply to consumers from other cultures. Several cultural roadblocks diminish the universality of the theory of reasoned action: • Some acts are not voluntary, and the model predicts the performance of a voluntary act.

• The relative impact of subjective norms may vary across cultures.

• The model presupposes consumers are thinking ahead, while not all cultures subscribe to the linear perspective on time.

• Some (more fatalistic) cultures do not believe the consumer controls his/her actions.

(20 minutes, Chapter Objective 5, AACSB: Reflective Thinking and Multicultural and Diversity Understanding) 8-14. List three psychological principles related to persuasion.

The psychological principles include reciprocity, scarcity, authority, consistency, liking, and consensus.

(3 minutes, Chapter Objective 5,) 8-15. Describe the elements of the traditional communications model, and tell how the updated model differs.

The traditional model of communication includes the components of source, channel, message, receiver, and feedback. The updated model (interactive model) recognizes that there are multiple senders and multiple receivers, all sending and receiving information simultaneously through a central medium. It also recognizes the importance of permission marketing.

(15 minutes, Chapter Objective 6, AACSB: Reflective Thinking)

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8-16. What is source credibility, and what are two factors that influence our decision as to whether a source is credible?

Source credibility refers to a source’s perceived expertise, objectivity, or trustworthiness.

Factors affecting source credibility are: 1) whether the source’s qualifications are viewed as relevant, and 2) whether or not there is a bias associated with the source.

(5-7 minutes, Chapter Objective 8, AACSB: Reflective Thinking) 8-17. What is the difference between buzz and hype?

Buzz is word of mouth that is viewed as authentic and generated by customers. In contrast, hype is dismissed as inauthentic—corporate propaganda planted by a company with an axe to grind.

(5 minutes, Chapter Objective 8, AACSB: Reflective Thinking) 8-18. What is a halo effect, and why does it happen?

The halo effect occurs when persons who rank high on one dimension are assumed to excel on others as well. It happens because of the transfer of meaning from one object to another. Classical conditioning can help explain how the halo effect works.

(5 minutes, Chapter Objective 8, AACSB: Reflective Thinking) 8-19. What is an avatar, and why might an advertiser choose to use one instead of hiring a celebrity endorser?

An avatar is the manifestation of a Hindu deity in superhuman or animal form. In the computing world, it means a cyberspace presence represented by a character that you can move around inside a visual, graphical world. The advantages of virtual avatars compared to flesh-and-blood models include the ability to change the avatar in real time to suit the needs of the target audience. From an advertising perspective, they are likely to be more cost-effective than hiring a real person. They are also less susceptible to the negative reputation effects a human spokesperson may activate through their behaviors.

(15 minutes, Chapter Objective 8, AACSB: Reflective Thinking) 8-20. Marketers must decide whether to incorporate rational or emotional appeals in a communications strategy. Describe conditions that are more favorable to one or the other.

The answer often depends on the nature of the product and the type of relationship consumers have with it. It is hard to gauge the precise effects of rational or emotional appeals. While recall ability of ad content tends to be better for “thinking” ads than for “feeling” ads, conventional measures of advertising effective may not be appropriate to measure the cumulative effects of emotional ads. These measures assess cognitive responses and may penalize feeling ads because the reactions are not as easy to articulate.

(5 minutes, Chapter Objective 10, AACSB: Reflective Thinking)

8-21. When should a marketer present a message visually versus verbally?

Visuals should be used when the marketer wants to generate an emotional response.

Because it requires more effort to process, a verbal message is most appropriate for high-involvement situations, such as in print contexts in which the reader is motivated to

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really pay attention to the advertising. Because verbal material decays more rapidly in memory, messages require frequent exposure to obtain the desired effect. Visual images, in contrast, allow the receiver to chunk information at the time of encoding. Chunking results in a stronger memory trace that aids retrieval over time.

Visual elements may affect brand attitudes in one of two ways. First, the consumer may form inferences about the brand and change his beliefs because of an illustration’s imagery. For example, people in a study who saw an ad for a facial tissue accompanied by a photo of a sunset were more likely to believe that the brand came in attractive colors. Second, brand attitudes may be affected more directly; for example, a strong positive or negative reaction the visual elements cause will influence the consumer’s attitude toward the ad (Aad) that will then affect brand attitudes (Ab).

(15 minutes, Chapter Objective 9, AACSB: Reflective Thinking) 8-22. How does the Two-Factor Theory explain the effects of message repetition on attitude change?

The two-factor theory explains the fine line between familiarity, which can result in favorable attitudes through the mere exposure effect, and boredom, which can result in habituation where the consumer stops paying attention to the ad, by proposing that two separate psychological processes are operating when a person is repeatedly exposed to an ad. The positive side of repetition is that it increases familiarity and thus reduces uncertainty about the product. The negative side is that over time boredom increases with each exposure. At some point, the amount of boredom incurred begins to exceed the amount of uncertainty reduced, resulting in wear-out.

(10 minutes, Chapter Objective 9, AACSB: Reflective Thinking) (a) When is it best to present a two-sided message versus a one-sided message?

When the audience is educated, the use of refutational arguments, in which a negative issue is raised and then dismissed, can be quite effective. This approach can increase source credibility by reducing reporting bias. In addition, people who are skeptical about the product may be more receptive to a balanced argument instead of a “whitewash.”

(5 minutes, Chapter Objective 9, AACSB: Reflective Thinking) 8-23. Do humorous ads work and if so under what conditions?

Humor is more likely to be effective when the brand is clearly identified and the funny material does not “swamp” the message. This danger is similar to one we have already discussed about beautiful models diverting attention from copy points. Subtle humor is usually better, as is humor that does not make fun of the potential consumer. Finally, humor should be appropriate to the product’s image. An undertaker or a bank might want to avoid humor, whereas other products may adapt to it quite well.

(10 minutes, Chapter Objective 9, AACSB: Reflective Thinking) (a) Should marketers ever try to arouse fear in order to persuade consumers?

Negative fear appeals are usually most effective when only a moderate threat is used, and when the ad presents a solution to the problem. Consumers will tune out an ad with strong fear appeals because they can do nothing to solve the problem. Consumers will

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ignore mild fear appeals because they do not pose a threat. In general, moderate fear appeals work better, when source credibility is high.

(10 minutes, Chapter Objective 9, AACSB: Reflective Thinking) 8-24. Why do marketers use metaphors to craft persuasive messages? Give two examples of this technique.

Metaphors allow the marketer to activate meaningful images and apply them to everyday events. In the stock market, “white knights” battle “hostile raiders” using “poison pills;” Tony the Tiger equates cereal with strength, and the Merrill Lynch bull sends the message that the brokerage is “a breed apart.”

(5 minutes, Chapter Objective 9, AACSB: Reflective Thinking) 8-25. What is the difference between a lecture and a drama?

A lecture is like a speech in which the source speaks directly to the audience in an attempt to inform them about a product or persuade them to buy it. A drama is similar to a play or movie.

(5 minutes, Chapter Objective 9, AACSB: Reflective Thinking) 8-26. Describe the Elaboration Likelihood Model, and summarize how it relates to the relative importance of what is said versus how it’s said.

The elaboration likelihood model (ELM) assumes that once a consumer receives a message, she begins to process it. Depending on the personal relevance of this information, the receiver will follow one of two routes to persuasion. Under conditions of high involvement, the consumer takes the central route to persuasion. Under conditions of low involvement, she takes a peripheral route instead.

(10 minutes, Chapter Objective 10, AACSB: Reflective Thinking)

CONSUMER BEHAVIOR CHALLENGE DISCUSS 8-27. The Federal Trade Commission recently sponsored a conference on “Blurred Lines: Advertising or Content?” that reflects the agency’s concerns about the resemblance between native ads and “real” articles. The chapter discusses the problem of sock puppeting where executives masquerade as everyday consumers and post negative reviews about their competitors. Numerous cases have come to light of hotels, restaurants, and other businesses that pay customers to write positive evaluations on review sites. Wikipedia can be edited by anyone. Do we care about source credibility anymore? What does the future look like for source effects in an age when anyone can post content, and pretend it came from a credible source?

Source credibility is the communicator’s expertise, objectivity, or trustworthiness. The consumers have a belief that this person is competent and will provide the necessary information we need to effectively evaluate products. Credible sources are particularly persuasive when a consumer is trying to learn about a product or form an opinion of it.

However, some subtle cues can diminish credibility, such as a disclaimer. Sincerity is particularly important when firms publicize activities that benefit the community.

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However, increased incidences of sock putting have negatively affected some sites.

Wikipedia allows anyone to edit entries, and reliability is not assured, yet, it continues to be a valued source by some, especially students. Marketing messages that consumers perceive as authentic and consumer generated tend to be more effective than those considered hype, inauthentic, biased, and company generated. However, the digital environment makes it harder to distinguish between the two. The FTC has instituted guidelines for organizations that advertise in digital media, but misleading information continues to be posted. Student’s feelings about source credibility and the future of sources will vary.

(10 minutes, Chapter Objective 8, AACSB: Ethical Understanding and Reasoning Abilities) 8-28. Many universities contract with commercial companies to run campus websites and email services. These agreements provide Web services to colleges at little or no cost. But these actions have aroused controversy because major companies pay to place advertising on the sites. That gives marketers the opportunity to influence the attitudes of thousands of students who are involuntarily exposed to product messages. University administrators argue that they could not provide the services by themselves—students expect to be able to fill out financial aid forms and register for classes online. Colleges that do not offer such services may lose their ability to attract students. How do you feel about this situation? Should companies be able to buy access to your eyeballs from the school you pay to attend if it means you get access to enhanced online services in return?

Hopefully, the responses to this question will take in the full range of possibilities and a healthy debate will ensue. Business and marketing students, however, often favor the rights of the company to engage in practices such as this to promote their brands. Some will likely bring up the argument that as long as promotional practices are legal, there is nothing wrong with them. Others may disagree from an ethical perspective.

(20 minutes, Chapter Objective 6, AACSB: Ethical Understanding and Reasoning Abilities) 8-29. As more of us rely on our smartphones, advertisers are following us onto this platform.

The first iAds now appear on iPhones and iPods, and the early evidence is that they work well. In one study (funded by Apple), people who were exposed to an iAd for Campbell’s were more than twice as likely to recall it than those who had seen a TV ad were. Recipients were also four times more likely to say they would buy the advertised product. As a consumer, is this good news or bad news? How do you feel about getting ads on your smartphone? How do you think the marketplace will react to this new advertising medium as it becomes more commonplace?

One of the reasons students may provide for the increased effectiveness of iAds is the lack of clutter in the format. Another reason may be the novelty of the ads. A third reason may be consumers have less ability to block or avoid the ads than they do in other formats. A fourth reason may be the characteristics of smart iPhone/touch-screen iPod adopters. They may be pre-disposed to have a high need for information. Students will have different ideas about whether it is appropriate for the smartphone to have ads. It is likely that most will be willing to accept the advertising. As the ads become more commonplace, it is likely that consumers will be overwhelmed and less likely to

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remember and respond to the ads, especially if they do not relate to the consumer’s needs.

(20 minutes, Chapter Objective 7, AACSB: Reflective Thinking) 8-30. An antismoking ad sponsored by the New York City Department of Health crossed the line for many viewers. The spot showed a young boy who cries hysterically as a crowd of adults walks by him. The voiceover says, “This is how your child feels after losing you for a minute. Just imagine if they lost you for life.” The ad aroused a lot of controversy because it was not clear if the child was merely acting or if the spot’s producers provoked his tears for the camera. Is this genre of “scared straight” advertising an effective way to convince people to curb unhealthy behaviors like smoking?

Students will find this challenge question more interesting if the instructor shows the clip in class. Although this is an opinion question, students may feel more empathy for the child than for the marketer in this case. The instructor can also show the recently proposed packaging changes from the Food and Drug Administration that were ruled against in court when the cigarette companies proposed the images were designed to get an emotional response instead of delivering facts.

(10 minutes, Chapter Objective 9, AACSB: Ethical Understanding and Reasoning Abilities) 8-31. Google updated its terms of service to allow shared endorsements though it’s likely most users don’t read these terms too carefully. Not everyone is thrilled about finding out his or her comments appear in an ad without giving explicit permission. Users who claimed the company had not adequately notified them about how it was using endorsements sued Facebook. What should be the platform’s obligation to ask permission? Are we as consumers responsible for whatever it does so long as we agree to the site’s terms of service (and read the fine print)?

Student responses will vary, but should consider intention versus behavior. Attitudes have both direction and strength. Normative influence can result in a contradiction between what we say we will do (and what we are o.k. with) and what we actually do (and are o.k. with) when the moment of truth arrives. The model that measures attitude toward the act of buying is also relevant, as it focuses on the perceived consequences of an action.

(10 minutes, Chapter Objective 5, AACSB: Ethical Understanding and Reasoning Abilities) 8-32. The Coca-Cola Company pulled a U.K. Internet promotion campaign after parents accused it of targeting children by using references to a notorious pornographic movie.

As part of its efforts to reach young social media users for its Dr. Pepper brand, the company took over consenting users’ Facebook status boxes. Then, the company would post mildly embarrassing questions such as “Lost my special blankie. How will I go sleepies?” and “What’s wrong with peeing in the shower?” However, when a parent discovered that her 14-year old daughter’s profile had been updated with a message that directly referred to a hardcore porn film, the plan backfired and Coke had to pull the promotion. What does it take to get the attention of jaded young people, who are exposed to all kinds of messages in cyberspace? What guidelines (if any) should marketers follow when they try to talk to young people on social media platforms?

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Social media can be effective platforms for marketers to reach young people because of the amount of time young people spend on social networking sites. Marketers can use these media to have a conversation with the young consumer and to create a voice that resonates with the young consumer by tapping into their tastes and values. However, the voice must be authentic or young consumers will ignore it. Further, the volume of advertising online increases the importance of developing a relationship with the consumer where s/he opts in to receive the messages.

Students will have different opinions about the guidelines marketers should follow, and may debate the role of parental supervision vs. marketer regulation and the role of selfregulation vs. public policy.

(20 minutes, Chapter Objective 7, AACSB: Ethical Understanding and Reasoning Abilities) 8-33. A flog is a fake blog a company posts to build buzz around its brand. Is this ethical?

Most students will see these “gray area” tactics as just another way of doing business.

However, if one focuses on the basic tenet of the AMA’s code of ethics dealing with deceptive practices, then flogging is unethical. It is, by nature, deceptive. In fact, such will only work if the consumer is deceived.

(5 minutes, Chapter Objective 8, AACSB: Ethical Understanding and Reasoning Abilities) 8-34. The sleeper effect implies that perhaps we shouldn’t worry too much, about how positively people evaluate a source. Similarly, there is a saying in public relations that “any publicity is good publicity.” Do you agree?

There will certainly be exceptions to this. The good thing about publicity is that it is free.

Thus, when a company of any kind is getting publicity, they are getting free promotion.

The extent to which negative publicity will have positive effects on consumer perceptions simply depends. One of the best-case scenarios is when the negative publicity is controversial and offends people who are not part of the target group, while being perceived in a positive manner by those who are part of the target group.

(10 minutes, Chapter Objective 8, AACSB: Ethical Understanding and Reasoning Abilities) 8-35. Discuss some conditions that would cause you to advise a marketer to use a comparative advertising strategy.

Comparative advertising may be effective for low-involvement products, like convenience goods, new brands that have advantages over existing brands, and brands that are experiencing decreased sales using non-comparative advertising. Comparative ads are more effective when brands have a positive image. For new product introductions, comparative ads benefit from the association they form between established products and new, unknown products. Students should recognize that repositioning an older established brand would also be a viable situation for comparative advertising. The discussion also might include an analysis of conditions when it would not be advisable to use comparative ads. Students should be encouraged to list ads they have seen or heard

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and to describe the aspects of each ad that would make the use of comparative advertising advisable or inadvisable.

(10 minutes, Chapter Objective 9, AACSB: Reflective Thinking) 8-36. The American Medical Association encountered a firestorm of controversy when it agreed to sponsor a line of health care products manufactured by Sunbeam (a decision it later reversed). Should trade or professional organizations, journalists, professors, and others endorse specific products at the expense of other offerings?

This question addresses the issue that not all people who endorse products are necessarily celebrities or models. The effect of the endorsement can be very strong, however, because of the element of trust and respect (or even the power of recommendation) that might be involved. Students should think of situations beyond those mentioned in the question that address this issue. A lively discussion should follow. How do the students feel about the ethics involved? In what circumstances should a sitting President, endorse a product?

(10 minutes, Chapter Objective 8, AACSB: Ethical Understanding and Reasoning Abilities) 8-37. Many, many companies rely on celebrity endorsers as communications sources to persuade. Especially when targeting younger people, these spokespeople often are “cool” musicians, athletes, or movie stars. In your opinion, who would be the most effective celebrity endorser today and why? Who would be the least effective? Why? As with the previous question, students should use more than just their opinions. Direct them to the principles discussed in the sections on source attractiveness and source credibility. Some responses here will likely mirror the reality of which celebrities are used the most. Others will likely recognize that there are many celebrities who are not endorsing products that would be very effective.

(15 minutes, Chapter Objective 8, AACSB: Reflective Thinking) 8-38. Swiss Legend, a watch brand, gets famous people to wear its colorful timepieces. One way it does this is to give away its product at awards shows. Publicists call this common practice “gifting the talent”: Companies provide stars with “goody bags” full of complimentary products. What do you think about the practice of “gifting the talent” in order to accumulate endorsements? Is this a sound strategy? Is it ethical for celebrities to accept these gifts Although this may be considered a gray area promotional technique, it does not carry with it the level of deception that flogging does. Many fans and viewers are aware that when stars are wearing things at events, they have been given those items or are even paid to wear such. For those that are not aware of this, there is no information given that implies that the star bought the apparel or accessory item of their own volition. At the most basic level, it is a minimal investment with potential very effective media coverage.

(15 minutes, Chapter Objective 8, AACSB: Reflective Thinking and Ethical Understanding and Reasoning Abilities) 8-39. Watchdog groups have long decried product placements because they blur the line between content and advertising without adequately informing viewers. The networks

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themselves appear to be divided on how far they want to open the gate. According to one study, the effectiveness of product placement varies by product category and type of placement. Consumers indicate that product placements have the most influence on their grocery, electronics, and apparel purchases. The most common platform for a placement is to get a brand shown on a T-shirt or other piece of an actor’s wardrobe. What do you think about this practice? Under what condition is product placement likely to influence you and your friends? When (if ever) is it counterproductive?

Product placement and celebrity endorsement can add credibility and recognition.

Product placement is the insertion of real products in fictional movies, TV shows, books, and plays. A study reported that consumers respond well to placements when the show’s plat makes the product’s benefit clear. Audiences also have a favorable impression when a retailer provided furniture, clothes, appliances, and other staples for struggling families. These actions generate feelings of emotional security. However, when the placement is not consistent with the plot, the brands can be negatively affected because they seem out of place.

(5 minutes, Chapter Objective 10, AACSB: Reflective Thinking) 8-40. One of the most controversial intersections between marketing and society occurs when companies provide “educational materials” to schools. Many firms, including Nike, Hershey, Crayola, Nintendo, and Foot Locker, provide free book covers swathed in ads.

Standard art supplies, blocks, trucks, and dolls get supplemented with Milton Bradley and Care Bears worksheets, Purell hand-cleaning activities, and Pizza Hut reading programs.

Clearasil provides sample packets of its acne medication along with brochures to educate high school students about proper skin care; the handouts also direct students to the Clearasil Web site where they can register for music downloads and iPods. Other companies contract with schools to run focus groups with their students during the school day to get reactions to new product ideas. Some schools encourage kids to practice their math as they count Tootsie Rolls, and the kids use reading software that bears the logos of Kmart, Coke, Pepsi, and Cap’n Crunch cereal. Many educators argue that these materials are a godsend for resource-poor schools that otherwise could not provide computers and other goodies to their students. However, a California law bans the use of textbooks with brand names and company logos. This legislation was prompted by complaints from parents about a middle-school math book that uses names such as Barbie, Oreos, Nike, and Sony PlayStation in word problems. What’s your position on these practices? Should corporations be allowed to promote their products in schools in exchange for donations of educational materials, computers, and so on?

Student responses will vary, but may include discussions on product placement benefits and drawbacks. Some students might consider a comparison with advergaming.

Advergaming is the practice of integrating brands and products with the stories the game tells, much like integrating brands in text books and homework activities.

(10 minutes, Chapter Objective 10, AACSB: Ethical Understanding and Reasoning)

APPLY

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8-41. Think of a behavior someone does that is inconsistent with his or her attitudes (e.g., attitudes toward cholesterol, drug use, or even buying things to make them stand out or attain status). Ask the person to elaborate on why he or she does the behavior, and try to identify the way the person has resolved dissonant elements.

Students should be able to generate many diverse examples of this type of consumer behavior. Assume you are a high school student who is health conscious but who may smoke occasionally because your friends smoke. The reason you smoke may be to “fit in” with a group, or the behavior may serve as some type of initiation into the group. You may resolve dissonant elements by telling yourself that an occasional cigarette will not hurt you as long as you keep exercising and eating right.

(25 minutes, Chapter Objective 4, AACSB: Reflective Thinking) 8-42. Devise an attitude survey for a set of competing automobiles. Identify areas of competitive advantage or disadvantage for each model you include.

The semantic-differential scale often is used to describe a consumer’s beliefs about product, brands, and /or companies. Students are likely to develop scale items reflecting a variety of beliefs about individual products, where a set of product attributes is rated on a series of scales. For example: My travel agent is: Very efficient Very accessible Very friendly

1—2—3—4—5—6—7 1—2—3—4—5—6—7 1—2—3—4—5—6—7

Very inefficient Very inaccessible Very unfriendly

Semantic-differential scales also may be used to compare the images of competing brands, as in the next example: Honda Accords have good interior features.

Agree 1—2—3—4—5—6—7

Disagree

Toyota Camry’s have good interior features.

Agree 1—2—3—4—5—6—7

Disagree

Chevrolet Malibu’s have good interior features.

Agree 1—2—3—4—5—6—7 (90 minutes, Chapter Objective 5, AACSB: Analytic Skills)

Disagree

8-43. Construct a multi-attribute model for a set of local restaurants. Based on your findings, suggest how restaurant managers can improve an establishment’s images via the strategies described in this chapter.

The multi-attribute models that students develop for a set of local restaurants should include: • A number of product attributes—characteristics of the restaurants, such as price, type of foods, number of menu items, location, etc.

• Beliefs regarding specific restaurants (in terms of attributes).

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•

Important weights reflecting the relative priority of specific attributes for them individually.

Although there likely will be some common elements in the models developed, students should be encouraged to think about how each model is reflective of the individual responsible for the product evaluation. The instructor should point out to students the complexity of consumer attitudes, as demonstrated by the diversity of attitudinal statements, product attributes, beliefs, and importance weights that might be chosen.

(Possible Individual or Group Field Project Idea) (75 minutes, Chapter Objective 5, AACSB: Analytic Skills) 8-44. Locate foreign ads at sites like japander.com in which celebrities endorse products they do not pitch on their home turf. Ask friends or classmates to rate the attractiveness of each celebrity, then show them these ads and ask them to rate the celebrities again. Does the star’s “brand image” change after it is paired with cheesy ads? Based on these results, what advice would you give to a manager who has to choose among endorsement offers for a famous client?

Student responses should address how messages build credibility and source attractiveness. Students may also recognize the application of Classical Conditioning, where the negative association has the potential to transfer from the product, or the act of endorsing the product if the celebrity is a serious actor, to the celebrity.

(20 minutes, Chapter Objective 8, AACSB: Reflective Thinking)

8-45. Why would a marketer consider saying negative things about his or her product? When is this strategy feasible? Can you find examples of it?

The use of two-sided arguments is effective when the audience is well educated and not loyal to the product. These conditions exist for many new product introductions and brand extensions. When the advertised product is complex, something negative can be said about the minor attribute without producing an overall negative effect, as long as positive descriptions of major attributes of the product also are included. For example, Curtis Mathis has advertised that its televisions are very expensive (a negative attribute) while countering with information about the superb quality, workmanship, and service provided.

(15-20 minutes, Chapter Objective 9, AACSB: Reflective Thinking) 8-46. Collect ads that rely on sex appeal to sell products. How often do they communicate benefits of the actual product?

Students will be able to find examples of products that use sex appeal in almost any magazine, but magazines targeted toward men or women are the best sources. NOTE: Be sure to examine ads before they are presented to the class. Some students are carried away (especially the males) and present material that is offensive to other class members (especially the females). The instructor should not rely solely on the students’ judgment in this matter. (Possible Field Project Idea) (30 minutes, Chapter Objective 9, AACSB: Reflective Thinking)

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8-47. Observe the process of counter-argumentation by asking a friend to talk aloud while watching a commercial. Ask him to respond to each point in the ad or to write down reactions to the claims made. How much skepticism regarding the claims can you detect?

Students will enjoy this project. You might encourage a student to videotape a few ads and show the tape to a friend. This will give the student an opportunity to choose a few ads that make a number of claims that can be analyzed. (Possible Field Project Idea) 15 minutes, Chapter Objective 9, AACSB: Reflective Thinking) 8-48. The chapter discusses the important problem of medication adherence. How can healthcare marketers strengthen the link between intentions and behavior to boost the rate at which people actually take their prescribed medications? Devise a communications strategy to increase the adherence rate.

The responses and communication strategy will be different for each student. Students should address the inconsistency between attitudes and behaviors. The theory of reasoned actions indicates there is a difference between intentions and behaviors. The communication strategy should target the behavior more than the intention. It should also address normative influences that can result in a contradiction between what we say we will do and what we actually do.

(5 minutes, Learning Objective 5, AACSB: Reflective Thinking) 8-49. Make a log of all the commercials shown on a network channel shows during a 2-hour period. Assign each to a product category and decide whether each is as drama or argument. Describe the types of messages the ads use (e.g., two-sided arguments) and keep track of the types of spokespeople who appear (e.g., TV actors, famous people, animated characters). What can you conclude about the dominant forms of persuasive tactics marketers currently employ?

The instructor might want to encourage students to work in pairs to better manage the recording of 10- and 15-second commercials. One person could write about one commercial while the other person is listening to the next commercial. (Possible Field Project Idea) (150 minutes, Chapter Objective 9, AACSB: Ethical Understanding and Reasoning Abilities 8-50. Collect examples of ads that rely on the use of metaphors or resonance. Do you feel these ads are effective? If you were working with the products, would you feel more comfortable with ads that use a more straightforward, “hard-sell” approach? Why or why not?

Make sure students review the section of the text that describes how metaphors and resonance are used in advertising before they go in search of ads. Encourage the students to discuss both the positive and the negative aspects of metaphors or resonance.

(Possible Field Project Idea) (30 minutes, Chapter Objective 9, AACSB: Reflective Thinking) 8-51. Create a list of current celebrities whom you feel typify cultural categories (e.g., clown, mother figure, etc.). What specific brands do you feel each could effectively endorse?

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Students should be encouraged to think carefully about a variety of product categories to do this project. Listing celebrities, their characteristics, brand characteristics, and matchups is a good way to begin. Many of the matchups will be product specific. Ask students how many of the celebrities they have chosen could be used outside of specific product ranges. Encourage discussion with this question.

(20 minutes, Chapter Objective 8, AACSB: Reflective Thinking) 8-52. Conduct an “avatar hunt” on e-commerce Web sites, online video game sites, and online communities such as The Sims that let people select what they want to look like in cyberspace. What seem to be the dominant figure people are choosing? Are they realistic or fantasy characters? Male or female? What types of avatars do you believe would be most effective for each these different kinds of websites and why?

This should be a fun exercise that students will enjoy. Hopefully, students will draw from concepts discussed in the chapter regarding celebrity and nonhuman endorsers.

Specifically, encourage students to incorporate principles of source attractiveness as they consider what types of avatars would be most effective for various websites and products.

You might also consider asking students to include an explanation of why they feel the more dominant avatars are more effective than human celebrity endorsers are.

(40 minutes, Chapter Objective 8, AACSB: Reflective Thinking)

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CASE STUDY TEACHING NOTES Chapter 8 Case Study: Shampoo Buying: A “Bad Hair” Day? Summary of Case The hair care aisle of a typical drugstore has more than 200 choices for shampoo. The packages promote a myriad of benefits including repair, protection, hydration, control, and nourishment.

How does a consumer make the match between his or her needs and the brand benefits? It’s not easy to choose, and therefore not a surprise that many shoppers spend about 20 minutes in this aisle when they select a shampoo brand.

Suggestions for Presentation Have the students list as many shampoo brands that they can think of.

Suggested Answers for Discussion Questions CS 8-1.

Describe Cream Silk’s promotion within the context of the multiattribute model: Which attribute(s) were central to the promotion and how does the model explain what they company was trying to accomplish with the “Human Hair Quartet?” What limitations might this model have for predicting consumer’s attitudes and purchases behavior towards Cream Silk? (Hint: Take a look at the Theory of Reasoned Action.)

Cream Silk core benefit is the strength it gives hair, one problem with hair care products is consumer’s loyalty to other products.

(10 minutes, Chapter Objectives 8 and 9, AACSB: Reflective Thinking CS 8-2.

In contrast to the Cream Silk promotion, Old Spice used its characteristically quirky approach to persuade men to try its hair care products. The integrated campaign “That’s the Power of Hair,” incorporated a popular Huey Lewis tune, an interactive Web site, and funny ads featuring animated hair. Discuss the type of message appeal an d the Elaboration Likelihood Model route each campaign used.

Consumers like funny, uplifting ads, that will appeal to men because the word strong is associated with men.

(10 minutes, Chapter Objective 8, AACSB: Reflective Thinking)

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Additional Support Material

STUDENT PROJECTS Individual Projects 1.

Have students explain the consistency, balance, and Fishbein theories to a friend, and then ask the friend to analyze two of his or her recent experiences that seem to confirm or disconfirm one or more of these theories. Report the findings to the class.

To be able to explain it to a friend, the student must understand each of the theories and be able to differentiate between the theories. Thus, this is a useful exercise for reinforcing the theories. Further, students get feedback from a friend that allows them to think critically about whether the theory relates to his/her experiences.

(15 minutes, Chapter Objective 5, AACSB: Reflective Thinking and Communication Abilities 2.

In this project, students should identify one specific example for each of the three hierarchies of the ABC model. For each, they should give details as to the application of each component.

Students should select one CAB example, one ABC example, and one BAC example to fulfill the requirements of examples of the standard, low-involvement and experiential hierarchies, respectively.

(15 minutes, Chapter Objective 2, AACSB: Reflective Thinking) 3.

It is time for true confessions. Describe three instances when your purchase behavior was inconsistent with an attitude toward the product or service you were buying. Explain why this happened. Share this with the class, asking them if they agree with the explanation or whether they have other notions.

Students may provide examples where outside influences intervened, they did not have the resources to select the product/service they really wanted, or where they only had certain products or services available because of the location or an out of stock situation.

(10 minutes, Chapter Objective 5, AACSB: Reflective Thinking and Communication Abilities) 4.

Have students prepare an example of the Fishbein model and present the findings to the class.

Students should identify attributes that are important to attitude formation, ask the respondents to note the importance of each attribute, and then ask the respondents to rate the brands on those attributes. The attitude score will be with sum of the weighted beliefs (importance rating x belief rating) for all of the attributes for each brand.

(30 minutes, Chapter Objective 5, AACSB: Analytic Skills and Communication Abilities 5.

Ask one of your students to interview three people and have each respondent identify an advertisement that they have a positive attitude toward and an ad to which they have a negative attitude. Be sure to inquire to find out how their attitudes toward the ads influence their attitudes toward the products and likelihood of purchase.

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Favorable attitudes toward an ad often will result in favorable attitudes toward the product, especially in cases where the consumer does not have direct experience with the product. In general, experience is more powerful than advertising in consumer evaluations of a product.

(45 minutes, Chapter Objectives 3 and 5, AACSB: Reflective Thinking) 6.

Have students produce an example of some type of promotion used for each of the principles of reciprocity, scarcity, authority, consistency, liking, and consensus.

Reciprocity – we are more likely to give if we receive. Students may create an ad that shows gift-giving, note the direct response technique where a research company includes a dollar along with the survey, or talk about non-profit organizations that send “free” labels, among other examples.

Scarcity – items are more attractive when they are not available. Students may note limited time offers and/or limited quantity offers. They also may note wait lists for high fashion items.

Authority – we believe authoritative sources more readily than non-authoritative sources.

Students may use an appeal from a celebrity who is an expert in the product category s/he is promoting.

Consistency – people try not to contradict themselves in terms of what they say and do about an issue. Students may note the foot in door technique, where the salesperson gets the individual to say yes to a small thing in the hope that s/he will say yes when it comes time to close the deal.

Liking – we agree with those we like/admire. Students may note the attractiveness of spokespeople and salespeople.

Consensus - We consider what others do before we decide what to do. Students may create advertisements that note “9 out of 10…” etc.

(30 minutes, Chapter Objective 5, AACSB: Reflective Thinking and Communication Abilities 7.

Have students conduct a simple content analysis by examining either print or broadcast ads. They may find such ads in real sources such as magazines, newspapers, or by watching television. They may also find such ads online at websites that maintain archives of advertisements. Students should view numerous ads and analyze which of the following message appeals appear to be used: (a) emotional, (b) rational, (c) sex, (d) humorous, and (e) fear. Does the medium or specific media vehicle have an effect on which appeals are used most commonly? After conducting this analysis, have students explain which appeal(s) is most powerful. Most persuasive? Most credible?

This extensive project may be appropriate as an individual project outside of class.

Students should receive enough time to complete the content analysis and a general idea of the time frame and number of ads they should evaluate. The assignment requires critical thinking about the use of different types of claims, so it should reinforce basic understanding of the claims as well as provide students with exposure of how and when they are used.

(90 minutes, Chapter Objective 6, AACSB: Reflective Thinking) 8.

Bring in a number of print or television ads that rely on the use of metaphors or resonance (or have your students do it). Have the students discuss the ads in groups. What are their

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initial reactions to the ads? How effective do they think they are? Do they think some other approach would be more convincing? Why? This exercise will reinforce the concepts of metaphors and resonance and provide students with the opportunity to think critically about their effectiveness. Students that provide another approach should provide their reasoning for the suggestion.

(40 minutes, Chapter Objective 9, AACSB: Reflective Thinking and Analytic Skills) Group Projects 1.

Give the class a list of eight or ten common generic products (e.g., cars, peanut butter, detergent, toothpaste, gasoline, toilet paper, microwave dinners, a professional football team, an airline, and a soft drink) and ask them to list their favorite brand(s) of the product. See if those who are participating know how they developed their brand preference and how the products’ attributes are related to their attitudes toward the product(s).

This exercise will provide the opportunity for students to discuss differences in the formation of brand preferences and the importance of different attributes, which will help reinforce the information about attitude formation.

(30 minutes, Chapter Objective 3, AACSB: Reflective Thinking) 2.

Divide the class into teams and have each team come up with a set of about ten descriptive words that could be used to positively or negatively describe a specific consumer good (e.g., a stereo, car, expensive clothing, etc.). Send students out to interview a friend who owns this product. Determine the length of time the respondent has owned the product and then have the respondent evaluate the product according to some criteria determined by the class. See if the people who more recently purchased the product have a more positive attitude toward it than those who have owned it for a longer period.

Students will analyze the length of the relationship with the product relative to the attitudes associated with the product. In some cases, recent consumers may have a honeymoon effect or will have a strong emphasis on positive aspects of the product to overcome cognitive dissonance. However, in general, commitment to positive attitudes is likely to increase over time. Because of time involved in the exercise, the instructor may wish to do this in class between groups or only have a few students participate in the project.

(60 minutes, Chapter Objective 3, AACSB: Analytic Skills) 3.

Ask a group of students to think about restaurants they like and do not like to patronize.

Have them design a multi-attribute model for three of these restaurants, making sure both spectrums are included. Have students make suggestions of how the managers could improve the restaurants’ images by following the strategies and tactics found in this chapter.

Student measurement should include the importance of the attributes as well as the beliefs about the attributes. Ways to change the attitudes may include adding an attribute, changing beliefs (about one of the brand’s attributes or a competitor’s attribute), changing importance ratings.

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(30 minutes, Chapter Objective 5, AACSB: Reflective Thinking) 4.

Bring in a number of print or television ads that use celebrity endorsers (or have students do it). Have students get into groups to discuss how effective they think the ads are. By evaluating the spokesperson as either “good” or “poor,” determine whether the class likes the celebrity. Do they find the ads believable or contrived? Probe to find out why they feel this way.

This is a critical thinking exercise where students make judgments about the effectiveness of a celebrity endorser based on the characteristics described in the chapter (attractiveness, credibility, fit with the product, etc.).

(15 minutes, Chapter Objective 8, AACSB: Reflective Thinking) 5.

Have student groups collect ads that demonstrate the literary devices of allegory, metaphor, simile, and resonance. Have them discuss the effectiveness of such with the class.

Look for students to understand what each of the concepts is and differences between the techniques. The perception of effectiveness of each technique is likely to depend on the product category, familiarity with the brand, and other aspects of the execution.

(30 minutes, Chapter Objective 9, AACSB: Reflective Thinking) 6.

Have groups of students take a common consumable product and apply a fear appeal to promoting the product. Have the students critique the effort with respect to the material presented in the chapter on using fear appeals. Have them do the same for applying a humor appeal to a commonly serious product.

Students should recognize that moderate fear appeals are most effective; consumers shut down or avoid attending to high fear appeals, and low fear appeals do not motivate a consumer response. Students should also recognize that using humor to promote a serious product might backfire.

(20 minutes, Chapter Objective 9, AACSB: Reflective Thinking,)

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eLAB Individual Assignments 1.

Go to www.levistrauss.com. Levi Strauss used to dominate the jeans market. It was a mainstay product for youth in the ’50s, ’60s, and ’70s. Something happened in the ’80s and ’90s, however, that caused the youth to begin shifting their attention to other brands and different ways of dressing. What did attitudes have to do with this shift? How should the company best deal with these changes? Using yourself as an example, tell Levi’s what they must do to secure your business again. If you are already a customer, explain what the company must do to keep your business.

The trip to the website is important if the student is not a customer or is not familiar with Levi Strauss products. The things the students will want Levis to do to earn their business will depend on what motivates the students to buy clothes and the attributes that are important to the students.

(15 minutes, Chapter Objectives 3 and 4, AACSB: Reflective Thinking) Visit www.levistrauss.com and click on the “citizenship” link. Read their statements and policies regarding environment, community, diversity, etc. What is the students’ attitude toward the policies of Levi Strauss? Can they apply the ABC model and explain? What is their level of commitment to their attitude toward Levi Strauss Company?

The students’ attitudes toward the company, based on its corporate responsibility practices, may be different from their attitudes toward the products it makes. Students are likely to talk about the standard learning hierarchy since they are evaluating information about the policies, and then deciding how they feel about it and behaving based on those cognitions and feelings.

(15 minutes, Chapter Objective 3, AACSB: Reflective Thinking) 2.

3.

Go to www.dropzone.com. Apply the ABC model of attitudes to the activity of skydiving. Which of the three hierarchies is most applicable? What modifications could be made to this website?

Students may have different opinions about which model of attitudes would be used to form an attitude toward the activity of skydiving. Because it involves a high level of risk, students may feel consumers will follow the standard learning hierarchy, which is used to evaluate high involvement products and services. If so, the website should provide information for consumers who are likely to search and thoroughly evaluate alternatives.

Students may argue that consumers engage in the experiential hierarchy because a rational decision-making process may deter someone from skydiving. If so, the website would be adapted to instigate impulses that will drive behavior.

(20 minutes, Chapter Objective 3, AACSB: Reflective Thinking) 4.

Visit www.izod.com. Is a multi-attribute model a good one to apply to this product to explain how attitudes are formed? Why or why not? Suggest an alternative model.

Izod products may be expensive, so even if a consumer has a positive attitude toward the product, they may not act on that attitude. The theory of trying may be an appropriate alternative model.

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(15 minutes, Chapter Objective 5, AACSB: Reflective Thinking) 5.

Go to www.ge.com. Pick a product from the huge portfolio of General Electric. This product should be one that you do not use or do not have a negative attitude. Design a brief advertising campaign that would persuade you to use the product. Explain the process that you went through and the principles from the chapter you used in your campaign.

Students should address the attributes about which they have negative beliefs in the campaign. Students should recognize how beliefs relate to attitudes.

(15 minutes, Chapter Objective 5, AACSB: Reflective Thinking) Go to www.floss.com. We all know that we should floss our teeth more often. Why don’t we? With the help of this website, create a series of arguments that could get consumers to floss more often. Which products would seem to be best positioned to get consumers the most results from their increased flossing? Explain your choice.

Students should recognize the sources of resistance and may consider using two-sided arguments to overcome those sources of resistance. Look for students to provide a rationale for their selection of the products that are best positioned to help students get results from increased flossing.

(15 minutes, Chapter Objective 8, AACSB: Reflective Thinking) 6.

Group Assignments 1.

Go to www.lego.com. Once your group visits this site, they will recognize how far Danish toymaker Lego has come from the days when they only made plastic blocks.

Today, the company is into robotics in a big way. That is right—robotics. Assume that Lego has made a functioning personal assistant robot. What attitudes must be identified, formed, or changed for this product to be successful? Be complete in your appraisal.

Lastly, what features should the robot have?

Look for students to apply the principles of persuasion and attitude change in their responses.

(25 minutes, Chapter Objectives 9 and 10, AACSB: Reflective Thinking) 2.

Have groups of students go to www.moveon.org. As a group, they should spend some time reviewing the material on this Web page. Each student will likely have different attitudes. However, the task here is to apply either the principle of cognitive consistency or cognitive dissonance. How is either applicable to the experience of having gone to this site?

Students are open to information that is consistent with existing attitudes and look for ways to relieve tension when information is inconsistent. The principle that is most relevant will depend on the students’ attitudes before engaging in the website.

(45 minutes, Chapter Objective 4, AACSB: Reflective Thinking) 3.

Go to http://www.theaxeeffect.com. Go to the various links for the website of Axe body spray. Analyze the content in terms of message appeals.

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Axe uses sex appeals. Because of a heavy use of sexual innuendos, students may identify metaphors in the website content as well.

(45 minutes, Chapter Objective 9, AACSB: Analytic Skills)

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Chapter 9: DECISION MAKING CHAPTER OBJECTIVES When students have finished reading this chapter, they should understand why: 1. The three categories of consumer decision-making are cognitive, habitual, and affective.

2. A cognitive purchase decision is the outcome of a series of stages that results in the selection of one product over competing options.

3. The way information about a product is framed can prime a decision even when a consumer is unaware of this influence.

4. We often rely upon “rules-of-thumb” to make routine decisions.

5. Marketers often need to understand consumers’ behavior rather than a consumer’s behavior.

6. The decision-making process differs when people chose what to buy on behalf of an organization rather than for personal use.

7. Members of a family unit play different roles and have different amounts of influence when the family makes purchase decisions.

CHAPTER SUMMARY The three categories of consumer decision-making are cognitive, habitual, and affective.

Consumer decision-making is a central part of consumer behavior, but the way we evaluate and choose products (and the amount of thought we put into these choices) varies widely, depending on such dimensions as the degree of novelty or risk related to the decision. Perspectives on decision-making range from a focus on habits that people develop over time to novel situations involving a great deal of risk in which consumers must carefully collect and analyze information before making a choice. Many of our decisions are highly automated; we make them largely by habit. The way we evaluate and choose a product depends on our degree of involvement with the product, the marketing message, and/or the purchase situation. Product involvement can range from very low, where purchase decisions are made via inertia, to very high, where consumers form very strong bonds with what they buy.

A cognitive purchase decision is the outcome of a series of stages that results in the selection of one product over competing options.

A typical decision involves several steps. The first is problem recognition, when we realize we must take some action.This recognition may occur because a current possession malfunctions or perhaps because we have a desire for something new. Once the consumer recognizes a problem and sees it as sufficiently important to warrant some action, he or she begins the process of information search.

This search may range from performing a simple memory scan to determine what he or she has done before to resolve the same problem to extensive fieldwork during which he or she consults a variety of sources to amass as much information as possible. The World Wide Web has changed the way many of us search for information. Today, our problem is more likely to weed out excess detail than to search for

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more information. Comparative search sites and intelligent agents help to filter and guide the search process. We may rely on cybermediaries, such as Web portals, to sort through massive amounts of information as a way to simplify the decision-making process. In the evaluation of alternatives stage, the options a person considers constitute his or her evoked set. Members of the evoked set usually share some characteristics; we categorize them similarly. The way the person mentally groups products influences which alternatives she will consider, and usually we associate some brands more strongly with these categories (i.e., they are more prototypical). When the consumer eventually must make a product choice from among alternatives, he uses one of several decision rules. Noncompensatory rules eliminate alternatives that are deficient on any of the criteria we’ve chosen. Compensatory rules, which we are more likely to apply in high-involvement situations, allow us to consider each alternative’s good and bad points more carefully to arrive at the overall best choice. Once the consumer makes a choice, he or she engages in postpurchase evaluation to determine whether it was a good one; this assessment in turn influences the process the next time the problem occurs.

The way information about a product choice is framed can prime a decision even when the consumer is unaware of this influence.

Principles of mental accounting demonstrate that the way a problem is framed and whether it is put in terms of gains or losses influences what we decide. In addition, other cues in the environment— including subtle ones of which we may not even be aware—may prime us to choose one option over another. A prime is a stimulus that encourages people to focus on some specific aspect of their lives.

Much of the current work in behavioral economics demonstrates how a nudge—a deliberate change by an organization that intends to modify behavior—can result in dramatic effects.

We often rely upon “rules-of-thumb” to make routine decisions.

In many cases, people engage in surprisingly little search. Instead, they rely on various mental shortcuts, such as brand names or price, or they may simply imitate others’ choices. We may use heuristics, or mental rules-of-thumb, to simplify decision-making. In particular, we develop many market beliefs over time. One of the most common beliefs is that we can determine quality by looking at the price. Other heuristics rely on well-known brand names or a product’s country of origin as signals of product quality.

When we consistently purchase a brand over time, this pattern may be the result of true brand loyalty or simply inertia because it’s the easiest thing to do.

Marketers often need to understand consumers’ behavior rather than a consumer’s behavior. More than one person actually makes many purchasing decisions. Collective decision-making occurs whenever two or more people evaluate, select, or use a product or service. In organizations and in families, members play several different roles during the decision-making process. These roles include the gatekeeper, influencer, buyer, and user.

The decision-making process differs when people choose what to buy on behalf of an organization rather than for personal use.

Organizational buyers are people who make purchasing decisions on behalf of a company or other group. Although many of the same factors that affect how they make decisions in their personal lives influence these buyers, their organizational choices tend to be more rational. They are also likely to involve more financial risk, and as they become more complex, it is probable that a greater number of people will be involved in making the decision. The amount of cognitive effort that goes into organizational decisions relates to internal factors, such as the individuals’ psychological characteristics,

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and external factors, such as the company’s willingness to tolerate risk. One of the most important determinants is the type of purchase the company wants to make: The extent of problem solving required depends on whether the product or service it procures is simply a reorder (a straight rebuy), a reorder with minor modifications (modified rebuy), or something it never bought before or something complex and risky (new task). Online purchasing sites revolutionize the way organizational decision makers collect and evaluate product information in business-to-business (B2B) e-commerce.

Members of a family unit play different roles and have different amounts of influence when the family makes purchase decisions.

Marketers have to understand how families make decisions. Spouses in particular have different priorities and exert varying amounts of influence in terms of effort and power. Working women tend to command more power in purchasing decisions, but on the other hand the significant growth in the number of stay-at-home fathers also influences this dynamic.

CHAPTER OUTLINE I. What’s Your Problem?

Researchers realize that decision makers actually possess a repertoire of strategies. We use a thought process called constructive processing to evaluate the effort we will need to make a decision and then tailor our cognitive effort to the task. In some cases we may create a mental budget to help us make estimates over time. Figure 9.1 reveals three types of decision-making: cognitive, habitual, and affective.

A. Consumer Hyperchoice forces us to make decision that may drain energy, while decreasing our abilities to make smart choices.

B. When we attempt to change or maintain our actions, we begin to self-regulate. We specify in advance how we want to respond to issues. These implementation intentions might dictate how much weight we give to information, might include a timetable for decision making.

C. Consumers might exaggerate the benefits or negative aspects of a choice if it will interfere with the ultimate goal, in a process known as counteractive construal.

D. Our ability to self-regulate changes over time, especially when we are tired. The morning morality effect shows that people are more like to cheat or lie in the afternoon than in the morning. The part of the brain called the executive control center, where important decisions are make, can be distracted when we work on other simple tasks. *****Use Figure 9.1 Here *****

Discussion Opportunity—Ask students to think of products that they use that pose a risk. Ask: How does this risk affect your decision-making? Try to think of products that have a social risk. What are they?

What products have you not used because of the risk? How could marketers of these products overcome this risk function and get you to use their products?

II. Cognitive Decision-Making A. Steps in the Cognitive Decision-Making Process

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*****Use Figure 9.2 Here ***** 1. Step #1: Problem recognition. Problem recognition occurs when we experience a significant difference between our current state of affairs and some state we desire. Figure 9.3 illustrates the shifts in actual and ideal states.

Discussion Opportunity—Provide an illustration that demonstrates the actual and ideal states.

Demonstrate how a gap between the two can occur. *****Use Figure 9.3 Here *****

Discussion Opportunity—Ask: How do sellers convince you that you have a problem that they can solve?

2. Step #2: Information search. Information search is the process by which we survey the environment for appropriate data to make a reasonable decision.

• Consumers differ in the amount of search they tend to undertake.

• Cybermediaries help consumers to filter and organize online market information so that customers can identify and evaluate alternatives more efficiently. Intelligent agents are sophisticated software programs that use collaborative filtering technologies to learn from past user behavior in order to recommend new purchases.

• Figure 9.4 illustrates the relationship between amount of information search and product knowledge. *****Use Figure 9.4 Here ***** 3. Step #3: Evaluation of alternatives. We call the alternatives a consumer knows about the evoked set and the ones he or she seriously considers the consideration set.

• How do people put products into categories? We cognitively represent information in a knowledge structure, a set of beliefs we organize in our minds. We represent a product in a cognitive structure at one of three levels: basic, superordinate, subordinate. Figure 2.8 illustrates this. ➢ Basic level category—typically most useful; items have a lot in common but broad range of alternatives can be considered. ➢ Superordinate category—abstract concepts. ➢ Subordinate level—individual brands; prototypical items help describe subordinate level.

• Product categorization has many strategic implications. Some of these are: a. Position a product—The conception of the product relative to other products in the consumer’s mind, or positioning strategy, hinges on the extent to which the consumer categorizes a product. b. Identify competitors— Do different products act as substitutes?

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c. Create an exemplar product— The most known, accepted product or brand can be a category exemplar that exerts disproportionate influence on how people think of the category. d. Locate products in the store—Consumers often expect to find certain products within certain places within the store environment.

•

Evaluative criteria are the dimensions we use to judge the merits of competing options. Determinant attributes are the features we actually use to differentiate among our choices.

4. Step #4: Product choice. In this stage the consumer decides. There are decision rules that may guide our choices. Simple decision rules are non-compensatory decision rules, meaning a product with a low standing on one attribute cannot make up for this position by being better on another attribute. Rules within this structure can be: • The lexicographic rule—the brand with the best attribute is selected.

• The elimination-by-aspects rule—must have a specific feature to be chosen.

• The conjunctive rule—the consumer processes products by brand. Cutoffs are established for each brand. Failure to meet one cutoff means the brand will be rejected.

Discussion Opportunity—Provide an example of how you could use a non-compensatory decision rule.

How could a marketer deal with this if you were not selecting their brand?

5. Step #5: Post purchase evaluation. Post purchase evaluation occurs when we experience the product or service we selected and decide whether it met our expectations. Our reaction is consumer satisfaction or dissatisfaction. According to the expectancy disconfirmation model, we form beliefs about product performance based on our prior experience with the product or communications about the product that imply a certain level of quality. If the experience matches our beliefs, we are satisfied. If not, we are dissatisfied.

B. Neuromarketing uses functional magnetic resonance imaging (MRI) to track blood flow in the brain as we respond to marketing messages and design features. Marketers hope to increase their understanding of response in order better market products.

C. Online Decision Making 1. A cybermediary, or web site, can help consumers better organize information about a good or service. Intelligent agents are software programs that use collaborative filtering technologies to learn a consumer’s past behavior, and recommend new purchases based on that behavior.

2. Search engine optimization refers to the procedures companies use to design content for web sites and post. This will maximize the likelihood that their content will show up when someone searches for a related term. a. A meta tag is a code embedded in a web page and is only visible to consumers in the source code. b. A title tag is an HTML tag that defines the page’s title.

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c. The heading tag is used to section and describe contents. d. A title indicates the pages contents. Titles are used as hooks that increase the likelihood people will click on it. The development of strong titles is referred to as linkbaiting.

How Do We Put Products Into Categories?

A. Hybrid products feature characteristics from two distinct domains. Thus we have a Crossover Utility Vehicle (CUV) and a Sports Utility Vehicle (SUV).

B. Knowledge structure, this term refers to a set of beliefs and the way we organize these beliefs in our minds. *****Use Figure 9.5 Here ***** C. Evaluate criteria and dimensions. We use to judge the merits of competing options while determinant attributes are features we actually use to differentiate among choices. Positioning strategy is the market’s ability convince the consumer to consider its product within a given category, such as televisions, or desserts. This is accomplished by identifying competitors, creating an exemplary product and having strong product placement within the store.

E. Consumers used evaluative criteria to judge the merits of competing options. Consumers consider where products differ, and well as how they are similar. The determinant attributes are the ones we actually use in making our choices.

1. The compensatory rule allows a product to make up for its shortcomings in one area by excelling in another area.

2. The simple additive rule leads to the option that has the most positive attributes. The weighted additive rule allows the consumer to consider the relative important of attributes by weighting each one.

3. When we make habitual or emotional purchases, use typically use a noncompensatory rule. If an option doesn’t suit us, we just reject it and move on to something else. ➢ The lexicographic rule says we should select the brand that is best in the area of the most important attributes. ➢ The elimination-by-aspects rules is similar to the lexicographic rule, but allows us to impose specific cut-offs. ➢ The conjunctive rules allow consumers to process by brand. *****Use Table 9.1 Here ***** IV. Habitual Decision-Making Habitual decision-making occurs with little to no conscious effort.

Ask students if they’ve made a snap judgment that turned out to be correct before.

III. Priming and Nudging Priming refers to environmental cues that influence us. A nudge is a subtle change that influences behavior. The default bias refers to a tendency for people to comply with a requirement rather than to make the effort not to comply.

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A. Decision-making Biases and Shortcuts We can distinguish between a decision strategy that seeks to deliver the best possible result (maximizing) and one that yields an adequate solution and minimizes decision-making costs (satisficing). The idea that we will settle for a solution that is good enough because we lack the resources to weigh every possible factor is called the bounded rationality perspective on decision-making. Mental accounting helps to explain the way we post a problem (called framing) and whether it is phrased in terms of gains or losses influences our decision. The sunkcost fallacy says that having paid for something makes us reluctant to waste it. Behavioral economics blends psychology and economics to study how consumers make decisions. Loss aversion says that people put more emphasis on loss than on gain in a situation. Prospect theory defines choice in terms of gains and losses.

Discussion Opportunity—Ask: What biases do you have when you search for (a) a car, (b) a computer, and (c) a university or college?

B. Heuristics: Mental Shortcuts 1. Covariation means that we tend to assume certain attributes covary. For instance, we may believe that a clean car is in good mechanical condition.

2. Country of origin is a determinant attribute in the decision-making process. a. Consumers strongly associate certain items with specific countries and products from those countries benefit from these linkages. b. The tendency to prefer products or people of one’s own culture over those from another country is called ethnocentrism. *****Use Table 9.2 Here ***** 3. Familiar brand names is a short cut.

4. Higher prices may indicate higher quality.

Discussion Opportunity—Ask: What stores do you like to go to because you like the salespeople? What do you like about them? What are some of the stores you hate to shop at because of the salespeople?

How do they make you feel? What specifically do you not like about them? What would you do to correct the situation if you were the management of the store?

V. Collective Decision Making A. Roles in Collective Decision-Making When more than one person is involved in the purchasing process for products or services that may be used by multiple consumers, it is called collective decision-making. A number of specific roles are played when a collective decision must be made, either by members of a household or by individuals in an organizational buying center.

• Initiator—the person with the idea or need.

• Gatekeeper—the person who controls the flow of information to the group.

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• Influencer—the person who tries to sway the outcome of the decision.

• Buyer—the one who makes the decision.

• User—the person who winds up using the product.

VI. B2B Decision-Making 1. Organizational buyers are people who purchase goods and services on behalf of companies for use in the process of manufacturing, distribution, or resale. These individuals buy from business-to-business (B2B) marketers, who specialize in meeting the needs of such organizations as corporations, government agencies, hospitals, and retailers.

2. The organizational buyer’s perception of the purchase situation is influenced by a number of factors: • Expectations of the supplier.

• The organizational climate of his/her own company.

• The buyer’s assessment of his/her own performance.

3. How does organizational decision-making compare to consumer decision-making?

• Purchase decisions frequently involve many people.

• Products are often bought according to precise, technical specifications.

• Impulse buying is rare.

• Decisions are often of high risk.

• Dollar volume of purchases is often substantial.

• There is more emphasis on personal selling than on other types of promotion.

Discussion Opportunity—Ask: How are decisions made by organizations and decisions made by individuals the same? How are they different? How are strategies the same? Different?

4. Typically, complex organizational decisions tend to be made by a group of people (members of a buying center) who play different roles in the decision.

5. The classification scheme, which divides organizational buying decision-making into three types is called the buyclass theory of purchasing. These range from the most to the least complex Dimensions are: • The level of information that must be gathered prior to making a decision.

• The seriousness of all possible alternatives.

• The buyer’s familiarity with the purchase.

6. The types of decisions in the buyclass framework include: • A straight rebuy is like a habitual decision. This is an automatic decision (as in an inventory reorder).

• A modified rebuy situation involves limited decision-making. This is a repurchase with some minor modifications.

• A new task involves extensive problem solving. This decision has not been made before and is usually a team decision.

Discussion Opportunity—Ask students to give examples of products that would be classified as straight rebuys, modified rebuys, and new task products for a business organization. Use any example organization to illustrate your descriptions.

Use Table 9.3 here

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7. A prediction market is an outgrowth of the wisdom of crowds phenomenon. This approach asserts that groups of people with knowledge about an industry collectively are better than any are as individuals. In a prediction market framework, companies empower their employees as traders. The traders place bets on what they think will happen with future sales, new products, and so on.

VII. The Intimate Corporation: Family Decision-Making Discussion Opportunity—Ask: Describe your family structure. Would you say that it is traditional?

What impact does your family structure have on purchasing? How could an advertiser design an ad to appeal to your family? What would be in that ad?

Discussion Opportunity—Ask students to write down their definition of “family.” Compare the answers with the rest of the class. How does this definition match with alternative lifestyles?

Discussion Opportunity—Ask: Why is it important for marketers to know how to define a family? What difference does it make to an e-marketer? *****Use Consumer Behavior Challenge #9-48 Here ***** Discussion Opportunity—Watch TV (or read a TV Guide) for a week. List and describe the various ways families are depicted. Are these realistic depictions or not? Explain.

A. In a consensual purchase decision, the group agrees on the desired purchase, differing only in terms of how it will be achieved. In an accommodative purchase decision, group members have different preferences or priorities and cannot agree on a purchase that will satisfy the minimum expectations of all involved.

Discussion Opportunity—Provide an illustration from your family where consensual purchase decisions and accommodative purchase decisions occurred. Which form is the most normal?

B. Conflict occurs when there is not complete correspondence in family members’ needs and preferences. There are specific factors that determine how much family decision conflict there will be.

• Interpersonal needs – a person’s level of investment in the group • Product involvement and utility – the degree to which a person will use the product to satisfy a need • Responsibility – for procurement, maintenance, payment, etc.

• Power – the degree to which one family member exerts influence over the others 1.Researchers have paid special attention to which spouse plays the role of what has been called the family financial officer (FFO), who keeps track of the family’s bills and decides how any surplus funds will be spent.

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Discussion Opportunity—Ask: What might a marketing firm do to discover who the FFO is in a family?

What strategies might be used to reach this person? Why is the role of the FFO changing over time?

C. Family members construct a family identity that defines the household to members and insiders using rituals, narratives, and interactions to maintain structure, character, and clarify members’ relationships to one another.

D. The family unit is a set of customer networks that invest in products and services to reach collective identity goals, recognizing that these pursuits may compete with rather than complement individual interests.

There are several sex roles that affect decision-making responsibilities. The number of helicopter moms, overprotective mothers who hover around their kids and insert themselves into their lives, is on the rise.

E. Marketers apply the family life cycle (FLC) concept to segment households. a. The FLC combines trends in income and family composition with the changes these demands place on income. b. As we age, our preferences and needs tend to change. c. Four variables are useful for describing these changes: 1) Age, 2) Marital status, 3) Presence or absence of kids in the home, and 4) Ages of children, if present.

Discussion Opportunity—Ask: Are there other areas that you believe cause conflict in family units?

What do these variables depend on (such as who is involved)? How can marketers use knowledge of conflict in their marketing strategy? Can you think of any products that are designed to enhance conflict? Reduce it? Explain. d. When one family member chooses a product, it is an autonomic decision. Syncretic decisions involve both partners. e. Sheconomy is an analyst term for women dominating emerging markets. In the US, the gender revolution is developing into gender convergence, in which there are more similarities between American men and women than differences.

Discussion Opportunity—Ask: In the traditional family, who generally makes the decision to buy a car?

A computer? A couch? A vacation?

Discussion Opportunity—Ask: Would you suspect more syncratic decisions in today’s society by a family unit? If not, explain why.

f. Working mothers often struggle with what one researcher calls the juggling lifestyle, or a frenzied, guilt-ridden compromise between conflicting cultural ideals of motherhood and professionalism. g. Cultural background plays a big role in whether husbands or wives control purchase decisions. Four factors appear to determine the degree to which decisions will be made jointly or by one or the other spouse. They are:

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Sex-role stereotypes—men buy masculine products and females buy feminine products.

• Spousal resources—the spouse who contributes the most has the greater influence.

• Experience—time constraints and expertise establishes one decision maker.

• Socioeconomic status—middle-class families make more joint decisions. h. Despite recent changes in decision-making responsibilities, women still are primarily responsible for the continuation of the family’s kin-network system. They perform the rituals intended to maintain ties among family members. i. The synoptic ideal calls for the husband and wife to take a common view and act as joint decision makers.

Discussion Opportunity—Ask students to consider what heuristics couples use to make decisions. Give an example of a typical situation.

Discussion Opportunity—Have students think of an individual who has power over them. On 1. Group shopping can change an individual consumer’s behavior. The general effect of group behavior on individual behavior is that the identity of the individual is submerged in a group, known as de-individualization. Home shopping parties capitalize on group pressures to boost sales. Pressures to conform may be particularly intense and may escalate as more and more group members begin to “cave in” – the bandwagon effect. *****Use Review #9-23 Here ***** Discussion Opportunity—Ask: Have you ever gone shopping with a group of people your own age? Do you remember buying (or encouraging others to buy) something that you probably would not have if you were alone? Did you take it back, give it away, or throw it away? Did a group ever dissuade you from buying something you wanted? Did you go back later by yourself and make the purchase?

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End-of-Chapter Support Material SUMMARY OF SPECIAL FEATURE BOXES 1. CB As I See It: Wendy Liu, University of California, San Diego One of the most difficult tasks for consumers is to exert self-control. Recent research has found that not all plans are created equal. Some planning activities facilitate self-control, and others actually hinder self-control efforts.

2. The Tangled Web Research has found that when you focus on your friends, you feel better. The boost in selfesteem prompts us to lose self-control and engage in impulsive behaviors such as binge eating or reckless spending.

3. Marketing Pitfall Product labels assist us with problem-solving but some are more useful than others. This box illustrates some less than useful labels.

4. CB As I See It: Frederic Brunel, Boston University When competitors match each other on product features, quality, and price, the distinguishing feature often becomes a superior visual product design.

5. Marketing Opportunity Consumers want to know the origin of products. Product authenticity is becoming a determinant attribute.

6. Marketing Opportunity Many products originate from employee and customer ideas. This concept is moving in to the apparel industry as consumers can now choose t-shirt designs, accessories, etc., using online technology.

7. The Tangled Web Parents are monitoring what children see and post on social media sites such as Facebook.

8. The Tangled Web Facebook can impact a couple’s relationship because the platform makes it easy to rekindle old relationships. Many divorces occur when partners find inappropriate messages on a Facebook wall, which then becomes evidence.

9. CB As I See It: Amber Epp, University of Wisconsin-Madison When consumers make decisions, they are immersed in family relationships. Family is a main organizing force that shapes consumers’ choices and experiences.

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REVIEW QUESTIONS 9-1.

Why can “mindless” decision making actually be more efficient than devoting a lot of thought to what we buy?

Sometimes the decision-making process is almost automatic; we seem to make snap judgments based on very little information. At other times, coming to a purchase decision begins to resemble a full-time job. A person may literally spend days or weeks thinking about an important purchase such as a new home, even to the point of obsession. Mindless decision-making is more efficient because we do not waste time seeking information when the decision is not as important or we have previously made the decision.

(5 minutes, Chapter Objective 1, AACSB: Reflective Thinking)

9-2.

List the steps in the model of cognitive decision-making.

Problem recognition, information search, evaluation of alternatives, product choice, and outcomes.

(5 minutes, Chapter Objective 2, AACSB: Reflective Thinking)

9-3.

What is purchase momentum, and how does it relate (or not) to the model of rational decisionmaking?

Purchase momentum occurs when these initial impulses actually increase the likelihood that we will buy even more (instead of less as our needs are satisfied), as if we are “revved up” and plunged into a spending spree. It does not follow the traditional model of cognitive decision making because there is less time for information search and evaluation of alternatives, and the act of buying something else helps trigger the need recognition.

(5 minutes, Chapter Objective 3, AACSB: Reflective Thinking)

9-4.

Give an example of the type of purchase that each of the three types of decision-making – cognitive, habitual, and affective - would most likely explain.

A cognitive decision is one that would involve rational thought such as choosing a new vacuum cleaner. Habitual decision-making is one that is made by habit such as making a repurchase of one’s favorite shampoo. Affective decision-making involves emotion – such as choosing a gift.

(5 minutes, Chapter Objective 1, AACSB: Application of Knowledge)

9-5.

Name two ways in which a consumer problem arises.

1) A person’s standard of comparison may be altered, 2) the quality of the consumer’s actual state can move downward, and 3) the consumer’s ideal state can move upward.

(3 minutes, Chapter Objective 2, AACSB: Application of Knowledge)

9-6.

Give an example of the sunk-cost fallacy.

Simply put, the sunk-cost fallacy occurs when someone has paid for something and is therefore reluctant to waste it. When someone attends a sporting event even though weather may put him or her at personal risk is an example.

(5 minutes, Chapter Objective 3, AACSB: Application of Knowledge)

9-7.

What is prospect theory? Does it support the argument that we are rational decision makers?

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Prospect theory, a descriptive model of how people make choices, finds that utility is a function of gains and losses, and risk differs when the consumer faces options involving gains versus those involving losses. Losses are perceived as more important than gains. This says that the factors of decision-making are relative. That would imply that we are not rational.

(5 minutes, Chapter Objective 3, AACSB: Reflective Thinking) 9-8.

“Marketers need to be extra sure their product works as promised when the first introduce it.”

How does this statement relate to what we know about consumers’ evoked sets?

People are more likely to add a new brand to the evoked set than one that we previously considered but passed over, even after additional positive information has been provided for that brand. For marketers, consumers’ unwillingness to give a rejected product a second chance underscores the importance of ensuring that it performs well from the time it is introduced.

(5 minutes, Chapter Objective 2, AACSB: Reflective Thinking)

9-9.

Describe the difference between a superordinate category, a basic level category, and a subordinate category.

Categories exist in a taxonomy from most concrete to most abstract. The middle level, known as a basic level category, is typically the most useful in classifying products, because items grouped together tend to have a lot in common with each other but still permit a range of alternatives to be considered. The broader superordinate category is more abstract, whereas the more specific subordinate category often includes individual brands.

(5 minutes, Chapter Objective 2, AACSB: Reflective Thinking)

9-10. What is an example of an exemplar product?

If a product is a good example of a category, it is more familiar to consumers and they more easily recognize and recall it. Judgments about category attributes tend to be disproportionately influenced by the characteristics of category exemplars.

(5 minutes, Chapter Objective 2, AACSB: Reflective Thinking) 9-11. List three product attributes that consumers can use as product quality signals and provide an example of each.

1) Price: Consumers commonly associate a higher price as an indicator of a higher level of quality. 2) Country-of-origin: A common U.S. perception is that watches that are made in Switzerland are of a higher quality than watches made in any other country. 3) Brand name: Some brands have developed an image of quality (i.e., Mercedes Benz, Toyota, etc.) more so than others (i.e., Kia).

(10 minutes, Chapter Objective 3, AACSB: Application of Knowledge 9-12. How does a brand name work as a heuristic?

Branding is a marketing strategy that often functions, as a heuristic because people assume top brands can be trusted. People form preferences for a favorite brand, and then they literally may never change their minds in the course of a lifetime.

(5 minutes, Chapter Objective 3, AACSB: Reflective Thinking) 9-13. Describe the difference between inertia and brand loyalty.

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Inertia exists when we buy a brand out of habit merely because it requires less effort. For brand loyalty to exist, a pattern of repeat purchase must be accompanied by an underlying positive attitude toward the brand. The underlying attitude makes the consumer less likely to switch in response to a promotion than if they simply behaved based on inertia.

(5 minutes, Chapter Objective 1, AACSB: Reflective Thinking) 9-14. What is the difference between a non-compensatory and a compensatory decision rule? Give one example of each.

Non-compensatory decision rules are choice shortcuts where a product with a low standing on one attribute cannot make up for this position by being better on another attribute. Unlike noncompensatory decision rules, compensatory decision rules give a product a chance to make up for its shortcomings. Consumers who employ these rules tend to be more involved in the purchase and thus are willing to exert the effort to consider the entire picture in a more exacting way. The willingness to let good and bad product qualities balance out can result in quite different choices.

(5 minutes, Chapter Objective 2, AACSB: Reflective Thinking) 9-15. What is prime? How does it differ from a nudge?

A prime is a stimulus that encourages people to focus on some specific aspect of their lives such as their financial well-being, or the environment. A nudge is a deliberate change by an organization that intends to modify behavior, and can result in dramatic effects.

(5 minutes, Chapter Objective 3, AACSB: Reflective Thinking) 9-16. What are some factors that influence how an organizational buyer evaluates a purchase decision?

A number of factors influence the organizational buyer’s perception of the purchase situation.

These include his or her expectations of the supplier (e.g., product quality, the competence and behavior of the firm’s employees, and prior experiences in dealing with that supplier), the organizational climate of the company (i.e., how it rewards performance and what it values), and the buyer’s assessment of his or her own performance (e.g., whether he or she believes in taking risks).

(5 minutes, Chapter Objective 6, AACSB: Reflective Thinking) 9-17. What is a prediction market?

A prediction market is one of the hottest trends in organizational decision-making techniques.

This approach asserts that groups of people with knowledge about an industry are, collectively, better predictors of the future than are any of them as individuals. In a prediction market framework, companies from Microsoft to Eli Lilly and Hewlett-Packard empower their employees as “traders.” Like a stock market, traders place bets on what they think will happen regarding future sales, the success of new products, or how other firms in a distribution channel will behave, —and they often receive a cash reward if their “stock picks” pan out.

(5 minutes, Chapter Objective 6, AACSB: Reflective Thinking) 9-18. Summarize the buyclass model of purchasing. How do decisions differ within each class?

The classic buyclass theory of purchasing divides organizational buying decisions into three types that range from the least to the most complex. Three decision-making

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dimensions describe the purchasing strategies of an organizational buyer. A straight rebuy is a habitual decision. It’s an automatic choice, as when an inventory level reaches a preestablished reorder point. Most organizations maintain an approved vendor list, and as long as experience with a supplier is satisfactory, there is little or no ongoing information search or evaluation. A modified rebuy situation involves limited decision making. It occurs when an organization wants to repurchase a product or service but also wants to make some minor modifications. This decision might involve a limited search for information among a few vendors. One or a few people will probably make the final decision. A new task involves extensive problem solving. Because the company hasn’t made a similar decision already, there is often a serious risk that the product won’t perform as it should or that it will be too costly. This is when the organization designates a buying center with assorted specialists to evaluate the purchase, and they typically gather a lot of information before they come to a decision.

(10 minutes, Chapter Objective 5, AACSB: Reflective Thinking)

9-19. What are some of the ways in which organizational decisions differ from individual consumer decisions? How are they similar?

The purchase decisions that companies make frequently involve many people, including those who do the actual buying, those who directly or indirectly influence this decision, and the employees who will actually use the product or service. Organizations and companies often use precise technical specifications that require a lot of knowledge about the product category. Impulse buying is rare (industrial buyers do not suddenly get an “urge to splurge” on lead pipe or silicon chips). Because buyers are professionals, they base their decisions on past experience and they carefully weigh alternatives. Decisions often are risky, especially in the sense that a buyer’s career may ride on his judgment. The dollar volume of purchases is often substantial; it dwarfs most individual consumers’ grocery bills or mortgage payments. One hundred to 250 organizational customers typically account for more than half of a supplier’s sales volume, which gives the buyers a lot of influence over the supplier. B2B marketing often emphasizes personal selling more than advertising or other forms of promotion.

Dealing with organizational buyers typically requires more face-to- face contact than when marketers sell to end consumers.

(10 minutes, Chapter Objective 5, AACSB: Reflective Thinking) 9-20. List three roles employees play in the organizational decision-making process.

Employees are often collaborators in the decision making process, or participate in the problem solving process including the evaluation of product choices. Depending on the decision, the choice may include some or all of the group members, and different group members play important roles in what can be a complicated process. These roles include the following: Initiator—The person who brings up the idea or identifies a need. Gatekeeper—The person who conducts the information search and controls the flow of information available to the group. In organizational contexts, the gatekeeper identifies possible vendors and products for the rest of the group to consider. Influencer—The person who tries to sway the outcome of the decision. Some people may be more motivated than others to get involved, and participants also possess different amounts of power to get their point across.

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Buyer—The person who actually makes the purchase. The buyer may or may not actually use the product. User—The person who actually consumes the product or service.

(10 minutes, Chapter Objective 5, AACSB: Reflective Thinking) 9-21. What is the difference between an autonomic and syncretic decision?

When one family member chooses a product, this is an autonomic decision. In traditional households, for example, men often have sole responsibility to select a car, whereas decorating choices fall to women. Syncretic decisions, such as a vacation destination, involve both partners.

These choices are common for vacations, homes, appliances, furniture, home electronics, and long-distance phone services. As the couple’s educational level increases, they are more likely to make decisions together.

(5 minutes, Chapter Objective 7, AACSB: Reflective Thinking) 9-22. What are some differences between “traditional” and “modern” couples in terms of how they allocate household responsibilities?

As women continue to work outside the home in great number, their influence on household purchase decisions grows accordingly. The share of mothers employed full- or part-time has quadrupled since the 1950s and today accounts for nearly three quarters of women with children at home. The number of women who are their families’ sole or primary breadwinner also has soared, to 40 percent today from 11 percent in 1960. As we’ve seen, women’s roles within the family decision-making unit are changing, but so are those of men. For one thing, single men remain a powerful and often ignored force in the marketplace.

Right now, 3 out of 10 men are single, and more than 80 percent of them make the sole or key big-ticket decisions in their households. Another driver of this change is that as we’ve just seen, more women are working outside the home and at better-paying jobs. This means that a growing number of husbands today stay home with the kids: The Census Bureau reports that one-fifth of fathers with preschool-age children and working wives are the primary caretaker. As one marketing executive observed, “Kids are going to grow up with dads that give them baths and drive them to soccer and are cutting up oranges for team snacks.” Already, by some estimates men do more than half of the grocery shopping in the United States.

(10 minutes, Chapter Objective 7, AACSB: Reflective Thinking) 9-23. What is a kin-network system?

Despite the shift in decision-making responsibilities, women are still primarily responsible for the continuation of the family’s kin-network system, They maintain ties among family members, both immediate and extended. Women are more likely to coordinate visits among relatives, stay in touch with family members, send greeting cards, and arrange social engagements. This organizing role means that women often make important decisions about the family’s leisure activities, and they are more likely to decide with whom the family will socialize.

(5 minutes, Chapter Objective 7, AACSB: Reflective Thinking) 9-24. Describe a heuristic a couple might use when they make a decision, and provide an example of it.

Responses will vary by student, based on examples. The couple defines their areas of common preference on obvious, objective dimensions rather than subtler, hard-to-define cues. For example, they may easily agree on the number of bedrooms they need in the new home, but they

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have a harder time when they need to agree on how the home should look. The couple negotiates a system of task specialization in which each is responsible for certain duties or decision areas and does not intrude on the other’s “turf.” For many couples, sex roles often dictate just what these territories are. For example, the wife may do advance scouting for houses that meet their requirements, and the husband determines whether the couple can obtain a mortgage. The likelihood of one partner conceding to the wishes of the other depends on how passionately each person desires a specific outcome. One spouse yields to the influence of the other in many cases simply because his or her preference for a certain attribute is not particularly intense. In other situations, he is more willing to fight for what he wants (in other words, “choose your battles”).

In cases where intense preferences for different attributes exist, rather than attempting to influence each other, spouses will “trade off ” a less-intense preference for a more strongly felt desire. For example, a husband who is somewhat indifferent about kitchen design may give in to his wife in exchange for permission to design his own “Man Cave.”

(10 minutes, Chapter Objective 7, AACSB: Reflective Thinking)

CONSUMER BEHAVIOR CHALLENGE DISCUSS 9-25. Excessive food consumption may link to emotional issues such as feelings of inferiority or low self-esteem. In some situations people consume products (especially food) as a reaction to prior life experiences such as loss of a loved one or perhaps abuse as a child. A British man whom the U.K. news media once dubbed “the world’s fattest man” when he weighed in at 980 pounds is a case in point. He explained that as an adult his insatiable desire to constantly eat stemmed from an abusive father and sexual abuse by a relative: “I still had all these things going around in my head from my childhood. Food replaced the love I didn’t get from my parents.” (The good news: after a gastric bypass operation this man has lost almost two-thirds of his body weight).

Obviously this is an extreme case, and it certainly doesn’t mean that everyone who struggles with his or her weight is a victim of abuse! Nonetheless, emotion often plays a role—a dieter may feel elated when he weighs in at three pounds less than last week; however, if he fails to make progress he may become discouraged and actually sabotage himself with a Krispy Kreme binge. Is it ethical for food companies to exploit these issues by linking their products to enhanced moods?

Responses will vary based on the beliefs of students. Students should consider the cognitive, habitual, and effective aspects of consumer decision making. The feedback loop should be used to help with self-regulation. Implementation intentions should be discussed in terms of how they are exploited.

(20 minutes, chapter Objective 1, AACSB: Ethical understanding and reasoning) 9-26. The chapter discusses ways that organizations can use “nudges” to change consumer behavior.

Critics refer to them as benevolent paternalism because they argue they force people to “eat their vegetables” by restricting the freedom to choose. For example, several cities including New York and Philadelphia have tried (unsuccessfully thus far) to ban the sales of extra large portions of sugary drinks. What’s your take on these efforts – should local, state or federal governments be in the business of nudging citizens to be healthier?

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Responses will vary based on the beliefs of the students. Students should understand how much of the current work in behavioral economics demonstrates how a nudge—a deliberate change by an organization that intends to modify behavior—can result in dramatic effects. A simple “nudge” that changes how people act is to switch from asking consumers to “opt in” to a program to asking them to “opt out” of a program if they don’t want to participate.

(20 minutes, chapter Objective 1, AACSB: Ethical understanding and reasoning) 9-27. Why is it difficult to place a product in a consumer’s evoked set after it has already been rejected? What strategies might a marketer use in an attempt to accomplish this goal?

It is difficult to place a product into an evoked set after it has been rejected because consumers are “cognitive misers.” This means that people conserve their mental resources and expend only a minimum effort required to solve a problem. Once a product has been eliminated from consideration based on some evaluation process, consumers are not likely to expend additional cognitive resources to re-evaluate that product.

Promotional strategies can be used to get the consumer to reconsider the product. Price discounts, coupons, special offers, rebates, or free samples will increase the possibility that a product will re-enter the evoked set. Any other means to get the consumer to try the product will increase the possibility of consideration of the product, and successful trial will increase the chances of a product being included in the consumer’s evoked set.

(15 minutes, Chapter Objective 3, AACSB: Reflective Thinking)

9-28. Technology has the potential to make our lives easier as it reduces the amount of clutter we need to work through to access the information on the Internet that really interests us. However, perhaps intelligent agents that make recommendations based only on what we and others like us have chosen in the past limit us, in that they reduce the chance that we will stumble on something (e.g., a book on a topic we’ve never heard of or a music group that’s different from the style we usually listen to) through serendipity. Will the proliferation of “shopping bots” make our lives too predictable by only giving us more of the same? If so, is this a problem?

Responses will vary by student. Intelligent agents are sophisticated software programs that use collaborative filtering technologies to learn from past user behavior to recommend new purchases. When you let Amazon.com suggest a new book, the site uses an intelligent agent to propose novels based on what you and others like you have bought in the past. The biggest problem Web surfers face these days is to narrow down their choices, not to beef them up. In cyberspace, simplification is key. If we Google a term, most of us are only likely to look at the first few results at the top of the list.

Indeed, that’s one reason why search engine optimization (SEO) is so important today; this term refers to the procedures companies use to design the content of Web sites and posts to maximize the likelihood that their content will show up when someone searches for a relevant term. Our goal is to persuade people to access our content. Just like an expert fisherman chooses his spot and carefully selects the right lure to catch a fish, SEO experts create online content that will attract the attention of the search algorithms, or mathematical formulas, that companies like Google use to determine which entries will turn up in a search.

The algorithm will hunt for certain keywords, and it also will consider who uses them.

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(20 minutes, chapter Objective 2, AACSB: Ethical understanding and reasoning) 9-29. It’s increasingly clear that many postings on blogs and product review Web sites are fake or are posted there to manipulate consumers’ opinions. How big a problem is this if consumers increasingly look to consumer-generated product reviews during the stage of information search? What steps, if any, can marketers take to nip this problem in the bud?

Increasingly many of us rely on online reviews to steer us toward and away from specific restaurants, hotels, movies, garments, music, and just about everything else. A survey of 28,000 respondents in 56 countries reported that online user ratings are the second-most trusted source of brand information (after recommendations from family and friends). We usually put a lot of stock in what members of our social networks recommend. Unfortunately, user ratings don’t link strongly to actual product quality that objective evaluation services like Consumer Reports provide. And, there’s evidence that mobile reviews may be less helpful than desktop reviews, even when the same reviewer writes both. Comments posted via mobile devices are more emotional and more negative.34 Regardless of their accuracy, customer product reviews are a key driver of satisfaction and loyalty. Another advantage these reviews provide is that consumers learn about other, less popular options they may like as well, and at the same time products such as movies, books, and CDs that aren’t “blockbusters” are more likely to sell.

(20 minutes, chapter Objective 2, AACSB: Ethical understanding and reasoning)

9-30. Commercial Alert, a consumer group, is highly critical of neuromarketing. The group's executive director wrote, “What would happen in this country if corporate marketers and political consultants could literally peer inside our brains and chart the neural activity that leads to our selections in the supermarket and voting booth? What if they then could trigger this neural activity by various means, so as to modify our behavior to serve their own ends?” What do you think? Is neuromarketing dangerous?

The idea that neuromarketing is any more dangerous than more traditional methods of market research rests on two assumptions. 1) These methods allow marketers to read minds. While the technologies employed are advanced, reading minds is far down the path. Of course, one never knows what the future will bring. 2) If marketers could read minds, then they would have the capability to trigger certain responses through any means. The bottom line is that consumers still have freedom to choose.

(10 minutes, Chapter Objective 3, AACSB: Ethical Understanding and Reasoning Abilities) 9-31. Research supports the argument that the way we pay for a product changes the way we perceive it. More specifically, credit cards prime people to focus less on the costs of the item and more on the benefits. Using plastic decouples the expense of the purchase so we tend to buy more when we can charge it. Newer innovations like digital wallets take this a step further so payment— at least at the time of purchase—is even less painful. Are these formats going to create problems if they prime us to think more about short-term gratification and less about the long-term hit to our budgets? Do marketers have an obligation to try to prevent these problems?

Responses will vary by student but should consider the idea of priming consumers in the decision making process. Researchers who work on prospect theory analyze how the value of a decision depends on gains or losses; they identify principles of mental accounting that relate to the way

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we frame the question as well as external issues that shouldn’t influence our choices, but do anyway. The notion that even subtle changes in a person’s environment can strongly influence the choices he or she makes has emerged on center stage in the study of consumer behavior in recent years. Unlike standard economic theory that regards people as rational decision makers, the rapidly growing field of behavioral economics focuses on the effects of psychological and social factors on the economic decisions we make, and many of these choices are anything but “rational.” Indeed it turns out that it’s quite possible to modify the choices of individuals and groups merely by tinkering with the way we present information to them. Much of the emerging work in behavioral economics focuses on the role of priming: Cues in the environment that make us more likely to react in a certain way even though we’re unaware of these influences. A prime is a stimulus that encourages people to focus on some specific aspect of their lives such as their financial well-being or the environment.

(20 minutes, Chapter Objective 3, AACSB: Ethical Understanding and Reasoning Abilities)

9-32. As more people enter virtual worlds like Second Life and Kaneva, family decision-making research may have to include our virtual partners (and children?) as well. Do you agree? How do you think consumer researchers could use a virtual world to help them understand decision making in the real world?

Responses will vary by student. One analysis of family decision making took a closer look at the idea that family members mutually construct a family identity that defines the household both to members and to outsiders. According to this perspective (which is similar to the role theory approach to consumer behavior we discussed in Chapter 1), family rituals, narratives (stories the members tell about the family), and everyday interactions help families maintain their structure, maintain their family character (day-to-day characteristics of family life), and clarify members’ relationships to one another. The value of this approach to marketers is that it reminds us of how often products and services help to define the family identity.

(20 minutes, Chapter Objective 7, AACSB: Ethical Understanding and Reasoning Abilities)

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Industrial purchase decisions are totally rational. Aesthetic or subjective factors don’t – and shouldn’t – play a role in this process. Do you agree?

Student responses will vary but should address several issues that are key in B2B decision making. The purchase decisions that companies make frequently involve many people, including those who do the actual buying, those who directly or indirectly influence this decision, and the employees who will actually use the product or service.

Organizations and companies often use precise technical specifications that require a lot of knowledge about the product category. Impulse buying is rare (industrial buyers do not suddenly get an “urge to splurge” on lead pipe or silicon chips). Because buyers are professionals, they base their decisions on past experience and they carefully weigh alternatives.

Decisions often are risky, especially in the sense that a buyer’s career may ride on his judgment.

The dollar volume of purchases is often substantial; it dwarfs most individual consumers’ grocery bills or mortgage payments. One hundred to 250 organizational customers typically account for more than half of a supplier’s sales volume, which gives the buyers a lot of influence over the supplier. B2B marketing often emphasizes personal selling more than advertising or

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other forms of promotion. Dealing with organizational buyers typically requires more face-toface contact than when marketers sell to end consumers.

(15 Minutes, Chapter Objective 6, AACSB: Reflective Thinking) 9-34. We can think of college students who live away from home as having a substitute “family.”

Whether you live with your parents, with a spouse, or with other students, how are decisions made in your college residence “family”? Do some people take on the role of mother, father, or child? Give a specific example of a decision that had to be made and the roles members played.

Scenarios and examples will vary by student but should identify the roles of various family members and how those traditional roles affect their decision making process.

(10 minutes, Chapter Objective 7, AACSB: Reflective Thinking) 9-34 The promotional products industry thrives on corporate clients that order $19 billion per year of T-shirts, mugs, pens, and other branded items that are intended to keep their organizations at the forefront of their customers’ minds. This has caused a lot of backlash, especially in the medical/pharmaceutical industry where critics worry about the undue influence of these advertising messages. Stanford University Medical Center prohibits its physicians from accepting even small gifts, such as pens and mugs, from pharmaceutical sales representatives under a new policy that it hopes will limit industry influence on patient care and doctor education. The new policy is part of a small but growing movement among medical centers (Yale and the University of Pennsylvania have similar policies). The policy also prohibits doctors from accepting free drug samples and from publishing articles ghostwritten by industry contractors in medical journals (a fairly common practice). These changes come at a time when many of us are concerned about the safety and rising cost of drugs and medical devices. About 90 percent of the pharmaceutical industry’s $21 billion marketing budget targets physicians. Some studies have shown that even small gifts create a sense of obligation; one critical study charged that free drug samples are “a powerful inducement for physicians and patients to rely on medications that are expensive but not more effective.” Indeed, some industry documents from a civil lawsuit show that big pharmaceutical companies sometimes calculate to the penny the profits that doctors could make from their drugs. Sales representatives shared those profit estimates with doctors and their staffs, the documents show. In response to pressure in the market, the pharmaceutical industry is largely banning the use of promotional products. One result is that the businesses that supply these premiums will lose around $1 billion per year in sales.

What do you think about this initiative? Is it fair to deprive an industry of its livelihood in this way? Why or why not? Where is the line between legitimate promotion of one’s products and unethical practice? Should professionals engage in organizational decision making that has such far-reaching medical and financial ramifications? Is this philosophy selfish?

Student responses will vary. Students should indicate an understanding of an evoked set as well as a consideration set. Product positioning might also be discussed here. Evaluative criteria and determinant attributes should be considered when making decisions about products. Students should indicate an understanding of ethics and promotion.

(30 minutes, Chapter Objective 3, AACSB: Ethical Understanding and Reasoning Abilities)

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APPLY 9-36 Find examples of electronic recommendation agents on the Web. Evaluate these. Are they helpful?

What characteristics of the sites you locate are likely to make you buy products you would not have bought on your own?

Amazon.com and Mysimon.com have intelligent agents. The students may have to spend a fair amount of time to come up with actual recommendation agents. Their responses to the second question are likely to vary and it may be unclear whether they would have come across the products via another source.

(15 minutes, Chapter Objective 4, AACSB: Reflective Thinking) 9-37 Sometimes a company actually invents a determinant attribute: Pepsi-Cola accomplished this when it stamped freshness dates on soda cans. It spent about $25 million on an advertising and promotional campaign to convince consumers that there’s nothing quite as horrible as a stale can of soda-even though people in the industry estimate that drinkers consume 98 percent of all cans well before this could be a problem. Six months after it introduced the campaign, lo and behold, an independent survey found that 61 percent of respondents felt that freshness dating is an important attribute for a soft drink!. Devise a similar strategy for another product category by coming up with a brand new product attribute. How would you communicate this attribute to your customers?

In order for a marketer to effectively recommend a new decision criterion, its communication should convey three pieces of information: 1. It should point out that there are significant differences among brands on the attribute.

2. It should supply the consumer with a decision-making rule, such as if (deciding among competing brands), then . . . (use the attribute as a criterion). It should convey a rule that can be easily integrated with how the person has made this decision in the past. Otherwise, the recommendation is likely to be ignored because it requires too much mental work.

3. These things should be applied to coming up with a new attribute and communicating it to the target market.

(15 minutes, Chapter Objective 3, AACSB: Reflective Thinking) 9-38 Define the three levels of product categorization described in the chapter. Diagram these levels for a health club.

The text discusses the following levels of product categorization: 1. Superordinate—the broadest and most abstract level (e.g., health clubs).

2. Basic—the most useful category to classify products because these items have much in common with each other (e.g., weight/powerlifting clubs).

3. Subordinate—the most specific category (e.g., Nautilus Fitness Clubs).

(10 minutes, Chapter Objective 3, AACSB: Reflective Thinking) 9-39 Choose a friend or parent whom grocery shops on a regular basis, and keep a log of their purchases of common consumer products during the term. Can you detect any evidence of brand loyalty in any categories based on consistency of purchases? If so, talk to the person about these purchases. Try to determine if his or her choices are based on true brand loyalty or on inertia. What techniques might you use to differentiate between the two?

To begin with, the instructor should ask the students to differentiate between brand loyalty and inertia. Brand loyalty is represented by a pattern of repeat product purchases, accompanied by

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an underlying positive attitude toward the brand. Inertia describes consumption at the low end of involvement, where decisions are made out of habit because the consumer lacks the motivation to consider alternatives.

For example, a student said that her mother buys the same cereal every week. In discussing the reason for buying the cereal, her mother said she bought it because it was what the student’s father liked. She considered him to be brand loyal. Techniques the student could use to find out if the father were truly brand loyal would be to ask him to try other cereals. After trying these alternatives, if he insisted that his was the best, he could be considered to be brand loyal.

(Possible Field Project Idea) (45 minutes, Chapter Objective 3, AACSB: Reflective Thinking) 9-40 Hershey’s stresses the determinant attribute of product authenticity when the chocolate company states: “Hershey, PA is where it all started more than 100 years ago, and it’s still where the famous Hershey’s Kisses are made. Find examples of other companies that appeal to their heritage. How effective are these messages?

Student responses will vary some may include Coors, Sam Adams, Smucker’s, Johnson-Johnson, and Disney.

(20 minutes, Chapter Objective 2, AACSB: Reflective Thinking, Course Learning Outcome 10) 9-41 Form a group of three. Pick a product and develop a marketing plan based on either cognitive or habitual decision making. What are the major differences in emphasis between the two perspectives?

Which is the most likely type of decision-making process for the product you selected?

Answers will vary.

(20 minutes, Chapter Objective 2, AACSB: Reflective Thinking) 9-42 Identify a person who is about to a major purchase. Ask that person to make a chronological list of all the information sources he or she consults before deciding what to buy. How would you characterize the types of sources he or she uses (i.e., internal versus external, media versus personal, etc.)? Which sources appeared to have the most impact on the person’s decision?

Student responses will vary. Several issues may be considered including bounded rationality and brand loyalty issues. How consumers process information in the decision making process should be considered, as well as their role within the family and that decision making unit.

(20 minutes, Chapter Objective 2, AACSB: Reflective Thinking 9-43 Perform a survey of country of origin stereotypes. Compile a list of five countries and ask people what products they associate with each. What are their evaluations of the products and likely attributes of these different products? The power of a country stereotype can also be demonstrated in another way.

Prepare a brief description of a product, including a list of features, and ask people to rate it in terms of quality, likelihood of purchase, and so on. Make several versions of the description, varying only the country from which it comes. Do ratings change as a function of the country of origin?

Students may have strong associations for many countries tied to specific products or product categories. Examples might include European import/luxury cars, French wines, Italian leather goods, Swedish crystal, and Japanese electronics. It may be interesting to expand the notion of country of origin and ask students to talk about areas in the United States that are particularly well known for specific products. Alternatively, for both country and region of origin, students should be challenged to

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think of examples that represent weak or poor association that marketers would want to avoid. (Possible Field Project Idea) (60 minutes, Chapter Objective 3, AACSB: Reflective Thinking) 9-44 Ask a friend to “talk through” the process he or she used to choose one brand over others during a recent purchase. Based on this description, can you identify the decision rule that was most likely employed?

The instructor might begin by reviewing the two types of decision rules, namely, compensatory and noncompensatory. Compensatory decision rules involve averaging information about attributes of competing products where a poor rating on one attribute can be offset by a good rating on another.

Non-compensatory decision rules, alternately, would find a brand with a low rating on one relevant/important attribute eliminated from the consumer’s choices, despite higher ratings on less relevant/important attributes. The specific types of compensatory and non-compensatory rules also should be reviewed.

(20 minutes, Chapter Objective 2, AACSB: Analytic Thinking) 9-45 Think of a product you recently shopped for online. Describe your search process. How did you become aware that you wanted or needed that product? How did you evaluate alternatives? Did you wind up buying online? Why or why not? What factors would make it more or less likely that you would buy something online versus in a traditional store?

Student responses will vary.

(20 minutes, Chapter Objective 2, AACSB: Reflective Thinking) 9-46 Can you replicate Richard’s decision-making process as he chose a TV brand for other consumers or other products? Create a grid for a different product category that lists available brands and the features each offers. (Hint: Product Web sites for computers, cars, and other complex products often generate these grids when they allow you to choose the “compare products” option.) Present this grid to several respondents and ask each to talk aloud as they evaluate their options.

Based on their description, can you identify which decision rule they seem to use?

Student answers will vary. Grids will likely have an indication of features, prices, and quality issues.

Decisions may be based on cognitive, habitual, or affective processes. There may be discussion about constructive processing, mental budgets, and self regulation. Students should consider emotion in the decision making process.

(20 minutes, Chapter Objective 1, AACSB: Reflective Thinking) 9-47 Extraneous characteristics of the choice situation can influence our selections, even though they wouldn’t if we were totally rational decision makers. Create two versions of this scenario (alternate the text you see in parentheses as directed) and ask a separate group of people to respond to each: You are lying on the beach on a hot day. All you have to drink is ice water.

For the past hour you have been thinking about how much you would enjoy a nice cold bottle of your favorite brand of beer. A companion gets up to go make a phone call and offers to bring back a beer from the only nearby place where beer is sold (either a fancy resort hotel or a small, run-down grocery store, depending on the version you’re given). He says that the beer might be expensive and so asks how much you are willing to pay for it. What price do you tell him?

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When researchers gave both versions of this question to respondents, they found that the median price participants who read the fancy-resort version gave was $2.65, but those who got the grocery-store version were only willing to pay $1.50. In both versions, the consumption act is the same, the beer is the same, and they don’t consume any “atmosphere” because they drink the beer on the beach. How do these results compare to yours?

Student responses will vary based on who was interviewed.

(30 minutes, Chapter Objective 7, AACSB: Application of Knowledge) 9-48 Arrange to interview two married couples, one younger and one older. Prepare a response form that lists five product categories—groceries, furniture, appliances, vacations, and automobiles—and ask each spouse to indicate, without consulting the other, whether purchases in each category are made by joint or unilateral decisions, and to indicate whether the unilateral decisions are made by the husband or the wife. Compare each couple’s responses for agreement between husbands and wives relative to who makes the decisions, and compare both couples’ overall responses for differences relative to the number of joint versus unilateral decisions. Report your findings and conclusions.

Student responses will vary based on the interviews.

(45 minutes, Chapter Objective 7, AACSB: Application of Knowledge) 9-49 Collect ads for three different product categories that target families. Find another set of ads for different brands of the same items that don’t feature families. Prepare a report comparing the probable effectiveness of the two approaches. Which specific categories would most likely benefit from a family emphasis?

Student responses will vary based on products and ads chosen. Categories that would most likely benefit from a family emphasis might include non-specialized products. If some family members have strong opinions that will change the results. Examples that might benefit from family input include routine purchases or any syncretic decision such as vacations, homes, or appliances. The idea of family identity and interaction should be addressed.

(45 minutes, Chapter Objective 7, AACSB: Reflective Thinking) 9-50 Pick three married couples and ask each husband and wife to list the names of all cousins, second cousins, and so on for both sides of the family. Based on the results, what can you conclude about the relative role of men and women in maintaining the kin-network system?

Responses will vary but should identify the role women play in managing the kin-network.

(45 minutes, Chapter Objective 7, AACSB: Reflective Thinking)

CASE STUDY TEACHING NOTES Chapter 9 Case Study: Tesla Motors: Driving Forward With A New Consumer Decision Journey Summary of Case The consumer decision-making process is undergoing major change and will never be the same.

Consumers are more informed than ever, with access to virtually endless information. But that wealth of information is leading to many distractions and frustrations along the path to purchase. What experts used to illustrate as a linear or funnel-like decision making path now looks more like a circular, looping

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journey where distractions often lead consumers to revisit information search and alternative evaluation, just when it seemed like a purchase decision should have been reached.

Suggestions for Presentation This case can be taught as part of the decision-making process. If used in class, you can ask students to outline the stages of the decision-making process for choosing a new vehicle.

Suggested Answers for Discussion Questions CS9-1. How does Tesla Motors’ marketing strategy connect with the changes going on in the consumer decision journey today? Do you believe that they can be successful over the long-term with this kind of an approach?

Tesla strategy is to connect with consumer’s changing attitudes on fossil fuel, so they want to have an electric alternative. (10 minutes, Chapter Objective 1, AACSB: Reflective Thinking) CS9-2. The chapter identifies three different categories of consumer decision making: cognitive, habitual, and affective. How does Tesla seem to view the type of decision making that consumers go through when they purchase their vehicles?

Tesla views the decision making process for an electric car as either cognitive or affective.

(5 minutes, Chapter Objectives 1 and 3, AACSB: Reflective Thinking)

Additional Support Material STUDENT PROJECTS Individual Projects 1.

As an in-class activity, discuss with the class the concept of risk. Distribute a list of several different consumer products or have a student do this. Then ask students what types of risk they would associate with each of the products. How could the risk be reduced?

Students may mention monetary, functional, physical, social and/or psychological risk. Seeking information is one way to reduce risk. Providing safety information, third party endorsements, reviews, or evaluations, offering product trials and/or warranties may also reduce perceived risk.

(10 minutes, Chapter Objective 1, AACSB: Reflective Thinking) 2.

Have individual students evaluate a recent purchase of a large-scale item (e.g., expensive clothing, car, stereo system, appliance, furniture, etc.) based on the stages in the Consumer Decision Making Process. Ask them if they think they gathered enough information before

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making their decision. See if they were satisfied with the quantity or quality of the information they had at their disposal.

Students may make assumptions about why information was or was not available.

(15 minutes, Chapter Objectives 1 and 2, AACSB: Reflective Thinking) 3.

Have students choose a specific type of product. Then, have them find product-rating reports from Consumer Reports or a similar organization that tests products. The students should evaluate the rating system the organization used. What other information would have been useful?

Students should select a higher involvement product if they want the information to be available via Consumer Reports. Student evaluations of missing useful information will depend on the product chosen.

(20 minutes, Chapter Objective 2, AACSB: Reflective Thinking) 4.

Ask a student to compile a description of three products that include both features and country of origin. Then have the student ask a few people to rate the quality of the products and whether they would probably buy them. See if he or she can find out why the respondents feel this way.

Some respondents may indicate that the country of origin is part of the issue, but many will not.

Students may need to probe with specific questions about the country of origin. In addition, responses will likely differ by age group.

(45 minutes, Chapter Objective 3, AACSB: Reflective Thinking) 5.

It is often revealing when a student interviews a manager of a local retail store to determine how the store is attempting to meet the consumer’s need for information. After the interview, suggest that the student use powers of observation to determine how effective the approach seems to be.

Retail products with high margins may use salespeople to provide information. Other retailers may use shelf-talkers, kiosks, Qcodes, and websites.

(30 minutes, Chapter Objective 2, AACSB: Reflective Thinking) 6.

In this field project, have a student design a project to illustrate when customers use internal versus external sources of information and deliberate versus accidental sources of information during the search process.

The design of the project will likely include some form of interview with consumers about their search process. As part of the design, students will reinforce the concepts.

(45 minutes, Chapter Objective 2, AACSB: Reflective Thinking) 7.

Have a student identify countries-of-origin of popular U.S. cars. Find out how many cars that we identify as “American” are made in other countries and how many cars we identify as “foreign” are assembled in the United States. A variation on this would be to do the same with heavy equipment (such as John Deere) or with motorcycles or cars that are considered to be of Japanese origin.

Students may be surprised to learn about foreign brands that are assembled in the United States.

In discussion, ask them if learning this changes their attitudes toward the brands.

(45 minutes, Chapter Objective 3, AACSB: Dynamics of the Global Economy)

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8.

What sources of information are most valuable to you when making a decision on purchasing (a) a computer, (b) an expensive piece of jewelry, (c) selecting a place to worship, and (d) something online? Explain.

Student responses may vary, particularly for d) something online, which is very vague. Look for students to explain why they rely on those sources of information.

(15 minutes, Chapter Objective 2, AACSB: Reflective Thinking) 9.

Have the students keep a diary listing their highest and lowest involvement product purchases or service transactions for each day for a week. Have them identify the decision process they went through and how satisfied they were with their decision. Then have them write a short paper describing the lessons they learned from the purchases. What mistakes were made?

Students should be given enough time to reflect on the purchases so they have lessons they learned from the purchases available. Students should recognize the different between the high involvement decisions, which likely included the steps in the extensive decision making process, and the low involvement decisions.

(25 minutes, Chapter Objectives 1 and 2, AACSB: Reflective Thinking) 10.

Ask a student to bring to class an advertisement that is designed to activate the problemrecognition process. Does the student think that the ad works on the consumer’s actual state or ideal state? See if the student can improve the problem recognition features of the advertisement.

This exercise will help students differentiate between the actual and the ideal state. Look for students to provide support for why their suggestions improve the problem recognition features of the advertisement.

(10 minutes, Chapter Objective 2, AACSB: Reflective Thinking) Group Projects 1.

This project will require student groups to conduct consumer interviews. They should contact people (acquaintances, friends, etc.) and ask them questions about a recent purchase or consideration of a purchase. Specifically, they should ask the consumer what factors led them to problem recognition. They should also ask the respondents to explain the similarities or differences that existed between their choices at decision time.

Students should ask for specific stimuli that led to problem recognition and note if the problem was recognized because of a difference from the ideal state or a deterioration of the actual state.

(120 minutes, Chapter Objectives 2, AACSB: Reflective Thinking) 2.

Student groups should consider the product category of gas/electric hybrid vehicles. Based on the consumer decision-making process, they should design a strategy for a company selling this product. They should cover each stage of the decision-making model used in the chapter.

Students should include problem recognition, information search, evaluation of alternatives, purchase and post-purchase steps and design strategies that address consumer needs at each stage.

(45 minutes, Chapter Objective 2, AACSB: Reflective Thinking)

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3.

In groups, students should discuss popular stereotypes that discriminate against a company, person, country, or product. Having selected one of these, they should design a strategy that would help to reduce the stereotype’s negative effects.

Stereotypes will vary, but students should recognize that they are often the result of associations that developed at some point in time (either through direct experience or from word-of-mouth).

A strategy to help reduce the stereotype’s negative effects may include developing an association with something positive.

(25 minutes, Chapter Objective 3, AACSB: Reflective Thinking) 4.

Have student groups devise taxonomy of categories for a product category. Then, have them reposition certain brands at the subordinate level by modifying that taxonomy. How could the companies carry out such a repositioning?

Students should include the superordinate (abstract), basic (broad) and subordinate (brand) levels in their taxonomy and label each level accordingly. For the repositioning, students may identify alternate uses for a product (e.g. baking soda for cooking, cleaning, deodorizing).

(25 minutes, Chapter Objective 2, AACSB: Reflective Thinking5. Compile a list of four or five foreign countries or have a student do it. Ask the class to identify products or classes of products that they usually associate with that country. After they have selected their product categories, have the class evaluate the quality of the products that typically come from each country. What stereotypes were involved?

Student responses will vary. This exercise will help reinforce the concept of stereotypes. Probe students to learn how the stereotypes were formed.

(60 minutes, Chapter Objective 3, AACSB: Reflective Thinking)

eLAB Individual Assignments 1.

Go to www.bose.com. What makes the SoundDock Portable iPod docking station worth more than similar products by competitors? Demonstrate how a consumer might evaluate such a purchase. What decision rules might be used? What strategies might Bose use to educate the consumer as to the value of their product? The same question can be applied to iPhone from www.apple.com.

Students should consider heuristics (including brands and the price-quality heuristic) and consider compensatory and non-compensatory decision rules in their responses. For the last part of the question, Bose customers will probably engage in the cognitive decision making process, so students will want to provide strategies for each stage of the decision making process.

(20 minutes, Chapter Objective 2, AACSB: Reflective Thinking) 2.

Go to www.peapod.com. Online grocery is alive and well. Although most grocery purchases that we make fall into the category of habitual decision-making, somehow, this concept is working for some people. Spend some time on this site and assemble a grocery order. What are the pros and cons of using an online service for habitual decision-making decisions?

Peapod.com and other grocery services allow you to recall your past grocery lists, which saves time and effort associated with choosing each product you want each time. This is particular

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valuable for habitual purchases. Buying online reduces the likelihood of impulse purchases that may increase the overall grocery bill, but it also may reduce the likelihood that a consumer sees a good deal on a substitute product.

(20 minutes, Chapter Objective 3, AACSB: Reflective Thinking) Group Assignments 1.

Go to www.casino.com. Become familiar with the concept of prospect theory. Spend some time as a group on this or other online gambling websites. What examples do you find of applying prospect theory?

Consumers may feel they are missing the jackpot. People are less willing to gamble with profits than with losses and losses are weighed more heavily than gains.

(20 minutes, Chapter Objective 3, AACSB: Reflective Thinking) 2.

Go to www.conagrafoods.com. One of the mega-conglomerates of the modern age, ConAgra Foods boasts dozens of brands in numerous different product categories. As a group, create a categorization chart with at least three levels of abstraction to show how the brands of ConAgra fit under one umbrella category.

Students should include the superordinate (abstract), basic (broad) and subordinate (brand) levels in their taxonomy and label each level.

(45 minutes, Chapter Objective 2, AACSB: Reflective Thinking)

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Chapter 10: BUYING, USING AND DISPOSING CHAPTER OBJECTIVES When students have finished reading this chapter, they should understand why: 1. Many factors at the time of purchase dramatically influence the consumer’s decisionmaking process.

2. The information a store’s layout, Web site, or salespeople provides strongly influences a purchase decision 3. The growth of a “sharing economy” changes how many consumers think about buying rather than renting products.

4. Our decisions about how to dispose of a product are as important as how we decide to obtain it in the first place.

CHAPTER SUMMARY Many factors at the time of purchase dramatically influence the consumer’s decision-making process.

Many factors affect a purchase. These include the consumer’s antecedent state (e.g., his or her mood, time pressure, or disposition toward shopping). Time is an important resource that often determines how much effort and search will go into a decision. Our moods are influenced by the degree of pleasure and arousal a store environment creates.

The usage context of a product is a segmentation variable; consumers look for different product attributes depending on the use to which they intend to put their purchase. The presence or absence of other people (co- consumers)—and the types of people they are—can also affect a consumer’s decisions. The shopping experience is a pivotal part of the purchase decision.

In many cases, retailing is like theatre—the consumer’s evaluation of stores and products may depend on the type of “performance” he witnesses. The actors (e.g., salespeople), the setting (the store environment), and props (e.g., store displays) influence this evaluation. Like a brand personality, a number of factors, such as perceived convenience, sophistication, and expertise of salespeople, determine store image. With increasing competition from non-store alternatives, creating a positive shopping experience has never been more important. Online shopping is growing in importance, and this new way to acquire products has both good (e.g., convenience) and bad (e.g., security) aspects.

The information a store’s layout, web site, or sales people provides strongly influences a purchase decision.

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Because we don’t make many purchase decisions until we’re actually in the store, Point-ofpurchase (POP) stimuli are important sales tools. These include product samples, elaborate package displays, place-based media, and in-store promotional materials such as “shelf talkers.”

POP stimuli are particularly useful in promoting impulse buying, which happens when a consumer yields to a sudden urge for a product. Increasingly, mobile shopping apps are also playing a key role. The consumer’s encounter with a salesperson is a complex and important process. The outcome can be affected by such factors as the salesperson’s similarity to the customer and his or her perceived credibility.

The growth of a “sharing economy” changes how many consumers think about buying rather than renting products.

In the rapidly growing sharing economy people rent what they need rather than buy it. New technologies make this process much easier and online networks allow us to form bonds of trust with strangers. In addition, many consumers no longer place a premium on owning products and prefer to “borrow” them only for the specific times when they actually need them.

Our decisions about how we dispose of a product are as important as how we decide to obtain it in the first place.

Concern about the environment and waste make the issue of product disposal key in many categories. In addition to understanding if and how consumers recycle, newer recommerce models such as swishing are emerging that enable people to share more of their used goods with one another rather than disposing of them

CHAPTER OUTLINE I. Situational Effects on Consumer Behavior A. A consumer’s choices are affected by many personal factors, such as his or her mood, whether there is time pressure to make the purchase, and the particular situation or context for which the product is needed. Figure 10.1 illustrates these relationships. *****Use Figure 10.1 Here ***** B. A consumption situation is defined by factors over and above the characteristics of the person and of the product that influence the buying and/or using of products and services.

1. The day reconstruction method can be used to understand mood changes and consumption situations throughout the day.

2. Situational effects can be behavioral (e.g., entertaining friends) and perceptual (e.g., being depressed or feeling pressed for time).

3. A person’s situational self-image, the role she plays at any one time, can also affect the purchase process.

4. Table 10.1 gives one example of how a marketer fine-tunes its segmentation strategy to the usage situation. *****Use Table 10.1 Here *****

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Discussion Opportunity—Ask the class to think of situations where situational self-image would be very important to consider in formulating strategy.

Discussion Opportunity—Ask: What are some products that are tied to your self-image? Explain.

C. A consumer’s physical and social environment can make a big difference in motives for product usage and affect how the product is evaluated.

1. Examples of the physical environment would include the decor, smells, and even temperature within the selling environment (such as a store).

2. If other consumers are present when sales are made, they are called co-consumers.

The presence or absence of other customers can be positive or negative.

3. The presence of a large number of people in a consumer environment increases physiological arousal levels, which are subject to the consumer’s interpretation.

4. Store density refers to the actual number of people who occupy a space while the psychological state of crowding exists only if a negative affective state occurs because of this density. Crowds can make the experience more intense.

5. The type of consumers who patronize a store can affect our evaluations (e.g., people tend to shop where other shoppers are like them).

Discussion Opportunity—Ask students to think of a local “hot spot.” Describe its characteristics.

If you were going to design a similar “hot spot,” what additional features would you add? Why? D. Temporal Factors: Time is one of the consumers’ most precious resources. The time available before a decision must be made affects the choices we make.

Discussion Opportunity—Ask: What is your view toward time when shopping? How could time affect your shopping behavior?

Discussion Opportunity—Ask students to compare “time” when considering shopping on the Internet versus traditional shopping in a store. Consider the advantages and disadvantages.

1. Open rates (the percentage of people who open an email message from a marketer) vary throughout the day, with the peak at mid-day on weekdays.

2. Time is an economic variable. It is a resource divided among activities.

3. An individual’s priorities determine his or her time style, which is the rate at which we choose to spend the time resource.

4. Many consumers are affected by what they would call time poverty, or the perception that they are pressed for time.

Discussion Opportunity—Ask students to think of ways marketers attempt to appeal to consumers that have a sense of time poverty. Give a product illustration.

Discussion Opportunity—Give an illustration of a polychronic activity that you perform. What can a marketer learn from this activity to better present products or services to you?

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5. Psychological time refers to the subjectiveness of time perceptions.

6. Researchers have identified four dimensions of time: 1) social dimension, 2) temporal situation, 3) planning orientation, and 4) polychronic orientation dimension that have resulted in the identification of five metaphors that capture consumers’ perspectives on time: a. Time is a Pressure Cooker—Analytic in planning, other oriented, monochronic. b. Time is a Map—Analytic planners, temporal orientation, polychromic. c. Time is a Mirror—Analytic planners, polychromic orientation, past temporal orientation. d. Time is a River—Spontaneous with a present focus. e. Time is a Feast—Analytic planners with a present temporal orientation.

7. Different societies have different perspectives on time. These include: a. Linear separable time—Events proceed in an orderly sequence and different times are well defined. b. Procedural time—People simply decide to do something when they want to.

Clocks may be ignored. c. Circular or cyclic time—People are governed by natural cycles.

8. There is a psychological dimension of time or how it is experienced. This is important in queuing theory (a mathematical study of waiting lines). It has been found that a consumer’s experience of waiting can radically influence his or her perceptions of service quality. *****Use Figure 10.2 Here ***** Discussion Opportunity—Ask students to think of a positive and negative experience that they have had with a waiting line. Relate how the marketers handled these situations.

Discussion Opportunity—Ask: Do “waiting lines” exist on the Internet? When do you have to wait? Is it irritating? How can it be overcome?

II. The Shopping Experience A. Emotional States and the Shopping Environment 1. Your mood or physiological condition can affect purchases and how products are evaluated.

2. Two dimensions (shown in Figure 10.3), pleasure (enjoyment) and arousal (stimulation), determine if a shopper will react positively or negatively to a consumption environment.

3. A specific mood is some combination of pleasure and arousal.

4. In general, a mood state (either positive or negative) biases judgments of products and services in that direction.

5. Moods can be affected by store design, the weather, or other factors specific to the consumer (such as music or even television programming).

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6. When a consumer is in a good mood, s/he processes ads with less elaboration/pays less attention to the specifics of the message and relies more on heuristics.

7. Research companies study facial reactions to understand emotional reactions to new products, looking for a true smile (which includes a relaxation of the upper eyelid) and not a social smile (which occurs around the mouth). *****Use Figure 10.3 Here ***** B. When The Going Gets Tough, The Tough Go Shopping 1. Shopping is an activity that can be performed for either utilitarian (functional or tangible) or hedonic (pleasurable or intangible) reasons.

2. Consumers can be segmented based on their shopping orientations, or general attitudes about shopping.

3. Hedonic shopping motives include: a. Social experiences b. Sharing of common interests c. Interpersonal attraction d. Instant status e. The thrill of the hunt Discussion Opportunity—Ask: Can you think of other reasons for shopping? How could the marketer use these (and the ones listed in the chapter) to design strategies to attract you into the store?

Discussion Opportunity—Ask: Are the reasons for shopping on the Internet the same as those for shopping in a store or mall? Compare and contrast the differences. How do Internet marketers appeal to your shopping motives on the Internet? Do they consciously try to lure you away from the traditional shopping format? If so, how?

C. E-Commerce: Clicks versus Bricks 1. The experience of acquiring goods online may be different from offline.

2. E-commerce sites take advantage of technology to provide extra value. a. Sites allow customers to try on and customize offerings. b. Sites allow customer to crowdsource offerings. c. Pretailers provide exclusive styles that would not be produced without public interest.

3. Online shoppers tend to value these aspects of a website: a. The ability to click on an item to create a pop-up window with more details about the product including price, size, colors, and inventory availability. b. The ability to click on an item and add it to your cart without leaving the page you on. c. The ability to feel merchandise through better imagery, more product descriptions, and details. d. The ability to enter all data related to your purchase on one page rather than going through several checkout pages.

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e. The ability to mix and match product images on one page to determine whether they will look good together.

Discussion Opportunity—Compare the pros and cons mentioned in Table 9.2. Ask: Which do you think are the most important? Which of the cons are the easiest to overcome? What could you add to the list? If you have not shopped online, why not? How could a marketer get you to shop online? If you have shopped, what do you like the best? What could be improved in your shopping experience?

D. Retailing as Theater 1. Malls are becoming giant entertainment centers to lure customers back to malls as non-store alternatives multiply.

2. Many stores are designed around an image environment. This is a strategy known as retail theming and can be described based upon four basic kinds of themes: a. Landscape themes—rely on associations with images of nature. b. Marketscape themes—built on associations with man-made places. c. Cyberspace themes—incorporate images of information and communications technology. d. Mindscape themes—draw on abstract ideas and concepts, introspection, and fantasy.

3. Cutting-edge retailers are figuring out that they need to convert a store into a being space that resembles a commercial living room where consumers can relax, be entertained, hang out with friends, etc.

4. Some being spaces cater to minipreneurs (one-person businesses).

5. Another type of retail environment is the pop-up store that open to do business for a few days or weeks and then are dismantled. *****Use Consumer Behavior Challenges Here ***** Discuss #11 and #13 Discussion Opportunity—Ask: Is there a mall or store that you like to go to even if you do not want to buy something? What is the attraction?

E. Store image includes location; merchandise suitability, and knowledge and congeniality of the sales staff. *****Use Review #4 Here ***** Discussion Opportunity—Describe a store that you think has a unique personality or image.

How do you think the store maintains that image? Do you think this image was part of their original strategy?

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1. Atmospherics are the “conscious designing of space and its various dimensions to evoke certain effects in buyers.” a. This could include colors, scents, and sounds and important to the store’s image. b. Consumers who enjoy their experiences spend more time and money in a store.

2. Activity stores are a new trend. They allow the consumer to participate in the production of a good or service.

3. Light and music also affect consumer behavior. ***** Use Figure 10.4 Here; Use Review #2 Here ***** Use Consumer Behavior Challenge Discuss #10 Discussion Opportunity—Ask students to describe the atmospherics of (a) McDonald’s, (b) WalMart, (c) a prestigious department store in your area, and (d) a bar or nightclub in your area.

Do you think the atmosphere in these places accomplishes what the management intended?

F. In-Store Decision Making 1. Marketers increasingly recognize the significant degree to which many purchases are influenced by the store environment. a. Consumers have mental budgets for grocery trips that have an itemized portion and in-store slack that is reserved for unplanned purchases. b. Stores should use samples and reminders at the point of sale to encourage consumers to spend all of their mental budgets.

2. Mobile shopping apps can help consumers locate merchandise and can help employees provide product information.

3. Spontaneous shopping occurs when a shopper suddenly decides to buy something and it can occur under one of two different processes: a. Unplanned buying may occur when a person is unfamiliar with a store’s layout or perhaps when under some time pressure. b. Impulse buying, in contrast, occurs when the person experiences a sudden urge that he or she cannot resist. i.

Impulse items include candy and gum. ii.

Retailers use wide aisles to encourage browsing of high margin items. iii. Credit card usage is associated with unhealthy and impulsive food products. *****Use Figure 10.4 Here ***** Discussion Opportunity—Ask: When it comes to shopping, would you describe yourself as a planner, partial planner, or an impulse purchaser? Give an illustration.

4. Point-of-purchase (POP) stimuli are being increasingly used to instigate impulse shopping. This can range from displays to free samples.

Discussion Opportunity—Have students list some interesting or unique POP materials that you have seen. Do you think that it is ethical to put marketing materials in public places such as restrooms or waiting rooms?

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G. The Salesperson: A Lead Role in the Play 1. The effect of a competent salesperson, which adds value via expert advice that makes the shopper’s choice easier, can be understood in terms of exchange theory that stresses that every interaction involves an exchange of value.

2. A buyer/seller situation is as in many other dyadic encounters (two-person groups); it is a relationship where some agreement must be reached about the roles of each participant during the process of identity negotiation. a. A salesperson’s role and effectiveness is affected by age, appearance, education level, motivation to sell, ability to adapt, and similarity to the customer, including incidental similarity such as a shared birthday or common birthplace. b. People differ in their interaction styles from assertive (and aggressive) to nonassertive.

Discussion Opportunity—Ask: What stores do you like to go to because you like the salespeople?

What do you like about them? What are some of the stores you hate to shop at because of the salespeople? How do they make you feel? What specifically do you not like about them? What would you do to correct the situation if you were the management of the store?

III. Ownership and the Sharing Economy A. Sharing economy or what is sometimes called collaborative consumption. In this business model people rent what the need is rather than buy it. Collaborative consumption communities typically offer a web site that allow individuals to list their services and rating system that allow both buyers and sellers to rate their experiences.

Technology has dramatically lowered transaction costs, so that it’s much easier to share assets and track them across large numbers of people.

IV.. Post-purchase Satisfaction and Disposal A. Consumer satisfaction/dissatisfaction (CS/D) describes the overall feelings a person has about a product after it has been purchased.

B. Postpurchase Satisfaction?

1. Consumers want quality and value. We infer quality when we rely on cues such as brand name, price, product warranties, and so on.

2. According to the expectancy disconfirmation model, consumers form beliefs about a product’s performance based on prior experience with the product or communications about the product that imply a certain level of quality.

3. Managing expectations—To avoid customer dissatisfaction, marketers should avoid promising something they cannot deliver. The power of quality claims is most evident when a company’s product fails.

4. Consumers that expect too much may be fired if it is not feasible to meet his/her needs or underpromising or setting expectations low so they may be exceeded can alter expectations.

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Discussion Opportunity—Ask: What do you usually do when you are dissatisfied with a product or service? Have you ever made a legal or public complaint? If so, describe the event and the outcome.

IV. Product Disposal A. Because people often do form strong attachments to products, the decision to dispose of something may be a painful one.

Discussion Opportunity—Ask students to describe a painful disposal situation that you have encountered. What was the result? Would you do it differently if you had it to do over again? (An example might be the selling of an old car that was a favorite or throwing away something that would now be valuable, such as old baseball cards.)

Discussion Opportunity—Ask: How can marketers use the consumer’s reluctance to part with favorite products in their marketing strategy? Apply this to a situation where you would like the consumer to part with an old product and buy a new one.

B. Disposal Options 1. Abandoned products include as much as 12% of grocery products we buy which do not get used.

2. Some adults are pack rats.

3. The perceived effort associated with recycling is the best predictor of whether people will recycle (not attitudes).

4. Lateral cycling is a disposal option in which one consumer exchanges something she owns with someone else. a. This is part of an underground economy. b. Sharing sites allow people to share rent and exchange goods locally. c. The process of lateral cycling is literally a lifestyle for anti-consumerists who call themselves freegans. d. Free meets are flea markets where no one exchanges money.

5. People who are attached to their stuff may hire a professional organizer to help them declutter and simplify their lives.

6. Some researchers examined how consumers practice divestment rituals, where they take steps to gradually distance themselves from things they treasure so that they can sell them or give them away. The rituals included: a. Iconic transfer ritual (taking pictures and videos before disposal) b. Transition-place ritual (putting items away in a garage before disposal) c. Ritual cleansing (washing, ironing, and wrapping the item before disposal) Discussion Opportunity—Ask students to think of an example where you have lateral cycled something. Describe the experience. Think of something where you have purchased something that has been lateral cycled. What did you feel about the experience? How did you deal with doubts? How should the marketer try to persuade you to buy new rather than used? Where do you think new industries in lateral cycling will occur in the future?

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Discussion Opportunity—Have students share and discuss experiences they have had buying/selling items on eBay or other online auction sites. How do they think such sites have had an impact on the underground economy?

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End-of-Chapter Support Material SUMMARY OF SPECIAL FEATURE BOXES 1.

Net Profit

Virtual currency has increased in use, leading to digital wallets, which are electronic devises that individuals to make e-commerce transactions.

2.

Marketing Opportunity

Stores are being converted to being spaces, places that act as social living rooms. These places, such as coffee shops, offer comfy chairs and sofas, Wi-Fi, and work spaces.

3.

CB As I See It: Julie Baker, Texas A&M University

Consumers depend heavily on visual cues in the physical environment when making purchase decision. Features such as windows, doorways, lighting, and architectural style are visual cues that shape perceptions of and feeling about a store.

4.

Net Profit

Because of frustration and hassles associated with brick-and-mortar stores, the use of shopping apps has increased. Those who use a handheld mobile computer reported an improved shopping experience.

5.

CB As I See It: Jean-Charles Chebat, HEC-Montreal, Canada and Technion, Israel

Store atmosphere affects emotion, basically arousal and pleasure, that affect shopper’s cognitive activity and behavior, mostly how much time and money shippers spend in stores. Shopper behavior also changes based on who they shop with.

6.

The Tangled Web

The site customerssuck.com allows those who work in the retail and food industries to vent about customers and their questions, and attitudes.

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REVIEW QUESTIONS 10-1. What is time poverty, and how can it influence our purchase decisions?

Many consumers believe they are more pressed for time than ever before. It may increase usage of convenience goods and decision-making shortcuts.

(5 minutes, Chapter Objective 1, AACSB: Reflective Thinking) 10-2. What are the two dimensions that determine whether we will react positively or negatively to a purchase environment?

Pleasure—–a person can enjoy or not enjoy a situation and arousal—he can feel stimulated or not.

(5 minutes, Chapter Objective 2, AACSB: Reflective Thinking, 10-3. List three separate motivations for shopping, give an example of each.

Social experiences: The shopping center or department store has replaced the traditional town square or county fair as a community gathering place.

Sharing of common interests: Stores frequently offer specialized goods that allow people with shared interests to communicate. Interpersonal attraction: Shopping centers are a natural place to congregate. The shopping mall has become a central “hangout” for teenagers.

Instant status: As every salesperson knows, some people savor the experience of being waited on, even though they may not necessarily buy anything.

The thrill of the hunt: Some people pride themselves on being able to find the best bargains.

(15 minutes, Chapter Objective 2, AACSB: Reflective Thinking) 10-4. What are some important pros and cons of e-commerce?

Numerous benefits and limitations of e-commerce are listed in Table 9.2 for both the consumer and the marketer.

(10 minutes, Chapter Objective 2, AACSB: Reflective Thinking,) 10-5. List three factors that help to determine store image.

Color, scents, and sounds.

(5 minutes, Chapter Objective 2, AACSB: Reflective Thinking) 10-6. What is the difference between unplanned buying and impulse buying?

Unplanned buying may occur when a person is unfamiliar with a store’s layout or perhaps when under some time pressure; or, a person may be reminded to buy something by seeing it on a store shelf. In contrast, impulse buying occurs when the person experiences a sudden urge he cannot resist.

(10 minutes, Chapter Objective 2, AACSB: Reflective Thinking) 10-7. How do business models in the sharing economy differ from traditional purchase processes?

We’re witnessing the rise of the sharing economy, or what is sometimes called collaborative consumption. In this business model people rent what they need rather than

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buying it. Collaborative consumption communities typically offer a Web site that allows individuals to list their services and a ratings system that allows both buyers and sellers to rate their experiences. What is fueling this revolution? Primarily technology that dramatically lowers transaction costs, so that it’s much easier to share assets and track them across large numbers of people. Online payment systems make it easy to exchange money. Social networks create communities and build trust among strangers who can access each other’s histories. Sellers can make money from assets they don’t use much; think about how many hours a typical owner actually uses an electric drill compared to how much it costs to buy one.

(10 minutes, Chapter Objective 2, AACSB: Reflective Thinking) 10-8. What is the difference between recycling and lateral cycling?

During lateral cycling, one consumer exchanges something he or she owns for something the other person owns. Reusing other people’s things is especially important in our throwaway society because, as one researcher put it, “there is no longer an ‘away’ to throw things to.” Although traditional marketers don’t pay much attention to used product sellers, factors such as concern about the environment, demands for quality, and cost and fashion consciousness make these “secondary” markets more important. In fact, economic estimates of this underground economy range from 3 to 30 percent of the gross national product of the United States and up to 70 percent of the gross domestic product of other countries. The new trend of recommerce (a play on the term e-commerce) shows that many consumers want to squeeze more value out of their possessions by selling or trading them.

(10 minutes, Chapter Objective 4, AACSB: Reflective Thinking)

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CONSUMER BEHAVIOR CHALLENGE DISCUSS 10-9. Are pop-up stores just a fad or a retailing concept that is here to stay?

Given that there are so many strategies that have circulated through retailing, it is likely that nothing is “here to stay.” Students should be engaged in a discussion as to how long they thing that this trend will last and possible reasons that it might end (no longer providing the benefits of promoting the new idea; stores so profitable that they remain open, etc.).

(5 minutes, Chapter Objective 2, AACSB: Reflective Thinking) 10-10. Think about exceptionally good and bad salespeople you have encountered as a shopper.

What qualities seem to differentiate them from others?

The instructor might ask students to recall the last time they went shopping. In the context of that shopping trip, students should describe the characteristics of the salespeople who assisted them. The instructor, or a member of the class, should generate a list of the most common traits mentioned and use the class discussion to profile both good and bad salespeople. The students also should be encouraged to consider the text discussion of source credibility, including such characteristics as similarity, attractiveness, expertise, trustworthiness, and likeability.

(10 minutes, Chapter Objective 3, AACSB: Reflective Thinking) 10-11. Discuss the concept of timestyle. Based on your own experiences, how might we segment consumers in terms of their timestyles?

The concept of timestyle reflects how individuals allocate their time to various activities.

You might want to discuss your own timestyle with the class and encourage students to do the same. A discussion of how consumers might be segmented based on their timestyles should be included. Products that benefit from different timestyles also could be discussed. For example: How much time do you spend teaching, grading papers, researching, and doing college and community service? How much time do you spend with your family, doing household chores, eating, sleeping, exercising, and having fun?

(10 minutes, Chapter Objective 1, AACSB: Reflective Thinking) 10-12 Consumers who participate in the sharing economy seem willing to interact with total strangers. Despite safety and privacy concerns, what is the long-term outlook for this change in the way we think about interacting with people whom we don’t know? How can businesses help to diminish worries some people may have about these practices?

Consumers no longer want to buy them. Instead we’re witnessing the rise of the sharing economy, or what is sometimes called collaborative consumption. In this business model people rent what they need rather than buying it. Collaborative consumption communities typically offer a Web site that allows individuals to list their services and a ratings system that allows both buyers and sellers to rate their experiences. Technology that dramatically lowers transaction costs, so that it’s much easier to share assets and track them across large numbers of people. Online payment systems make it easy to

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exchange money. Social networks create communities and build trust among strangers who can access each other’s histories.

(10 minutes, Chapter Objective 3, AACSB: Reflective Thinking) 10-13 Several men’s clothing retailers nationwide now provide free booze to their male clientele to encourage them to hang out in their stores. Is it ethical to encourage customers to get wastedbefore they shop?

This is an extension of what salons have been doing for some time for women. Student opinions will vary with students pointing out that it is up to the customers to choose how much to consume. Make the connection for students that offering such refreshments are a part of store image and atmospherics.

(5 minutes, Chapter Objective 1, AACSB: Ethical Understanding and Reasoning Abilities)

10-14 Some retailers work hard to cultivate a certain look or image, and they may even choose employees who fit this look. Abercrombie & Fitch, for example, seems to link itself to a clean-cut, all-American image. At one point, a lawsuit claimed that Abercrombie & Fitch systematically “refuses to hire qualified minority applicants as brand representatives to work on the sales floor and discourages applications from minority applicants.”

(Abercrombie replied that it has “zero tolerance for discrimination.”) We know the Hooters restaurant chain is known for its attractive female waitresses. Should a retailer have the right to recruit employees who are consistent with its image even if this means excluding certain types of people (e.g. non-Caucasians, men) from the sales floor? What are some positive and negative aspects of a policy that requires employees who interact with customers to wear a uniform?

Traditionally, the law has allowed for hiring people with a certain look or body type if it can be proven that this is a necessary component of the product or service. For example, airlines can refuse to hire flight personnel that exceed a weight and size limitation (or terminate them if they exceed the limitations after being hired) because there is limited space to work on the airplanes. Ethnic restaurants can choose to only hire people of that ethnicity. Modeling agencies and movie/TV production companies make hiring decisions based almost exclusively on the way people look. However, for many chains such as Abercrombie & Fitch, it is difficult to justify this link. In addition, in a case such as its, they would be unwise to attempt such a link for reasons of public perception. Since this lawsuit, Abercrombie & Fitch has implemented personnel policies to ensure that this problem will be eliminated. Whether or not students feel retailers should have the right to exclude certain types of people will vary based on the students opinion. The discussion on the use of uniforms should include the role of identity negotiation. A uniform is a factor that helps to define a salesperson’s role in the organization.

(15 minutes, Chapter Objective 2 and 3, AACSB: Reflective Thinking) 10-15 The store environment is heating up as more and more companies put their promotional dollars into point-of-purchase efforts. Some stores confront shoppers with videos at the checkout counter, computer monitors attached to their shopping carts, and ads stenciled on the floors. We are also increasingly exposed to ads in non-shopping environments. A

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health club in New York was forced to remove TV monitors that showed advertising on the Health Club Media Networks, after exercisers claimed that the programming interfered with their workouts. Do you feel that these innovations are overly intrusive? At what point might shoppers rebel and demand some peace and quiet while they shop? Do you see any market potential in the future for stores that “countermarket” by promising a “hands-off” shopping environment?

Student opinion will vary based on their knowledge/experience and feelings/beliefs about place-based media. You might ask your students if they ever encounter this type of promotion and explore their reaction at the time of exposure. Students might also be asked to consider a more objective opinion, in light of what they have learned from this course. They should be challenged to view the advantages and disadvantages of these practices from the perspectives of both consumers and retailers.

(20 minutes, Chapter Objective 2, AACSB: Reflective Thinking) 10-16 Courts often prohibit special-interest groups from distributing literature in shopping malls.

Mall managements claim that these centers are private property. However, these groups argue that the mall is the modern-day version of the town square and as such is a public forum. Find some recent court cases involving this free-speech issue and examine the arguments pro and con. What is the status of the mall as a public forum? Do you agree with this concept?

This exercise will challenge the student to conduct primary and secondary research.

Encourage exploration of this issue with other students, faculty members, and consumer advocacy groups. A search should be conducted of published sources such as court cases and the Law Review. They might call the management office of a local mall for additional information.

(30 minutes, Chapter Objective 2, AACSB: Reflective Thinking) 10-17 Marketers use “tricks” to minimize psychological waiting time. These techniques range from altering customers’ perceptions of a line’s length to providing distractions that divert attention from waiting: One hotel chain received excessive complaints about the wait for elevators, so it installed mirrors near the elevator banks. People’s natural tendency to check their appearance reduced complaints, even though the actual waiting time was unchanged.

Airline passengers often complain about the wait to claim their baggage. In one airport, they would walk 1 minute from the plane to the baggage carousel and then wait 7 minutes for their luggage. When the airport changed the layout so that the walk to the carousel took 6 minutes and bags arrived 2 minutes after that, complaints disappeared.

Restaurant chains are scrambling to put the “fast” back into fast food, especially for drive-through lanes, which now account for 65 percent of revenues. In a study that ranked the speed of 25 fast-food chains, cars spent an average of 203.6 seconds from the menu board to departure. Wendy’s was clocked the fastest at 150.3 seconds. To speed things up and eliminate spills, McDonald’s created a salad that comes in a container to fit into car cup holders. Arby’s is working on a “high viscosity” version of its special sauce that’s

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less likely to spill. Burger King is testing see-through bags so customers can quickly check their orders before speeding off.

What are your waiting line “pain points?” How can companies change their processes to make these situations easier or more enjoyable for you?

The psychological dimension of time—how we actually experience it—is an important factor in queuing theory, the mathematical study of waiting lines. As we all know, our experience when we wait has a big effect on our evaluations of what we get at the end of the wait. Although we assume that something must be pretty good if we have to wait for it, the negative feelings that long waits arouse can quickly turn people off. Student discussions ontheir “pain points” will vary.

(15 minutes, Chapter Objective 1, AACSB: Reflective Thinking) APPLY 10-18 Conduct naturalistic observation at a local mall. Sit in a central location and observe the activities of mall employees and patrons. Keep a log of the nonretailing activity you observe (e.g., special performances, exhibits, socializing, etc.). Does this activity enhance or detract from business the mall conducts? As malls become more like high-tech game rooms, how valid is the criticism raised that shopping areas are only encouraging more loitering by teenage boys who don’t spend a lot in stores and simply scare away other customers?

Students tend to like this exercise. Now that they have been exposed to a variety of consumer behavior constructs, they are likely to see things in the retail context that they did not notice before. They will probably notice a wide variety of non-retailing activities in the mall. Encourage your students to think about the advantages and disadvantages of these other activities from both the consumers’ and retailers’ points of view. Encourage students to develop a specific plan for dealing with teenage loitering that would work, be legal, and would not interfere with normal store and mall traffic. Students might interview mall officials or security officers to get their viewpoint about loitering.

(Possible Field Project Idea) (90 minutes, Chapter Objective 1, AACSB: Analytic Skills) 10-19 Select three competing clothing stores in your area and conduct a store image study for them. Ask a group of consumers to rate each store on a set of attributes and plot these ratings on the same graph. Based on your findings, are there any areas of competitive advantage or disadvantage you could bring to the attention of store management?

Students should review the section on store image (including Atmospherics) before beginning this exercise. You might encourage the students to select stores that are very different from each other rather than “direct competitors.” Consider using this as an opportunity to discuss the strengths and weaknesses of this type of market research.

(Possible Field Project Idea) (30 minutes, Chapter Objective 1, AACSB: Analytic Skills) 10-20 Using Table 10.1 as a model, construct a person-situation segmentation matrix for a brand of perfume.

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You might want to ask different groups of students to construct a matrix for other very different types of products, such as convenience versus specialty goods. Tell students to look up these terms in the glossary and index for further information. Allow students to experiment with variables to construct their matrix. (Possible Field Project or In-Class Group Project Idea) (25 minutes, Chapter Objective 1, AACSB: Reflective Thinking 10-21 Many retailers believe that when they pile a lot of stuff around their store, this cluttered look encourages shoppers to hunt for items and eventually buy more. Dollar General recently raised the height of its shelves to more than six feet; J. C. Penney transformed empty walls into jewelry and accessory displays; Old Navy added lanes lined with items like water bottles, candy, and lunchboxes. Best Buy is even testing the impact of filling aisles with bulky items like Segways and bicycles to compensate for the smaller space that thin TVs and smaller speakers take up. Walmart recently did an abrupt about-face: The company only recently remodeled its stores by eliminating the pallets of items it used to stack in the centers of aisles, and it reduced overall inventory by about 9%. Customers loved the leaner, cleaner look. Only one problem: They bought less stuff. As a senior Walmart executive commented, “They loved the experience.

They just bought less. And that generally is not a good long-term strategy.” Now, Walmart is adding inventory back in and is once again piling stacks of merchandise in aisles. What is your take on these store-stocking strategies? Visit several “big-box” stores in your area, such as Walmart, Target, Best Buy, Costco, and so on. If possible, interview shoppers about their experiences. Do they have trouble navigating around the store? Do they enjoy the clutter? Does it feel like a “treasure hunt” when they have to pick their way around piles and pallets? If you were designing a store, how would you craft a stocking strategy that would make it easy to shop there?

A variety of responses will emerge from this activity because students may have different motivations for shopping and may have different experiences within the store depending on the shopper density when they shop. Students should recognize the trade-off between the convenience of making things neat, orderly and easy to find and the messy, cluttered store with things stacked high, which customers associate with lower prices.

(30 minutes, Chapter Objective 1, AACSB: Reflective Thinking) 10-22 Identify three people who own electric coffee makers. Then, “go to the gemba” by observing them as they actually prepare coffee in the appliance at home. Based on these experiences, what recommendations might you make to the designer of a new coffee maker model that would improve customers’ experiences with the product?

Student responses will vary (30 minutes, Chapter Objective 2, AACSB: Reflective Thinking) 10-23 Interview three consumers who have used a sharing economy service, such as Zipcar, Airbnb, Snapgoods, etc. How would you characterize their experiences compare to more traditional models?

Student responses will vary.

(30 minutes, Chapter Objective 3, AACSB: Reflective Thinking)

CASE STUDY TEACHING NOTES .

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Chapter 10 Case Study: Furnishing An Experience Summary of Case Walk into a Jordan’s Furniture store on a Saturday afternoon. If you have the time, you watch the latest 3-D IMAX movie in a 500-seat theatre before you pick out your new sofa. This might sound like a crazy in-store activity for a furniture store, but events like this are what drive sales at Jordan’s Furniture stores in the Boston area. The company’s slog, “not just a store…an experience,” keeps customers coming every day and literally illustrates the concept of “retailing as theater.”

Suggestions for Presentation Have students discuss other businesses that use “theater” to keep customers coming in.

Suggested Answers for Discussion Questions CS 10-1.

Evaluate the shopping experience at Jordan’s. Why is it so successful? Be sure to consider how they have incorporated concepts related to physical and social surroundings, as well as atmospherics. Is there any downside to this approach to retailing?

Jordan’s shopping experience is successful because consumers can try out products in the same way they would use them at home. The only downside is that this method of retailing is very expensive.

(10 minutes, Chapter Objective 5, AACSB: Reflective Thinking) CS 10-2.

Do you think the appeal of Jordan’s and its attractions is universal across all demographic groups? For example, if Jordan’s were building a new location near colleges, what “shopper-tainment” features would draw college students? Do you believe this would motivate students to purchase furniture from Jordan’s?

Jordan’s shopping experience is more likely to attract younger more affluent customers.

(10 minutes, Chapter Objective 5, AACSB: Analytic Skills) CS 10-3.

How has Jordan’s used the brand community around the Boston Red Sox to its advantage? What other communities could it use?

Consumers have an emotional relationship to their favorite sports teams.

(15 minutes, Chapter Objective 5, AACSB: Analytic Skills,)

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Additional Support Material STUDENT PROJECTS Individual Projects 1.

Have students employ the method of Day Reconstruction to document their own behavior for a day and report on the findings. What trends do they notice? Are there things that they found that they did not expect?

Students may notice effects of mood and other situational factors that they may not have recognized without the exercise.

(30 minutes, Chapter Objective 1, AACSB: Reflective Thinking) 2.

Have students go to a shopping mall. Have them analyze the behavior of shoppers based on observation only. Can they determine the nature of people’s reasons for shopping?

Have them keep track and present the results to the class.

Students may observe the pace at which the consumers are shopping, the number and types of purchases they have made from shopping bags, the number of people in the shopping group, the gender composition of the group, and the time of day, among other things, and make inferences about the shoppers motivations.

(90 minutes, Chapter Objective 2, AACSB: Reflective Thinking) 3.

Ask a student to visit competing discount houses, supermarkets, department stores, or specialty shops in your area and describe the image they have of each store. What factors account for the image differences? For the poorest image store, design a strategy for upgrading its image.

Student responses will vary depending on the stores visited, but they should recognize that there is often a cost associated with atmospherics. Therefore, stores with a higher image may also have higher margins on the products they sell. At the same time, some stores may try to look bare bones and cluttered because consumers associated these store designs with lower prices.

(120 minutes, Chapter Objective 2, AACSB: Reflective Thinking) 4.

Have students talk to other students at the university or college. What forms of complaint behavior do they observe? What strategies could the university or college follow to alleviate these complaints?

Students may enjoy this project. Student-to-student complaint interactions would be categorized as word of mouth. If the student complained to a third party or directly to the university, their complaints would fit in different categories. The strategies to alleviate complaints may be directed at the student or at the problem.

(60 minutes, Chapter Objective 4, AACSB: Reflective Thinking)

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5.

Have someone visit a local supermarket and question the manager regarding how shelf space is allocated. What and who determines which products are placed on the shelves, how much space they are allocated, and at what level they are displayed on the shelf?

Students may be surprised at the amount of thought that goes into shelf positioning.

Students who find it interesting may also want to read Paco Underhill’s book, Why We Buy: The Science of Shopping.

(45 minutes, Chapter Objective 2, AACSB: Reflective Thinking) Many consumers have become more interested in conserving than in “throwing away.”

Have students think of ideas they have for creative recycling. Then, see if they can figure out ways to profitably market these ideas to the public.

Some organizations provide rewards to consumers that recycle (e.g. recyclebank.com).

Organizations like ebay.com, craigslist.org and freecycle.org help consumers recycle.

People who run flea markets make money by renting space to people who often want to sell used merchandise. Students might also sell extended warranties or service plans on second-hand products.

(20 minutes, Chapter Objective 5, AACSB: Reflective Thinking) 6.

7.

Ask a student to relate to the class a purchase experience in which dissatisfaction resulted from the product or service purchased. Have the student tell the class how he/she reacted in terms of post-purchase dissonance. How could the seller avoid future similar incidents?

Post-purchase dissonance is a result of tension that often occurs because of a difference between expectations and reality. The student should recognize that lowering expectations or improving service is two ways of reducing the gap between expected and actual service.

(30 minutes, Chapter Objective 4, AACSB: Reflective Thinking and Communication Abilities) 8.

Have students interview someone older than fifty. What do they look for in a shopping environment? Compare this with your own and/or the student’s expectations. Discuss the differences.

Students should observe differences in expectations for customer service, atmospherics, crowding, the availability of technological tools, and social media access, among other things. Look for students to identify the differences and make inferences about why the differences exist.

(45 minutes, Chapter Objective 2, AACSB: Analytic Skills)

9.

Freecycle something. Then, take something off of Freecycle.org. Report on the experience including the feelings of giving/receiving, the benefit or value to the giver/receiver, etc.

Individual feelings will vary; the value should include the value of the object and the reduced cost to the environment.

(30 minutes, Chapter Objective 5, AACSB: Reflective Thinking and Communication Abilities)

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10.

Have each student think of a time when they had to get rid of something that had been significant to them. Analyze this situation in terms of divestment rituals.

Divestment rituals include iconic transfer ritual (taking pictures and videos before disposal), transition-place ritual (putting items away in a garage before disposal); and ritual cleansing (washing, ironing, and wrapping the item before disposal).

(15 minutes, Chapter Objective 5, AACSB: Reflective Thinking) 11.

Faculty often gets free textbooks from publishers in order to review and possibly prescribe them for their courses. Book buyers come by faculty offices to get books (sometimes, instructor copies), which are then “recycled” into the aftermarket. Is this activity ethical? Does this help keep the cost of books lower for students? Alternatively, should the faculty freecycle these books by offering them to needy students?

Many schools have policies against selling text books to book buyers. The costs for some students may be lower, but the publisher probably has revenue goals so it is likely to increase the costs for other students. Faculty members can put unused copies on reserve at the library; this provides the benefit of sharing the content with needy students without profiting from something that was a goodwill gift from the publisher, which may ultimately increase prices for other students.

(30 minutes, Chapter Objective 5, AACSB: Ethical Understanding and Reasoning Abilities Group Projects In groups, visit three or four different grocery stores, note the elements of the stores’ environment, and compare them. Based on what you have seen, make recommendations to the store manager in order to improve the retailing environment.

Look for students to select specific aspects of the store environment to improve and to tie their recommendations to the store’s overall positioning.

(90 minutes, Chapter Objective 2, AACSB: Reflective Thinking) 1.

2.

Student teams should go to an activity store to interview the manager. Given that the concept of the store is built around participating in the production of a good, ask the manager what benefits they perceive in this model, both from the consumer perspective and from the company perspective.

Before assigning this exercise, make sure there is an activity store nearby that is willing to participate in the interview process. If there is only one activity store, you may want to select a single group to do this project so the manager is not overwhelmed with inquiries.

As an alternative, you can ask students to explore the websites of activity stores online to find the same information. Publicly traded stores will have information about the company perspective in their annual reports, and the consumer perspective should be evident from the copy on the website, which is likely to explain the value of the shopping experience to the consumer.

(60 minutes, Chapter Objective 2, AACSB: Reflective Thinking) 3.

Assign each student group a competitive task. Each member of the group should attempt to get an item off Freecycle.org. The competition is: Which member of the group can

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come up with a free item that is worth the most? Which did the most good for the giver?

Which did the most good in terms of keeping it out of a landfill?

The value of the free item in total dollars should be compared to the value of keeping the product out of a landfill.

(30 minutes, Chapter Objective 4, AACSB: Reflective Thinking)

4.

Have groups of students research and catalog recycling/reusing efforts in their community as part of the class project. They can think of this assignment as their contribution to public service. They can contact the local media to disseminate this information to the local public.

Look for students to focus on the positive dimension of existing efforts as well as the areas for improvement and to tie their recommendations back to what they learned in consumer behavior about product disposal.

(30 minutes, Chapter Objective 4, AACSB: Reflective Thinking and Communication Abilities

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eLAB Individual Assignments 1.

Go to www.bestbuy.com. The Best Buy website promises interactivity with the customer. What evidence do you find that this has occurred (if any)? Evaluate the Best Buy website as to ease of use and customer involvement. What are your impressions about the Best Buy approach? What is the company doing right and what are they doing wrong with respect to customer buying?

Students may note the ability to search, watch videos about “blue shirt test drives” of products, easy access to weekly promotional specials, the ability to compare products, etc. Look for students to provide support that relates back to the consumer behavior concepts in the chapter for what they company is doing right and what the company is doing wrong on the website.

(15 minutes, Chapter Objective 2, AACSB: Reflective Thinking,) 2.

Go to www.starbucked.com. What is the overall purpose of this website? Based on the information given on this website, discuss how consumers can become so dissatisfied that they would create or participate in such a website. Give examples of the different possible courses of action for reacting to poor service.

Starbucked.com is a complaint website. Strong brands are particularly susceptible to these kinds of consumer responses. This is because they tend to evoke passion and are a large target that generates enough buzz to attract other customers. Students should identify the ability for Starbucks to review customer complaints on this site to improve customer service.

(25 minutes, Chapter Objective 4, AACSB: Reflective Thinking) Group Assignments 1.

Go to www.bananarepublic.com and www.oldnavy.com. Have your group compare these two websites as to online atmosphere. Next, if possible, go to a Banana Republic and Old Navy store to determine the differences between in-store atmospheres. Comment on what you find. How have the two organizations positioned themselves? Is there consistency between the approaches used on the Web versus the approaches used in the retail environment? Explain. What improvements should or both of the organizations make with respect to consumer buying? Explain how you arrived at your suggestion(s).

Both company websites are linked, as is gap.com and piperlime.com, and provides access to a common shopping bag. However, the designs of the websites are very different, as are the store images in the bricks and mortar versions of the store. Students should observe differences in the atmospherics, the sales people, the type and quantity of merchandise and relate these differences to the positioning of the stores. For the recommendations, look for students to provide support for their suggestions from the chapter.

(45 minutes, Chapter Objective 2, AACSB: Reflective Thinking and Analytic Skills)

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2.

Go to www.customerssuck.com. As a group, examine accounts given by employees as to the outrageous behavior observed in retail settings. Summarize the findings. What conclusions can be made from this?

The examples on this website are a little bit dated, but can still be useful for students to categorize findings. Students may have examples from their own retail experiences.

(20 minutes, Chapter Objective 4, AACSB: Reflective Thinking) 3.

Visit www.customerrespect.com/ and learn about what they do about treating online customers. Is this service necessary?

The service may provide online “listening” for companies that do not have the resources to perform this important responsibility in house. Student opinions will vary about whether the service is necessary, but should agree on the importance of designing websites to meet customer needs.

(30 minutes, Chapter Objective 4, AACSB: Reflective Thinking)

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Chapter 11: Groups and Social Media

Chapter 11: Groups and Social Media CHAPTER OBJECTIVES When students finish this chapter they should understand why: 1. Other people and groups, especially those that possess social power, influence our decisions.

2. Word-of-mouth communication is the most imporant driver of product choice.

3. Opinion leaders’ recommendations are more influential than others when we decide to buy.

4. Social media changes the way we learn about and select products.

CHAPTER SUMMARY After reading this chapter, students should understand why: Other people and groups, especially those that possess social power, influence our decisions.

We belong to or admire many different groups, and a desire for them to accept us often drives our purchase decisions. Individuals or groups whose opinions or behavior are particularly important to consumers are reference groups. Both formal and informal groups influence the individual’s purchase decisions, although such factors as the conspicuousness of the product and the relevance of the reference group for a particular purchase determine how influential the reference group is. Individuals have influence in a group to the extent that they possess social power. Types of social power include information power, referent power, legitimate power, expert power, reward power, and coercive power. Brand communities unite consumers who share a common passion for a product. Brandfests, which companies organize to encourage this kind of community, can build brand loyalty and reinforce group membership. We conform to the desires of others for two basic reasons: (1) People who model their behavior after others because they take others’ behavior as evidence of the correct way to act are conforming because of informational social influence; and (2) those who conform to satisfy the expectations of others or to be accepted by the group are affected by normative social influence. Group members often do things they would not do as individuals because their identities become merged with the group; they become deindividuated Word-of-mouth communication is the most important driver of product choice.

Much of what we know about products we learn through word-of-mouth (WOM) communication rather than formal advertising. We tend to exchange product-related information in casual conversations. Although WOM often is helpful to make consumers aware of products, it can also hurt companies when damaging product rumors or negative WOM occur.

Opinion leaders’ recommendations are more influential than others when we decide to buy.

Opinion leaders who are knowledgeable about a product and whose opinions are highly regarded tend to influence others’ choices. Specific opinion leaders are somewhat hard to identify, but marketers who know their general characteristics can try to target them in their media and .

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Chapter 11: Groups and Social Media

promotional strategies. Other influencers include market mavens, who have a general interest in marketplace activities; and surrogate consumers, who are compensated for their advice about purchases.

Social media changes the way we learn about and select products.

Social media platforms significantly increase our access to others’ opinions about products and services. Virtual consumption communities unite those who share a common passion for products that include apparel, cars, music, beer, political candidates, etc. Many social media users post content online that satisfies motive for selfenhancement as well as the desire to share opinions and experiences about products and services. Consumers may engage with these brands via social games. Viral marketing techniques enlist individuals to spread online WOM about brands. Online opinion leaders play a pivotal role in disseminating influential recommendations and product information.

CHAPTER OUTLINE I.

Groups A. Social identity theory suggests that each of us has several “selves’ that relate to groups.

1. Social power describes the “capacity to alter the actions of others” 2. Referent power supports the idea that a person will copy behaviors of other prominent people, such as a celebrity.

3. Information power occurs when we know something others would like to know.

4. Legitimate power is the authority we have in the consumer context.

5. Expert power derives from the knowledge one has about a content area.

6. Reward power is the ability to provide positive reinforcement.

7. Coercive power is the ability to influence someone because of social or physical intimidation.

B. A reference group is an actual or imaginary individual or group that significantly influences our evaluation, aspirations, or behaviors.

1. A member reference group consists of people we actually know.

2. An aspirational reference group is a group of those we don’t know, but admire.

3. An avoidance group is a group that we dislike and avoid buying anything that might identify us with that group.

C. Conformity is a change in beliefs or actions, or the development of new norms, or informal rules, that govern behavior.

1. Cultural pressures are a result of the cultural encouragement to conform.

2. Fear of deviance is the belief that a group will apply sanctions to punish nonconforming behaviors.

3. Commitment is the dedications to a group or value that membership has in it.

4. Group unanimity, size, and expertise make it harder to resist the demands of a large number of people.

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Chapter 11: Groups and Social Media

5. Susceptibility to interpersonal influence refers to an individuals need to have others think highly of him or her.

6. Environmental cues effects peoples level of conformity.

D. A brand community is a group of consumers who share a set of social relationships based on the usage of or interest in a product.

II. Word-of-Mouth Communication A. Word of Mouth 1. Word of mouth communication is product information that individuals transmit to other individuals.

2. It is more powerful than advertising.

3. Advertising is more effective at reinforcing existing beliefs than creating new ones.

Discussion Opportunity—Ask: When was the last time you gave someone advice about buying a product? Describe the situation, the information, and the outcome.

Discussion Opportunity—Ask: When was the last time you received WOM advice to purchase a product? Was there social conformity pressure? If so, describe the pressure and what eventually happened.

B. Buzz Building Guerrilla marketing refers to using promotional strategies that use unconventional means and venues to push products. The term implies that the marketer ambushes the unsuspecting recipient.

C. Negative WOM: The Power of Rumors 1. Negative word-of-mouth (WOM) is weighted more heavily than positive WOM. 2. There are three basic themes that came to light in a study of complaint websites: a. Injustice – consumers talked about the difficulty in contacting the company b. Identity – posters characterize the company as evil, not just incompetent c. Agency – individuals try to create a sense of collective identity 3. Serial reproduction is the examination of how content mutates. a. Sometimes people change content to make them consistent with their preexisting schemas, a process called assimilation. b. Sometimes people engage in leveling, where they omit details to simplify the structure. c. Sometimes people engage in sharpening, where they exaggerate prominent details. ***** Use Figure 11.1 Here ***** Discussion Opportunity—Give an illustration of a guerrilla marketing effort you have seen.

Analyze it.

III. Opinion Leadership A. Opinion Leaders

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Chapter 11: Groups and Social Media

1. Opinion leaders are people who are frequently able to influence others’ attitudes or behaviors.

• They are technically competent.

• They have prescreened, evaluated, and synthesized (in an unbiased way) product information.

• They are socially active and interconnected in their community.

• They are similar to the consumer in values and beliefs, a characteristic described by the term homophily. Then tend to be slightly higher in terms of status and educational attainment than those they influence do, but not so high as to be in a different social class.

• They are often among the first to buy new products. They often absorb risk because they purchase products first. They are more credible because of their hands-on experience.

Discussion Opportunity—Ask students to consider the following: Whom do you know that you would classify as an opinion leader? In what areas is he/she a leader? Are you an opinion leader? Under what circumstances and to whom do you perform this role?

B. How influential is an opinion leader?

1. When marketers and social scientists initially developed the concept of the opinion leader, it was assumed that certain influential people in a community would exert an overall impact on group members’ attitudes. There is a question today as to whether there is such a thing as a generalized opinion leader.

2. Opinion leaders tend to be concentrated in their field of interest or expertise. Some opinion leaders overlap into other fields, but not into all fields. a. Monomorphic—experts in a limited field. b. Polymorphic—experts in several fields (but usually concentrated).

3. The original framework is the two-step flow model of influence. a. A small group of influencers disseminates information because they can modify the opinions of a large number of other people. b. The model was updated to recognize that the communication of information was dependent on people who are easily influenced. These people participate in twoway dialogue with the opinion leader as part of an influence network. c. These conversations create information cascades, where the information triggers a series of interactions.

C. Types of Opinion Leaders 1. Opinion leaders may or may not be purchasers of products they recommend.

2. A consumer category called the market maven has been proposed to describe people who are actively involved in transmitting marketplace information of all types.

Market mavens are closer to the conception of a general opinion leader.

Discussion Opportunity—Ask students to describe a market maven that they know. What information do you get from them? How do you think they got the information they transmit?

3. A surrogate consumer is a person who is hired to provide input into purchase decisions. .

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Chapter 11: Groups and Social Media

a. The surrogate consumer is usually compensated for this involvement. b. Examples would include interior decorators, stockbrokers, professional shoppers, or college consultants.

D. How do we find Opinion Leaders?

1. In exploratory studies, researchers identify the profile of a representative opinion leader and generalize these insights to a larger market.

2. In the self-designating method, researchers ask individual consumers whether they consider themselves opinion leaders. It is not as reliable as other methods, but it can easily be applied to a large group of potential opinion leaders.

3. Key informants may be asked to identify opinion leaders.

4. Tracing communication patterns among group members is called the sociometric method. It examines networks through network analysis, which focuses on communication in social systems and considers relations among people in a referral network, including tie strength among them.

5. Tie strength refers to the nature of the bond between people. a. It can range from strong primary (e.g. spouse) to weak secondary (acquaintance). b. Although strong ties are important, weak ties are too because they perform a bridging function between subgroups.

IV. The Social Media Revolution A. Online Social Media and Brand Community 1. Social networks are a set of socially relevant nodes connected by one or more relations.

• Nodes are members in the network.

• Members are network units.

• Ties or relationships connect network units.

• Social networks are sometimes called social graphs, which also may refer to a diagram of interconnections of units in a network.

• Nodes in a network experience interactions (e.g. talking to each other, attending an event, working together).

• Flows (exchanges of resources, information or influence among members of the network) occur between nodes. Flows go in many directions on multiple platforms, including emails, text messages, virtual worlds, and face-to-face meetups - a condition termed media multiplexity.

C. Digital Word-of-mouth 1. 1. Viral marketing occurs when an organization motivates visitors to forward online content to others. Online communities exhibit the following basic characteristics: • The Megaphone Effect allows consumers to share their views with a large audience every day.

Discussion Opportunity—Ask: Is there any category of consumer products in which you think you might be considered an opinion leader?

1. Social games are multiplayer, competitive, goal-oriented activities with defined rules of engagement and online connectivity among a community of players. We’ll see more transactional advertising in games. Social games typically include

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• Leaderboards • Achievement badges • Buddy lists 2. Social games are built on several layers including platform, mode, milieu, and genre.

• A game platform refers to the hardware systems on which the game is played.

• Mode refers to the way players experience the game world.

• Milieu describes the visual nature of the game, such as science fiction, fantasy, horror, and retro.

• The genre of a game refers to the method of play. Popular genres include simulation, action, and role-playing.

D. Online Opinion Leaders 3. Online opinion leaders, sometimes called power users, are powerful because they can reach millions of people around the world and directly or indirectly influence their purchase decisions.

4. Brand specific mentions in social networks are influence impressions.

• The 6.2% of social media users that are responsible for 80% of brand mentions are Mass Connectors.

• Mass Connectors who spread influence impressions trigger a momentum effect, where friends share the mentions with friends, etc.

Discussion Opportunity—Ask: What product have you recently purchased that you would classify as an innovation? Where did you hear about it? What thought process did you go through before you made the purchase?

Discussion Opportunity—With input from students, make a list of products that fit the three forms of innovations. Discuss the significance of these innovations. How does the promotion for these products differ?

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End-of-Chapter Support Material SUMMARY OF SPECIAL FEATURE BOXES 1.

Marketing Opportunity Activities that were previously considered solitary activities, such as running, are not more likely to be group activities.

2.

The Tangled Web Antibrand communities are online groups that are united by their disdain for a product.

These groups tend to attract social idealist who advocate nonmaterialistic lifestyles.

3.

Marketing Opportunity Consumers are spending a lot of money for the chance to hang out with and play with their idols. Baseball camps, music groups and others all promote the relationship between idols and fans.

4.

The Tangled Web When we make decisions as part of a group, we tend to have fewer restrains on our behavior.

5.

Marketing Pitfall Social loafing happens when we don’t devote as much time or effort to a task because it is part of a larger group effort.

6.

Net Profit Varsity Brands surveyed teenage girls to learn how they decide what to buy. Teen girls lead the pack when it comes to spreading ideas via social media.

7.

CB As I See It: Eileen Fischer, York University When consumers share their opinions about products, there are often unintended consequences. Fans of certain TV shows will reframe, remix, or reject new elements when they are introduced in to the show.

8.

The Tangled Web

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Herding behavior is common among consumers as the mimic what others in a group do.

9.

Net Profit Massive multiplayer online role-playing games have created a growth area in digital virtual consumption, where players spend real money to buy virtual goods.

10.

CB As I See It: Jonah Berger, The Wharton School, University of Pennsylvania Word of mouth opinion sharing is frequent and important, and can go viral. Marketers try to capitalize on this notion, but need to remember the psychology of viral content.

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REVIEW QUESTIONS 11-1. What is word-of-mouth, and how can it be more powerful than advertising?

Word-of-mouth (WOM) is product information transmitted by individuals to individuals.

Because we get the word from people we know, WOM tends to be more reliable and trustworthy than recommendations we get through more formal marketing channels.

(5 minutes, Chapter Objective 1, AACSB: Reflective Thinking) 11-2. Which is more powerful, positive or negative word-of-mouth?

Consumers weigh negative word of mouth more heavily than they do positive comments.

(5 minutes, Chapter Objective 1,) 11-3. Describe some ways in which marketers are using the Internet to encourage positive word-of-mouth.

A virtual community of consumption is a collection of people whose online interactions are based upon shared enthusiasm for and knowledge of a specific consumption activity.

Like the brand communities we discussed earlier, these groups form around a shared love for a product, whether it is Barbie dolls or Blackberry PDAs. However, members remain anonymous because they only interact with each other in cyberspace.(10 minutes, Chapter Objective 1, AACSB: Reflective Thinking) 11-4. What is viral marketing? Give an example of this strategy.

Viral marketing refers to the strategy of getting visitors to a website to forward information on the site to their friends in order to make still more consumers aware of the product—usually by creating online content that is entertaining or just plain weird. Viral marketing for oil? Pretty slick. WD-40 quadrupled visitors to its fan club website by offering 1,000 AM/FM radios in the shape of oilcans to individuals who signed up 10 other members. (5 minutes, Chapter Objective 2, AACSB: Reflective Thinking) 11-5. What is an opinion leader? Give three reasons why they are powerful influences on consumers’ opinions.

An opinion leader is a person who is frequently able to influence others’ attitudes or behaviors.

• •

•

•

They are technically competent and thus convincing because they possess expert power.

They have prescreened, evaluated, and synthesized product information in an unbiased way, so they possess knowledge power. Unlike commercial endorsers, opinion leaders do not actually represent the interests of one company. Thus, they are more credible because they have no “axe to grind.”

They tend to be socially active and highly interconnected in their communities. They are likely to hold offices in community groups and clubs and to be active outside of the home. As a result, opinion leaders often have legitimate power by virtue of their social standing.

They tend to be similar to the consumer in terms of their values and beliefs, so they possess referent power. Note that although opinion leaders are set apart by their

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interest or expertise in a product category, they are more convincing to the extent that they are homophilous rather than heterophilous. Homophily refers to the degree to which a pair of individuals is similar in terms of education, social status, and beliefs. Effective opinion leaders tend to be slightly higher in terms of status and educational attainment than those they influence, but not so high as to be in a different social class.

• Opinion leaders are often among the first to buy new products, so they absorb much of the risk. This experience reduces uncertainty for others who are not as courageous.

Furthermore, whereas company-sponsored communications tend to focus exclusively on the positive aspects of a product, the hands-on experience of opinion leaders makes them more likely to impart both positive and negative information about product performance.

(10 minutes, Chapter Objective 2, AACSB: Reflective Thinking) 11-6. Is there such a thing as a generalized opinion leader? Why or why not?

When marketers and social scientists initially developed the concept of the opinion leader, they assumed that certain influential people in a community would exert an overall impact on group members’ attitudes. However, later work began to question the assumption that there is such a thing as a generalized opinion leader, somebody whose recommendations we seek for all types of purchases. Very few people are capable of being expert in a number of fields. Sociologists distinguish between those who are monomorphic, or expert in a limited field, and those who are polymorphic, or expert in several fields.

(5 minutes, Chapter Objective 2, AACSB: Reflective Thinking) 11-7. What is the relationship between an opinion leader and an opinion seeker?

The fact that we transmit advice about products does not mean other people take that advice. For someone to be considered a bona fide opinion leader, opinion seekers must actually heed his advice. An alternative is to select certain group members (key informants) who we ask to identify opinion leaders. The success of this approach hinges on locating those who have accurate knowledge of the group and on minimizing their response biases (e.g., the tendency to inflate one’s own influence on the choices of others).

(5 minutes, Chapter Objective 2, AACSB: Reflective Thinking) 11-8. What is the difference between a market maven and a surrogate consumer?

In addition to everyday consumers who are instrumental in influencing others’ purchase decisions, a class of marketing intermediary called the surrogate consumer is an active player in many categories. A consumer category called the market maven describes people who are actively involved in transmitting marketplace information of all types.

(5 minutes, Chapter Objective 2, AACSB: Reflective Thinking,) 11-9. What are sociometric techniques? Under what conditions does it make sense to use them?

Sociometric methods trace communication patterns among members of a group. These techniques allow researchers to systematically map out the interactions that take place among group members.

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(5 minutes, Chapter Objective 2, AACSB: Reflective Thinking) 11-10. List three types of social power, and give an example of each.

Responses will vary by students. Social power describes the capacity to alter the actions of others. It can be based on referent power (the power to promote a fashion brand by a celebrity), information power (identifying the next trend in gaming), legitimate power (doctors at a hospital teaching medical students), expert power (hiring an astronaut to design technology for the space station), reward power (earning loyalty rewards from your favorite retailer), or coercive power (a car salesman offering a special price if you buy today).

(5 minutes, Chapter Objective 1, AACSB: Reflective Thinking) 11-11. What is brand community, and why is it of interest to marketers?

A brand community is a group of consumers—like those zealous Halo players— who share a set of social relationships based on usage of or interest in a product. Researchers find that people who participate in these events feel more positive about the sponsor’s products as a result, and this enhances brand loyalty. They tend to forgive product failures or lapses in service quality, and they’re less likely to switch brands even if they learn that competing products are as good or better. Furthermore, these community members become emotionally involved in the company’s welfare, and they often serve as brand missionaries because they carry its marketing message to others. Researchers find that brand community members do more than help the product build buzz; their inputs actually create added value for themselves and other members as they develop better ways to use and customize products.

(5 minutes, Chapter Objective 1, AACSB: Reflective Thinking) 11-12. Define conformity and give an example of it. Name three reasons why people conform.

Conformity is a change in beliefs or actions as a reaction to real or imagined group pressure. For a society to function, its members develop norms or informal rules that govern behavior. Without these rules, we would have chaos. Imagine the confusion if a simple norm such as “always stop for a red traffic light” did not exist. There are several reasons why people conform, and student answer will vary, but should include a combination of cultural pressures, fear of deviance, commitment, group unanimity, size and expertise, susceptibility to interpersonal influence, and environmental cues.

(5 minutes, Chapter Objective 1, AACSB: Reflective Thinking) 11-13. How does the Principle of Least Interest relate to your success in a romantic relationship?

The more people are dedicated to a group and value their membership in it, the greater their motivation to conform to the group’s wishes. Rock groupies and followers of TV evangelists may do anything their idols ask of them, and terrorists become martyrs for their cause. According to the Principle of Least Interest the person who is least committed to staying in a relationship has the most power because that party doesn’t care as much if the other person rejects him.

(5 minutes, Chapter Objective 1, AACSB: Reflective Thinking)

CONSUMER BEHAVIOR CHALLENGE .

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DISCUSS 11-14. A recent sociometric study on obesity (similar to the one we read about regarding clusters of smokers) provides a striking example of how our social networks influence what we do. The researchers analyzed a sample of more than 12,000 people who participated in the Framingham Heart Study, which closely documented their health from 1971 to 2003.

They discovered that obesity can spread from person to person, much like a virus. The investigators knew who was friends with whom, as well as who was a spouse or sibling or neighbor, and they knew how much each person weighed at various times over three decades so they could reconstruct what happened over the years if study participants became obese. Guess what? When one person gains weight, close friends tend to gain weight, too. A person’s chances of becoming obese if a close friend put on the pounds increased by 57 percent! The friend’s influence remained even if he or she lived hundreds of miles away. The researchers speculated that the reason for this social contagion effect is that when our best buds get fat, this alters our perception of normal body weight so we aren’t as concerned when we put on a few pounds as well.

Sociometric methods trace communication patterns among members of a group.

These techniques allow researchers to systematically map out the interactions among group members. In many cases, one or a few people emerge as the “nodes” in a map— our opinion leaders. This method is the most precise, but it is difficult and expensive to implement because it involves close study of interaction patterns in small groups. For this reason, it’s best to apply a sociometric technique in a closed, self-contained social setting, such as in hospitals, in prisons, and on military bases, where members are largely isolated from other social networks. Sociometric techniques don’t just look at who talks (or texts) to whom; they also consider the type of relationships among members of a social network. Tie strength refers to the nature of the bond between people. It can range from strong primary (e.g., one’s spouse) to weak secondary (e.g., an acquaintance whom one rarely sees). Although strong ties are important, weak ties are as well because they perform a bridging function. This type of connection allows a consumer access between subgroups.

(15 minutes, Chapter Objective 3, AACSB: Analytical Thinking) 11-15. The average U.S. teenager spends well more than 8 hours a day in front of a screen, whether smartphone, PC, TV or tablet. One study reported increasing physical isolation among Internet users; it created a controversy and drew angry complaints from some users who insisted that time they spent online did not detract from their social relationships. However, the researchers said they had now gathered further evidence showing that Internet use has lowered the amount of time people spend socializing with friends and even sleeping. According to the study, an hour of time spent using the Internet reduces face-to-face contact with friends, co-workers and family by 23.5 minutes, lowers the amount of time spent watching television by 10 minutes and shortens sleep by 8.5 minutes. What’s your perspective on this issue—does increasing use of the Internet have positive or negative implications for interpersonal relationships in our society?

The answer to this question all depends on how “interpersonal” is defined. If the

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definition sticks to that of traditional face-to-face communication, then it will be hard to argue that increased time online does not detract from interpersonal communication.

Time is a limited resource. And as is shown above in the question itself, there is research to back this up. However, if students lean toward defining interpersonal communication as any type of communication between people, then there will be strong argument for the fact that increased time online enhances such. Given that many people spend time emailing, IMing, chatting, interacting in forums, blogs, etc., then in many cases, the time spent online is providing opporunities to interact with others that would otherwise not be there.

(15 minutes, Chapter Objective 4, AACSB: Analytical Thinking) 11-16. A consumer tribe is similar to a brand community; it is a group of people who share a lifestyle and can identify with each other because of a shared allegiance to an activity or a product. Although these tribes are often unstable and short lived, at least for a time members identify with others through shared emotions, moral beliefs, styles of life, and of course the products they jointly consume as part of their tribal affiliation. Some companies, especially those that are more youth-oriented, use a tribal marketing strategy that links their product to, say, a group of shredders. However, there also are plenty of tribes with older members, such as car enthusiasts who gather to celebrate cult products like the Citroën in Europe and the Ford Mustang in the United States, or “foodies” who share their passion for cooking with other Wolfgang Puck wannabes around the world.

Identify and visit a tribal festival in your area (e.g. a comic book convention, a rock concert, a basketball tournament, a vegan food show, etc). What role do marketers play in this event? How and to what extent do attendees identify with other “tribal” members?

Responses will vary based on the tribal event students choose to participate in, but should discuss opinion leaders and influence networks.

(3 -4 hours, Chapter Objective 3, AACSB: Reflective Thinking) 11-17. The Word-of-Mouth Marketing Association recently announced a set of rules and guidelines for word-of-mouth advertising. The trade group maintains that marketers must make sure that people talking up products or services disclose for whom they are working. They also must use real consumers, not actors, who discuss what they really believe about a product. The rules were prompted by several controversial incidents such as a campaign the U.S. arm of Sony Ericsson Mobile Communications created for a camera phone. The company hired 60 actors to hang out at tourist attractions and ask unsuspecting passersby to take their pictures with the Sony Ericsson devices. The actors were told to identify themselves only when asked directly. What do you think about “stealth” campaigns like this? Should marketers be required to disclose their true intentions when they try to initiate positive word of mouth?

Traditionally, most students will respond that there is nothing wrong or even ethically questionable about such stealth practices as those described above. Even when they are led toward thinking that such practices are unethical, most will say that this is just another promotional practice, and that companies are within their rights to do such; that no harm is done. Within inclusion of the information that the AMA has actually censured such practices, the responses by students might be different.

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(15 minutes, Chapter Objective 1, AACSB: Ethical Understanding and Reasoning Abilities) 11-18. Walmart contended with a widespread text-messaging hoax that warned women to stay away from its stores or risk death. The digital rumor apparently originated in an urban myth (an unsubstantiated “fact” that many people accept as true) that circulated via email several years ago. As a reflection of how widespread this myth became, at one point Walmart was number 5 on Twitter’s list of trending topics. If you were a Walmart communication executive, how might you deal with this kind of public relations nightmare?

Students are likely to have different opinions about the best way to handle the rumors.

Draw their attention to the information about rumors and word-of-mouth so they understand the value of having consumers share the right information (vs. using less credible advertising).

(15 minutes, Chapter Objective 1, AACSB: Ethical Understanding and Reasoning Abilities) 11-19. The strategy of viral marketing gets customers to sell a product to other customers on behalf of the company. That often means convincing your friends to climb on the bandwagon, and sometimes you get a cut if they buy something. Some might argue that that means you’re selling out your friends (or at least selling to your friends) in exchange for a piece of the action. Others might say you’re simply sharing the wealth with your buddies. Have you ever passed along names of your friends to a company or Web site? If so, what happened? How do you feel about this practice?

Responses will vary based on student experiences. When people share their opinions about products with their social networks, they may do so to satisfy one of several goals: To manage the impression they make on others, to regulate emotions by expressing affective reactions, to share and acquire information, to bond with others, and to persuade others to change their opinions. Unlike a spontaneous conversation in the physical world, when consumers write about products they have more time to think strategically about what they’re saying—and about how these judgments reflect on them.

(15 minutes, Chapter Objective 4, AACSB: Ethical Understanding and Reasoning) APPLY 11-20. Identify fashion opinion leaders on your campus. Do they fit the profile the chapter describes?

The class might agree to focus on a particular group of fashion opinion leaders. After deciding on the group, they could go through an opinion leader profile and determine whether or not the group members actually are fashion experts. (Possible Field Project Idea) (15 minutes, Chapter Objectives 2 and 7, AACSB: Reflective Thinking) 11-21. A study on antibranding documented hostility among consumers who object to the gasguzzling Hummer vehicle. One driver posted this message: “The H2 is a death machine.

You’d better hope that you don’t collide with an H2 in your economy car. You can kiss

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your ass goodbye thanks to the H2’s massive weight and raised bumpers. Too bad you couldn’t afford an urban assault vehicle of your own.” Identify an antibranding site for another product. What functions do the site seem to serve? How can people who participate there be considered part of a community?

Answers will vary, some students will discuss public service announcements like don’t drink and drive or don’t smoke ,etc.

(15 minutes, Chapter Objectives 2 and 7, AACSB: Reflective Thinking) 11-22. Conduct a sociometric analysis within your dormitory or neighborhood. For a product category such as music or cars, ask each individual to identify other individuals with whom they share information. Systematically trace all of these avenues of communication, and identify opinion leaders by locating individuals who are repeatedly named as providing helpful information.

Students should include a discussion of sociometry in their responses and recognize that sociometric methods allow researchers to systematically point out the interactions that take place among group members. Conducting a study of this type should highlight for students how difficult and expensive such activities can be. (Possible Field Project Idea) (90 minutes, Chapter Objective 2, AACSB: Analytical Thinking) 11-23. Trace a referral pattern for a service provider such as a hairstylist; track how clients came to choose him or her. See if you can identify opinion leaders who are responsible for referring several clients to the businessperson. How might the service provider take advantage of this process to grow his or her business?

Students are likely to come up with all types of incentive programs that will motivate customers to refer friends. Once something like that is in place, the likelihood of a referral network emerging is greater.

(30 minutes, Chapter Objective 2, AACSB: Reflective Thinking) 11-24. The power of unspoken social norms often becomes obvious only when we violate them.

To witness the result firsthand, try one of the following: Stand facing the back wall in an elevator, serve dessert before the main course, offer to pay cash for dinner at a friend’s home, wear pajamas to class, or tell someone not to have a nice day.

Answers will vary.

(15 minutes, Chapter Objectives 2 and 7, AACSB: Reflective Thinking) 11-25. Identify a set of avoidance groups for your peers. Can you identify any consumption decisions that you and your friends make with these groups in mind?

Responses will vary by student. Reference groups impact our buying decisions both positively and negatively. In most cases, we model our behavior to be in line with what we think the group expects us to do. Sometimes, however, we also deliberately do the opposite if we want to distance ourselves from avoidance groups. You may carefully study the dress or mannerisms of a group you dislike (e.g., “nerds,” “druggies,” or “preppies”) and scrupulously avoid buying anything that might identify you with that group. Rebellious adolescents do the opposite of what their parents desire to make a statement about their independence. In one study, college freshmen reported consuming less alcohol when they associated it with their avoidance groups.

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(15 minutes, Chapter Objective 1, AACSB: Reflective Thinking) 11-26. Several colleges have sponsored “social media detox” events. Students at Saint Mary’s College of California were challenged to “Disconnect, Power Off and Unplug” in order to rediscover “The Lost Art of Solitude;” no Internet for a month! The library at Wake Forest University created a “ZieSta Room” where technology is banned. Do a “detox” of your own for 48 hours. No cellphones. No Facebook. No social media of any kind. Keep a diary of your experiences.

Student outcomes will vary.

(50 hours, Chapter Objective 4, AACSB: Information Technology)

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CASE STUDY TEACHING NOTES Chapter 11 Case Study: Never Stay Here! The Power of Negative Online Reviews.

Summary of Case TripAdvisor offers a review system for major travel partners and other travel-related businesses.

Its community of travelers influences opinions and behaviors around the world. This case discusses options for handling negative reviews. Most marketers agree that listening and responding is the best strategy.

Suggestions for Presentation You may wish to encourage students to explore TripAdvisor before discussing this case. As an exercise, you could ask them to plan out a sample Spring Break trip using TripAdvisor reviews.

Suggested Answers for Discussion Questions CS 11-1.

How comfortable should consumers be in letting the review of others influence where and how they travel? What are the pros and cons?

Boston-based Cone Communications’ research revealed that 89 percent of consumers say they find online channels to be trustworthy sources for product and service reviews.

In addition, Cone’s research showed that four out of five consumers have changed their minds about a recommended purchase based solely on negative information they found online. Online reviews are important for business survival and revenue growth. One study revealed that a one-star increase in a Yelp rating can lead to as much as a nine percent increase in revenue. Another Cornell University study found that for every increased point in reputation rating (TripAdvisor’s 1-5 scale), hotels can increase prices by 11 percent and not lose business. In the competitive world of hotel marketing, it’s clear that social media marketing and visitor review sites will continue to influence travelers’ decisions and must be taken seriously. Students might identify other pros and cons and include them in the discussion.

(15 minutes, Chapter Objective 4, AACSB: Information Technology) CS 11-2.

What steps do you recommend a hotel take when dealing with a negative online review? Try to find one example of a hotel that has done a good job of responding to a negative review.

The case explains that hotels should listen and respond. Following service recovery literature, the hotel can try to fix the issue and/or recovery by offering some discount or refund as an apology.

(15 minutes, Chapter Objective 4, AACSB: Application of Knowledge)

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Additional Support Material STUDENT PROJECTS Individual Projects

1.

Ask each student to think about individual family members, friends, and acquaintances.

On paper, have them identify the people who act as opinion leaders, product innovators, and market mavens. Describe what each person does. Have a few students share their observations with the class.

Look for evidence that students can differentiate between opinion leaders (knowledgeable consumers who are frequently able to influence others’ attitudes or behaviors), product innovators (consumers who actively seek out the latest and greatest in a product category and are willing to take risks), and market mavens (individuals with a general interest in the marketplace).

(20 minutes, Chapter Objective 2, AACSB: Reflective Thinking) 2.

Have a student think about some goods and services that he/she has purchased recently.

To what extent did word-of-mouth communication influence purchases?

Word-of-mouth tends to be more credible than advertising. Students are more likely to rely on word-of-mouth and external search, in general, in high involvement purchase categories. Social risk may increase reliance on word-of-mouth. Negative word-of-mouth tends to be a larger consideration in purchase decisions than positive word-of-mouth.

(10 minutes, Chapter Objective 1, AACSB: Reflective Thinking) 3.

Encourage a student to think of something he/she recently purchased in which advice was actively sought from others. For what reasons was advice sought? Why was the particular person selected to provide this advice?

Students are likely to note advice was sought for a high involvement product, which usually motivates more active external search. Advice is typically sought from individuals with knowledge/expertise in the product category.

(15 minutes, Chapter Objective 2, AACSB: Reflective Thinking) 4.

Have each student identify one case of guerrilla marketing. It should be the objective to find a case where the maximum amount of promotional benefit was achieved with the least amount of resources. They should attempt to find information that will allow for estimates of these figures. Upon sharing cases with the class, keep track to determine the most effective campaign, based on this ROI-type measure.

It is often challenging to find credible measures of the impact of guerrilla marketing efforts because of the nature of the interactions. Discuss the fact that some companies may inflate these numbers to make their services seem more attractive to marketers.

Also, note the difference between exposure to an individual and exposure to an individual in the marketer’s target audience.

(20 minutes, Chapter Objective 1, AACSB: Reflective Thinking)

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Group Projects 1.

Each student group will have the task of forming or joining a brand community. Have them decide upon a brand that none of them really uses. Then, have them research the brand extensively and begin their own pro-product dialogue among themselves. If they wish to establish an online chat room or message board, that would be all the better. After having done this for a set period, have group members discuss how they feel about the brand. Whether they have purchased or not, do they feel more “loyal”? Have they developed positive attitudes? Do they find themselves engaging in WOM outside the group?

Students should select a product they use, have an interest in, and are passionate about, if possible. Look for students to connect with the ideas in the figure (e.g. social networking, community engagement, impression management, and brand use).

(90 minutes, Chapter Objective 1, AACSB: Reflective Thinking) 2.

Have the students videotape interviews with three individuals regarding a product they recently purchased for the first time. Why did they purchase it? What was the role of “word of mouth” and personal influence (whether real or simulated)? The group should edit the tape to present a summary illustration of their findings.

As in the individual project, interviewees are likely to note advice was sought for a high involvement product, which usually motivates more active external search. Advice is typically sought from individuals with knowledge/expertise in the product category.

(60 minutes, Chapter Objective 1, AACSB: Reflective Thinking) 3.

Describe how opinion leaders can be formed and found on the Internet. Describe the advantages and disadvantages of using opinion leaders on the Web. How would this form of opinion leadership be different from any other form of opinion leadership (if at all)?

Opinion leaders can be formed via the Internet because of the availability of product information to be synthesized and the ability to connect with a large number of individuals. Opinion leaders might be found in top organic search results, by having a high circle of trust/positive feedback from other users, or having many followers. They may be less likely to be similar to the consumer in terms of values and beliefs.

(30 minutes, Chapter Objective 2, AACSB: Analytical Thinking) 4.

Have student groups do an analysis of a rumor that was started about a product or company (e.g., a human finger found in a can of Pepsi, the “Satanic” connection in Procter & Gamble’s moon-and-stars logo; Pop Rocks candy will make your stomach explode; McDonald’s puts worms in its hamburgers; there are spider eggs in Bubble Yum, etc.). What effect did these rumors have on sales? How did the company handle the situation?

Look for students to include research on the rumor/to include outside sources in their assignment. You can extend this assignment by asking the student to suggest an alternative response strategy for the company.

(60 minutes, Chapter Objective 2, AACSB: Reflective Thinking)

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5.

Have a group prepare a sociometric analysis of online grocery shoppers. How is this group different and similar to in-store shoppers?

Sociometric analysis would show whether the individuals refer others or influence others’ purchase decision online. They could be compared to off-line shoppers.

(90 minutes, Chapter Objective 2, AACSB: Analytical Thinking)

eLAB Individual Assignments 1.

Go to www.gogorillamedia.com/gogorillamedia.html. This is an agency that specializes in guerrilla marketing tactics. Summarize five such tactics, identifying benefits and examples of using each.

The website reviews different strategies that have been employed by the agency in the past. Look for students to tie the tactic to the benefits of its use.

(20 minutes, Chapter Objective 2, AACSB: Reflective Thinking) 2.

Go to www.hairclub.com. One of the great problems facing men in our day and age is the prospect of going bald. How does the Hair Club for Men play to male fears? How do they use opinion leaders to persuade prospective customers to try their products? What do you think of the organization’s promotional campaigns? Explain.

The Hair Club shows successful clients receiving positive reinforcement for their new looks, including the Hair Club’s president. Encourage students to think about the ethics of indicating that bald = ugly and hair = happy, successful, and attractive.

(30 minutes, Chapter Objective 2, AACSB: Reflective Thinking)

Group Assignments 1.

Visit a few fraternity or sorority websites and evaluate how they try to influence their current and potential brothers and sisters. Talk to students who are members and those that are not associated with them. Determine if their group influences are effective or not based on your assessments of the two groups – members and non-members.

Students should have observations from the public communications on the web sites, from members, and from non-members. Look for students to support their conclusions about the effectiveness of the group influences from these three sets of observations.

(60 minutes, Chapter Objective 2, AACSB: Analytical Thinking)

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Chapter 12: Income and Social Class CHAPTER OBJECTIVES When students finish this chapter they should understand why: 1. Our confidence in our future, as well as in the overall economy, determines how freely we spend and the types of products we buy.

2. We group consumers into social classes that say a lot about where they stand in society.

3. Individuals’ desires to make a statement about their social class, or the class to which they hope to belong, influence the products they like and dislike.

CHAPTER SUMMARY Our confidence in our future, as well as in the overall economy, determines how freely we spend and the types of products we buy.

The field of behavioral economics studies how consumers decide what to do with their money.

Consumer confidence—the state of mind consumers have about their own personal situation, as well as their feelings about their overall economic prospects—helps to determine whether they will purchase goods and services, take on debt, or save their money.

We group consumers into social classes that say a lot about where they stand in society.

A consumer’s social class refers to his or her standing in society. Factors including education, occupation, and income determine the class to which we belong.

Virtually all groups make distinctions among members in terms of relative superiority, power, and access to valued resources. This social stratification creates a status hierarchy where consumers prefer some goods to others. Although income is an important indicator of social class, the relationship is far from perfect.

Factors such as place of residence, cultural interests, and worldview also determine social class.

As income distributions change around the world, it is getting more difficult to distinguish among members of social classes—many products succeed because they appeal to a newly emerging group marketers call the mass class (people with incomes high enough to purchase luxury items, at least on a small scale).

Individuals’ desires to make a statement about their social class, or the class to which they hope to belong, influence the products they like and dislike.

Conspicuous consumption, where a person flaunts his status by deliberately using up valuable resources, is one way to “buy up” to a higher social class. Nouveau riches, whose relatively recent acquisition of income rather than ancestry or breeding accounts for their enhanced social mobility, are the most likely to do this. We use status symbols to communicate our standing to others. Parody display occurs when we seek display by deliberately avoiding fashionable products.

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CHAPTER OUTLINE I. Income and Consumer Identity Income patterns are being shaped by a shift in women’s roles toward higher paying occupations and increases in educational attainment.

To Spend or Not to Spend, That Is the Question 1. Consumer demand for goods and services depends on ability to buy and willingness to buy.

2. Discretionary income is the money available to a household over and above that required for a comfortable standard of living.

3. The most noticeable change in the way the population spends its money when ages and income levels rise is that a much larger share of the budget is spent on shelter and transportation and less on food and apparel.

A. Individual Attitudes toward Money 1. People have different attitudes toward money. These might range from tightwads who hate to part with money to spendthrifts who enjoy spending and buying.

2. Money has complex psychological meaning; we equate it with success or failure, social acceptability, security, love, freedom, and yes even sex appeal. There are therapists who specialize in treating money-related disorders, and they report that some people even feel guilty about their success and deliberately make bad investments to reduce this feeling! Some other clinical conditions include atephobia (fear of being ruined), harapaxophobia (fear of becoming a victim of robbers), peniaphobia (fear of poverty), and aurophobia (fear of gold).

Discussion Opportunity—Ask: How do you feel about money? What does it represent to you?

Would you classify yourself as a saver or a spender? Do you think other people would agree with this? On a scale of one to ten, where does money fall on your personal scale of priorities?

Discussion Opportunity—Ask: What are your greatest fears with respect to money? Explain.

What do you expect of a spouse with respect to money? Are you stingy or sharing with respect to money? Where do you think this feeling comes from?

B. Consumer Confidence 1. A consumer’s beliefs about what the future holds is an indicator of consumer confidence, which reflects the extent to which people are optimistic or pessimistic about the future health of the economy and how they will fare down the road.

2. The Survey Research Center at the University of Michigan has developed the following questions to survey consumer confidence: a. Would you say that you and your family are better off or worse off financially than a year ago? b. Will you be better off or worse off a year from now? c. Is now a good time or a bad time for people to buy major household items such as furniture or a refrigerator?

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d. Do you plan to buy a car in the next year?

3. The overall savings rate is influenced by the individual consumer’s pessimism or optimism about his or her personal circumstances, world events, and cultural differences in attitudes toward saving.

Discussion Opportunity—Ask: Do you think these four questions are good for measuring consumer confidence? Do you think people would truthfully answer all these questions? Would you? What other questions might be added to the list? Why? C. Income Inequality and Social Mobility 1. Income inequality if the extent to which resources are distributed unevenly with a population. This has created the new label “one percenter” where the most affluent one percent of people worldwide control more than half the globe’s total wealth.

2. Plutonomy describes an economy that is driven by a small number of wealthy people.

3. Social mobility refers to how individuals move from one social class to another. a. Horizontal mobility occurs when a person moves from one position to another that is roughly equivalent in terms of social status. b. Downward mobility refers to movement to a lower economic status. c. Upward mobility is the movement to a economic status that is wealthier than your current status.

D. The Great Recession and Materialism 1. Frugalistas refuse to sacrifice style but they achieve it on a budget.

2. Plutonomy is an economy that is driven by a small number of rich people.

3. In spite of less demand for luxury goods in the U.S. and greater demand for goods and services that are part of the Poor Getting Poorer Index, there is a growing emphasis on corporate social responsibility.

4. Many consumers have reconsidered the value of possessions due to economic troubles.

But bad economic conditions also seem to be related to happiness. Research shows that people are happier when they spend money on experiences rather than on material objects.

5. People also tend to get more joy from buying many smaller things rather than fewer big purchases. This is called hedonic adaptation.

E. Income-Based Marketing 1. The female-to-male earnings ration is 0.78.

2. The college wage premium describes the pay gap between what a worker with a college degree earns compared to those without one. This gap has grown to about 80 percent or more.

3. Consumers can be divided into three groups based on their attitudes towards luxury. a. Luxury is function, and purchases should last and item an enduring value. b. Luxury is a reward and luxury goods should be used to show success. c. Luxury is an indulgence and should express individuality and make others take notice. Luxury tends to be more emotional for this group.

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4. Marketers also need to provide for the bottom of the pyramid, those who have less to spend than the rich, but who have the same basic needs as everyone else.

5. Old money families live primarily on inherited funds and tend to be discreet about exhibiting wealth.

6. Social prominence in old money circles comes with money, a family history of public service and philanthropy, and tangible markers of these contributions that enable donors to achieve immortality (e.g. Carnegie Hall).

7. Old money consumers distinguish among themselves in terms of ancestry and lineage rather than wealth and are secure in their status.

8. The working wealthy or nouveau riche recently achieved wealth and do not know how to spend it. Many suffer status anxiety so they monitor the cultural environment to make sure they are consuming the right goods and services. Their flamboyant consumption is an example of symbolic self-completion because they display class symbols to make up for lack of assurance about correct behaviors.

9. A worldview is one way to differentiate among social classes. Working class people have different behavioral patterns than do the wealthy. Affluenza is a condition which describes wealthy people who are unhappy despite their wealth. Cosmopolitanism is an aspect of worldview that considers a person’s openness to the world and their desire for diverse experiences.

Discussion Opportunity—Ask students to evaluate how each of the following groups feels about savings and the general state of our economy (and their position in it): (a) a teenager, (b) a senior in college, (c) your parents, and (d) your grandparents (or other people in this age range).

II. Social Class and Consumer Identity A. Pick a Pecking Order 1. In most animal species the most assertive or aggressive animals exert control over the others and have their first pick of food, living space, and even mating partners.

People are not so different in that we too have a hierarchy of social class. In a dominance-submission hierarchy, each individual is submissive to individuals above him/her and dominates those below (pecking order). People develop a pecking order that ranks resources like education, housing and consumer goods.

2. A consumer’s standing in society, or social class, is determined by a complex set of variables, including income, family background, and occupation. The place one occupies in the social structure is an important determinant not only of how much money is spent, but it also influences how it is spent.

Discussion Opportunity—Ask: What other variables can you think of that might have a strong association (determinant of) with social class?

B. According to Karl Marx, the “haves” control the resources and the means of production and the “have-nots” provide the labor.

C. According to Max Weber, multidimensional people are ranked by social honor (status groups), power (party), wealth, and property (class).

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D. We use the term social class to describe generally the overall rank of people in a society.

People who belong to the same social class have approximately equal social standing in the community.

E. The tendency to marry within one’s own social class is known as homogamy.

Discussion Opportunity—Have your students comment on the phrase “Social class is as much a state of being as it is of having.” How important is social class to you? Explain.

Discussion Opportunity—Ask students to think of examples of achieved status and examples of ascribed status. Have them use real people for their example illustrations.

F. Social Class in the United States 1. One of the most famous social class scales is the one developed by Lloyd Warner in 1941. Warner’s six divisions are: a. Upper Upper (old rich) b. Lower Upper (new rich) c. Upper Middle (professionals and owners) d. Lower Middle (lower-paid, white-collar workers and high-paid, blue-collar workers) e. Upper Lower (blue-collar workers) f. Lower Lower (underemployed and unemployed) *****Use Figure 12.2 Here; Use Consumer Behavior Challenge #23 Here ***** Discussion Opportunity—Ask: Which of Warner’s social class divisions most accurately describe where you are with respect to social class? To which class do you aspire? How will you achieve this change?

Discussion Opportunity—Ask students to give one example of dramatic social class change wherein a person moved dramatically up or down the social class scale. Explain your example.

What changes did this movement cause?

2. Class Structure Around the World a. Every society has some type of hierarchical class structure that determines people’s access to products and services. b. In China, a middle class is rapidly developing. This has made a market for all kinds of goods and services. c. Japan is a very brand-conscious society where upscale, designer labels are quite popular. This is especially true with the large working female demographic. d. In the Middle East, shopping is a major leisure activity for women with money, most of who do not work outside the home. e. The United Kingdom is very class-conscious, with class structure being traditionally preordained. The Great British Class Survey found that the distinct classes in the U.K. has grown from three to seven, ranging from the elite, to the precariat.

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f. Thanks to a booming economy, Indian consumers are embracing the high-end brands and consumerism of the West and using credit cards to spend their way into luxury.

3. How Do We Measure Social Class? a. Social scientists disagree on the best way to measure social class. b. Figure 11.3 shows an example of a computerized status index. c. One problem in assigning people to a social class is that many people are not equal in standing on all relevant dimensions. Social scientists use the concept of status crystallization to assess the impact of social class inconsistency. d. Some people make less money than their class expects, which means they are underprivileged, while others may make more than their class expects, which means they are overprivileged. e. We still tend to assume that husbands define a family’s social class and that wives achieve their class through their husbands. Attractive women are likely to be able to “marry up” which is called hierogamy.

III. Status Symbols and Social Capital A. Social Capital 1. In addition to economic capital, French theorist Bourdieu noted that people compete for social capital too.

2. Cultural capital is the set of distinctive and socially rare tastes and practices like knowledge of “refined” behavior.

3. This is true of the online world as well such that Twitter members with the most followers have more social capital than those with fewer followers.

4. Mass marketers have found ways to serve a class called the mass class with everyday products that suggest luxury.

B. What Do You Use That Fork For? Taste Cultures, Codes, and Cultural Capital 1. A taste culture describes consumers in terms of their aesthetic and intellectual preferences.

2. Figure 11.4 shows the clusters of furnishings and decorative items found based on social class.

3. Another approach to social class focuses on the codes, the ways consumers express and interpret meanings, people within different social strata use.

4. There are two ways to communicate product benefits that incorporate different types of codes. Restricted codes focus on the content of objects, not on relationships among objects. Elaborated codes are more complex and depend on a more sophisticated worldview. Table 11.1 explains some differences between the two types of codes.

C. Status Symbols 1. A major motivation to buy is to let others know that we can afford them. The products serve as status symbols. *****Use Consumer Behavior Challenge Discuss #24 Here ***** 2. Imitations of status symbols prompted three coping strategies from luxury fashion brand consumers in India and Thailand:

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3. Flights – stop using the brand to avoid association with lesser-status person who buys fake brands.

4. Reclamation – emphasize long relationship with the brand and express concern for the brand’s image.

5. Abranding – they disguise their luxury items in the belief that high-status people do not need to display expensive logos, so those who do betray lower status.

D. Thorstein Veblen felt products were used to inspire envy in others through a display of wealth or power.

1. Veblen coined the phrase conspicuous consumption to refer to people’s desire to provide prominent visible evidence of their ability to afford luxury goods.

2. The phenomenon of conspicuous consumption was most evident among the leisure class, for whom productive work is taboo (idle rich).

3. Cougars are women who date younger men, presumably to use the men as arm candy. *****Use Consumer Behavior Challenge Discuss #25 Here ***** E. Consumers engage in conspicuous consumption as a way to display status markers, yet the prominence of these markers varies from products with large recognizable emblems to those with no logos at all. Those with highly visible signals are called loud signals while those with more subtle signals are said to have quiet signals. The differences in the level of visibility of a product as a status symbol is called brand prominence. When people choose a brand based on brand prominence, they are said to be status signaling. Figure 11.5 provides a typology of status signaling.

Discussion Opportunity—Have the class create a list of ten status symbols that are important to them. Then have them share their lists with the class. How are these symbols linked to success?

If a marketer knew your list, how would it affect their strategy for marketing to you?

Discussion Opportunity—Ask: What brands have the greatest brand prominence for you? *****Use Figure 12.3 Here ***** F. Lifestyles 1. Lifestyle: Who We Are, What We Do A. Lifestyle refers to a pattern of consumption reflecting a person’s choices of how he or she spends time and money. It is (in an economic sense) how one elects to allocate income.

B. A lifestyle marketing perspective recognizes that people sort themselves into groups on the basis of the things they like to do, how they like to spend their leisure time, and how they choose to spend their disposable income.

C. Other terms used to describe lifestyle are taste public, consumer group, symbolic community, and status culture.

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Discussion Opportunity—Ask: What are some different lifestyles that people about your age (those attending and not attending college) tend to follow? What are the differences between your lifestyle and someone who is a returning student (or a normal undergraduate if you are a returning student)? A graduate student?

2. Product Complementarity and Co-Branding Strategies A. People, products, and settings combine to express a consumption style. The adoption of a lifestyle-marketing perspective implies that we must look at patterns of behavior to understand consumers. ***** Use Review #17 Here ***** B. Co-branding strategies are used by marketers to combine products that appeal to similar patterns of behavior.

C. Product complementarity occurs when the symbolic meanings of different products are related to each other. These products, termed consumption constellations, are used by consumers to define, communicate, and perform social roles. *****Use Consumer Behavior Challenge Discuss #22 Here *****

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End-of-Chapter Support Material SUMMARY OF SPECIAL FEATURE BOXES 1.

Marketing Pitfall A person’s credit score based on outstanding debt has become a symbol of a person’s worth. Credit scores are considered in hiring decisions, dating, and loans.

2.

Marketing Opportunity The appeal of living in urban environments continues to grow, causing housing prices in many cities to skyrocket. Micro-loft are economical and ecofriendly alternatives to more costly housing.

3.

The Tangled Web The digital dived between the rich and poor is still a reality. People who don’t have access to the internet can be at a real disadvantage.

4.

CB As I See It: Paul Henry, University of Sydney, Australia We tend to associated with and work with people who share our values and priorities, as well as our cultural and social preferences. Class is related to income and wealth, but it also distinguished how people plan finances and manage money, as well as financial goal setting.

5.

Marketing Pitfall In China, the quality of life has improved dramatically for many. In the past, people were fairly equal, and the ratio of males to females was about even. Today, incomes are higher, and more women are postponing marriage to pursue careers. The one child policy has resulted in as many as 24 million unmarried men.

6.

Marketing Pitfall The term “chav” refers to young, lower-class men and women who mix flashy brands with track suits. They spend a lot of disposable income on fashion, food, and gadgets.

7.

Marketing Pitfall Research shows that people who identify with a relatively low-status category desire objectives they associate with high status to enhance social standing. However, this policy works against them in the long run.

8.

CB As I See It: Benjamin G. Voyer, ESCP Europe Business School & London School of Economics, United Kingdom Luxury goods constitute a unique product and service category in marketing. Luxury consumption has been linked to wealth, social class, and economic power. Luxury goods have also been associated with unsustainability or unhealthiness.

9.

Marketing Pitfall 12-9 .

Luxury goods serve as status symbols, but counterfeit products threaten to diminish their value.

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REVIEW QUESTIONS 12-1. How have women contributed to the overall rise in income in our society?

One reason for this increase in income is that there also have been a larger proportion of people of working age participating in the labor force. Mothers with preschool children are the fastest-growing segment of working people. Furthermore, many of these jobs are in high-paying occupations such as medicine and architecture that used to be dominated by men. Although women are still a minority in most professional occupations, their ranks continue to swell. The steady increase in the numbers of working women is a primary cause of the rapid growth of middle- and upper-income families. There are now more than 18 million married couples making over $50,000 a year. However, in almost two-thirds of these families, the wife’s paycheck is propelling the couple up the income ladder.

(5 minutes, Chapter Objective 1, AACSB: Reflective Thinking) 12-2. Define discretionary income.

Discretionary income is the money available to a household over and above that required for a comfortable standard of living.

(5 minutes, Chapter Objective 1, AACSB: Application of Knowledge) 12-3. How does consumer confidence influence consumer behavior?

Consumers’ beliefs about what the future holds are an indicator of consumer confidence that reflects the extent to which people are optimistic or pessimistic about the future health of the economy and how they will fare down the road. These beliefs influence how much money they will pump into the economy when making discretionary purchases.

(5 minutes, Chapter Objective 1, AACSB: Application of Knowledge) 12-4. What is a pecking order?

In many animal species, a social organization develops whereby the most assertive or aggressive animals exert control over the others and have the first pick of food, living space, and even mating partners. Chickens, for example, develop a clearly defined dominance–submission hierarchy. Within this hierarchy, each hen has a position in which she is submissive to all of the hens above her and dominates all of the ones below her (hence, the origin of the term pecking order). People are not much different. They also develop a pecking order that ranks them in terms of their relative standing in society. This standing determines their access to such resources as education, housing, and consumer goods. People try to improve their ranking by moving up in the social order whenever possible. This desire to improve one’s lot in life, and often to let others know that one has done so, is at the core of many marketing strategies.

(10 minutes, Chapter Objective 2, AACSB: Application of Knowledge) 12-5. What is social class? Is it different from income and if so how?

We use the term social class more generally to describe the overall rank of people in a society. People who are grouped within the same social class are approximately equal in terms of their social standing in the community. They work in roughly similar occupations, and they tend to have similar lifestyles by virtue of their income levels and common tastes. These people tend to socialize with one another and share many ideas 12-11 .

and values regarding the way life should be lived. Indeed, “birds of a feather do flock together.”

(10 minutes, Chapter Objective 2, AACSB: Application of Knowledge) 12-6. Define social mobility and describe the different forms it takes.

In some societies, such as India, one’s social class is very difficult to change, but America is reputed to be a country in which “any man (or woman?) can grow up to be president.” Social mobility refers to the “passage of individuals from one social class to another.” Social mobility can be upward or downward.

(10 minutes, Chapter Objective 2, AACSB: Application of Knowledge) 12-7. What one variable is the best indicator of social class? What are some other important indicators?

When we think about a person’s social class, there are a number of pieces of information we may consider. Two major ones are occupation and income. A third important factor is educational attainment that is strongly related to income and occupation.

(5 minutes, Chapter Objective 3, AACSB: Reflective Thinking) 12-8. What is income inequality, and why is it a problem?

Today one of the biggest issues we hear about is income inequality, that is, the extent to which resources are distributed unevenly within a population. One consequence of rising inequality is that more consumers worry about “falling behind” if a breadwinner loses his or her job or if the family can no longer afford the cost of housing, transportation, and other necessities. For example, a researcher who conducted an in-depth study of residents of a rural trailer park identified one segment of consumers she called the Reluctant Emigrants. These people once lived in fixed-site homes but various economic problems forced them to move to the more affordable trailer park. Because their lives are on a downward trajectory, their primary concerns focus on security and protection (5 minutes, Chapter Objective 1, AACSB: Reflective Thinking) 12-9. Why might a person’s social class not change when he or she earns more money?

One problem is that even if a family increases household income by adding wage earners, each additional job is likely to be of lower status. A homemaker who gets a parttime job is not as likely to get one that is of equal or greater status than the primary wage earner’s full-time job. In addition, the extra money earned is often not pooled toward the common good of the family. Instead, the individual uses it for his own personal spending.

More money does not then result in increased status or changes in consumption patterns because it tends to be devoted to buying more of the usual rather than upgrading to higher-status products.

(10 minutes, Chapter Objective 3, AACSB: Reflective Thinking) 12-10. What are some of the problems we encounter when we try to measure social class?

One reason is that most measures of social class were designed to accommodate the traditional nuclear family, with a male wage earner in the middle of his career and a female full-time homemaker. Such measures have trouble accounting for two-income families, young singles living alone, or households headed by women, who are so 12-12 .

prevalent in today’s society. Another problem with measuring social class is the increasing anonymity of our society. Earlier studies relied on the reputational method, in which extensive interviewing was done within a community to determine the reputations and backgrounds of individuals. This information, coupled with the tracing of interaction patterns among people, provided a very comprehensive view of social standing within a community. However, this approach is virtually impossible to implement in most communities today. One compromise is to interview individuals to obtain demographic data and to combine these data with the subjective impressions of the interviewer regarding the person’s possessions and standard of living.

(15 minutes, Chapter Objective 3, AACSB: Reflective Thinking) 12-11. How does the worldview of blue-collar and white-collar consumers tend to differ?

Although they would like to have more in the way of material goods, working-class people do not necessarily envy those who rank above them in social standing. They may not view the maintenance of a high-status lifestyle as worth the effort. As one blue-collar consumer commented, “Life is very hectic for those people. There are more breakdowns and alcoholism. It must be very hard to sustain the status, the clothes, and the parties that are expected. I don’t think I’d want to take their place.”

(10 minutes, Chapter Objective 3, AACSB: Reflective Thinking) 12-12. What is a taste culture?

A taste culture differentiates people in terms of their aesthetic and intellectual preferences. This concept helps to illuminate the important yet sometimes subtle distinctions in consumption choices among the social classes.

(5 minutes, Chapter Objective 3, AACSB: Application of Knowledge) 12-13. Describe the difference between a restricted and an elaborated code. Give an example of each.

Restricted codes are dominant among the working class, whereas the middle and upper classes tend to use elaborated codes. Restricted codes focus on the content of objects, not on relationships among objects. Elaborated codes, in contrast, are more complex and depend on a more sophisticated worldview. These code differences extend to the way consumers approach basic concepts such as time, social relationships, and objects.

(10 minutes, Chapter Objective 3, AACSB: Reflective Thinking) 12-14. What is cultural capital, and why is enrolling in an etiquette class a way to accumulate it?

This refers to a set of distinctive and socially rare tastes and practices—knowledge of “refined” behavior that admits a person into the realm of the upper class. The elite in a society collect a set of skills that enable them to hold positions of power and authority, and they pass these on to their children (such as etiquette lessons and debutante balls).

These resources gain in value because access to them is restricted. That is part of the reason why people compete so fiercely for admission to elite colleges. Much as we hate to admit it, the rich are different.

(10 minutes, Chapter Objective 3, AACSB: Application of Knowledge)

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12-15. How do you differentiate between “old money” versus “nouveau riche” consumers?

We call consumers who have achieved extreme wealth and have relatively recently become members of upper social classes the nouveau riches, a term that many people use in a derogatory manner to describe newcomers to the world of wealth.

(5 minutes, Chapter Objective 3, AACSB: Reflective Thinking) 12-16. What roles do status symbols play in purchase decisions?

We tend to evaluate ourselves, our professional accomplishments, our appearance, and our material well-being relative to others. Often it’s not enough just to have wealth or fame; what matters is that you have more of it than others. A major motivation to buy is not to enjoy these items but rather to let others know that we can afford them. These products are status symbols. The popular bumper-sticker slogan, “He who dies with the most toys, wins,” summarizes the desire to accumulate these badges of achievement.

Status-seeking is a significant source of motivation to procure appropriate products and services that we hope will let others know we’ve “made it.” A study demonstrated how people turn to status symbols to prop up their self-concepts, especially when they feel badly or uncertain about other aspects of their lives. Rising incomes in man economically developing countries, such as South Korea and China, coupled with decreasing prices for quality consumer goods and services, create explosive demand for luxury products or at least “affordable” versions of these goods. This change fuels demand for mass-consumed products that still offer some degree of panache. Companies such as H&M, Zara, EasyJet, and L’Oréal provide creature comforts to a consumer segment that analysts label mass class. This term describes the hundreds of millions of global consumers who now enjoy a level of purchasing power that’s sufficient to let them afford high-quality products—except for big-ticket items such as college educations, housing, or luxury cars.

(5 minutes, Chapter Objective 3, AACSB: Reflective Thinking) 12-17. What is conspicuous consumption? Give a current example.

Conspicuous consumption refers to people’s desire to provide prominent visible evidence of their ability to afford luxury goods.

(5 minutes, Chapter Objective 3, AACSB: Application of Knowledge) 12-18. What is a current example of parody display?

As the competition to accumulate status symbols escalates, sometimes the best tactic is to switch gears and go in reverse. One way to do this is to deliberately avoid status symbols—that is, to seek status by mocking it. Social scientists call this sophisticated form of conspicuous consumption parody display. Hence, the popularity of old, ripped blue jeans, and “utility” vehicles such as Jeeps among the upper classes.

(5 minutes, Chapter Objective 3, AACSB: Reflective Thinking) 12-19. Describe what we men by the term mass class and summarize what causes this phenomenon.

Mass class describes the hundreds of millions of global consumers who now enjoy a level of purchasing power that’s sufficient to let them afford high-quality products—except for big-ticket items such as college educations, housing, or luxury cars. A lot of “affordable luxuries” now are within reach of many consumers who could not have acquired them in 12-14 .

the past. Rising incomes in many economically developing countries, such as South Korea and China, coupled with decreasing prices for quality consumer goods and services, create explosive demand for luxury products or at least “affordable” versions of these goods.

(5 minutes, Chapter Objective 3, AACSB: Reflective Thinking)

CONSUMER BEHAVIOR CHALLENGE DISCUSS 12-20. Sears, JC Penney, and Walmart tried hard in recent years to upgrade their images and appeal to higher-class consumers. How successful have these efforts been? Do you believe this strategy is wise?

JC Penney has not been very successful in changing its image. Because consumers have always thought of stores like J. Penney, Sears, and Walmart as discount or low-price stores, it is likely that these stores will have difficulty changing their images among the public. Attempting to change a store’s image when consumers have a strong perception of the store’s image—and one that is largely inconsistent with the proposed image—can be a very risky strategy. As in the case of JC Penney, retailers run the risk of alienating a significant group of loyal consumers with these attempts.

(15 minutes, Chapter Objective 3, AACSB: Analytic Skills) 12-21. What are some of the obstacles to measuring social class in today’s society? Discuss some ways to get around these obstacles.

Some of the obstacles in measuring social class in today’s society are changes in family structure, anonymity, and status inconsistency. One way to get around obstacles is to obtain demographic data and combine the data with the interviewer’s subjective impressions of the individual’s standard of living and possessions. Interviewers should be adequately trained. Researchers should attempt to cross-validate data with multiple judges.

(15 minutes, Chapter Objective 3, AACSB: Reflective Thinking 12-22. What consumption differences might you expect to observe between families characterized as underprivileged versus those whose income is average for its social class?

An example of the consumption differences one might expect to observe between a family characterized as underprivileged versus one whose income is average for its social class include the brands of clothing worn, the types of cars driven, types of vacations (flying versus driving, hotels versus camping), and vacation destinations (local state park versus Hawaii). Students likely will identify a number of factors in their own lives that distinguish them as members of the “middle” class. Underprivileged people tend to spend more to look like they belong in a social class. Ask students if they have a tendency to overestimate the class they are in. Why would they do this?

(15 minutes, Chapter Objective 3, AACSB: Reflective Thinking)

12-15 .

12-23. How do you assign people to social classes, or do you at all? What consumption cues do you use (e.g., clothing, speech, cars, etc.) to determine social standing?

As discussed in the text, people are assigned to social classes by virtue of their social standing in the community. People are grouped according to their occupation, lifestyle, ideas and values, and income. Consumption cues that may be used to determine people’s social standing include their cars, homes, clothing, speech, and types of people with whom they socialize.

(15 minutes, Chapter Objective 3, AACSB: Reflective Thinking) 12-24. In today’s economy, it has become somewhat vulgar to flaunt your money – if you have any left. Do you think this means that status symbols like luxury products are passé? Why or why not?

This will be an interesting debate among students. They may agree that luxury can be consumed in tasteful ways. The absence of a conspicuous brand on luxury items is one way around this concern. Luxury products are becoming more popular in China and some Arab countries.

(15 minutes, Chapter Objective 3, AACSB: Reflective Thinking) 12-25. Thorstein Veblen argued that men used women as “trophy wives” to display their wealth.

Is this argument still valid today?

Student responses will vary based on their opinion of trophy wives. To Veblen, wives are an economic resource. He criticized the “decorative” role of women, as rich men showered them with expensive clothes, pretentious homes, and a life of leisure as a way to advertise their own wealth. Today we refer to these women as trophy wives. In recent years the tables have turned as older women—who increasingly boast the same incomes and social capital as their male peers—seek out younger men as arm candy. These socalled cougars are everywhere; surveys estimate that about one-third of women older than age 40 date younger men.

(5 minutes, Chapter Objective 3, AACSB: Reflective Thinking) 12-26. Research suggest that social class influences how much compassion people show to others who need help. For example, one study reported that luxury car drivers were more likely to cut off other motorists instead of waiting for their turn at the intersection.

Another showed that less-affluent people are more likely to agree with such statements as, “I often notice people who need help,” and “It’s important to take care of people who are vulnerable.” Other studies have demonstrated that upper-class people are not as good at recognizing others’ emotions. One explanation is that more resources provide a sense of independence; the less we have to rely on others, the less we care about their feelings.

Do you agree that wealthy people are less caring? Why or why not?

Student responses will vary. One approach to social class focuses on the codes (the ways consumers express and interpret meanings) people within different social strata use.

Restricted codes focus on the content of objects, not on relationships among objects.

Elaborated codes, in contrast, are more complex and depend on a more sophisticated worldview. These code differences extend to the way consumers approach basic concepts such as time, social relationships, and objects.

(5 minutes, Chapter Objective 3, AACSB: Ethical Understanding and Reasoning ) 12-16 .

12-27. This chapter observes that some marketers find “greener pastures” when they target lowincome people. How ethical is it to single out consumers who cannot afford to waste their precious resources on discretionary items? Under what circumstances should we encourage or discourage this segmentation strategy?

Student responses will vary but should indicate an understanding of segmentation strategy and why marketers use it. There should also be an understand of the 4 A’s of addressing low-income consumers and targeting the bottom of the pyramid.

(10 minutes, Chapter Objective 1, AACSB: Ethical Understanding and Reasoning) APPLY 12-28. Compile a list of occupations and ask a sample of students in a variety of majors (both business and non-business) to rank the prestige of these jobs. Can you detect any differences in these rankings as a function of students’ majors?

The students should be encouraged to try this exercise with a variety of individuals, not just students in different majors. It would be interesting to see differences in perceptions of prestige due to gender, age, current occupation, level of education, etc. (Possible Field Project Idea) 30 minutes, Chapter Objective 2, AACSB: Analytic Skills) 12-29. Compile a collection of ads that depict consumers of different social classes. What generalizations can you make about the reality of these ads and about the media in which they appear?

The instructor might review this exercise after students have completed it. The instructor might attempt to identify aspects of the advertisements that students used to classify consumers as members of different social classes. A discussion of how our attitudes and perceptions are influenced by stereotypical beliefs could then be used with the students’ own examples as evidence of stereotypical beliefs and their potentially negative consequences. (Possible Field Project Idea) (30 minutes, Chapter Objective 3, AACSB: Reflective Thinking)

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CASE STUDY TEACHING NOTES Chapter 12 Case Study: Success At The Bottom Of The Pyramid? P&G’s Gillette Guard Shows It’s Possible Summary of Case Consumer behavior is influenced by internal and external factors. One of the external factors that sets real boundaries for consumers is their level of income. Some marketers refer to strategies directed at different income tiers as targeting certain levels of a pyramid. Marketing to the bottom of the pyramid, focusing on consumers with very limited financial means.

Suggestions for Presentation This material can be used to illustrate how reference groups also have status symbols.

Suggested Answers for Discussion Questions CS 12-1.

Using the “4A’s” framework in Figure 12.1, analyze the considerations that went into the development of the Gillette Guard razor for the Indian market?

Gillette Guard focuses on needs of the consumer at a “ruthless cost.” This meant paying attention to the smallest details, by designing a stripped down single blade.

(10 minutes, Chapter Objective 4, AACSB: Application of Knowledge) CS 12-2.

Are companies targeting the bottom of the pyramid taking advantage of vulnerable consumers with limited resources?

No, consumers at the bottom of the pyramid still have needs.

(10 minutes, Chapter Objective 4, AACSB: Diverse and Multicultural Work Environments) CS 12-3.

More than half of U.S. workers earn less than $30,000 a year barely above the poverty line for a family of five. What would you recommend to a company looking to target the bottom of the pyramid consumers in the United States?

Companies should use Gillette’s India Research as a blueprint on how to reach this market affectively.

(10 minutes, Chapter Objective 4, AACSB: Diverse and Multicultural Work Environments

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Additional Support Material

STUDENT PROJECTS Individual Projects Have students look for the parody display segments in town – for instance, the freegans, or the blue denim pants (Von Dutch) crowd. Talk to them and determine their rationale for their lifestyle and their opinions about other social classes.

When upper class individuals avoid brands this is called parody display. Students may find the reasons why interesting. However, it may be difficult to find parody display segments.

(15 minutes, Chapter Objective 3, AACSB: Reflective Thinking) 1.

2.

Have a student visit a high-end specialty store for a luxury good (i.e., Louis Vuitton, Coach, Burberry, etc.). Have them interview a sales associate or manager about the existence of the mass class segment. Can they identify the difference between upper-class people and middle- to lower-class people who buy the products? What are the noted differences? How prevalent are the mass culture members?

Students should find the first-hand experience of the sales associate interesting. The appeal to the mass class is likely to depend on the retailer.

(30 minutes, Chapter Objective 3, AACSB: Reflective Thinking) 3.

Conduct this as an in-class activity. Prepare a list of 15 occupations and distribute copies to the class. Ask each student to rank the occupations according to prestige. Compile the results (either during class, or after for the next class period). Discuss the results with the class. Are there consistencies? Why do these form? What implications do these perceptions have on consumer behavior?

This exercise relates to the information about occupational prestige. Different people are likely to have different responses to the occupations. Students should be encouraged to explore the root of these differences.

(15 minutes, Chapter Objective 2, AACSB: Reflective Thinking) Ask students to find at least two manufacturer’s ads for the same type of product (e.g., clothing, food product, personal care product, etc.) that they think are aimed at different social classes. How do these ads differ?

Look for students to relate the elements of the advertisement, including the social environment, the furnishings in the background, the colors used, etc. to other consumption behaviors of each social class.

(20 minutes, Chapter Objective 3, AACSB: Reflective Thinking) 4.

5.

Ask a student to bring in an ad in which the brand being marketed was at one time a status symbol, but fell out of fashion for a time (e.g., Cadillac, Parker Pen, Izod-Lacoste,

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etc.). Have the student discuss whether the ad still attempts to create that perception.

What new product, if any, has replaced the featured product as a status symbol?

For a status symbol to distinguish a customer and show s/he has “made it,” it must be exclusive in some way. Cadillac, for example, hurt its image as a status symbol when it introduced lower priced models and offered inexpensive leases, making the brand more available to those with less money. That, coupled with the fact that it only retained appeal to an older audience that did not want the increasingly desirable foreign luxury cars, hurt its ability to continue to communicate status.

(25 minutes, Chapter Objective 3, AACSB: Reflective Thinking) 6.

Have a student interview one or more salespeople from one of the following product categories: new or used cars, stereo equipment, clothing, insurance, or real estate. Ask the student to determine the social classes or status of their customers. Does the student recommend that the sales approach will vary depending on the customer’s social class?

The chapter notes some of the differences in how social class members shop. The student’s recommendation may be based on the salesperson’s perceptions of these differences and the students evaluation of whether capitalizing on the differences is ethical.

(45 minutes, Chapter Objective 3, AACSB: Ethical Understanding and Reasoning Abilities) 7.

What status symbols motivate you to purchase? Pick an example product and give an illustration.

Student responses will vary. Look for students to explain how owning the product or using the service differentiates them from those who do not own/use the product.

(15 minutes, Chapter Objective 3, AACSB: Reflective Thinking) 8.

How can online marketers use social class in marketing efforts? Give examples of good and bad usage. Go online to do this if possible.

Students might compare sites that cater to the upper class (e.g. robbreport.com) to sites that cater to the middle class (e.g. parade.com). They also may compare retailers. Look for students to evaluate the marketing efforts critically in their responses.

(45 minutes, Chapter Objective 3, AACSB: Reflective Thinking) 9.

Ask students to compile a selection of recent ads that attempt to link consumption of a product with a specific lifestyle. In class, have students demonstrate what they have found. Discuss how the goal of linking product consumption to a lifestyle is usually accomplished.

There are plenty of brands that use sports sponsorships (e.g. tennis, golf, X-games) to associate with a specific lifestyle. Well-known spokespeople can also be used to create a link.

(45 minutes, Chapter Objective 4, AACSB: Reflective Thinking) 10.

Ask students to think of a specific lifestyle (your own, your parent’s, your aspirations, etc.) and then make a list of products and services that are linked in the consumer’s mind to that specific lifestyle. (Hint: You might decorate your living room, design a wardrobe, think of options for a car, etc.)

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Student responses will vary. It may be helpful to narrow down the specific task, perhaps using the hints to select one area where the lifestyle might be reflected.

(30 minutes, Chapter Objective 5, AACSB: Reflective Thinking) Group Projects 1.

Have student groups visit two sections of a community—one where residents are professionals and businesspeople and one where residents are mostly working class. Ask them to note how the homes vary in terms of color, architecture, and the general appearance of the lawn and landscape. Have them check the paper or call a realtor to find the general value of homes in the area. What types of stores are in the neighborhood and how are they promoted?

Look for students to identify characteristics of the homes and the retailers that serve the neighborhoods. Students may also use real estate tracking services like zillow.com in some markets to find out the value of homes in the different areas.

(60 minutes, Chapter Objective 2, AACSB: Reflective Thinking) 2.

Ask a group to classify the major retail stores (department and specialty stores) in your community according to their estimation of the social class of their target market. Have them explain how the marketing strategy is different for each of the stores profiled.

Look for students’ descriptions of social class to go beyond income and consider education and occupation. Students should relate the marketing strategy back to the information in the chapter about how members of different social classes shop.

(20 minutes, Chapter Objective 3, AACSB: Reflective Thinking) 3.

Ask students to make a list of slang terms that are used to disparage social classes. Why are these terms used? How do marketers disparage or make fun of social classes (which they do not target)? What is the best way to treat all classes with ethics and dignity?

Slang terms are most likely to apply to upper class and lower class categories. Students should recognize that marketer efforts to associate with one class often depend on their ability to differentiate the consumers who will use it from other social classes. Be sensitive to the fact that some of the slang may be offensive to some students.

(15 minutes, Chapter Objective 3, AACSB: Reflective Thinking) 4.

Have your group designate which social class would most accurately describe each member’s current position. Where do the members expect to be in 5 years with respect to social class? What differences will occur if the anticipated movement in social class occurs? Discuss the changes in class.

Many people categorize themselves as middle class, which is one of the issues with selfdesignating social class. Some students may consider their own status and not the status of their parents. Many business students may aspire to be lower upper class in five years.

(25 minutes, Chapter Objective 3, AACSB: Reflective Thinking) 5.

Assign groups of students to go to an airport (or other location where they will find lots of foot traffic) to people watch. Have them classify as many people as possible according

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to social class based on the appearance and behaviors of individuals. Have the class as a whole discuss their results. What lessons can be learned from this?

It will be challenging for consumers to determine social class based on the appearance of individuals. Further, some social classes are not likely to be represented at the airport.

Students may rely on status symbols and distinguish people based on behaviors, like whether they travel business class or first class. International airports will add another layer of complexity to trying to determine the social class of individuals since status symbols in other countries are different from those in the United States.

(90 minutes, Chapter Objective 3, AACSB: Reflective Thinking) 6.

Student groups should identify three examples of lifestyle marketing on the Internet.

Have members of the group demonstrate at least one of these sites in class. Show how the site uses lifestyles to the organization’s advantage.

Students should select websites that appeal to people with common leisure activities and discretionary spending habits. Many sites are aimed at a specific lifestyle so they can attract a certain type of advertiser. The exercise can also be done with blogs.

(15 minutes, Chapter Objective 5, AACSB: Reflective Thinking)

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eLAB Individual Assignments 1.

Go to www.burberry.com. How does this prestige fashion label use social class and status to sell its products? Comment on their approach. Does this approach make you want to buy such products? Explain.

Burberry.com uses a distinctive font, color scheme, and music, in addition to highly stylized photographs of its products. The products are not available to everyone because they use exclusive distribution and high price points. Student opinions about whether the products are desirable are likely to vary.

(15 minutes, Chapter Objective 3, AACSB: Reflective Thinking) 2.

Go to www.maxlang.com. How much would you pay for a belt for casual or business wear? How much does Max Lang charge? Is Max Lang selling belts or status? How can the Max Lang website overcome problems such as sizing and the desire to personally see prestige products? What do you think of the organization’s strategy?

Max Lang sells expensive belts and belt buckles, but the website design does not support the position of Max Lang belts as a status symbol. The website has a toll free number for support. The site may have to rely on reputation/word of mouth and online reviews in the absence of the ability to view the products.

(15 minutes, Chapter Objective 3, AACSB: Reflective Thinking) 3.

Go to www.hammacher.com. How does Hammacher Schlemmer use prestige and the desire to be different in its marketing effort? Give illustrations from the company’s website to support your conclusions. Is this a good strategy for the company to follow?

Explain.

Hammacher Schlemmer sells unique merchandise at various price points, but some of the merchandise is very expensive. Its retail location is three blocks from Bloomingdales in New York City (on 57th near the cross section with Lexington Avenue), and Bloomingdales is a high-end department store. The website uses a clean design and features individual, unique products to support its positioning. Look for students to support their opinions about whether the company is following a good strategy with information from the chapter about positioning products to different social classes.

(20 minutes, Chapter Objective 3, AACSB: Reflective Thinking) 4.

Go to www.burtsbees.com. How does this site use lifestyle marketing to its advantage?

What lifestyle would be most associated with the products shown on this site? After reading the history of the founders, how were the founders able to project their own lifestyles into the products produced by the company? How could the company expand its sales into other lifestyle segments?

Burt’s Bees sells natural products. Its products are likely to appeal to people whom value natural products and the environment. Its founders include their story on the website and on the packaging for some of the products. Look for students to talk about expansion into other lifestyle segments in ways that does not alienate the current lifestyle segment.

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(15 minutes, Chapter Objective 5, AACSB: Reflective Thinking) Group Assignments 1.

Visit both www.macaronigrill.com and www.dennys.com. Have your group analyze the approaches that both of these websites have taken to appeal to their target markets. What elements and cues in these websites reflect the principles contained in this chapter on social status?

Both companies appeal to the masses, but Macaroni Grill appeals to a slightly higher social class. Denny’s tends to focus on the quantity of food at a low price point, while Macaroni Grill tends to focus on the quality of the food. The colors and layout used on each site are in line with their different positions.

(20 minutes, Chapter Objective 3, AACSB: Reflective Thinking) 2.

Visit http://www.strategicbusinessinsights.com/vals/presurvey.shtml and complete the VALS survey. Have your group discuss the questions posed to sort you into categories. Do the questions assess important attributes for marketers to understand consumer groups? What other information about lifestyle would you want to know?

Develop your own questionnaire.

Teams will have different answers but this is a good exercise for encouraging them to consider measurement of constructs as well as the needs of marketers for high-quality and insightful information.

(20 minutes, Chapter Objective 6, AACSB: Reflective Thinking)

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CHAPTER 13: SUBCULTURES CHAPTER OBJECTIVES When students finish this chapter they should understand why: 1. Consumer identity derives from “we” as well as “I”.

2. Our memberships in ethnic, racial, and religious subcultures often guide our consumption choices.

3. Marketers increasingly use religious and spiritual themes when they talk to consumers.

4. Our traditional notions about families are outdated.

5. We have many things in common with others because they are about the same age.

6. Teens are an important age segment for marketers.

7. Baby Boomers are the most economically powerful age segment.

8. Seniors are a more important market segment than many marketers realize.

9. Birds of a feather flock together in place-based subcultures.

CHAPTER SUMMARY Consumer identity derives from “we” as well as “I”.

Consumers identify with many groups that share common characteristics and identities, but some of these affiliations are more central to how we define ourselves. Subcultures are large groups that exist within a society, and membership in them often gives marketers a valuable clue about individuals’ consumption decisions. Important sources of consumer identity include gender, race/ethnicity, religion, age, and place of residence.

Our memberships in ethnic, racial, and religious subcultures often guide our consumption choices.

A person’s ethnic origins, racial identity, and religious background often are major components of his or her identity. African Americans, Hispanic Americans, and Asian Americans are the three most important ethnic/ racial subcultures in the United States. Key issues to reach members of racial/ethnic subcultures are consumers’ degree of acculturation into mainstream U.S. society and the recognition of important cultural differences among subgroups (e.g., Puerto Ricans, Cubans, and Mexicans).

Marketers increasingly use religious and spiritual themes to talk to consumers.

The quest for spirituality influences demand in product categories including books, music, and .

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cinema. Although the impact of religious identification on consumer behavior is not clear, some differences among religious subcultures do emerge. Marketers need to consider the sensibilities of believers carefully when they use religious symbolism to appeal to members of different denominations.

Our traditional notions about families are outdated.

We’ve seen that subcultural identities revolve around shared experiences and perspectives.

That’s why it’s so important for marketers to think about both when consumers are born and the family structure into which they’re born. Age groups and the family unit help to shape people’s experiences, needs, and preferences.

We have many things in common with others because they are about the same age.

Consumers who grew up at the same time share many cultural memories because they belong to a common age cohort, so they may respond well to marketers’ nostalgia appeals that remind them of these experiences.

Teens are an important age segment for marketers.

Teenagers are in the middle of a transition from childhood to adulthood, and their self-concepts tend to be unstable. They are receptive to products that help them to be accepted and to enable them to assert their independence. Because many teens earn money but have few financial obligations, they are a particularly important segment for many nonessential or expressive products, ranging from chewing gum to clothing fashions and music. Because of changes in family structure, many teens also are taking more responsibility for their families’ day-to-day shopping Baby Boomers are the most economically powerful age segment.

Baby boomers are the most powerful age segment because of their size and economic influence.

Boomers continue to affect demands for housing, childcare, automobiles, clothing, and many other products.

Seniors are a more important market segment than many marketers realize.

As the population ages, the needs of older consumers will become increasingly important. Many marketers ignore seniors because of the stereotype that they are too inactive and spend too little.

This stereotype is no longer accurate. Many older adults are healthy, vigorous, and interested in new products and experiences—and they have the income to purchase them. Marketing appeals to this age subculture should focus on consumers’ perceived ages, which tend to be more youthful than their chronological ages.

Birds of a feather flock together in place-based subcultures.

Geodemography refers to analytical techniques that combine data on consumer expenditures and other socioeconomic factors such as geographic information about the areas in which people live, in order to identify consumers who share common consumption patterns. Researchers base this approach on the common assumption that “birds of a feather flock together.” Marketers can increase the efficiency of their messages when they focus on the similarities among consumers who choose to live in the same place.

CHAPTER OUTLINE .

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I. Ethnic and Racial Subcultures A. Subcultures 1. Consumers are defined by group memberships within the society-at-large. These groups are known as subcultures, whose members share beliefs and common experiences that set them apart from others.

2. Microcultures form around a strong shared identification with an activity or art form.

Discussion Opportunity—Have the class identify as many subcultures as possible. Which of these match up with those in the text? Which go beyond the text?

3. One important subcultural difference is how abstract or literal the group is. a. High-context cultures—group members are tight-knit, symbols and gestures carry much weight, and they are sensitive to nuances in ads. Most minorities fall in this category. b. Low-context culture—group members are less sensitive to ethnicity. Most Anglos are in this group.

Discussion Opportunity—Give an illustration of how membership in an ethnic subculture predicts level and type of media exposure, food and apparel preferences, political behavior, and leisure activities. Be specific in the illustrations.

II. Subculture Stereotypes A. Ethnic identities often are significant components of a consumer’s self-concept.

B. An ethnic subculture consists of a self-perpetuating group of consumers who are held together by common cultural and/or genetic ties and are identified both by its members and by others as being a distinguishable category.

C. People’s racial and ethnic differences should be explicitly taken into account when formulating marketing strategies.

Discussion Opportunity—Ask: What are some of the ways that members of ethnic and racial minorities identify with and support each other? What implication does this have for marketers?

Discussion Opportunity—Ask: What are the good and bad points of adherence to ethnicity? Give illustrations if possible. How should marketers deal with ethnicity?

Discussion Opportunity—Ask: Why would a multicultural household be an attractive target for marketers? Explain your thoughts.

Discussion Opportunity—Have students consider whether immigrants should be advertised to in their own language or in English? Have different students defend their point of view.

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D. Ethnicity and Acculturation Many subcultures have powerful stereotypes associated with them. These stereotypes can be viewed positively or negatively.

1. Marketers have used ethnic symbolism in the past as shorthand to connote certain product attributes. The images employed were often crude and unflattering.

*****Use Review #1 and #8 Here ***** Discussion Opportunity—Identify a specific ethnic or racial minority. Have the students make a list of some of the negative stereotype descriptions that is associated with the group. In a column next to the negative word, write a positive word that describes the same behavior or characteristic. How might this analysis be useful to marketers? Note: This is a sensitive discussion topic. It should be approached with caution and professionalism.

Discussion Opportunity—Even though this project may take some time, look through contemporary magazines and find illustrations of what you perceive to be ethnic stereotyping or insensitivity. Explain why you think your examples qualify.

Discussion Opportunity—Ask: What are some of the ethnic products (e.g., foods, clothes, accessories, etc.) that have become part of the mainstream U.S. culture?

E. The Acculturation Process 1. Acculturation refers to the process of movement and adaptation to one country’s cultural environment by a person from another country.

2. Individual differences, such as whether the person speaks English, influence how rocky the adjustment will be.

3. Acculturation agents are people and institutions that teach the ways of a culture.

These agents may come from a culture of origin or from a culture of immigration.

4. Several processes affect how immigrants adapt to their new surroundings: a. Movement – the factors that motivate people to uproot themselves from another location and go to another. b. Translation – different rules for operating in the environment c. Adaptation – forming new consumption patterns 5. During the acculturation process, many immigrants undergo assimilation, where they adopt products, habits, and values they identify with mainstream culture.

6. At the same time, there is an attempt at maintenance of practices they associate with the culture of origin.

7. Some may resist acculturation and resent the process. Immigrants tend to exhibit segregation in that they typically live and shop in places that are physically separate from mainstream consumers.

8. The progressive learning model helps us to understand the acculturation process. a. This perspective assumes that people gradually learn a new culture as they increasingly are exposed to it.

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b. We expect that when people acculturate they will mix the practices of their original culture with those of their new or host culture. c. Those who retain strong ethnic identification differ from their more assimilated counterparts in these ways: i. More negative attitude toward business ii. Access more media in native language iii. More brand loyal iv. More likely to prefer brands with prestige labels v. More likely to buy brands that specifically advertise to their ethnic group d. When consumers transform objects and places into those that feel cozy, hospitable and authentic this is called warming. e. De-ethnicization refers to the process whereby a product formerly associated with a specific ethnic group is detached from its roots and marketed to other subcultures. For example, bagels—from the Jewish culture—which now can be bought in a jalapeño version—Hispanic culture.

Discussion Opportunity—Think of three de-ethnicization products that you may have bought recently. How did you first hear about them? Do you think of them as being ethnic in their nature?

F. The “Big Three” American Ethnic Subcultures 1. The Hispanic population is the largest ethnic subculture.

2. Asian Americans are part of the fastest-growing ethnic group.

Discussion Opportunity—Find magazine illustrations where the advertisement is specifically directed toward the Hispanic consumer. Share your findings with the class.

Discussion Opportunity—What are some ways that marketers are trying to help Hispanic consumers more easily assimilate into the mainstream U.S. culture? What are some ways marketers are trying to keep the Hispanic subculture separate?

G. African Americans make up more than 13 percent o the U.S. population.

1. Marketers recognize the huge impact of this racial subculture and work hard to identify products and services that will appeal to these consumers.

2. African American women rank skin as more important than hair, figure, makeup, and clothes, as it represents a source of their heritage.

Discussion Opportunity—Ask: What other purchase differences have you noticed between African American consumers and those of other groups in the United States? Examine traditional African American magazines and their respective ads. What products seem to be emphasized?

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H. Hispanic describes people of many different backgrounds.

1. 60% of Hispanic-Americans are of Mexican descent; Puerto Ricans make up less than 10% but are the second largest group.

2. The 2010 Census reported 50 million Hispanics or one in six US residents.

3. Demographically, two important characteristics of the Hispanic market are worth noting. i.

It is a young market ii.

The Hispanic family is likely to live in large, traditional, married-withchildren families with lots of participation from grandparents.

4. They tend to be community oriented and have high aspirations for children. They more often live in large, traditional, married-with-children families.

Discussion Opportunity—What are some further research characteristics of the Hispanic subculture that you have noticed? How might these be used by the marketer?

Discussion Opportunity—What should marketers emphasize when trying to appeal to the Hispanic market? What should they avoid?

I. Many Hispanics don’t think of themselves as distinctly Latino or American, but somewhere in the middle, or ambicultural. Although their numbers are relatively small, Asian-Americans are the fastest growing, most affluent and best-educated minority group in the United States.

1. Their medium income is 28 percent higher than the U.S. average and they are more than twice as likely to have graduated from college.

2. They are active and impulsive buyers.

3. It is a culturally diverse group with different languages and dialects.

Discussion Opportunity—Ask: Why do you think Asian Americans put such an emphasis on education? How can marketers capitalize on the high education level of Asian Americans?

4. They are status conscious, brand loyal and buy premium brands.

5. Asian Americans place great emphasis on family.

Discussion Opportunity—Ask: How are the various Asian American groups different from each other? What can marketers do to avoid embarrassment and costly cultural blunders in their promotions?

Discussion Opportunity—The text indicates that the term Asian refers to 20 ethnic groups. Do research to determine what these groups are. Comment on the diversity.

Discussion Opportunity—What should marketers emphasize when trying to appeal to the Asian market? What should they avoid?

Discussion Opportunity—Research the Chinese belief of feng shui. What ramifications could this have for marketers? Explain. .

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III. Religious Subcultures A. How Religion Influences Consumption 1. Recent years have witnessed a resurgence of interest in religion and spirituality.

2. Religious or spiritual messages can be used to describe brand communities or as a foundation for non-religious organizations. For example, Weight Watchers and Alcoholics Anonymous use a spiritual-therapeutic model.

3. Brand logos can serve the same function as a religious symbol for some people.

There is a negative relationship between brand reliance and religiosity.

B. Organized Religion and Consumption 1. Religion influences food purchases, attitudes toward sexuality, birthrates, household formulation, income, and political attitudes.

2. Religious leaders can encourage consumption or, more importantly, discourage consumption.

C. Born-Again Consumers 1. In the U.S., there are 400 megachurches, each which serves 2,000+ congregants per week. Combined they have an annual income of $1.85 billion.

2. In the U.S., we trace most religious marketing activity to 72 million “born-again” Christians. They follow literal interpretations of the Bible and acknowledge being born again through belief in Jesus.

3. Several brands use faith-based marketing strategies D. Islamic Marketing 1. Muslims will be more than one-quarter of the Earth’s population by 2030.

2. Halal food and other commodities, services, and activities may also appeal to mainstream consumers.

IV. The Family Unit and Age Subcultures Discussion Opportunity—Ask: Describe your family structure. Would you say that it is traditional? What impact does your family structure have on purchasing? How could an advertiser design an ad to appeal to your family? What would be in that ad?

A. The Modern Family 1. Intentional families are groups of unrelated people who meet regularly for meals and who spend holidays together.

2. The extended family was once the most common family unit. It consisted of three generations living together and often included the grandparents, but aunts, uncles, and cousins.

3. The nuclear family—a mother, father, and one or more children—became the modern family.

4. The U.S. Census Bureau regards any occupied housing unit as a household, regardless of the relationships between the people who live there.

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Discussion Opportunity—Ask students to write down their definition of “family.” Compare the answers with the rest of the class. How does this definition match with alternative lifestyles?

Discussion Opportunity—Ask: Why is it important for marketers to know how to define a family?

What difference does it make to an e-marketer? *****Use Consumer Behavior Challenge Here ***** Discuss #18 5. The economy has affected families, increasing the number of children who live with grandparents and the incidence of boomerang kids (children who return home after college instead of getting their own places.

6. Middle-aged people have been labeled the Sandwich Generation by some because they support the generations above and below them.

7. Family size depends on such factors as educational level, the availability of birth control, and religion.

8. Demographers define the fertility rate as the number of births per year per 1,000 women of childbearing age. a. The fertility rate increased dramatically in the late 1950s and early 1960s, when parents of baby boomers reached childbearing age. b. When Baby Boomers had their own children, it was a baby boomlet in the 1980s.

9. Childless couples, including those who define themselves as voluntarily childless, are an attractive segment for some companies. DINKS (dual income, no kids) couples are better educated on average than those with kids are.

Discussion Opportunity—Ask: Is the phenomenon of “boomerang kids” new? What brought the kids back to the nest in previous years? If you are a “boomeranger,” describe your situation and why you returned. Why is this phenomenon important to marketers?

Discussion Opportunity—Watch TV (or read a TV Guide) for a week. List and describe the various ways families are depicted. Are these realistic depictions or not? Explain.

B. Animals are People, Too! Nonhuman Family Members 1. Americans are humanizing their dogs and cats and spending ever more on their care and comfort.

2. Some of our purchases for our pets include insurance and presents for their birthdays and holidays, etc.

C. The Family Life Cycle 1. Many factors affect what a family spends including the number of people in the family, their ages, and whether one, two, or more adults work outside the home.

2. Two especially important factors that determine how a couple spends time and money are 1) whether they have children and 2) whether the woman works.

3. Marketers apply the family life cycle (FLC) concept to segment households. a. The FLC combines trends in income and family composition with the changes these demands place on income. .

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b. As we age, our preferences and needs tend to change. c. Four variables are useful for describing these changes. i.

Age ii.

Marital status iii. Presence or absence of kids in the home iv.

Ages of children, if present V. Age Cohorts A. Age cohorts consist of people of similar ages who have similar experiences.

Discussion Opportunity—Provide an illustration from your family where consensual purchase decisions and accommodative purchase decisions occurred. Which form is the most normal?

Explain.

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1. The Interbellum Generation—People born at the beginning of the twentieth century.

2. The Silent Generation—People born between the two World Wars 3. The War Baby Generation—People born during World War II 4. The Baby Boom Generation—People born between 1946–1964 5. Generation X—People born between 1965–1985 6. Generation Y—People born between 1986–2002 7. Generation Z—People born 2003 and later B. Children: Consumers-in-Training 1. Disney estimates that the North American baby market to be worth $36.2 billion annually 2. Material parenting shapes children’s behavior. Kids whose parents use products to shape behavior are more likely to be materialistic as adults 3. Parental yielding occurs when a parental decision maker “surrenders” to a child’s request.

Use Consumer Behavior Challenge Here ***** Discuss #23 Discussion Opportunity—Ask: What is nostalgic to you? Think back to earlier school years.

What products were popular? Do you still use these products (if you can find them)? What is your all-time favorite musical group? How do marketers revive markets for nostalgic products?

Would the technique work with you?

Discussion Opportunity—Ask: How would you describe teens today? Is your description positive or negative? How does this description match the description of you during your teen years?

What can you learn from this exercise?

VI. Gen Y and Gen Z A. According to research done by Saatchi & Saatchi, a global advertising agency, there are four themes common to all teens: 1. Autonomy versus belonging—want independence but need support.

2. Rebellion versus conformity—rebellion against social norms but want acceptance.

3. Idealism versus pragmatism—must reconcile how the world should be with reality.

4. Narcissism versus intimacy—obsessed with appearance but want sincere relationships.

B. Gen Z grew up during the Great Recession and are less likely to believe in an idealized, carefree world.

1. Idols are self-made Internet stars 2. This generation is the most diverse ever experienced.

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3. As digital Natives, they spend a big chunk of their time online and expect to be engage in two-way digital conversations.

Discussion Opportunity—After examining the common themes applied to teenagers, ask how marketers could use this information to adjust strategy. What type of ads worked best on you when you were a teenager? Do you look at these ads and the products they represented differently now? Explain.

C. Gen Y 1. Generation Y kids go by various names, including Echo Boomers and Millennials. a. They are hopeful about the future and believe it is important to maintain a positive outlook on life. b. They make up one-third of the U.S. population and spend $170 billion a year. c. They reflect the changes to American life; they are diverse and many grew up in nontraditional families. d. Gen Yers are jugglers who place high value on being both footloose and connected through technology, a condition known as connexity.

2. Three major forces have shaped their experience: a. Economy: Gen Y includes a subgroup of ambitious go-getters, women in particular. This group is very aware of their “self-brand:/ b. Globalization: Millennials are eager to experience other cultures but in different ways c. Social media: Gen Y is open to public observation and every new post or status update reveals something about themselves.

3. When compared to parents and older siblings, Gen Yers hold relatively traditional values and prefer to fit in rather than rebel. a. Their acculturation agents stress teamwork. b. Violent crime, tobacco and alcohol use, and teen pregnancy are down. c. They trust the government and their parents. *****Use Consumer Behavior Challenges Here ***** Discuss #28 Discussion Opportunity—Ask: What do you think are three of the greatest problems facing a typical teenager (high school student) today? Can you suggest anything that marketers can do to help a teenager during this growing-up period? What would you do differently during your teenage years if you had a “do over”?

Discussion Opportunity—Ask: Can you think of ways you influenced your parents’ buying decisions when you were a teenager? What was your “track record”?

Discussion Opportunity—Ask: If you were hired to sell a new type of product directly to college students, what do you think would be the best way to reach them? What would your plan include? .

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Discussion Opportunity—Provide the following scenario to the class: Let us say that you were going to design a set that would show a typical dorm room for a college student attending a college or university today. This dorm room would provide the setting in which you would shoot a commercial to sell some product to the student. What would the room look like? What would be in it? What would be on the walls? How would this room be different from 10 or 20 years ago?

Discussion Opportunity—Ask: Remember the last time you went on Spring Break? How did marketers attempt to reach you and your fellow students? Evaluate the effectiveness of these techniques.

D. Gen X 1. The cohort of 46 million Americans who will be a powerful force through the end of this decade and beyond.

2. This generation has been labeled “Generation X,” “slackers,” or “baby busters.”

Discussion Opportunity—Regardless of whether you are in “Generation X” or not, what are your impressions of this cohort? Do you think it is misunderstood? What problems and opportunities will this generation face? If you were given the task of appealing to this generation, what approach or theme would you use? Why? VII. The Mature Market (Baby Boomers) A. The Baby Boomer age cohort is the source of many fundamental cultural and economic changes. The reason: power in numbers.

B. They account for a large percentage of consumer spending in many categories and constitute a third of media users. *****Use Consumer Behavior Challenge Here ***** Apply #40 Discussion Opportunity—Ask: If you were to characterize the baby boomers, how would you describe them? What do you think would “turn them on”? What do you admire about them?

What do you dislike about them?

Discussion Opportunity—Why did Woodstock have such an impact on this generation? How does this impact affect purchasing habits?

VIII. The Gray Market A. People older than 60 are the fastest growing age group on earth.

B. Older adults control more than 50% of discretionary income and worldwide consumers over 50 spend nearly $400 billion a year.

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C. Householders aged 55 to 64 spend 15% more than average per capita, and spend increasing amounts on exercise facilities, cruises and tourism, cosmetic surgery and skin treatments, and “how-to” books and university courses. *****Use Consumer Behavior Challenge Here ***** Apply #41 Discussion Opportunity—List three university courses that you think might be interesting to seniors. Have the class suggest their own choices. Discuss these choices.

D. A person’s perceived age, or how old the person feels, is a better predictor of behavior than chronological age; mental outlook and activity level have a lot more to do with longevity and quality of life than actual age.

E. For marketing to older people to succeed, they should link to one or more factors: a. Autonomy—they want to lead active lives and to be self-sufficient. b. Connectedness—they want to keep bonds with friends and family. c. Altruism—they want to give something back to the world.

Discussion Opportunity—Ask: What do you think are the key values of the elderly? How could these be incorporated into advertising to stimulate their interest in products?

IX. Place-Based Subcultures A. Geodemography refers to analytical techniques that combine data on consumer expenditures and other socioeconomic factors that geographic information about the areas in which people live, in order to identify consumers share common consumption patterns.

B. Marketers use clustering techniques like Nielsen’s PRIZM system to classify locations into meaningful categories.

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End-of-Chapter Support Material SUMMARY OF SPECIAL FEATURE BOXES 1.

The Tangled Web The release of several popular video games including Grand Theft Auto illustrates the concerns of some critics who argue that the games play on racial stereotypes.

2.

Net Profit At least in part because of the youthfulness of the Hispanic market, Hispanic Americans spend much more time online than non-Hispanics.

3.

CB As I See It: Jerome D. Williams, Rutgers University Multicultural consumer segments are of increasing importance to marketers as the combined buying power of African Americans, Hispanics, Asians, and American Indians exceeds $2 trillion. However, there is continuing inequality in the U.S. marketplace in terms of how these groups are treated.

4.

Marketing Opportunity The pet industry has more than $40 billion in annual revenue, more than either the toy or candy industry. Almost one-third of all U.S. households have at least one pet.

5.

Marketing Pitfall Marketers push the limited when marketing to tweens. The average age at which women begin to use beauty products is 13, and one study found that 6 to 9 year olds use lipstick or lip gloss.

6.

Marketing Pitfall Hookah pens have become a popular alternative to e-cigarettes, even though they are chemically identical. It is expected that sales of these products will pass those of conventional cigarettes.

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REVIEW QUESTIONS 13-1. What is a subculture?

Consumers’ lifestyles are affected by group memberships within the society-at-large. We call these groups subcultures, whose members share beliefs and common experiences that set them apart from others. Every consumer belongs to many subcultures. These memberships can be based on similarities in age, race or ethnic background, or place of residence.

(5 minutes, Chapter Objective 1, AACSB: Reflective Thinking) 13-2. What is the difference between a high-context and a low-context culture? What is an example of this difference?

In a high-context culture, group members tend to be tightly knit, and they are likely to infer meanings that go beyond the spoken word. Symbols and gestures, rather than words, carry much of the weight of the message. In contrast, people in a low-context culture are more literal.

(5 minutes, Chapter Objective 2, AACSB: Multicultural and Diversity Understanding) 13-3. Why is it difficult to identify consumers in terms of their ethnic subculture membership?

The United States is heterogeneous, so it is difficult to separate subcultures from mainstream society. Further, many people identify with two or more races, refusing to describe themselves as only white, black, Asian, Korean, Samoan or one of the other categories listed.

(5 minutes, Chapter Objective 2, AACSB: Multicultural and Diversity Understanding) 13-4. What is deethnicization? Give an example.

Deethnicization refers to the process whereby a product formerly associated with a specific ethnic group is detached from its roots and marketed to other subcultures. An example is bagels, which used to be associated with the Jewish subculture.

(5 minutes, Chapter Objective 3, AACSB: Multicultural and Diversity Understanding) 13-5. Why are Hispanic American consumers attractive to marketers?

The Hispanic subculture is a sleeping giant that until recently many U.S. marketers largely ignored. The growth and increasing affluence of this group has now made it impossible to overlook, and major corporations avidly court Hispanic consumers.

Marketers especially like the fact that Hispanics tend to be brand loyal. Hispanics who strongly identify with their ethnic origin are more likely to seek Hispanic vendors, to be loyal to brands used by family and friends, and to be influenced by Hispanic media. This segment is also highly concentrated geographically by country of origin, which makes them relatively easy to reach.

(15 minutes, Chapter Objective 4, AACSB: Multicultural and Diversity Understanding) 13-6. What is acculturation? How does it differ from enculturation?

Acculturation is the process of movement and adaptation to one country’s cultural environment by a person from another country. This is an important issue for marketers due to our increasingly global society. As people move from place to place, they may .

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quickly assimilate to their new homes, or they may resist this blending process and choose to insulate themselves from the mainstream culture. Although some people feel uncomfortable with the notion that marketers should explicitly take into account people’s racial and ethnic differences when they formulate their strategies, the reality is that these subcultural memberships do shape many needs and wants. Research indicates, for example, that members of minority groups find an advertising spokesperson from their own group more trustworthy, and this enhanced credibility in turn translates into more positive brand attitudes. However, marketers need to avoid the temptation to paint all members of an ethnic or racial group with the same brush; not only are these generalizations inaccurate, but they also are likely to turn off the very people a company wants to reach.

(5 minutes, Chapter Objective 1, AACSB: Multicultural and Diversity Understanding) 13-7. Who are acculturation agents? Give two examples.

The person’s contact with acculturation agents—people and institutions that teach the ways of a culture—are also crucial. Some of these agents are aligned with the culture of origin (in this case, Mexico), including family, friends, the church, local businesses, and Spanish-language media that keep the consumer in touch with her country of origin.

Other agents are associated with the culture of immigration (in this case, America) and help the consumer to learn how to navigate in the new environment. These include public schools, English-language media, and government agencies.

(10 minutes, Chapter Objective 3, AACSB: Multicultural and Diversity Understanding) 13-8. Describe the processes involved when a person assimilates into a new host culture.

Several processes come into play as immigrants adapt to their new surroundings.

Movement refers to the factors motivating people to physically uproot themselves from one location and go to another. In this case, people leave Mexico because of the scarcity of jobs and the desire to provide a good education for their children. On arrival, immigrants encounter a need for translation. This means attempting to master a set of rules for operating in the new environment, whether learning how to decipher a different currency or figuring out the social meanings of unfamiliar clothing styles. This cultural learning leads to a process of adaptation, by which people form new consumption patterns. For example, some of the Mexican women interviewed started to wear shorts and pants since settling in the United States, although this practice is frowned upon in Mexico.

During the acculturation process, many immigrants undergo assimilation, where they adopt products, habits, and values that are identified with the mainstream culture. At the same time, there is an attempt at maintenance of practices associated with the culture of origin. Immigrants stay in touch with people in their country and, like Maria, many continue to eat Spanish foods and read Spanish newspapers. Their continued identification with Mexican culture may cause resistance, as they resent the pressure to submerge their Mexican identities and take on new roles. Finally, immigrants (voluntarily or not) tend to exhibit segregation; they are likely to live and shop in places that are physically separated from mainstream Anglo consumers. These processes

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illustrate that ethnicity is a fluid concept, and the boundaries of a subculture are constantly being re-created.

(15 minutes, Chapter Objective 3, AACSB: Multicultural and Diversity Understanding) 13-9. Why are Asian Americans an attractive market segment? Why can they be difficult for marketers to reach?

Asians not only make up the fastest-growing population group, but they are generally the most affluent and best educated. Estimates put this segment’s buying power at $253 billion annually. That explains why the brokerage firm Charles Schwab now employs more than 300 people who speak Chinese, Korean, and Vietnamese at its call centers.

Despite its potential, this group is hard to market to because it actually is composed of subgroups that are culturally diverse and speak many different languages and dialects.

The term Asian refers to 20 ethnic groups, with Chinese being the largest and Filipino and Japanese second and third, respectively. Filipinos are the only Asians who predominantly speak English among themselves; most Asians prefer media in their own languages. The most frequently spoken languages among Asian Americans are Mandarin Chinese, Korean, Japanese, and Vietnamese.

(10 minutes, Chapter Objective 4, AACSB: Multicultural and Diversity Understanding 13-10. How do religious subcultures affect consumption decisions?

In some cases, dietary or dress requirements create demand products, and these items then may gain in popularity among other groups. For example, less than one-third of the 6 million consumers who buy kosher products are Jewish. Seventh-Day Adventists and Muslims have very similar dietary requirements, and other people simply believe that kosher food is of higher quality. That is why some of the nation’s largest manufacturers get involved. About two-thirds of Pepperidge Farm’s products, for example, are kosher.

In addition to food products, religious subcultures in particular may exert a significant impact on consumer variables such as personality, attitudes toward sexuality, birthrates and household formation, income, and political attitudes. Church leaders can encourage consumption, but more importantly, they can discourage it—sometimes with powerful effects.

(10 minutes, Chapter Objective 5, AACSB: Multicultural and Diversity Understanding) 13-11. What is a nuclear family, and how is it different from an extended family?

The extended family used to be the most common family unit. It consists of three generations who live together, and it often includes grandparents, aunts, uncles, and cousins. The nuclear family—a mother, a father, and one or more children largely replaced the extended family, at least in U.S. society.

(5minutes, Chapter Objective 4, AACSB: Multicultural and Diversity Understanding), 13-12. What are boomerang kids?

Children are more likely to live at home after graduating from college rather than taking their own places. Demographers call these returnees boomerang kids (you throw them out … they keep coming back). In today’s shrinking job market, many young people are .

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forced to redefine the assumption that college graduation automatically means living on their own. About 40 percent of adults between 25 and 29 are now living, or have lived recently, with their parents.

(5minutes, Chapter Objective 4, AACSB: Multicultural and Diversity Understanding), 13-13. What is the FLC, and why is it important to marketers?

Because they recognize that family needs and expenditures change over time, marketers apply the family life cycle (FLC) concept to segment households. The FLC combine trends in income and family composition with the changes these demands place on this income. As we age, our preferences and needs for products and activities tend to change.

Twenty-somethings spend less than average on most products and services because their households are small and their incomes are low. Income levels tend to rise (at least until retirement), so that people can afford more over time. Older consumers spend more per capita on luxury items such as gourmet foods and upscale home furnishings. In addition, we don’t need to repeat many purchases we make when we start out. For example, we tend to accumulate durable goods such as large appliances and replace them only as necessary. Over the years, researchers have proposed several models to describe family life-cycle stages, but with limited effect because most failed to take into account such important social trends as the changing role of women, the acceleration of alternative lifestyles, childless and delayed-child marriages, and single-parent households.

(5minutes, Chapter Objective 4, AACSB: Multicultural and Diversity Understanding), 13-14. What is an age cohort, and why is it of interest to marketers?

An age cohort consists of people of similar ages who have undergone similar experiences. They share many common memories about cultural heroes (e.g., John Wayne versus Brad Pitt, important historical events (e.g., World War II versus the 2001 terrorist attacks), and so on. Although there is no universally accepted way to divide people into age cohorts, each of us seems to have a good idea of what we mean when we refer to “my generation.”

(5 minutes, Chapter Objective 6, AACSB: Multicultural and Diversity Understanding) 13-15. How are Gen Yers different from their older brothers and sisters?

Unlike their parents or older siblings, Gen Yers tend to hold relatively traditional values and they believe in the value of fitting in rather than rebelling. Their acculturation agents (as we discussed in the previous chapter) stress teamwork—team teaching, team grading, collaborative sports, community service, service learning, and student juries. Violent crime among teenagers is down 60 to 70 percent. The use of tobacco and alcohol are at all-time lows. So is teen pregnancy. Five out of ten echo boomers say they trust the government, and virtually all of them trust Mom and Dad. (5 minutes, Chapter Objective 7, AACSB: Multicultural and Diversity Understanding) 13-16. What are tweens, and why are so many marketers interested in them?

Marketers use the term tweens to describe the 27 million children aged 8 to 14 who spend $14 billion a year on clothes, CDs, movies, and other “feel good” products.

Tweens are “between” childhood and adolescence and they exhibit characteristics of

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both age groups. As one tween commented, “When we’re alone we get weird and crazy and still act like kids. But in public we act cool, like teenagers.”

(5 minutes, Chapter Objective 7, AACSB: Multicultural and Diversity Understanding) 13-17. What are some industries that stand to benefit most from the increasing affluence and vitality of the senior market?

Travel and hospitality, car sales and rentals, apparel, banking, and others.

(3 minutes, Chapter Objective 9, AACSB: Multicultural and Diversity Understanding)

CONSUMER BEHAVIOR CHALLENGE DISCUSS 13-18. Geodemographic techniques assume that people who live in the same neighborhood have other things in common as well. Why do they make this assumption, and how accurate is it?

Geodemography refers to analytical techniques that combine data on consumer expenditures and other socioeconomic factors with geographic information about the areas in which people live to identify consumers who share common consumption patterns. Researchers base this approach on the common assumption that “birds of a feather flock together”—people who have similar needs and tastes also tend to live near one another, so it should be possible to locate “pockets” of like-minded people whom marketers can reach more economically by direct mail and other methods. Residents of different clusters display marked differences in their consumption of products. One popular clustering technique is Nielsen’s PRIZM system. This system classifies every U.S. Zip Code into 1 of 66 categories, ranging from the most affluent “Blue-Blood Estates” to the least well-off “Public Assistance.” Although consumers in two different clusters may purchase a product at an equivalent rate, these similarities end when we take their other purchases into account. These differences highlight the importance of going beyond simple product-category purchase data and demographics to really understand a market.

(10 minutes, Chapter Objective 9, AACSB: Multicultural and Diversity Understanding) 13-19. Should members of a religious group adapt marketing techniques that manufacturers customarily use to increase market share for their secular products? Why or why not?

Most students will probably say that some level of marketing used by churches and religious groups is fine. After all, without any kind of promotion, how are the members of an organization supposed to be informed about the services that a church offers?

Worshippers and potential worshippers have needs and desires, just like any consumers in any consumer context. So, it seems fitting that churches attempt to meet the needs of the members of their congregation. However, some students will probably raise the issue that there is a line in marketing something like religion. A Starbucks outlet in a church?

It has happened.

(10 minutes, Chapter Objective 5, AACSB: Multicultural and Diversity Understanding) 13-20. Several years ago R. J. Reynolds announced plans to test market a menthol cigarette called Uptown specifically to black consumers. According to the company, about 70 .

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percent of black smokers prefer menthol, more than twice the average rate. After market research showed that blacks tend to open cigarette packs from the bottom, the company decided to pack Uptowns with the filters facing down. Reynolds cancelled its plans after private health groups and government officials protested. Does a company have the right to exploit a subculture’s special characteristics, especially to increase sales of a harmful product such as cigarettes? What about the argument that virtually every business that follows the marketing concept designs a product to meet the needs and tastes of a preselected segment?

The instructor should anticipate a high level of interest and involvement with the issues represented in the RJR case. As in the case of targeting gays and the handicapped, there is likely to be a difference of opinion. It would be particularly interesting to hear the perspectives of both white and black students on this specific case. Generally, students should be able to think about and critically examine the issues regarding segmentation (on any basis) in order to meet the unique needs and wants of consumers and to increase overall sales of the product.

(20 minutes, Chapter Objective 4, AACSB: Multicultural and Diversity Understanding and Ethical Understanding and Reasoning Abilities) 13-21. Describe the progressive learning model and discuss why this perspective is important when marketing to subcultures.

The progressive learning model states that people gradually learn a new culture as they increasingly are exposed to it. As stated in the text, this model leads us to expect the consumer behavior of Hispanic Americans, for example, to be a mixture of practices taken from their original culture (e.g., Spanish, Mexican, etc.) and those of the new host culture (United States). Students should focus their discussions on the implications of this model for marketing strategy.

(10 minutes, Chapter Objective 3, AACSB: Multicultural and Diversity Understanding 13-22. Discuss the pros and cons of the voluntarily childless movement.

The percentage of women of childbearing age who define themselves as voluntarily childless is on the rise. Twenty percent of women ages 40 to 44 have no children, double the level of 30 years ago. Childless couples are an attractive market segment for some companies (but obviously not for others, such as Gerber Baby Food). So-called DINKS (double income, no kids) couples are better educated on average than are twoincome couples with children. According to the U.S. Census Bureau, 30 percent of childless couples consist of two college graduates, compared with 17 percent of those with kids. Many childless couples feel snubbed by a child-oriented society. In recent years they formed networking organizations such as Childfree by Choice to support this lifestyle decision.

(5 minutes, Chapter Objective 4, AACSB: Multicultural and Diversity Understanding) 13-23. When they identify and target newly divorced couples, do you think marketers exploit these couples’ situations? Are there instances in which you think marketers may actually be helpful to them? Support your answers with examples.

Responses will vary by student but should address the family life cycle. As people move through these life stages, we observe significant changes in expenditures in leisure, food,

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durables, and services, even after we adjust the figures to reflect changes in income. We simply attribute some of these changes to variations in functional needs, whereas others reflect deeper motivations as we transition from one role to another. For example, researchers find that new mothers undergo profound changes in self-concept during pregnancy and after delivery; these changes influence the types of products they consume to reflect their new identities. The same would be true of those who divorce.

(5 minutes, Chapter Objective 4, AACSB: Multicultural and Diversity Understanding) 13-24. Born-again Christian groups have been instrumental in organizing boycotts of products advertised on shows they find objectionable, especially those that they feel undermine family values. Church leaders can encourage consumption but, more importantly, they can also discourage it—sometimes with powerful effects. The Disney Corporation discovered how effective these movements can be when the Southern Baptist Convention voted to persuade all its members to boycott Disney’s operations. The church instituted its anti-Mickey rebellion to protest the “Gay Days” at the theme parks and advocated a view that Disney had a radical homosexual agenda that it promoted through its broadcasts. Soon other organizations joined the cause, including the American Family Association, the General Council of the Assemblies of God, the Congregational Holiness Church, the Catholic League for Religious and Civil Rights, and the Free Will Baptists.

The fallout from the boycott was significant; Disney was forced to lay off 4,000 employees. Do religious groups have a right or a responsibility to dictate what advertising a network should carry?

As with many of the previous exercises, the answer to this question is a matter of individual opinion. As always, the instructor should encourage students to consider both sides of the argument and develop examples or cases to defend both positions, regardless of their personal opinions.

(10 minutes, Chapter Objective 5, AACSB: Multicultural and Diversity Understanding and Ethical Understanding and Reasoning Abilities) 13-25. Religious symbolism appears in advertising, even though some people object to this practice. For example, a French Volkswagen ad for the relaunch of the Golf model showed a modern version of the Last Supper with the tag line, “Let us rejoice, my friends, for a new Golf has been born.” A group of clergy in France sued the company and the ad had to be removed from 10,000 billboards. One of the bishops involved in the suit said, “Advertising experts have told us that ads aim for the sacred in order to shock, because using sex does not work anymore.” Do you agree? Should religion be used to market products? Do you find this strategy effective or offensive? When and where is this appropriate, if at all?

In answering this question, students may come up with numerous related incidents to illustrate the impact of highlighting religion in popular culture and advertising. One interesting approach to this issue (and related issues of offenses based on any other group or subculture) might be to suggest that there should be no censure of such material at all; that in a society where free speech is a core value, such material should not need to be censured or regulated. If indeed companies cross the line, then the market should take care of itself by a decrease in demand for products produced by such companies.

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(15 minutes, Chapter Objective 5, AACSB: Multicultural and Diversity Understanding and Ethical Understanding and Reasoning Abilities) 13-26. The chapter describes efforts by some mainstream marketers to appeal to Muslim consumers by making halal products. Given the political attitudes some Americans hold regarding Muslims, is this a dangerous strategy or a courageous one? What are the potential pitfalls of this approach and how would you handle it?

Students are likely to have different opinions about whether it is dangerous or courageous, but they should recognize that it is important for marketers that claim to be making halal products to uphold the appropriate standards. Mainstream adoption of the products depends on what consumers perceive halal to mean. The fact that the number of Muslims is growing worldwide should also be considered in the students’ responses.

(10 minutes, Chapter Objective 5, AACSB: Multicultural and Diversity Understanding and Ethical Understanding and Reasoning Abilities) 13-27. This chapter discussed the dramatic changes in family structure today. The reality is that many other types of families continue to grow rapidly as well. Indeed, some experts argue that as traditional family living arrangements wane, we place even greater emphasis on siblings, close friends, and other relatives who provide companionship and social support. Some people join intentional families, groups of unrelated people who meet regularly for meals and who spend holidays together. Indeed, for some the act of meeting together to consume homemade food plays a central role in defining family: It is a symbolic way to separate a family unit from other social groups by allowing the cook(s) to personalize the meal and express affection via the effort that went into preparing the feast. What evidence do you find of the impact of nontraditional family structures? How will these alternative lifestyles change the way we think about consumer behavior?

Responses will vary by student. The response should recognize the concept of extended family and how the notion of the traditional family unit continues to evolve. The response may consider divorce, voluntary childlessness, and family life cycle.

(10 minutes, Chapter Objective 4, AACSB: Multicultural and Diversity) 13-28. This chapter describes members of Gen Y as much more traditional and team oriented than their older brothers and sisters. Do you agree?

Given that the traditional college students of today fall into the Gen Y category, this should be an interesting discussion. Do students want to see themselves as “traditional”?

If this is a good thing, then they are likely to agree. However, even if this is true, it will be interesting to see if students will want to “’fess up.”

(15 minutes, Chapter Objective 7, AACSB: Multicultural and Diversity Understanding) 13-29. Many parents worry about the time their kids spend online, but this activity may actually be good for them. A study by the MacArthur Foundation claims that surfers gain valuable skills to prepare them for the future. The study also finds that concerns about online predators are overblown; most kids socialize with friends they know from other situations like school or camp. What is your take on this? Are concerns about excessive Web surfing unjustified?

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Students will likely feel that the concern is overblown. Regardless, the use of the Internet for young people is important for marketers targeting this group.

(10 minutes, Chapter Objective 7, AACSB: Multicultural and Diversity Understanding) 13-30. What are some of the positives and negatives of targeting college students? Identify some specific marketing strategies that you feel have been either successful or unsuccessful at appealing to this segment. What characteristics distinguish the successes from the failures?

According to material found in the chapter, advertisers spend approximately $100 million per year to try to influence this $20 billion market. As noted, the average college student has approximately $200 in discretionary funds each month beyond their basic needs. The marketers would certainly like to capture those dollars. Advantages of pursuing this market include the facts that they have money to spend and they are willing to try new products. Many, however, are inexperienced buyers, are hard to reach through traditional media, and tend to be specialized in the way they receive their information.

As noted in the chapter, one unique way of reaching the college student is the use of sampler boxes and wall media. Students should be challenged to think of other media forms and strategies that might prove to be successful with their market. This question usually results in a lively discussion.

(15 minutes, Chapter Objective 7, AACSB: Multicultural and Diversity Understanding) 13-31. Is it practical to assume that people age 55 and older constitute one large consumer market? How can marketers segment this age subculture? What are some important variables to keep in mind when we tailor marketing messages to this age group?

Marketers have become convinced that the 55 and older age segment is diverse, with a minimum of four sub segments represented by the 55–64, 65–74, 75–84, and 85 and older categories. Clearly, with people living longer lives, there are going to be considerable differences in the health and general welfare of these individuals. Many will have more income relative to expenditures than at any other time in their lives, affording opportunities for full and rich lifestyles. Ultimately, the most influential characteristic of older adult consumers is their perceived age, or how old they feel.

(15 minutes, Chapter Objective 9, AACSB: Multicultural and Diversity Understanding)

APPLY 13-32. Locate current examples of marketing stimuli that depend on an ethnic or religious stereotype to communicate a message. How effective are these appeals?

Students are likely to identify beer companies for their practice of ethnic segmentation in advertising. To target Hispanic Americans or African Americans, for example, advertisers are employing well-known Hispanic American and African American personalities (e.g., movie stars, professional athletes, etc.) to promote their products. It is likely that these appeals are effective when the consumer feels a sense of identity or affinity with the spokesperson.

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(25 minutes, Chapter Objectives 4 and 5, AACSB: Multicultural and Diversity Understanding 13-33. To understand the power of ethnic stereotypes, conduct your own poll. For a set of ethnic groups, ask people to anonymously provide attributes (including personality traits and products) most likely to characterize each group using the technique of free association.

How much agreement do you obtain across respondents? To what extent do the characteristics derive from or reflect negative stereotypes? Compare the associations for an ethnic group between actual members of that group and nonmembers.

Students should be encouraged to conduct their own research for this exercise and many others. This may be a good time for the instructor to emphasize the importance and value of market and consumer research efforts.

(45 minutes, Chapter Objective 4, AACSB: Multicultural and Diversity Understanding and Analytic Skills) 13-34. Observe the interactions between parents and children in the cereal section of a local grocery store (remember to take earplugs with you). Prepare a report on the number of children who expressed preferences, how they expressed their preferences, and how parents responded, including the number who purchased the child’s choice.

The report prepared by students will differ based on their experience in data collection.

(45 minutes, Chapter Objective 1, AACSB: Multicultural and Diversity Understanding and Analytic Skills) 13-35. Select a product category and, using the life-cycle stages this chapter describes, list the variables likely to affect a purchase decision for the product by consumers in each stage of the cycle.

A life-cycle approach to the study of the family assumes that pivotal events alter role relationships and trigger new stages of life that alter our priorities and brand loyalties.

Students will have different responses based on the examples chosen.

(10 minutes, Chapter Objective 4, AACSB: Analytic Skills) 13-36. Consider three important changes in the modern family structure. For each, find an example of a marketer who seems to be conscious of this change in its product communications, retailing innovations, or other aspects of the marketing mix. If possible, also try to find examples of marketers who have failed to keep up with these developments.

Over the years, researchers have proposed several models to describe family life-cycle stages, but with limited effect because most failed to take into account such important social trends as the changing role of women, the acceleration of alternative lifestyles, childless and delayed-child marriages, and single-parent households. There are four variables that address these changes: age, marital status, the presence or absence of children in the home, and the age of the children, if present. The examples students choose will vary, and will their indication of how marketers keep up, or fail to keep up, with these developments.

(10 minutes, Chapter Objective 4, AACSB: Reflective Thinking)

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13-37. One study asked young people in the United States and the Netherlands to write essays about what is “cool” and “uncool” and to create visual collages that represent what it means to be cool. The researchers found that cool has multiple meanings to kids in these two cultures. Some of the common dimensions include having charisma, being in control, and being a bit aloof. Many of the respondents also agreed that being cool is a moving target: The harder you try to be cool, the more uncool you are! Here are some of their actual responses: • “Cool means being relaxed, to nonchalantly be the boss of every situation, and to radiate that” (Dutch female) • “Cool is the perception from others that you’ve got ‘something’ which is macho, trendy, hip, etc.” (Dutch male) • “Cool has something standoffish and at the same time, attractive” (Dutch male) “Being different, but not too different. Doing your own thing, and standing out, without looking desperate while you’re doing it” (American male) • “When you are sitting on a terrace in summer, you see those machos walk by, you know, with their mobile [phones] and their sunglasses. I always think, ‘Oh please, come back to earth!’ These guys only want to impress. That is just so uncool” (Dutch female) • “When a person thinks he is cool, he is absolutely uncool” (Dutch female) • “To be cool we have to make sure we measure up to it. We have to create an identity for ourselves that mirrors what we see in magazines, on TV, and with what we hear on our stereos” (American male) Replicate this study in your area. Recruit a group of teenagers to construct individual collages that represent what they feel is “cool.” Analyze their choices—what patterns do you see?

Responses will vary by students.

(1 hour, Chapter Objective 1, AACSB: Reflective Thinking) 13-38. One pair of researchers took an in-depth look at how 13 and 14 year old integrate the computer into their lives, and how they use it to express their cyber identities. These tweens have limited mobility in real life (too young to drive), so they use the computer to transport themselves to other places and modes of being. The researchers explored the metaphors these kids use when they think about their computers. For some, the PC is a “fraternity house” where they can socialize; it also can be a “carnival;” where they play games and an “external brain” that helps with homework. Interview some tweens about their online behaviors. How do they think about their digital devices? What role do they play in their lives?

(1 hour, Chapter Objective 1, AACSB: Reflective Thinking)

13-39. Locate one or more consumers (perhaps family members) who have emigrated from another country. Interview them about how they adapted to their host culture. In particular, what changes did they make in their consumption practices over time?

The class will be able to discuss this question in more depth if someone who personally knows an immigrant conducts this interview.

(30 minutes, Chapter Objective 2, AACSB: Multicultural and Diversity Understanding and Ethical Understanding and Reasoning Abilities

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13-40. Find good and bad examples of advertising targeted to older consumers. To what degree does advertising stereotype the elderly? What elements of ads or other promotions appear to determine their effectiveness in reaching and persuading this group?

The instructor can use information about sub segments in the older generation from question 20 in the discussion section. Consider that this question will be an interesting exercise for students and is likely to draw their attention to issues they have not carefully considered to date. Encourage them to find examples of what they view as both positive and negative treatment of the elderly in the media. They can also interview senior citizens to get their view.

(30 minutes, Chapter Objective 9, AACSB: Multicultural and Diversity Understanding) 13-41. Interview some retired people. How are they reconstructing their identities? What opportunities do their desires present for marketers?

People can reconstruct identity by focusing on revitalizing a previous identity (revived) or by pursuing a new one (emergent). In either case, marketers can provide the products and brands that will help “build” and reflect the identity in question.

(90 minutes, Chapter Objective 9, AACSB: Multicultural and Diversity Understanding

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CASE STUDY TEACHING NOTES Chapter 13 Case Study: Wells Fargo Banks on Embracing Same-Sex Marriage Summary of Case With the U.S. Supreme Court decision that upheld the constitutional right to same-sex marriage in June 2015, the cultural landscape changed dramatically. Although only 13 states had continued to oppose same-sex marriage, the decision was a significant moment for the LGBT community and for many other citizens who saw the issue as national confirmation of a fundamental civil right for a sizable portion of the population. Regardless of where individuals stand on this issue, many companies and brands are realizing that they must pay attention and respond strategically to this increasingly visible subcultural group.

Suggested Answers for Discussion Questions CS 13-1.

Some criticize the actions of companies that try to align themselves with the values and views of subcultures as simply moves to make more money rather than attempting to make a social statement. What is your evaluation of this criticism?

Using subcultures is just another form of target marketing (10 minutes, Chapter Objective 5, AACSB: Multicultural and Diversity Understanding) CS 13-2.

Is there a point at which a subculture becomes so “mainstream” that unique marketing approaches are no longer appropriate or necessary? Discuss.

Students answers will vary on this, some students will feel that subculture is no longer a viable segmentation variable, while other students will think subculture will become more important as the U.S. continues to become more diverse.

(10 minutes, Chapter Objective 5, AACSB: Multicultural and Diversity Understanding)

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Additional Support Material STUDENT PROJECTS Individual Projects 1.

Ask students to bring pictures of businesspersons, celebrities, athletes, etc. who, according to them, may have transcended ethnic or racial lines in terms of their appeal.

Have students justify their selections.

Student selections will vary. Beyonce, Jennifer Lopez, Derek Jeter, Michael Jordan, and President Obama may be among the selections. Ask students to provide evidence for the idea that the people they selected transcend ethnic or racial lines.

(10 minutes, Chapter Objective 3, AACSB: Multicultural and Diversity Understanding) 2.

Go through both mainstream and ethnic magazines and look for ads that might be culturally/religiously insensitive. Justify why the students think so.

Again, examples are likely to vary, but look for students to provide justification for their selections.

(30 minutes, Chapter Objective 3, AACSB: Multicultural and Diversity Understanding) 3.

Bring some magazines to class that are primarily targeted toward either African American or Caucasian audiences. Ask the students to look through each type of magazine and select advertisements that are similar, except for the models. Are there any other differences between the ads (e.g., language, social situation, etc.)? Explain.

Students’ selections will vary. Students may notice changes to the copy and the setting, in addition to the differences in the models.

(20-25 minutes, Chapter Objective 4, AACSB: Multicultural and Diversity Understanding) 4.

Have individual students bring to class print ads aimed at a particular subculture and show how the ads attempt to address the group. Do the students think they are effective?

Students will likely select racial or ethnic subcultures, so remind them they can select religious, age, lifestyle, etc. subcultures.

(30 minutes, Chapter Objectives 3-9, AACSB: Multicultural and Diversity Understanding) 5.

Assign students to interview a member of a subculture other than his or her own (e.g., African American, Hispanic American, Asian American, white, Catholic, Mormon, Jewish, etc.) to discover what types of products or services are purchased because of membership in this particular group. What are some marketing implications?

Students are likely to find differences in food eaten and perhaps in the way holidays are (or are not) celebrated. Look for students to reflect on the marketing implications.

(45 minutes, Chapter Objective 4 or 5, AACSB: Multicultural and Diversity Understanding) 6.

Have a student visit a toy store to observe the various types of toys that are for sale to ethnic subcultures. Have them give a report on the range of toys available and specify the intended racial or ethnic markets. .

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The selections will likely vary based on demand in the market at your location. In some cases, a product like Dora the Explorer, who is Hispanic, transcends ethnic boundaries.

(20 minutes, Chapter Objective 3, AACSB: Multicultural and Diversity Understanding) 7.

Send students to a retail store of their choice and have them comment on ethnic symbols that may or may not be used in marketing the store’s products. For example, are mannequins racially diverse? Should retail stores follow a policy of appealing to ethnic groups with symbols? Explain.

The diversity of symbols like mannequins and the opinions of students are likely to vary.

Mannequins are used to create need recognition at the point of sale; ask students for their opinions regarding whether the principle of similarity extends to mannequins.

(30 minutes, Chapter Objective 3, AACSB: Multicultural and Diversity Understanding) 8.

Assign students to talk to a religious professional (e.g., minister or priest) about his views toward marketing to consumers based on religious preferences. What is his opinion?

Does he market his religion? If so, how? Comment on whether you agree with this policy or not.

The responses from the religious professionals and the students are likely to vary. Look for students to support their opinions.

(30 minutes, Chapter Objective 5, AACSB: Multicultural and Diversity Understanding and Ethical Understanding and Reasoning Abilities) 9.

Given that college students are tech-savvy, they can research and catalog some of the viral marketing efforts implemented by marketers. Are these effective in reaching them?

If yes, why and if not, why? What can be done to improve the strategies?

The number of viral marketing efforts targeting college students is large, so you may want to narrow this task to five or six from the past three years. Look for students to provide their opinions, recommendations, and support for both.

(20 minutes, Chapter Objective 7, AACSB: Multicultural and Diversity Understanding) 10.

Have students collect ads that seem to stereotype some of the age groups discussed in the chapter. Are these effective or do they turn off the intended audience?

Students may have the easiest time finding ads that reflect stereotypes of teens and older adults.

(45 minutes, Chapter Objectives 6-9, AACSB: Multicultural and Diversity Understanding) 11.

Choose a basic product that is used by people of all age groups (soft drink, toothpaste, automobile, etc.). Identify different brands of this product that target different age groups (Gen Yers, Gen Xers, boomers, seniors). Identify key differences in the product itself as well, as in how these brands are promoted, priced, and distributed.

Look for students to identify the characteristics of the age cohort in their description/ evaluation of the 4 P’s used for the product marketing to each group.

(20 minutes, Chapter Objective 6, AACSB: Multicultural and Diversity Understanding)

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12.

Have students contact their parents or grandparents. What is nostalgic to them? How have you seen this used in advertising? What products have a nostalgic appeal for them? Do they say that nostalgic appeals work on them? Have them give examples.

What is nostalgic will vary by individual. Often times, examples relate to music used in advertisements. Some companies will revive earlier versions of their products to trigger nostalgic feelings.

(25 minutes, Chapter Objective 9, AACSB: Multicultural and Diversity Understanding) 13.

Ask students to use a product example (i.e., food products, automobiles) to illustrate how the marketer might promote to youths to take advantage of the influence they exert on family purchase decisions.

Food products that appeal to children are placed at eye level in the grocery store.

Further, food companies often use licensing deals to put children’s favorite characters on packaging and use the characters in communications. In the past, some automobile companies used cartoon characters. Now, automobile companies offer expanded features for kids (e.g. DVD players).

(15 minutes, Chapter Objective 7, AACSB: Reflective Thinking) Group Projects 1.

Assign student groups to visit two local supermarkets to find out if either has segmented their market based on the subculture or ethnic background of their customers. How many subcultures does each supermarket recognize? Have the students talk to the store manager if possible.

Many supermarkets have an Asian section, a Hispanic section, and/or an International section. Some have an organic section, which appeals to a lifestyle subculture. Some have a section of kosher goods. The availability of different sections depends on the needs of the market and the supermarket’s flexibility to serve the market.

(60 minutes, Chapter Objective 3, AACSB: Multicultural and Diversity Understanding) 2.

Have groups prepare a list of holidays that are oriented toward a particular subculture (e.g., Cinco de Mayo, Martin Luther King’s birthday, Passover, Easter, St. Patrick’s Day, etc.). Now have them ask a few people if they celebrate or commemorate these holidays.

What are the marketing implications? (Make sure that some of the people interviewed belong to the subcultures chosen.)

With the exception of Martin Luther King’s birthday, which may prompt travel and retail promotional sales but otherwise is less associated with specific consumption behaviors than the other holidays on the list, respondents should be able to talk about specific products associated with the holidays.

(20 minutes, Chapter Objective 3, AACSB: Multicultural and Diversity Understanding) 3.

Have student groups go to a senior citizen gathering (this can be any kind of gathering) and interview three men and three women about nostalgia. What were they most nostalgic about? How could this be used in marketing to capture their attention? What did you learn from this experience?

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As with individual project 12, the things that make the respondents nostalgic are likely to vary. Students should write up the implications of the insights gained from the interviews.

(90 minutes, Chapter Objective 9, AACSB: Multicultural and Diversity Understanding) 4.

Have student groups interview a working and a nonworking woman who have children in grade school. Have them write down the menu that they served for the previous evening meal. Ask them about the specific brands that they used to prepare the meal (e.g., bread, beverage, entree, vegetables, fruits, dessert, etc.). Have them then collate this information to discover any similarities and differences.

Students may find a heavier reliance on convenience foods in the household with the working woman. However, students should consider differences that might occur if the woman has outside help (e.g. a cook, a nanny that helps prepare meals, etc.), there is a non-working man in the household, the woman’s schedule allows flexibility to prepare dinner, etc.

(40 minutes, Chapter Objective 1, AACSB: Multicultural and Diversity Understanding) Have groups find good and bad examples of advertising targeted toward “seasoned citizens.” To what extent do these ads stereotype the elderly? Do you think that the elderly would like or resent the implications? Are there any elements in these ads that make them effective in reaching and persuading the elderly? Explain.

The elderly is a growing age group and has different subcultures within the group. Some marketers are responding to that in their communications. For example, the AARP is showing ads that make the distinction between the sub segments in its target audience.

Some ads that portray the elderly in a less positive light may be targeted to younger age cohorts.

(60 minutes, Chapter Objective 9, AACSB: Multicultural and Diversity Understanding) 5.

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eLAB Individual Assignments 1.

Go to the following: www.bet.com, www.jetmag.com, www.ebony.com, and www.vibe.com. What do these African American interest websites have in common?

How do they use desire for ethnicity to their advantage? Would members of other races be attracted to these sites? If so, why? State your general impressions of these sites. Do you think they will succeed in the end? Explain.

Bet.com has separate sections for celebrities, music, news and shows. JetMag.com has sections called buzz, beauty, love, connect, perspective, style, music and video and appears to be more targeted toward women. Sports, news, and money are below the fold; the emphasis is on entertainment. Ebony.com also seems targeted toward women. It has sections called music & culture, entertainment, style, lifestyle, wellness, and politics.

Finally, vibe.com is just about hip-hop music. It seems most likely to attract members of other races who are interested in hip-hop music. Johnson Publishing Group was planning to discontinue the publication of Jet and Ebony because of falling circulation and ad revenue. Under new leadership, with outsourced circulation and with JPMorgan Chase as a new equity stakeholder in 2011, the magazines numbers were improving.

However, like many magazines, they have to compete with communications on the web, where bloggers are talking about causes, politics, popular culture, etc. and presenting opinions free and 24/7. You may want to encourage students to visit clutchmagonline.com and/or some of the blogs that appeal to the African American subculture: racialicious.com, whataboutourdaughters.com, womanist-musings.com, http://www.auntjemimasrevenge.blogspot.com/, colorofchange.org, etc.

(30 minutes, Chapter Objective 4, AACSB: Multicultural and Diversity Understanding) 2.

Go to www.catholic.org, www.lds.org, www.scientology.org, and www.baptist.org.

Each of these sites expresses thoughts about religion and religious freedom. What techniques do the sites use to stimulate their audiences to follow their messages and commit to participation? How can marketers use religious websites to their advantage? Is there a potential conflict of interest or ethical dilemma in using religious websites for commercial purposes? Explain.

The websites use different tactics to engage consumers. For example, Scientology.org has an ad with music on its home page. Baptist.org, on the other hand, offers a lot of information. Often, the commerce aspects of the websites are related to charity work or humanitarian efforts. Still, students may have differences of opinion about the ethics of the commerce offerings.

(30 minutes, Chapter Objective 5, AACSB: Multicultural and Diversity Understanding) 3.

Go to www.margaritaville.com, www.fblegacy.com, and www.anime.com. What techniques learned in the chapter is used by these websites to attract their audiences?

What evidence of ethnicity do you observe? Is there anything “cultish” about the websites? If so, is that bad? Explain. How could these sites attract larger audiences?

Margaritaville.com is related to the case for this chapter about Parrot Heads. It provides a destination for individuals who are interested in Jimmy Buffett and related .

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merchandise. Fblegacy.com used to be fubu.com, which stood for “for us, by us,” and was aimed at the African American subculture. Anime.com appeals to anime fans.

Students will differ in their opinions about whether the websites are cultish and, if so, whether that is good or bad.

(20 minutes, Chapter Objective 3, AACSB: Multicultural and Diversity Understanding) 4.

Go to www.alloy.com and www.teensplatform.com. These are portals geared toward teens. How do these sites differ from Yahoo or Google for information search, ecommerce, and the presentation of other information?

Alloy.com targets teens with different types of information, with an emphasis on popular culture and fashion. Teensplatform.com allows users to generate their own content. The following CNN site did an analysis of teen websites and their effectiveness: archives.cnn.com/2000/TECH/computing/10/18/teen.portals.idg/index.html.

(15 minutes, Chapter Objective 7, AACSB: Multicultural and Diversity Understanding) 5.

Go to www.mtv.com. MTV has been around for a long time. Did you watch it when you were a teen? How has it changed? What new strategies is the organization using to reach its target market of today? Where will the organization be heading in the future? How could it keep its customers and viewers from “growing up” and leaving it as a source of entertainment and information? Plot a strategy that might help with this.

MTV has made changes throughout its history to appeal to the next generation of teens, with varying success. Students will likely have specific ideas to keep MTV content relevant to its fickle target audience. Look for them to tie it back to the chapter’s discussion of teens and what is cool.

(20 minutes, Chapter Objective 7, AACSB: Multicultural and Diversity Understanding) 6.

Go to www.seventeen.com/cosmogirl and www.cosmopolitan.com. How are these two sites different? What are their two target markets? What messages and values are being transmitted by the two websites? How can age and gender be combined by marketers to ensure success? Find two illustrations on the two websites to illustrate your thoughts or feelings.

The main difference between the two websites is the age groups they target. The content and format at cosmopolitan.com are designed to appeal to an older audience of women than the content and format at Cosmo girl, which is aggregated with the sites from Seventeen and Teen magazines.

(20 minutes, Chapter Objective 7, AACSB: Reflective Thinking and Multicultural and Diversity Understanding)

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Group Assignments 1.

Have your group explore www.starwars.com. How does this site make appeals to its selected audience? What are the strongest features of the website? Write a brief marketing plan for the website to attract more African American, Hispanic American, and Asian American visitors. Predict the success of your marketing planning effort.

Look for students to understand the characteristics, needs and wants of the three groups in their proposed strategies.

(20 minutes, Chapter Objective 4, AACSB: Multicultural and Diversity Understanding) 2.

Go to www.bratz.com. Have your group analyze how this popular toy site attempts to broaden its base to various ethnic groups. After analyzing the website, write a brief summary plan that demonstrates your group’s ideas for broadening the ethnic appeal of the website.

Bratz dolls gained popularity in part because of their diverse looks and urban, hip style.

Student ideas for broadening the ethnic appeal may include new characters, complete with “lifestyle profiles” that reflect the subculture, and additional language choices.

(30 minutes, Chapter Objective 3, AACSB: Multicultural and Diversity Understanding) Visit www.census.gov and update the profile of various ethnic groups in the U.S. – how many in the population, percentages, age categories, occupations, where they live, etc.

You may want to narrow down this task to specific information and/or specific markets.

You may also want to ask students to consider how the changes are likely to affect consumer behavior.

(15 minutes, Chapter Objective 3, AACSB: Multicultural and Diversity Understanding) 3.

4.

Visit www.aarp.com and determine the issues of the senior citizen segment. Are there any to which marketers need to pay attention? Determine how marketers can address them.

The AARP website attempts to keep up with the issues that are most important at any given point in time, so the issues vary. However, political discussions about Social Security benefits and health care, lifestyle issues such as fitness, blood pressure control and weight loss, and information about personal finance tend to be among the top headlines. These may be areas where senior citizens create a demand for services.

(15 minutes, Chapter Objective 9, AACSB: Multicultural and Diversity Understanding)

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CHAPTER 14: CULTURE CHAPTER OBJECTIVES When students finish this chapter they should understand why: 1. A culture is a society’s personality.

2. We distinguish between high culture and low culture.

3. Myths are stories that express a culture’s values, and in modern times marketing messages convey these values to members of the culture.

4. Many of our consumption activities—including holiday observances, grooming, and giftgiving—relate to rituals.

5. We describe products as either sacred or profane, and it’s not unusual for some products to move back and forth between the two categories.

6. New products, services and ideas spread through a population over time. Different types of people are more or less likely to adopt them during this diffusion process.

7. Many people and organizations play a role in the fashion system that creates and communicates symbolic meaning to consumers.

8. Fashion follows cycles and reflects cultural dynamics.

9. Western (and particularly U.S.) culture has a huge impact around the world, although people in other countries don’t necessarily ascribe the same meanings to products as we do.

10. Products that succeed in one culture may fail in another if marketers fail to understand the differences among consumers in each place.

CHAPTER SUMMARY A culture is a society’s personality.

A society’s culture includes its values, ethics, and the material objects its members produce. It is the accumulation of shared meanings and traditions among members of a society. We describe a culture in terms of ecology (the way people adapt to their habitat), its social structure, and its ideology (including moral and aesthetic principles).

We distinguish between high culture and low culture.

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Social scientists distinguish between high (or elite) forms and low (or popular) forms of culture.

Products of popular culture tend to follow a cultural formula and contain predictable components. However, these distinctions blur in modern society as marketers increasingly incorporate imagery from “high art” to sell everyday products.

Myths are stories that express a culture’s values, and in modern times marketing messages convey these values to members of the culture.

Myths are stories with symbolic elements that express the shared ideals of a culture. Many myths involve a binary opposition, defining values in terms of what they are and what they are not (e.g., nature versus technology). Advertising, movies, and other media transmit modern myths.

Many of our consumption activities—including holiday observances, grooming, and gift-giving— relate to rituals.

A ritual is a set of multiple, symbolic behaviors that occur in a fixed sequence and that we repeat periodically. Ritual is related to many consumption activities that occur in popular culture. These include holiday observances, gift-giving, and grooming. A rite of passage is a special kind of ritual that marks the transition from one role to another. These passages typically entail the need to acquire ritual artifacts to facilitate the transition. Modern rites of passage include graduations, fraternity initiations, weddings, debutante balls, and funerals.

We describe products as either sacred or profane, and it’s not unusual for some products to move back and forth between the two categories.

We divide consumer activities into sacred and profane domains. Sacred phenomena are “set apart” from everyday activities or products. Sacralization occurs when we set apart everyday people, events, or objects from the ordinary. Objectification occurs when we ascribe sacred qualities to products or items that sacred people once owned. Desacralization occurs when formerly sacred objects or activities become part of the everyday, as when companies reproduce “one-of-a-kind” works of art in large quantities.

New products, services, and ideas spread through a population over time. Different types of people are more or less likely to adopt them during this diffusion process.

Diffusion of innovations refers to the process whereby a new product, service, or idea spreads through a population. Innovators and early adopters are quick to adopt new products, and laggards are very slow. A consumer’s decision to adopt a new product depends of his or her personal characteristics as well as on characteristics of the innovation itself. We are more likely to adopt a new product if it demands relatively little behavioral change, is easy to understand, and provides a relative advantage compared to existing products.

Many people and organizations play a role in the fashion system that creates and communicates symbolic meanings to consumers.

The fashion system includes everyone involved in creating and transferring symbolic meanings.

Many different products express common cultural categories (e.g., gender distinctions). Many people tend to adopt a new style simultaneously in a process of collective selection. According to meme theory, ideas spread through a population in a geometric progression much as a virus infects many people until it reaches epidemic proportions. Other perspectives on motivations for adopting new styles include psychological, economic, and sociological models of fashion.

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Fashion follows cycles and reflects cultural dynamics.

The styles prevalent in a culture at any point in time reflect underlying political and social conditions. We term the set of agents responsible for creating stylistic alternatives a culture production system. Factors such as the types of people involved in this system and the amount of competition by alternative product forms influence the choices that eventually make their way to the marketplace for consideration by end consumers. Fashion follows cycles that resemble the product life cycle. We distinguish the two extremes of fashion adoption, classics and fads, in terms of the length of this cycle.

Western (and particularly U.S.) culture has a huge impact around the world, although people in other countries don’t necessarily ascribe the same meanings to products as we do.

The United States is a net exporter of popular culture. Consumers around the world eagerly adopt American products, especially entertainment vehicles and items they link to an American lifestyle (e.g., Marlboro cigarettes, Levi’s jeans). Despite the continuing “Americanization” of world culture, some people resist globalization because they fear it will dilute their own local cultures. In other cases, they practice creolization as they integrate these products with existing cultural practices. 

Products that succeed in one culture may fail in another if marketers fail to understand the differences among consumers in each place.

Because a consumer’s culture exerts such a big influence on his or her lifestyle choices, marketers must learn as much as possible about differences in cultural norms and preferences when they do business in more than one country. One important issue is the extent to which we need to tailor our marketing strategies to each culture. Followers of an etic perspective believe that people in many cultures appreciate the same universal messages. Believers in an emic perspective argue that individual cultures are too unique to permit such standardization; marketers must instead adapt their approaches to local values and practices. Attempts at global marketing have met with mixed success. In many cases this approach is more likely to work if the messages appeal to basic values or if the target markets consist of consumers who are internationally rather than locally oriented. 

CHAPTER OUTLINE I. Cultural Systems A. Cultural Systems Culture is a society’s personality. It includes both abstract ideas, such as values and ethics, and material objects and services.

Discussion Opportunity—Explain why culture is the “lens” through which people view products.

1. When consumers encounter another culture, they may notice they take for granted many of the assumptions they make about clothes, food, and interactions, resulting in culture shock.

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2. A consumer’s culture determines the overall priorities he or she attaches to different activities and products.

3. Consumers embrace products and services that resonate with a culture’s priorities.

Understanding which products is accepted provide knowledge about dominant cultural ideals.

Discussion Opportunity—Ask students how each of the following have affected the American culture: automobiles, microwaves, snowboards, computers, pocket pagers, the pill, leisure time, personal data assistants, Napster, and the Internet? What do you think came first—the attitude or the product?

4. Culture is not static. It is continually evolving, synthesizing old ideas with new ones.

5. A cultural system consists of three functional ideas: a. Ecology—the way a system adapts to its habitat. b. Social structure—the way in which orderly social life is maintained. c. Ideology—the way in which people relate to their environment and social groups.

This revolves around the belief that members of a society possess a common worldview (they share certain ideas about principles of order and fairness). They also share an ethos (a set of moral and aesthetic principles).

Discussion Opportunity—State what you think the U.S. culture would have to say about the culture’s role in a worldview. State five ethos (principles) that we share.

B. The Yin and Yang of Marketing and Culture As cultural products spread, outsiders can transform the original message through the cooptation process. Figure 14.1 illustrates this process. *****Use Figure 14.1 Here***** C. Cultural Movement Cultural selection involves a winnowing-down of options as shown in Figure 14.2. *****Use Figure 14.2 Here***** 1. Characteristics of fashion and popular culture include: a. Styles reflect more fundamental societal trends (politics and social conditions) b. A style begins as a unique statement by a small group and spreads c. Styles originate as interplay between deliberate inventions from designers and businesspeople and spontaneous actions by consumers. d. Cultural products travel widely. e. Influential people in the media play a significant role in deciding which will succeed. f. Most styles wear out and people look for new ways to express themselves.

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g. When a style becomes obsolete, others replace it.

2. The set of individuals and organizations responsible for creating and marketing a cultural product is a culture production system (CPS). The nature of these systems helps to determine the types of products that eventually emerge from them. a. Factors such as the number and diversity of competing systems and the amount of innovation versus conformity that is encouraged are important. b. A culture production system has three major subsystems: 1) Creative subsystem—responsible for generating new symbols and/or products.

2) Managerial subsystem—responsible for selecting, making tangible, mass producing, and managing the distribution of new symbols and/or products.

3) Communications subsystem—responsible for giving meaning to the new product and providing it with a symbolic set of attributes that are communicated to consumers.

Discussion Opportunity—Think of an example of a culture production system and identify the members of the system for a popular custom or trend that affects college students.

3. Many judges or “tastemakers” influence the products that are eventually offered to consumers. These cultural gatekeepers are responsible for filtering the overflow of information and materials intended for consumers (collectively, this is known as the throughput sector).

Discussion Opportunity—Ask: Who do you know that might be classified as a cultural gatekeeper? Explain.

II. High and Low Culture Culture production systems create many diverse products, but some basic distinctions can be offered regarding their characteristics. An art product is viewed primarily as an object of aesthetic contemplation without any functional value; it is original, subtle, and valuable. A craft product is admired because of the beauty with which it performs some function (such as a ceramic ashtray); it tends to follow a rapid production formula.

A. Cultural Formulae Cultural formulae use familiar roles and props to please the average taste of an undifferentiated audience/mass market. Members of the creative subsystem rely on these formulae and recycle images.

Discussion Opportunity—Ask: Can any cultural formulae be applied to college life? Explain.

III. Cultural Stories and Ceremonies

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A. Every culture develops stories and ceremonies that help its members to make sense of the world.

B. A myth is a story with symbolic elements that represents a culture’s ideals. The story focuses on a conflict between two opposing forces and its outcome is a moral guide.

Discussion Opportunity—Ask students to share their favorite myth. Have them explain how it is used.

1. Myths serve four interrelated functions in culture: a. Metaphysical—they help explain the origins of existence. b. Cosmological—all components are part of a single picture. c. Sociological—establish a social code to maintain order. d. Psychological—establish models for personal conduct.

Discussion Opportunity—Think of myths that seem to fall into the categories (functions) mentioned in the chapter (i.e., metaphysical, cosmological, sociological, and psychological).

How can these be tied (if they can) to purchasing?

2. Myths can be analyzed by examining their underlying structures. a. It has been noted that many stories involve binary opposition, where two opposing ends of some dimension are represented. Characters or products are often characterized as to what they “are not” rather than what they “are.” b. Conflict is often resolved by a mediating figure (animals are often given human characteristics to bridge the gap between humanity and nature).

3. Comic books, movies, holidays and commercials embody cultural myths. a. Some people create their own consumer fairy tales (stories that include magical agents, donors and helpers to overcome obstacles to happy endings). b. A myth common to many cultures is a monomyth—a hero emerges from the everyday world and often has super powers (e.g., comic book heroes). c. Examples of mythic movies include Gone with the Wind, E.T.: The Extraterrestrial, and Star Trek.

Discussion Opportunity—Have the class explain common myths from their cultures. How do these myths affect their purchase decisions or life?

Discussion Opportunity—Bring in an advertisement that you believe uses a myth to sell its products or services.

Discussion Opportunity—Ask: What movies do you think are mythical in nature and have changed our culture? What is the most recent mythical movie in your opinion? Why has it achieved this status?

IV. Rituals A ritual is a set of multiple, symbolic behaviors that occur in a fixed sequence and that tend to be repeated periodically.

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1. BBDO labeled brands that we use to perform rituals fortress brands because once they become embedded in our ceremonies, we are unlikely to replace them.

2. Many businesses owe their livelihoods to their ability to supply ritual artifacts, or items used in the performance of rituals, to consumers.

3. Virtually all consumers practice private grooming rituals, or ceremonies that help us transition from our private self to our public self or back again.

Discussion Opportunity—Ask: What is your morning ritual? What products do you need to support it? What are your primary rituals while at school? Is it interesting to think how all of these rituals will change in a few years when you enter the workplace full-time (and learn new rituals)?

Discussion Opportunity—Ask: What ritual from college, your workplace, or your family do you find to be the most fulfilling? Irritating? Explain and describe.

4. In a gift-giving ritual, we procure the perfect object, remove the price tag, wrap and deliver the object. a. There is a gift-giving norm of reciprocity. b. Gift giving is a form of economic exchange in which the giver transfers and item of value to a recipient, who must reciprocate. c. Gift giving also involves a symbolic exchange. d. Gift giving ritual proceeds in three distinct stages: i. Gestation – giver procures an item to mark an event (structural/ prescribed by culture or emergent/personal and idiosyncratic). ii. Presentation – process of gift exchange, recipient response and donor evaluation of the response. iii. Reformulation – giver and receiver redefine the bond between them to reflect their new relationship after the exchange. This may trigger a negative evaluation if the gift is inadequate due to a violation of the reciprocity norm, which obliges people to return the gesture of a gift with one of equal value. e. Giving is a moral imperative in Japanese culture (giri); each individual has welldefined people with him s/he shares reciprocal gift-giving obligations (kosai).

Discussion Opportunity—Ask: What differences are there when you purchase something for someone else versus when you purchase something for yourself?

Discussion Opportunity—Ask: How do marketers use gift giving to stimulate purchasing? What new occasions have recently been invented for doing this?

Discussion Opportunity—Ask: Did you ever receive a present that you did not think was good enough or was too good? How did you respond? Have you ever given a gift where the recipient’s response made you wish you had not bought the gift? How did this affect your purchases in the future?

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5. Holidays are filled with rituals unique to those occasions that often commemorate a cultural myth. Some of the most ritualistic ones are noted: a. Christmas b. Halloween c. Valentine’s Day d. Thanksgiving Discussion Opportunity—Ask: How do you think Halloween should be celebrated (if at all)?

What does this say about your culture and your view toward contemporary culture and values?

6. Rites of passage are rituals that mark a change in social status. a. Every society sets aside times when these passages occur. Marketers attempt to reach consumers during these passage times. b. There are three stages in a rite of passage. i.

Separation—detaching from the original group. ii. Liminality—person is literally in between statuses. iii. Aggregation—person reenters society after rite of passage.

Discussion Opportunity—Ask: How did your family react when you went off to college for your freshman year? When did you first go back home? When did you get back together with your high school friends? What happened when you came back to college this year? If you did not leave home to go to college, how was this process different? c. The final rite of passage is death. This ritual is tightly scripted in most societies.

Discussion Opportunity—Ask students to think about marketing death. Not very pleasant, is it? It is, however, a huge industry. List the rituals associated with death. How can these be marketed tastefully (to those who do not want to think about the subject)?

V. Sacred and Profane Consumption Sacred consumption involves objects and events that are “set apart” from normal activities and are treated with some degree of respect or awe. Profane consumption involves consumer objects and events that are ordinary, everyday objects and events that do not share the “specialness” of sacred ones.

A. Sacralization Sacralization occurs when ordinary objects, events, and even people take on sacred meaning.

1. Objectification occurs when we attribute sacred qualities to mundane items.

2. One way objectification occurs is through contamination, where objects we associate with sacred events or people become sacred in their own right.

3. Collecting refers to the systematic acquisition of a particular object or set of objects.

This is different from hoarding, which is merely unsystematic collecting. Collecting typically involves both rational and emotional components.

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Discussion Opportunity—Ask: How do you attempt to make your home special, homey, and even sacred? How can marketers use this desire to market to you?

Discussion Opportunity—Describe a special sacred place that you have been to.

B. Domains of Sacred Consumption 1. A society “sets apart” sacred places because they have religious or mystical significance. Some profane places are endowed with sacred qualities.

2. We can idolize sacred people as we set them apart from the masses.

3. Public events can resemble sacred, religious ceremonies (e.g. sporting events, where athletes are central figures in a hero tale; tourism, which is often marked by souvenirs).

Discussion Opportunity—Have students tell about an event that has become sacred to them. Ask: Have you ever seen this event used in a marketing effort? What will you tell your children about this event? Will it become part of their memory as well?

Discussion Opportunity—What personal mementos have students collected that might be construed as being tied to a sacred place, person, or event? Bring it to class.

C. From Sacred to Profane and Back Again 1. Some consumer activities move back and forth between the sacred and profane spheres over time.

2. Desacralization occurs when a sacred item or symbol is removed from its special place or is duplicated in mass quantities, becoming profane as a result. Religion to some extent has become desacralized.

Discussion Opportunity—Give an example of a person, event, or object that you have sacralized.

Give an example of a person, event, or object that you have desacralized. Explain why this occurred. Has it had any impact on your purchasing patterns?

VI. The Diffusion of Innovations A. The Diffusion Process 1. Diffusion of innovation refers to the process whereby a new product, service, or idea spreads through a population.

2. An innovation is any product or service that is perceived to be new by consumers (even if it has been used by others in other places).

Discussion Opportunity—Ask: What product have you recently purchased that you would classify as an innovation? Where did you hear about it? What thought process did you go through before you made the purchase?

B. How Do We Decide to Adopt an Innovation?

1. Figure 14.3 shows the types of adopters of innovations.

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2. Innovators and early adopters are very quick to adopt new products. Laggards are the slowest. Late adopters are in the middle.

3. Innovators are important to marketers because they are looking for and willing to try something new. They are socially active risk takers with high education and income.

4. Early adopters share characteristics with innovators, but have a high degree of concern for social acceptance and often wait for innovators to field test a style change. *****Use Figure 14.3 Here ***** Discussion Opportunity—Create an illustration of the types of adopters using a high-tech product or the e-commerce on the Internet.

C. Behavioral Demands of Innovations 1. Innovations can be categorized in terms of the degree to which they demand changes in behavior from adopters.

2. Three major forms are: a. A continuous innovation refers to a modification of an existing product. b. A dynamically continuous innovation is a more pronounced change in the existing product. c. A discontinuous innovation creates major changes in the way we live.

Discussion Opportunity—With input from students, make a list of products that fit the three forms of innovations. Discuss the significance of these innovations. How does the promotion for these products differ?

D. Prerequisites for Successful Adoption 1. Regardless of how much behavioral change is demanded by an innovation, several factors are desirable for a new product to succeed.

2. These attributes include: a. Compatibility—must fit the consumer’s lifestyle. b. Trialability—reduce risk by letting the consumer try it. c. Complexity—the lower the better. d. Observability—innovations that are observable spread faster. e. Relative advantage—must give advantages other products do not.

3. Note that complexity has a reverse relationship from the other characteristics. The simpler the innovation, the faster the rate of adoption.

Discussion Opportunity—Ask: What do you think were the three most important innovations in your lifetime (so far)? In your parents’ lifetime? In your grandparents’ lifetime? How did the innovations you just listed match with the prerequisites for successful adoption list?

Discussion Opportunity—Using an example of your own choosing, illustrate how the prerequisites for successful adoption influenced your purchase of a product or service.

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VII. The Fashion System A. The fashion system consists of all those people and organizations involved in creating symbolic meanings and transferring those meanings to cultural goods.

1. Fashion can be thought of as a code or language.

2. It is context-dependent. Different consumers interpret the same style differently.

3. Fashion products are often undercoded. There is no one precise meaning, but plenty of room for interpretation.

4. Fashion is the process of social diffusion by which a new style is adopted by some group(s) of consumers. a. A fashion, in contrast, refers to a particular combination of attributes. b. In fashion means that this combination is currently positively evaluated by some reference group.

B. Behavioral Science Perspectives on Fashion 1. Fashion operates on many levels; it is simultaneously a societal phenomenon and an individual one.

2. Many psychological factors help to explain why people are motivated to be in fashion. a. These include: conformity, variety-seeking, personal creativity and sexual attraction b. An early theory of fashion proposed that “shifting erogenous zones” (sexually arousing areas of the body) accounted for fashion changes, and that different zones become the object of interest because they reflect societal trends.

3. Economists approach fashion in terms of the model of supply and demand. Veblen’s notion of conspicuous consumption applied. a. Upscale consumers engage in parody display where they deliberately buy inexpensive products. b. When high prices create high demand; this is called the prestige-exclusivity effect. c. When low prices reduce demand; this termed snob effect.

4. The collective selection model is an example of a sociological approach to fashion. a. Trickle-down theory has been one of the most influential approaches to understanding fashion. i. Two conflicting forces drive fashion: Subordinate groups try to adopt the status symbols of the groups above them as they attempt to climb up the ladder of social mobility. ii. Those people in the superordinate groups are constantly looking below them on the ladder to ensure that they are not imitated. b. Trickle-down theory applies to a society with a stable class structure that allows us to easily identify lower- versus upper-class consumers, which is difficult. c. Other theories include the trickle-across (where fashions diffuse horizontally among members of the same social group) and trickle-up (people who lack prestige can take risks) theories.

5. Meme theory has been proposed to explain the fashion process using a medical metaphor.

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a. A meme is an idea or product that enters the consciousness of people over time. b. Like a virus that starts out small and spreads by infecting others, memes “leap” from brain to brain via a process of imitation. c. A change happens when the process of adoption reaches the moment of critical mass, or the tipping point.

Discussion Opportunity—Ask: Can you think of items people buy that seem to display their wealth? How do you know that these people have these items? Can you provide illustrations of the trickle-across and trickle-up theories?

Discussion Opportunity—Ask: Can you think of a current meme? Explain it and its effect.

VIII. Cycles of Fashion Adoption 1. Although the longevity of a particular style can range from a month to a century, fashions tend to flow in a predictable sequence.

2. The fashion acceptance cycle is quite similar to the more familiar product life cycle.

It is shown in Figure 14.4. *****Use Figure 14.4 Here ***** 3.

Consider how the fashion acceptance cycle works: a. There is an introduction stage, an acceptance stage, and a regression stage. b. The products may be trends, fads, or classics depending on the relative length of their acceptance cycles. i. A classic is a fashion with an extremely long acceptance cycle. ii. A fad is a very short lived, nonutilitarian fashion that spreads impulsively and rapidly. c. One can ask certain questions to determine if a fad is occurring vs. a trend. i. Does it fit with basic lifestyle changes? ii. What are the benefits? iii. Can we personalize it? iv. Is it a trend or a side effect? v. What other changes have occurred in the market (consider carryover effects)? vi. Who adopted the change?

IX. It’s a BRAND-New World Brands that create a global consumer culture unite people around the world with a common devotion.

A. It’s a Brand New World Learning other cultures is essential to a successful marketing effort because ignoring cultural sensitivities can be costly. Creolization occurs when foreign influences integrate with local meanings. As corporations compete around the world, we ask should an organization develop separate marketing plans for each culture or should it craft a single plan to use everywhere?

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B. Adopt a Standardized Strategy Companies may adopt a standardized strategy, or an etic perspective, which focuses on commonalities across cultures. These companies take the position that many industrialized cultures are so homogenized that the same approach will work throughout the world.

X. Adopt a Localized Strategy Companies may adopt a localized strategy, or emic perspective, which focuses on variations across cultures.

1. These companies feel that each culture is unique, with its own value system, conventions and regulations.

2. This perspective argues that each country has a national character, or a distinctive set of behavior and personality characteristics, so a marketer should tailor the strategy to the sensibilities of the culture.

Discussion Opportunity—Ask: If you were in charge of international markets for Kraft Foods, would you focus primarily on the etic or emic perspectives? Would your answer change if you worked for Chrysler? Explain.

A.Cross-Cultural Differences Relevant to Marketers 1. Some researchers argue the relevant dimension to consider is consumer style – a pattern of behaviors, attitudes and opinions that influences all of the person’s consumption activities – including attitudes toward advertising, preferred channels of information and purchase, brand loyalty and price consciousness.

2. Geert Hofstede’s cultural dimensions are among the most widely used measures of cross-cultural values.

• Power distance is the extent to which the less powerful members of organizations and institutions (like the family) accept and expect that power is distributed unequally.

• Individualism is the degree to which individuals are integrated into groups.

• Masculinity is the distribution of roles between the genders.

• Uncertainty avoidance is society’s tolerance for ambiguity.

• Long-term orientation is associated with thrift and perseverance (short-term values are associated with respect for tradition, fulfilling obligations, saving face).

B. Does Global Marketing Work?

To maximize the chances of success in multicultural efforts that are standardized, marketers must locate consumers in different countries that share a common worldview (e.g. people with a more international or cosmopolitan frame of reference; people who receive information from a worldwide perspective).

1. Affluent people who are “global citizens” (come into contact with ideas from around the world).

2. There are four segments of consumers: a. Global citizens (55% of consumers) use global success as a signal of quality and innovation but are concerned with social responsibility (consumer health, environment, worker rights). b. Global dreamers (23% of consumers) see global brands as quality products but

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are less concerned with social responsibility than global citizens. c. Antiglobals (13% of consumers) avoid doing business with transnational firms. d. Global agnostics (9%) do not base purchase decisions on a brand’s global attributes.

End-of-Chapter Support Material SUMMARY OF SPECIAL FEATURE BOXES 1.

Marketing Opportunity Tailgating is big business with many football fans preferring the pre-game party to the game itself.

2.

CB As I See It: Cele C. Otnes, University of Illinois at Urbana – Champaign Ordinary consumption-laden activities help structure people’s lives and contribute to their individual and social identities. Rituals include artifacts, scrips, performance roles, and the ritual audience. When marketers design rituals for customers they rely on all four of these dimensions, as well as aesthetics of the ritual and the language used.

3.

Net Profit Rituals are migrating online. Alibaba turned a minor Chinese holiday into a blockbuster sales event and an excuse for online shipping.

4.

Net Profit Marriage rituals have changed with technology, including the words we use to describe the significant other, and to comment on the preparation for the wedding.

5.

Net Profit M-Pesa is a mobile phone-based money transfer service used in parts of Africa where many consumers have no access to banks. The app based money transfers transformed how the local economies relate to the banking industry.

6.

Marketing Pitfall In a paradox of fashion, a brand has cachet because only a select group of people own it.

As more consumers adopt the brand, it is no longer exclusive and the original meaning is loss. It is a victim of its own success.

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7.

Net Profit Memes miners search for themes that emerge on forums, blogs, and video sites, to create humor that crosses traditional boundaries.

8.

The Tangled Web The internet meme, Slenderman, was used as a reason why a student stabbed another classmate.

9.

CB As I See It: Julien Cayla, Nanyang Business School, Singapore The way luxury products signal status and relationship vary based on culture. Many luxury brands build a relationship with consumers based on custom and tradition.

10.

Marketing Pitfall The language barrier creates a problem for marketers who wish to break into foreign markets, resulting in product names and descriptions that are less than desirable in the local markets.

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REVIEW QUESTIONS 14-1. What is culture? List three dimensions social scientists used to describe a culture and give an example of each.

We can think of culture as a society’s personality. It includes both abstract ideas, such as values and ethics, and material objects and services, such as the automobile, clothing, food, art, and sports that are produced or valued by a society. Put another way, culture is the accumulation of shared meanings, rituals, norms, and traditions among the members of an organization or society.

• Ecology—The way a system adapts to its habitat. Ecology is shaped by the technology a culture uses to obtain and distribute resources (e.g., industrialized societies versus Third World countries). The Japanese, for example, greatly value products designed for efficient use of space because of the cramped conditions in that island nation.

• Social structure—The way in which orderly social life is maintained. This includes the domestic and political groups that are dominant within the culture (e.g., the nuclear family versus the extended family; representative government versus dictatorship).

• Ideology—The mental characteristics of a people and the way in which they relate to their environment and social groups. This revolves around the notion that members of a society possess a common worldview. They share certain ideas about principles of order and fairness. They also share an ethos, or a set of moral and aesthetic principles. A theme park in Bombay that caters to India’s emerging middle class, called Water Kingdom, illustrates how a culture’s worldview can be distinctive. Many consumers there are unfamiliar with mixed-sex public activities of this nature, so the park rents swimsuits to women who have never worn one before.

No thongs here, though: The suits cover the women from wrists to ankles.

(20 minutes, Chapter Objective 1, AACSB: Diverse and Multicultural Work Environments) 14-2. A myth is a special kind of story. What makes it special? What is an example of a modern myth?

A myth is a story containing symbolic elements that express the shared emotions and ideals of a culture. It often features a conflict between two opposing forces. It often sets good against evil. It reduces anxiety because it provides consumers with guidelines about their world. An example of the modern myth is fairy tale weddings that Disney stages for couples that want to enact their own version of a popular fairy tale.

(5 minutes, Chapter Objective 5, AACSB: Reflective Thinking) 14-3. Give an example of a marketer who uses the principle of binary opposition.

Binary opposition occurs when there are two opposing ends of some dimension (e.g., good versus evil, nature versus technology). Characters, and in some cases products, are often defined by what they are not rather than what they are (“I can’t believe it’s not butter.”).

(5 minutes, Chapter Objective 5, AACSB: Reflective Thinking)

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14-4. What is a ritual? Describe three kinds of rituals and provide an example of each.

A ritual is a set of multiple, symbolic behaviors that occur at a variety of levels. Three kinds of rituals are: gift-giving rituals (ex. Christmas gifts), holiday rituals (ex. wearing costumes for Halloween), and grooming rituals (ex. bathing).

(10 minutes, Chapter Objective 6, AACSB: Application of Knowledge) 14-5. List the three stages of a rite of passage ritual.

A rite of passage consists of three phases, separation, liminality, and aggregation. For example, when a student leaves for college they will experience the three phases. In the first stage, separation, he detaches from his original group or status as a high school kid and leaves home for campus. Liminality is the middle stage, where he is in limbo between statuses. Think of those bewildered new first-year students who try to find their way around campus during orientation. In the aggregation stage, he returns to society with his new status. Our hero returns home for Thanksgiving break as a cocky college “veteran.”

(5minutes, Chapter Objective 4, AACSB: Reflective Thinking)

14-6. What is the difference between sacred and profane consumption? Provide one example of each.

Sacred consumption involves objects and events that are “set apart” from normal activities and are treated with some degree of respect or awe. They may or may not be associated with religion, but people tend to regard most religious items and events as sacred. An example of this might be an once-in-a-lifetime round-the-world cruise.

Profane consumption involves consumer objects and events that are ordinary, everyday objects and events that do not share the “specialness” of sacred ones. An example of this might be going mall shopping on the weekend.

(5 minutes, Chapter Objective 7, AACSB: Application of Knowledge) 14-7. How is a collection sacred? What is the difference between collecting and hoarding?

Collecting refers to the systematic acquisition of a particular object or set of objects.

Collecting expensive cars is a sacred experience for a few. A car might be sacralized as soon as it enters a collection and it takes on a special significance to the collector that outsiders may find hard to comprehend. We can distinguish this activity from hoarding, which is merely unsystematic collecting. Hoarding is becoming a problem in some areas where consumers’ refusal to throw things away in some extreme cases has resulted in fires, eviction, and even the removal of children from the home.

(5 minutes, Chapter Objective 7, AACSB: Reflective Thinking) 14-8. What is collective selection? Give an example.

We term the process by which certain symbolic alternatives are chosen over others collective selection. As with the creative subsystem, members of the managerial and communications subsystems also seem to develop a common frame of mind. Although products within each category must compete for acceptance in the marketplace, they can usually be characterized by their adherence to a dominant theme or motif—be it “The Western Look,” “New Wave,” “Danish Modern,” or “Nouvelle Cuisine.”

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(5 minutes, Chapter Objective 3, AACSB: Reflective Thinking) 14-9. Describe a culture production system and list its three components.

A culture production system is the set of individuals and organizations responsible for creating and marketing a cultural product. A culture production system has three major subsystems: • A creative subsystem responsible for generating new symbols and products.

• A managerial subsystem responsible for selecting, making tangible, mass producing, and managing the distribution of new symbols and products.

• A communications subsystem responsible for giving meaning to the new product and providing it with a symbolic set of attributes that it then communicates to consumers.

(10 minutes, Chapter Objective 3, AACSB: Reflective Thinking) 14-10. Define a cultural gatekeeper, and give three examples.

Many judges or “tastemakers” influence which products we as consumers get to consider. These cultural gatekeepers are responsible for filtering the overflow of information and materials intended for customers. Gatekeepers include movie, restaurant, and car reviewers, interior designers, disc jockeys, retail buyers, and magazine editors.

(10 minutes, Chapter Objective 3, AACSB: Reflective Thinking) 14-11. Describe the difference between arts and crafts.

An art product is an object we admire strictly for its beauty or because it inspires an emotional reaction in us (perhaps bliss, or perhaps disgust). In contrast, we admire a craft product because of the beauty with which it performs some function (e.g., a ceramic ashtray or hand-carved fishing lures). A craft tends to follow a formula that permits rapid production.

(5 minutes, Chapter Objective 2, AACSB: Reflective Thinking) 14-12. What is a cultural formula? Give an example.

The reliance on established plots and characters illustrates how mass culture churns out products that aim to please the average taste of a mass audience. Rather than being unique, they are predictable because they follow a well-defined pattern. Many popular art forms, such as detective stories or science fiction, follow a cultural formula in which familiar roles and props occur consistently. As members of the creative subsystem rely on these formulae, they tend to recycle images as they reach back through time for inspiration.

(5 minutes, Chapter Objective 2, AACSB: Reflective Thinking) 14-13. Who are innovators? Early adopters? Laggards?

Roughly, one-sixth of the population (innovators and early adopters) are very quick to adopt new products, and one-sixth of the people (laggards) are very slow. Even though innovators represent only about 2.5 percent of the population, marketers are always interested in identifying them. These brave souls are always on the lookout for novel products or services and who will be the first to try a new offering. Just as generalized opinion leaders do not appear to exist, innovators tend to be category-specific as well.

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Early adopters share many of the same characteristics as innovators, but an important difference is their degree of concern for social acceptance, especially with regard to expressive products, such as clothing, cosmetics, and so on.

(5 minutes, AACSB: Reflective Thinking) 14-14. What is the difference among the terms fashion, a fashion, and in fashion?

Fashion is the process of social diffusion by which a new style is adopted by some group(s) of consumers. In contrast, a fashion (or style) refers to a particular combination of attributes. In addition, to be in fashion means that some reference group positively evaluates this combination. Thus, the term Danish Modern refers to particular characteristics of furniture design (i.e., a fashion in interior design); it does not necessarily imply that Danish Modern is a fashion that consumers currently desire.

(10 minutes, Chapter Objective 3, AACSB: Reflective Thinking) 14-15. Summarize some of the major approaches we can use to understand fashion from the perspectives of psychologists, economists, and sociologists.

Many psychological factors help to explain why people are motivated to be in fashion.

These include conformity, variety seeking, personal creativity, and sexual attraction. For example, many consumers seem to have a “need for uniqueness.” They want to be different (though not necessarily too different!).

Economists approach fashion in terms of the model of supply and demand. Items that are in limited supply have high value, whereas those readily available are less desirable.

Rare items command respect and prestige.

The collective selection model we discussed previously is an example of a sociological approach to fashion. This perspective focuses on the initial adoption of a fashion (idea, style, etc.) by a subculture and its subsequent diffusion into society as a whole. Such diffusion often begins with youth subcultures like the hip-hop segment.

(15 minutes, Chapter Objective 3, AACSB: Reflective Thinking) 14-16. What is an example of a meme?

A meme is an idea or product that enters the consciousness of people over time— examples include tunes, catch phrases (“You’re fired!”), or styles such as the Hush Puppy.

(5 minutes, Chapter Objective 4, AACSB: Reflective Thinking) 14-17. What is the trickle-down effect? List some reasons why it is no longer as valid as it used to be.

Trickle-down theory, first proposed in 1904 by Georg Simmel, has been one of the most influential approaches to understanding fashion. It states that there are two conflicting forces that drive fashion change. First, subordinate groups try to adopt the status symbols of the groups above them as they attempt to climb up the ladder of social mobility. Dominant styles thus originate with the upper classes and trickle down to those below. However, this is where the second force kicks in: Those people in the superordinate groups are constantly looking below them on the ladder to ensure that they

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are not imitated. They respond to the attempts of lower classes to “impersonate” them by adopting even newer fashions. These two processes create a self-perpetuating cycle of change—the machine that drives fashion. It is less valid than it used to be because it is difficult to identify a stable upper/lower class. Class structure cannot account for the wide range of styles available, which are due to technological advances that allow the masses to learn about style simultaneously. Consumers are more influenced by opinion leaders who are similar to them. In addition, lower classes may influence upper classes, as they feel free to innovate and take risks.

(10 minutes, Chapter Objective 3, AACSB: Reflective Thinking) 14-18. What is the difference between a fad, a fashion, and a classic fashion life cycle?

Fashions are characterized by slow acceptance at the beginning, which (if the fashion is to “make it”) rapidly accelerates, peaks, and then tapers off. We can identify different classes of fashion by considering the relative length of the fashion acceptance cycle.

Many fashions exhibit a moderate cycle, taking several years to work their way through the stages of acceptance and decline; others are extremely long-lived or short-lived. A classic is a fashion with an extremely long acceptance cycle. It is in a sense “antifashion” because it guarantees stability and low risk to the purchaser for a long period. A fad is a very short-lived fashion. Relatively few people usually adopt a fad product. Adopters may all belong to a common subculture, and the fad “trickles across” members but rarely breaks out of that specific group.

(15 minutes, Chapter Objective 3, AACSB: Reflective Thinking)

CONSUMER BEHAVIOR CHALLENGE Discussion Questions 14-19. “Disney World is a sacred place.” Do you agree? Why or why not?

This question should be used to make sure that students understand the definition of “sacred” as it applies in consumer behavior (objects and events that are “set apart” from normal activities and are treated with some degree of respect or awe). Once they understand this, most all should agree that Disneyland is a sacred place to some . . . to many.

(5 minutes, Chapter Objective 7, AACSB: Reflective Thinking) 14-20. Describe the three stages of the rite of passage associated with graduating from college.

The rite of passage includes three phases: 1. Separation—detached from original group (e.g., college freshman leaves home).

2. Liminality—person is literally in between statuses (e.g., freshman during orientation).

3. Aggregation—person reenters society after rite of passage (e.g., goes home for Christmas as a “college veteran”).

For the college graduation example:

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Students should recognize the college graduate’s separation involves detachment from his or her college friends, roommates, fraternity brothers/sorority sisters, and professors.

2. During the liminality phase, the college graduate is in between stages—college and career—and experiences a period of adjustment to the new environment.

3. Aggregation occurs when the graduate becomes part of the professional society, identifying with his or her career rather than college.

(10 minutes, Chapter Objective 6, AACSB: Reflective Thinking) 1.

14-21. Have you ever given yourself a gift? If so, why did you do it and how did you decide what to get?

Research has shown that the most common reasons that people buy themselves gifts are to reward themselves for good deeds, to console themselves after negative events, or to motivate themselves to accomplish some goal. As students respond, relate their responses to these reasons for buying self-gifts.

(5 minutes, Chapter Objective 6, AACSB: Reflective Thinking) 14-22. Identify modern-day myths that corporations create. How do they communicate these stories to consumers?

Student responses will vary based on the myths they identify. A myth is a story with symbolic elements that represents a culture’s ideals. The story often focuses on some kind of conflict between two opposing forces, and its outcome serves as a moral guide for listeners. In this way, a myth reduces anxiety because it provides consumers with guidelines about their world. Most members of a culture learn these stories, but usually we don’t really think about their origins. In some cases marketers adapt these stories and (perhaps unconsciously) pattern their messages along a mythic structure. Myths serve four interrelated functions in a culture: metaphysical (they help explain the origins of existence), cosmological (they emphasize how components of the universe are interrelated), sociological (they maintain social order), and psychological (they provide models of personal conduct).

(10 minutes, Chapter Objective 3, AACSB: Reflective Thinking) 14-23. “Fraternity hazing is just a natural rite of passage that should not be prohibited by universities.” Do you agree?

Whether or not something is a rite of passage does not correlate with whether or not it is morally correct. If a rite of passage causes harm to people, then it can easily be argued that it is an unethical practice. In such cases, it can be argued that such practices should not be allowed. Making the link between this concept and whether or not fraternity hazing is harmful will be a bit “hazy.”

(10 minutes, Chapter Objective 6, AACSB: Reflective Thinking,) 14-24. “Christmas has become just another opportunity to exchange gifts and stimulate the economy.” Do you agree? Why or why not?

To some extent the answer to this question will reflect each student’s upbringing, their appreciation of this religious event and season, their sense of tradition, and their cynicism. Marketers and consumers are both to blame for the over-commercialization of

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the season. Many, however, still regard this season as one of the most religious on the calendar. Have students talk about Christmas traditions. Most can remember more traditions than details of presents they have received or given. Ask them to describe how their family feels about Christmas (from their mother and father’s standpoint). Is the Christmas season a time for family renewing and gathering (most will say yes)? This question should provide for a lively debate. Be sure to include the marketing aspects of the season and whether this is right or wrong.

(10 minutes, Chapter Objective 6, AACSB: Reflective Thinking) 14-25. Bridal registries specify very clearly the gifts that the couple wants. How do you feel about this practice? Should people actually specify what you should buy for them, or should a gift be a more personal expression from you?

There should be representatives that emerge to support both sides of this debate.

Although, because this practice has become so culturally accepted, younger people will probably see nothing wrong with it. However, traditionally, the nature of gift giving was more symbolic in nature. Part of gift giving is developing or reinforcing a symbolic relationship, but now the process is much more automated.

(10 minutes, Chapter Objective 6, AACSB: Reflective Thinking) 14-26. Rituals can provide us with a sense of order and security. In a study of the drinking rituals of college students, the researchers found that drinking imposed order in students’ daily lives—from the completion of assignments to what and when to eat. In addition, ritualizing an activity such as drinking provided security and fellowship at a time fraught with confusion and turbulent change. Obviously, though, there is a dark side to drinking rituals. Consider the highly publicized death of a Massachusetts Institute of Technology student who died three days after falling into an alcohol-induced coma as the result of a fraternity pledge. Indeed, binge drinking is probably the most widely practiced ritual among college students; it has been described as the most significant health hazard on college campuses today. What role does drinking play in the social life on your campus?

Based on your experience, how does it fit into rituals of college life? Should these practices be changed? If so, how?

Student responses will likely mirror the research on this topic; the majority of students at some point in their college experience are involved in ritualistic drinking. Thus, most everyone will have something to share—some (obviously) more than others will. Their responses to whether or not such practices should be changed will likely be based on whether or not they have had or have witnessed any negative experiences associated with drinking.

(15 minutes, Chapter Objective 6, AACSB: Reflective Thinking) 14-27. Movie companies often conduct market research when they produce big-budget films. If necessary, they will reshoot part of the movie when viewers say they do not like it. Some people oppose this practice: they claim that movies, or books, songs, plays, or other artistic endeavors should not conform to what the market wants, lest they sacrifice their integrity. What do you think?

The instructor should encourage students to review the relevant discussion in the text concerning aesthetic marketing research and then express their thoughts and feelings

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regarding the use of consumer research for these purposes. Considering these practices in light of the marketing concept should generate an interesting discussion.

(15 minutes, Chapter Objective 4, AACSB: Reflective Thinking) 14-28. Boots with 6-inch heels were a fashion rage among young Japanese women a few years ago. Several teens died after they tripped over their shoes and fractured their skulls.

However, followers of the style claimed they are willing to risk twisted ankles, broken bones, bruised faces, and other dangers the platform shoes caused. One teenager said, “I’ve fallen and twisted my ankle many times, but they are so cute that I won’t give them up until they go out of fashion.” Many consumers around the world seem to be willing to suffer for the sake of fashion. Others argue that we are merely pawns in the hands of designers who conspire to force unwieldy fashions down our throats. What do you think?

What is and what should be the role of fashion in our society? How important is it for people to be in style? What are the pros and cons of keeping up with the latest fashions?

Do you believe that we are at the mercy of designers?

Another question is very opinion oriented. Responses will largely be based on how consumers view fashion and how willing they are to sacrifice to incorporate fashion into their lives. The “should” element of this question may bring forward some idealistic responses. Most students will likely take the approach that consumers are free to do as they choose and that fashion “should” be what consumers want it to be.

(15 minutes, Chapter Objective 10, AACSB: Reflective Thinking) APPLY 14-29. People in Thailand are preoccupied with supernatural forces. One common sigh is a “spirit house,” a miniature dwelling intended for protective ghosts. Some include electric wiring and indoor lighting: you will even find them in 7-Eleven convenience stores throughout the country. Thais spend about $63 million per year on visits to fortune tellers. Stores sell amulets for good luck next to breath mints, and horoscope books next to junk food. There are YouTube channels devoted to fortunte telling and computre programs like “Feng Shui Master.” Which supposedly helps to predict the future of gold prices. How do consumers in the United States compare? Interview people you know about any “magic” items they own (e.g. how many of your friends have a lucky charm or hang a St. Christopher medal or some other object from their rearview mirrors?) Get them to describe their feelings about these objects and tell how they aquired their magical properties. How would they feel if they lose these special items?

The nature of “magic” as described in the text simply refers to the fact that marketers of many different types of goods will imply that their product will result in extraordinary effects. Most people will probably refer to items in their possession around which they themselves have somehow developed a sense of the supernatural. Be sure to make special note of any student who responds with an example that demonstrates that a company has actually played a role in the development of such perceptions.

(60 minutes, Chapter Objective 7, AACSB: Reflective Thinking) 14-30. Interview people you know who collect some kind of object. How do they organize and describe their collections? Do you see any evidence of sacred versus profane distinctions?

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The very nature of collecting should result in people applying some element of sacredness to the items being collected. However, there will likely be a range, with items that are more sacred and items that are less sacred.

(45 minutes, Chapter Objective 7, AACSB: Reflective Thinking) 14-31. Ask friends to describe an incident where they received a gift they thought was inappropriate. Why did they feel this way, and how did this event influence the relationship between them and the gift-giver?

According to the text, research has shown that gift giving is more exchange-oriented (instrumental) in the early stages of a relationship, but becomes more altruistic as the relationship develops. In addition, third parties can exert strong influences on gift giving as others influence people in their social network when selecting gifts for recipients. So student responses to this question should depend upon which stage of a relationship the gift giving took place in. However, given that this perspective on gift giving identifies a social and relationship component, a gift perceived as inappropriate will certainly affect the relationship between the receiver and the giver.

(30 minutes, Chapter Objective 6, AACSB: Reflective Thinking) 14-32. How might the rise of peer-to-peer music sharing influence the structure of the music CPS? One guess is that this method erodes the dominance of the big labels because listeners are more likely to access music from lesser-known groups. Survey your friends to determine whether this in fact is happening. Do they listen to a wider variety of artist, or simply download more from the big-time groups?

Student’s responses will vary based on their taste in music and where they stream music from.

(20 minutes, Chapter Objective 6, AACSB: Reflective Thinking) 14-33. Read several romance or action novels to see if you can identify a cultural formula at work. Do you see parallels among the roles different characters play (e.g., the hero, the evildoer, the temptress, etc.)?

Romance novels are an extreme case of a cultural formula. Computer programs even allow users to “write” their own romances by systematically varying certain set elements of the story. Given that, it should be easy for students to define a cultural formula by simply scanning various romance novels.

(360 minutes, Chapter Objective 3, AACSB: Reflective Thinking) 14-34. U.S. television inspires knockoffs around the world. But to be fair, many U.S. viewers don’t realize that U.S. reality show hits such as Big Brother and American Idol started out as European concepts that U.S. producers imported. In fact, the U.K. version of Big Brother briefly went off the air after a fight broke out and housemates threatened to kill each other. In contrast, a Malaysian show that borrows the American Idol format is called Imam Muda (Young Leader). Contestants debate religious topics and recite passages from the Koran. The winner doesn’t get a recording contract. Instead, he receives a job as an imam, or religious leader; a scholarship to study in Saudi Arabia; and an all-expensespaid pilgrimage to Mecca, Islam’s holiest city. See if you can identify foreign versions of

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reality shows. How have the creators of these programs adapted them to appeal to local customs?

This will be an interesting question for class discussion on variations in values.

(12.5 hours, Chapter Objectives 2 and 4, AACSB: Reflective Thinking

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CASE STUDY TEACHING NOTES Chapter 14 Case Study: Marketing the Ikea Fantasy around the World Summary of Case Companies who market internationally often have to work hard to find an effective and profitable balance between standardizing their marketing strategies while still reflecting an understanding of the unique characteristics and consumer behavior present in those markets.

Suggested Answers for Discussion Questions CS 14-1.

Discuss how IKEA’s approach has helped you to better understand the debate that exists between standardization compared with adaptation for international markets.

IKEA has convinced consumers that adaptation is not very difficult and all products do not need to be standardized.

(10 minutes, Chapter Objective 2, AACSB: Reflective Thinking, Course Learning Outcome 16) CS 14-2.

Compare and contrast two countries according to the Hofstede cultural model using the online tool at http://geert-hofstede.com/countries.html. How might this tool help a company like IKEA do a better job of marketing in each country?

Student’s answers will vary depending on the countries that were chosen.

(10 minutes, Chapter Objective 2, AACSB: Dynamics of the Global Economy) CS 14-3.

The text talks about the difference between low and high culture. Is IKEA trying to position its brand to be one or the other? Would this be different depending on the country location?

IKEA is branding their products as high culture, and for IKEA location has no effect on high culture.

(10 minutes, Chapter Objective 2, AACSB: Dynamics of the Global Economy)

Additional Support Material STUDENT PROJECTS Individual Projects 1.

Invite someone from the funeral industry to come to talk to the class on marketing practices in the industry. Ask students to collect literature from various funeral homes to study before the guest speaker’s visit. Have students formulate questions before the class.

This exercise will increase student familiarity with rituals and ritual artifacts. The funeral business has high margins because of the perceived importance of the rituals.

(40 minutes, Chapter Objective 6, AACSB: Reflective Thinking,)

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2.

Invite someone from the wedding industry to come to talk to the class on marketing practices in the industry. Ask students to collect literature from various wedding-related businesses to study before the guest speaker. Have students formulate questions before the class.

Similar to #1, this will increase student familiarity with rituals and ritual artifacts. You can assign both and have students do a comparison between the two industries.

(40 minutes, Chapter Objective 6, AACSB: Reflective Thinking) 3.

Ask students to identify what they perceive to be a sacred place on campus. How is this place honored? Marketed? How is information about this place passed on to future students? How does the university or college use this sacred place to market the university or college? Is this proper?

This exercise is more appropriate on campuses that have longstanding traditions.

Students will have different opinions about whether it is appropriate to market the tradition that makes the place sacred.

(20 minutes, Chapter Objective 7, AACSB: Reflective Thinking) 4.

Have students interview two people from two different foreign cultures. Have the students ask what major differences they see between the cultural values in their country and those in the American culture. Ask the students to explain these to the class.

American core values are likely to include: freedom, youthfulness, achievement, materialism, activity, conformity, individuality, efficiency, etc. Core values from the other culture will vary by culture.

(10 minutes, Chapter Objective 9, AACSB: Reflective Thinking) 5.

Ask students to describe rituals they follow when visiting a shopping mall, movie theater, or restaurant. How could marketers capitalize on these rituals?

Rituals might include stopping at the food court, throwing change in the fountain to make a wish, saying grace before eating, buying popcorn and Junior Mints, etc. Some of the rituals will be easier to commercialize.

(10 minutes, Chapter Objective 6, AACSB: Reflective Thinking) 6.

Have students comment on the practice of drinking while attending college. What are their opinions and perceptions of the role of drinking in the college experience? Is it ritualistic? If so, how do marketers capitalize on this ritual? If a college really wanted to discourage drinking, what would be the best way to do this culturally?

Some students may think of binge drinking as a rite of passage and part of the collegiate process. It would be difficult for a college to change this cultural norm in many cases since it is reinforced by other students’ behavior and in the media (TV, movies, advertising). Universities try to change the ritual through education and by offering alternative activities.

(20 minutes, Chapter Objective 6, AACSB: Reflective Thinking) 7.

Each student should identify and describe a possession that most people would consider ordinary, but to them is sacred. Have them describe how this sacredness developed.

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Student should select a possession that is set apart and special in some way. Look for students to explain how the possession became objectified and use the discussion to reinforce the concept of contamination, where objects we associate with sacred events or people become sacred in their own right.

(10 minutes, Chapter Objective 7, AACSB: Reflective Thinking) 8.

Visit an upscale-fashion department store or boutique. Interview the manager about fashion. How does the manager decide on which fashion merchandise to purchase? What does he or she do with fashion merchandise once it has run its course? How does he or she know when a fashion is becoming unfashionable? Relate your results to the class.

Many buyers will be centralized, so students may have more luck with these questions at a small, privately owned boutique than at a chain or department store. Look for students to relate the responses to the fashion life cycle discussed in the chapter.

(30 minutes, Chapter Objective 6, AACSB: Reflective Thinking) 9.

Go to a contemporary magazine and find illustrations of high and low culture. Indicate what type of consumers might be attracted to these different messages.

High culture is elite, and low culture is popular culture. Students may relate the consumers who are attracted to each type of culture to the earlier discussion of social class (Chapter 12), but should also recognize the lines between the two types of culture are blurred in the United States.

(20 minutes, Chapter Objective 3, AACSB: Reflective Thinking) Group Projects 1.

Have student groups research and report on how student cultures are being affected by the spread of social networking phenomenon. Is social networking sacred or profane consumption? What are its positive and negative effects?

Students are likely to argue that social networking is profane since it has been adopted by the masses and is not special. They are likely to have differences of opinions about the positive and negative effects, but should recognize the ability to constantly update others on what you are doing helps connect people. However, it also may lead to over sharing, which is particularly problematic when the information or visual shared has a negative impact on the sharer’s reputation.

(30 minutes, Chapter Objective 2, AACSB: Reflective Thinking) 2.

Have student groups identify an American custom, more, and convention. Then, have them design a new product or service (or multiple if necessary) that would take advantage of the existence of these crescive norms.

Look for students to label the custom, more and convention. Customs are norms that control basic behaviors, mores are customs that involve taboos/forbidden behavior and have a strong moral overtone, and conventions are norms that regulate how we conduct our lives.

(10 minutes, Chapter Objectives 2 and 9, AACSB: Reflective Thinking)

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3.

Have student groups identify what they feel is the most sacred symbol on campus and establish the reasons for this. Then, have the class come together and compare their results.

Sacred symbols often become sacred because of an event or an individual that rubbed off on the symbol. Students should recognize that some symbols that are on the list might be categorized as profane if they are desacralized.

(20 minutes, Chapter Objective 4, AACSB: Reflective Thinking) 4.

Ask groups to compare a list of rituals that will probably be performed (or that were performed) at their wedding ceremony and reception. What are the marketing implications of these rituals? (It is interesting to point out the different rituals based on a religious, ethnic, or racial subculture and rituals that seem to be solely American.) An added question might be: How are wedding plans affected when people from different subcultures get married?

This project is an extension of Individual Project #2. Students should do outside research on the rituals and the role of subculture in the rituals.

(40 minutes, Chapter Objective 6, AACSB: Reflective Thinking) 5.

Ask each group to design a new holiday to be implemented in the nation. This holiday should have a theme, a date for celebration, and a unique idea that could be marketed.

Have the class vote on the best idea.

You can bring up George’s holiday on Seinfeld, Festivus, to help get students thinking about what types of holidays might be proposed.

(20 minutes, Chapter Objective 6, AACSB: Reflective Thinking) 6.

Select a product category of interest. Develop a formal strategy to reality engineer the product. Include specific tactics relating to different components of the marketing mix.

Reality engineering occurs as elements of popular culture are appropriated by marketers and converted to vehicles for promotional strategies. Product placement is a popular way to engage in reality engineering. Look for students to include all elements of the marketing mix, including distribution and pricing, in their responses.

(40 minutes, Chapter Objective 4, AACSB: Reflective Thinking)

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eLAB Individual Assignments 1.

Go to www.menscience.com. Everyone has grooming rituals. Examine this website and the implications that it has for male grooming. Describe how the design of the website seeks to enhance male grooming rituals that would then require the use of products that they sell.

The website sells products for shaving, which most men do, but also encourages men to have a daily regimen for facial care, for fitness, for anti-aging, and for grooming other body hair. It provides information and sells products to support these grooming rituals.

(10 minutes, Chapter Objective 6, AACSB: Reflective Thinking) 2.

Go to www.elvis.com. After exploring this website, comment on the myth and legend of Elvis Presley. What marketing techniques are used? How has “the King” been able to retain a loyal following after all these years? Using data found on the website, construct a brief strategy for introducing the Presley music to today’s teen generation. Do not treat this as an impossible task. How would “the King” do it if he were alive today?

Remember, teens from the ’50s made him a superstar.

Students may rely on some of the information from Chapter 13, in addition to the information about myths and marketing and from the website, to support their recommendations regarding marketing Presley music to today’s teens.

(10 minutes, Chapter Objective 2, AACSB: Reflective Thinking) 3.

Visit www.cocacola.com and access their websites in various countries. Are the country-specific websites different? What are the main points of difference? What are the commonalities?

Students will be able to observe that the communications and the products (including packaging and flavors, in some cases) vary by country. Communications may reflect differences in values and language. Students can also look at the country-specific Facebook pages.

(20 minutes, Chapter Objective 9, AACSB: Reflective Thinking) 4.

Go to www.dkny.com and www.esteelauder.com. What is new in fashion, style, and cosmetics? Either of these sites might give you some clue. After visiting the websites, list what you perceive to be the top five trends in female fashion for this year. Remember, fashion may be more than just clothing. Report your opinions to the class.

The content on both of these websites is changed on a regular basis, so you may want to visit the sites to develop your own ideas before assigning the project to the students.

(20 minutes, Chapter Objective 6, AACSB: Reflective Thinking) 5.

Go to www.swissexpert.com and www.fashionknockoffs.com. Why do you think that the knockoff industry has become so big? Discuss this in terms of the fashion concepts discussed in the chapter. Also, include a discussion of the economics of buying such brands (how much does the real thing cost?).

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In addition to relating the response to the content about fashion concepts, students should also consider the information about status symbols and counterfeit products from chapter 12.

(15 minutes, Chapter Objective 3, AACSB: Reflective Thinking) 6.

Go to www.brandchannel.com/brandcameo_films.asp. Select five different films that have a high number of brands placed in them. Then, look up reviews for each film as well as how the film did at the box office and in home video. What impact do you think each of the placements had for the brand?

Student responses may depend on whether the placement was congruent with the plot. If not, student perceptions of what the placement did for the brand are likely to be negative.

The marketers who “placed” them hope they will increase brand familiarity and brand trust by making the brand seem like part of the culture.

(30 minutes, Chapter Objective 4, AACSB: Reflective Thinking) Group Assignments 1.

Go to www.marvel.com and www.dccomics.com. After visiting these two websites, have your group discuss and comment on the use of heroes and antiheroes in these two organizations’ products and websites. What magical qualities have been bestowed on the characters you have found? How are these characters used to deliver messages? How have marketers used these characters for merchandising purposes? Why do these characters remain popular? Which is your group’s favorite? Why? When you discuss the heroes and antiheroes, see if the students can relate the comic book characters’ personalities to any brand personalities. Which marketers try to create magical qualities on brands using similar story development to those used in the comics?

If students cannot think of any examples, do students feel it would be effective for any brands?

(30 minutes, Chapter Objective 7, AACSB: Reflective Thinking) 2.

Go to www.snopes.com. As a group, spend some time on this website. Then, choose an urban myth that you find most interesting (regardless of whether it is true or not). Apply the four interrelated functions of myths to the one that you chose. How can the concepts of binary opposition, mediating figure, or monomyth be applied to the myth that you chose? In your opinion, has the Internet made urban myths and legends more commonplace? Why? The four functions of myths are: metaphysical (they help explain the origins of existence), cosmological (all components are part of a single picture), sociological (they establish a social code to maintain order), and psychological (they establish models for personal conduct). When two opposing ends of some dimension are represented this is called binary opposition. Characters or products are often characterized as to what they “are not” rather than what they “are.” A mediating figure bridges the gap between humanity and nature. When a hero emerges from the everyday world and often has super powers this is a monomyth.

(20 minutes, Chapter Objective 2, AACSB: Reflective Thinking)

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14-31

3.

Visit www.fashion-era.com. Take some time as a group and browse the fashion trends from different periods. Find trends that are in fashion at one time period, then out of fashion, and then back in fashion at some other period. What governs these trends?

Discuss this and draw some conclusions based on the concepts in the chapter.

The website is organized by era, and it is not the most user friendly website so you may want to provide the groups with some direction so they do not get lost. Look for students to relate their conclusions to the content in the chapter regarding fashion and fashion life cycles.

(20 minutes, Chapter Objective 3, AACSB: Reflective Thinking)

.

14-32

Analyzing the Athletic Shoe Market for SHOE FIEND Background You are the marketing analyst for SHOE FIEND, an online athletic shoe store. To date, your company has done little formal marketing research about athletic shoe buyers in the United States. Using the 2014 MediaMark Reporter (MMR) data from GfK, you recently ran a series of reports about the shoe buying habits of several U.S. consumer segments. At this time, you have decided to focus on the 5 best-selling shoe brands on your website: Adidas, Asics, Nike, New Balance, and Reebok. After looking through the MMR report options, you decided that the most fitting question for your purposes was “Did you buy [SHOE BRAND] in the last 12 months?”.

The report is designed to compare the shoe buying habits of consumers across several different consumer characteristics: gender, age, and internet use. In addition, you also created three subsegment schemes that combined two different segmentation variables: Gender and Age (Men 18-34 and Women 18-34) and Internet use and Age (Heavy Internet users 18-34 years old).

Your Goal First, review the data from the GfK MMR report. You will use this information to make some inferences about the brand preferences of the different segments. Follow this, you will combine the information in the MMR report with some financial assumptions provided by SHOE FIEND to make some recommendations for future marketing tactics.

The Data The data in the report can be interpreted in the following manner: • • • • • •

Market Segment Size (000s): The total number US Adults that meet the criteria for the segment (regardless of whether they did or did not buy a particular shoe brand) Market Segment Size (%): The same as Market Segment Size (000s), but presented as a percentage of all US Adults Estimated Count (000s): The estimated number of U.S. adults within the segment who bought that particular pair of shoes at least once in the last 12 months. % of Total: Among all U.S. adults who bought a particular brand of shoes in the last 12months, the % of them who belong to that particular segment. % within Mkt. Seg who Bought in last year: The percentage of people within a particular segment who bought the shoe brand within the last 12 months Index: The likelihood of a member of the segment to have bought the particular shoe brand in the last 12 months, indexed to the likelihood of an average US adult (the US average equals an index value of 100). Thus, an index value of 120 can be interpreted as members of that segment being 20 percent more likely than the national average to have bought a particular brand of shoes in the last 12 months.

[Red is withheld from students; these are calculated exercises]

Market Segment Size (000s)

Adults 18-34 & Heavy Internet

Total

Men

Women

Adults 18-34

Men 1834

Women 18-34

Internet 1 (Heavy Users)

237,115

114,159

122,916

71,961

35,867

36,037

47,361

21,985 9.3

100

48.1

51.8

30.3

15.1

15.2

(Q1) 20.0

17,096

9,635

7,461

4,053

2,919

4,163

2,392

% of Total

100

56.36

43.64

6,973 (Q2) 40.78

23.71

17.08

24.35

13.99

% within Mkt. Seg. who Bought last year

7.21

8.44

6.07

9.69

11.3

8.1

8.79

10.88

Index

100

117

84

134

157

112

122

(Q3) 151

11,186

4,851

6,335

2,948

1,321

1,627

2,453

899

% of Total

100

43.37

26.36

11.81

14.55

21.93

8.04

% within Mkt. Seg. who Bought last year

4.72

4.25

56.63 (Q4) 5.16

4.1

3.68

4.51

5.18

4.09

Index

100

90

109

87

78

96

110

87

49,453

24,685

24,768

20,808

(Q5) 10,841

9,966

12,233

6,818

100

49.92

50.08

42.08

21.92

20.15

24.74

13.79

20.87

21.63

20.16

28.93

30.23

27.64

25.82

31

100

104

97

139

145

132

124

149

25,338

12,488

12,850

4,931

2,681

2,250

4,816

1,638

100

49.29

50.71

19.46

10.58

8.88

19.01

6.46

10.69

10.94

10.46

6.86

7.47

6.24

10.17

7.45

100

102

98

64

70

58

95

70

9,919

5,234

4,685

2,891

1,681

1,209

2,149

952

% of Total

100

52.77

47.23

29.14

16.95

12.19

21.66

9.6

% within Mkt. Seg. who Bought last year

4.18

4.59

3.81

4.02

4.69

3.35

4.54

4.33

Index

100

110

91

96

112

80

108

103

Market Segment Size (%) ADIDAS Estimated Count (000s)

ASICS Estimated Count (000s)

NIKE Estimated Count (000s) % of Total % within Mkt. Seg. who Bought last year Index NEW BALANCE Estimated Count (000s) % of Total % within Mkt. Seg. who Bought last year Index REEBOK Estimated Count (000s)

Task 1: Correct the Table: Unfortunately, it appears that someone accidentally left some of the calculated values blank in the table. Luckily, you know you can use the other available information in the table to calculate the missing values.

•

•

•

•

•

Q1: Calculate the Market Segment Size (in %) for Heavy Internet Users o CALCULATION = [Market Segment Size (000s) in the Internet 1 (Heavy Users) Column ] / [Market Segment Size (000s) in the Total Column] Q2: Calculate the % of Total Market for Adults 18-34 who Bought Adidas in the last 12 months o CALCULATION = [Estimated Count (000s in Adults 18-34] / [Estimated Count (000s in Totall) ] Q3: Calculate the Index for Adults 18-34 who are Heavy Internet Users who Bought Adidas in the last 12 months o CALCULATION = 100+ ( [% within Mkt. Seg. Who Bought last year in Adults 18-34 Heavy Internet] – [% within Mkt. Seg. Who Bought last year in Total] ) / [% within Mkt. Seg. Who Bought last year in Total] *100 Q4: For the Women column, calculate the % within Mkt. Segment who Bought Asics in the last 12 months o CALCULATION = [Estimated Count (000s)] / [Market Segment Size (000s) ] Q5: For Men 18-34, calculate the Estimated Count (000s) who Bought Nike shoes in the last 12 months o CALCULATION = [Market Segment Size (000s) for Men 18-34] * [% within Mkt. Seg. who Bought last year for Men 18-34]

Task 2: Making Inferences about Athletic Shoe Buyers 1. Generally speaking, does it appear that heavy internet users are more or less likely than the average US adult to have bought these shoe brands in the last 12 months? a. ANSWER: Heavy internet users are generally (slightly) more likely to have bought these shoe brands, as evidenced by 4 of the 5 brands having Index values above 100 (New Balance being the exception).

2. If you were going to run a series of advertisements for SHOE FIEND targeting younger adult women, which brand would you recommend to feature on the advertisement? Which shoe brand would you be disinclined to feature? Why? a. ANSWER: Adidas and Nike are both good answers here, but class debate can emerge on the relative pros and cons. On one hand, Adidas has the highest index value for young

women (157). However, the raw estimate of women who have bought Adidas is only second highest, far below the raw count estimate for Nike. This is an excellent time to debate between the different uses and merits of “total market” metrics vs. “individually averaged” metrics like the Index values. The same line of reasoning can be extended to debating between New Balance and Reebok being both candidates for exclusion from the advertisement.

3. Lately, management for SHOE FIEND has worried that its positioning has completely overlooked serving the wants of “older” consumers (over 45 years old). If SHOE FIEND decides to market toward older U.S. adults, which of the brands should SHOE FIEND be more conscientious about featuring? a. ANSWER: The answer here is New Balance, although the class could debate about the merits of Asics and Reebok as well. For New Balance, only 19.46% of all people who bought New Balance in the last year were 18-34. A reasonable inference from here is that older US adults are accounting for those remaining sales.

Task 3: Estimating the Value of the Shoe Buying Segments Using some assumptions provided by the CFO, you are tasked with estimating the annual sales (in $) for each shoe buying segment. To do so, you will need to make the following assumptions: o o

Average number of pairs bought within 12 months Average price of shoe brand

These numbers are estimates that came from the internal efforts of your financial analyst team.

Adidas Asics Nike New Balance Reebok

If someone buys at least one pair of a shoe brand in the last 12 months, how many total pairs of that brand do they buy, on average?

2.0 2.0 1.5 2.0 1.5

Average price per shoe pair $70 $70 $75 $70 $65

1. What are the total estimated sales of these five shoe brands for Heavy Internet users in the last 12 months? a. CALCULATION = 4,163*1,000*2.0*$70 + 2,453*1,000*2.0*$70 + 12,233*1,000*1.5*$75 + 4,816*1,000*2.0*$70 + 2,149*1,000*1.5*$65 2. For a random U.S. adult woman, how much would we estimate she spent on Asics shoes in the last 12 months? a. CALCULATION = 5.16 / 100 *2.0 * $70

Discussion and Debate: 1. Based solely on the information that was analyzed, do you think it makes more sense for SHOE FIEND to: treat the whole market as homogeneous (no segmentation), use a single variable segmentation scheme (just gender, just age, just Internet usage), or a multivariate segmentation scheme? Regardless of your answer, identify the advantages and limitations associated with your argument.

2. You are about to ask a junior analyst at SHOE FIEND to run another MMR report for you. Which additional variables do you think would be best to add into the report for segmentation purposes? Why?

Evolving Trends in Fitness and French Fries Background and Goal Your close friend has finally saved up enough money to open up their dream business – a fitness gym!

He hopes to one day turn his gym into a national chain, but for now he plans on opening just two locations in a large, U.S. city that in convenient for him. He recently read a news article about how fitness trends in his city are consistent with overall trends in the U.S., so he asked you to do a little research about fitness membership trends in the U.S. In addition, he asked you to look up membership trends for three likely competitors: Planet Fitness, LA Fitness, and 24 Hour Fitness. In addition, your friend has noted that some recent trends for gyms have included some rather curious practices, like giving away free pizza and candy to its members! He is wondering if you may be able to provide some insight, even if indirect, about such trends and how they may apply to his new gym.

You used GfK’s Media Mark Report tool to find information about U.S. adult gym membership trends in 2012 and 2014. Your plan is to use the two different time points to make some inferences about where the future of fitness gym marketing may be heading. In addition, you also found historical trends about U.S. adult spending at fast food restaurants. While not exactly the same as free pizza at gyms, you decided to look at the data to consider whether you can glean any insights. You also found some information about the types of cable channels and websites/apps used by different fitness consumers; you plan on using this information to give some advice to your friend about how to advertise for his new gym.

The Data The data in the report is all reported in the millions (000,000s) and interpreted in a similar way: •

•

•

“Bought Fast Food” and “Spent Over $100 on FF”: Both questions deal with someone’s fast food consumption in the past 6 months from either Spring 2014 or Spring 2012. The first question is a simple count of whether someone spent any money on fast food, while the second question estimates the number of people who spent over $100 on fast food in the past 6 months.

“Member of Gym”: This question is an estimate of U.S. adults who have had a membership in any sort of fitness gym in the last 12 months from either Spring 2014 or Spring 2012. This number includes any gym, not just 24 Hour Fitness, Planet Fitness, and LA Fitness.

“LA Fitness”, “24 Hour Fitness”, and “Planet Fitness”: These questions are the estimated count of U.S. adults who had a membership to the gym within the last 12 months from either Spring 2014 or Spring 2012.

• Bought Fast Food

Spent Over $100 on FF

Member of Gym

LA Fitness 2014

24 Hour Fitness 2012

Year

2012

2014

2012

2014

2012

2014

2012

Total

169.0

168.5

55.3

56.5

43.2

52.1

HH < $40,000

49.9

50.3

12.3

12.5

7.5

HH $40,000-$74,999

48.5

45.8

15.5

15.2

10.5

HH $75,000+

70.6

72.4

27.5

28.8

Men

81.4

80.8

29.4

30.0

Women

87.7

87.8

25.9

26.5

Planet Fitness 2014

2012

2014

2.9

4.2

4.5

3.6

2.6

4.9

10.9

0.5

1.0

0.8

0.6

0.6

1.3

12.2

0.7

1.2

0.8

0.9

0.6

1.3

25.2

28.9

1.7

2.0

2.9

2.0

1.3

2.3

20.4

24.3

1.3

1.9

2.5

1.9

1.3

2.3

22.8

27.7

1.6

2.3

2.0

1.6

1.2

2.5

All numbers reported in millions (000,000s)

•

•

•

Which of the three income groups had the largest increase in gym membership from 2012 to 2014? If this was expressed in terms of percentage increase, which income group experienced the largest increase from 2012 to 2014? o ANSWER = HH income of >$75k had the largest total increase in gym memberships (28.9 – 25.2) = 3.7 million increase. o ANSWER = In terms of percentage increase from 2012, 45.3% increase [ (10.9 – 7.5) / 7.5 ] among people making under HH income of 40k. o This is a good opportunity to talk about differences between absolute change and percentage change.

Which of the three gyms had the largest market share in 2012? In 2014? o ANSWER = Under the assumption that market share is defined as % of adults who have gym membership at a particular gym divided by total membership: ANSWER = 24 Hour Fitness in 2012 (4.5 / 43.2), Planet Fitness in 2014 (4.9 / 52.1). Note that a student may (correctly!) point out that this calculation doesn’t account for “double counting” of consumers with memberships more than one gym. Likely this number is negligible, but is a valid point.

From 2012 to 2014, does it appear that LA Fitness, 24 Hour Fitness, and Planet Fitness comprise a greater or lesser share of the total gym membership market? Why? o ANSWER = Again, under the assumption that “Member of a Gym” constitutes an accurate measure of the fitness membership market, we would conclude that the 3 gyms owned: (2.9+4.5+2.6) / 43.2 = 23.1% of the market in 2012 (4.2+3.6+4.9) / 52.1 = 24.2% of the market in 2014 Thus, although the total market has grown, the total growth of the three gyms has slightly outpaced total sector growth.

Discussion •

Compare the membership trends between LA Fitness, 24 Hour Fitness, and Planet Fitness. Are membership trends similar or different across genders and income groups? Consider the different marketing mixes of the three gyms; what do you think may account for the differences

•

•

in membership trends? (Tip: You can use a tool like Google News to search for news articles about each gym in 2012 or 2014) Your friend told you that he envisions his gym being a place where people who are “intimidated” of going to the gym will feel safe and empowered to work out. Assuming this aspect of your friend’s gym is going to be part of his positioning, which of the three competing gyms would you consider to be his most serious competitor? Why? Which income group has experienced the greatest increase in fast food spending from 2012 to 2014? Do you think this information is relevant for your friend when thinking about the marketing mix of his gym? Why or why not?

Cats, Kibble, and Cable TV Background and Goal You were hired by PROSPEROUS PETS, a small regional chain of boutique pet care stores. PROSPEROUS PETS focuses on serving dog and cat owners for all of their pet needs, including: pet sitting, pet training, grooming, toys, and food. PROSPEROUS PETS tends to serve customers who consider their dogs and cats “surrogate children,” and, in turn, are willing to spend top dollar on quality services and products.

PROSPEROUS PETS is preparing to launch its first television advertising campaign. The top management team has whittled the list of cable channels to potentially advertise on down to 11. Your task is to analyze additional information about the viewers of these 11 stations and come up with a short list of cable channels that you believe will be best for PROSPEROUS PETS. To aid you in your task, management handed you three reports generated from GfK’s Media Mark Report tool. The first report deals with the quantity of pets owned by viewers of each channel, the second report deals with the types of pet services used by channel viewers, and the final report is about where people buy their pet food.

The Data The data in each of the three reports can be interpreted in a similar manner.

• • •

The (mils) column is the estimated number (in millions) of people or U.S. households who exhibited the target behavior in the row and column. For example, 15.1 million U.S. adults report watching the cable channel AMC as well as own 1 dog.

The Vertical % column is the estimated % of all people in a column who watch the channel reported in the table’s row. For example, of all people who own 1 dog, 23.8% of them also report watching AMC. The Horizontal % column is the estimated % of all people in a row who also exhibit the behavior reported in the table’s column. For example, of all people who watch AMC, 29.7% of them own 1 dog.

These three pieces of information can be informative on their own. However, they can also be used to calculate other useful metrics.

Task 1: Understanding the Data Use the information provided in Table 1 to answer the following questions: 1. If someone owns a dog, what is the % chance they watch Fox News? What if they own a cat?

a. ANSWER: Has dog = 63.8+39.5+5.8 = 109.1 Has dog & watches Fox News = 19.1+11.3+1.6 = 32 32/109.1 = 29.3% of dog owners watch Fox News.

Has cat = 29.0 + 21.4 + 5.6 = 56 Has cat & watches Fox News = 8.3 + 5.9 + 1.4 = 15.6 15.6 / 56 = 27.8% of cat owners watch Fox News.

2. Which channel is much more likely to be watched by someone with 4 or more dogs than an average American? What is the INDEX value for this channel? An INDEX value of 100 is the benchmark for an average American adult to have 4 or more dogs. a. ANSWER: SyFy (4.0 horizontal % means 4 percent of all SyFy watchers have 4+ dogs, compared to the national average of 2.4% having 4+ dogs) INDEX = 4.0 / 2.4 = 1.67 = People who have 4+ dogs are 67 percent more likely than the average American to watch SyFy 3. Which channel is much LESS likely to be watched by someone with 4 or more cats than compared to an average American? What is the INDEX value? a. ANSWER: Fox News (2.1 horizontal % means 2.1% of all Fox News watchers have 4+ cats, compared to national average of 2.4 having 4+ cats) INDEX = 2.1 / 2.4 = 87.5, meaning people who have 4+ cats are 12.5 percent less likely than an average American to watch Fox News.

4. If we wanted to reach the absolute most 2 to 3 dog owning households by advertising on only a single cable channel, which channel would we pick? a. ANSWER = History Channel because 38.5% of all 2-3 dog owners said they watch History channel (Vertical % column).

5. Based on these results, is it fair to say that Animal Planet watchers are more likely to own either a cat or dog compared to the national average? a. ANSWER = Yes, as people who watch Animal Planet index over 100 (Animal Planet Horizontal % value / Total Horizontal % value) for all six columns of pet ownership.

6. Regardless of the number of dogs or cats someone owns (including zero!), about how many U.S. adults in total said they watch the Cooking Channel? a. ANSWER (this can be answered from any of the 6 sets of columns): b. [working from 1 dog] : = 100*8.4 / 26.8 = 31.3 million total Cooking Channel watchers c. [working from 1 cat] : = 100*3.4 / 10.8 = 31.4 million total Cooking Channel watchers (note rounding error)

Use the information provided in Table 2 to answer the following questions: 1. Your friend assumed that Animal Planet is the best channel for finding pet owners who use pet services frequently. Does your data support or contradict her belief? Why? a. ANSWER = Although Animal Planet watchers do tend to overindex on pet services, viewers of other channels overindex to an even greater extent. For example, consider HGTV. 12.9 / 10.2 *100 = 126 index for 4+ annual vet visits (while Animal Planet overindexes at only 125).

Use the information provided in Table 3 to answer the following questions:

1. Assuming people only buy from one of the three options, how many people in total bought their pet food from a discount store, a pet specialty store, or directly from their veterinarian? What % of this total bought from their veterinarian? a. ANSWER = 22.8+53.2+10.2 = 86.2 million people. 10.2 / 86.2 = 11.8% 2. Which cable channel had viewers with the largest % of their pet food shopping done at a veteranarian? a. ANSWER = SyFy viewers (2.0 / (4.1+9.0+2.0)) = 13.2%

Discussion and Debate: 1. Based only on the information provided, which 3 cable channels would you recommend as the best choices for promoting the business?

Which 3 cable channels do you think are the poorest fit?

2. What other additional information would you like to have so that you could make a more informed recommendation? Why is it important? How could you find out this information?

3. If PROSPEROUS PETS told you that its services were much more profitable than its product (toys, food, etc.) sales, would that change your recommendation? Why or why not?

TABLE 1: Pet Ownership and Cable Channel Viewing

Target

1 dog (mil s)

Hor z%

2-3 dogs (mil s)

Hor z%

4+ dogs (mil s)

Vert %

Total

63.8

HH subscribes to Cable AMC

Hor z%

2-3 cats (mil s)

Vert %

100.0

26.9

39.5

31.4

49.3

26.9

15.1

23.8

29.7

Animal Planet

15.5

24.2

Comedy Central

9.8

15.4

Cooking Channel

8.4

Discovery Channel Food Network

Hor z%

4+ cats (mil s)

Vert %

Vert %

Vert %

Hor z%

100.0

16.7

5.8

100.0

12.2

21.4

100.0

9.0

5.6

100.0

2.4

16.8

42.4

14.3

9.2

23.3

18.1

14.4

49.5

12.3

6.9

23.9

13.6

9.7

45.4

8.3

2.1

37.0

1.8

5.0

23.2

9.7

1.4

25.3

2.8

29.8

11.4

28.9

28.9

7.1

17.9

3.1

7.5

25.8

2.6

4.5

15.4

14.4

6.0

28.0

11.6

1.6

27.9

3.0

13.1

3.9

18.3

11.6

0.9

15.3

2.5

13.2

26.8

4.9

15.7

2.9

3.4

11.7

10.8

3.1

14.4

9.9

0.7

12.0

2.2

19.3

30.3

28.3

16.2

25.4

28.6

1.8

32.0

2.7

1.5

26.4

2.7

9.0

31.2

13.2

7.0

32.5

10.2

1.7

30.1

2.5

7.0

24.2

12.4

5.6

26.0

9.8

1.3

22.5

2.2

Fox News Channel

19.1

30.0

16.6

1.6

28.6

2.4

8.3

28.5

12.1

5.9

27.8

8.7

1.4

25.7

2.1

History Channel

21.4

HGTV

14.8

38.5

19.8

2.2

21.9

18.0

1.2

37.7

2.8

9.9

34.2

12.9

8.2

38.5

10.7

2.2

39.2

2.9

20.5

2.5

5.8

20.1

12.1

4.9

22.9

10.2

1.2

21.0

2.5

Syfy Weather Channel

7.9

20.0

20.3

12.5

31.7

16.9

1.6

27.0

4.0

5.2

17.9

13.3

4.4

20.5

11.3

1.3

23.3

3.4

2.0

34.7

2.7

9.5

32.7

12.8

6.8

31.6

9.1

2.0

36.0

2.7

Hor z%

1 cat (mil s)

Vert %

100.0

2.4

29.0

1.9

32.9

1.6

1.3

21.8

2.5

22.0

1.6

27.5

20.8

0.9

15.0

12.5

15.8

0.9

13.4

33.9

19.6

9.7

24.5

17.1

28.0

11.3

28.7

33.6

27.9

15.2

23.2

30.8

8.6

10.0

15.6

25.6

19.6

30.7

26.4

TABLE 2: Pet Service Usage and Cable Channel Viewing

Target

Has Pet Insur ance (mil s)

Hor z%

Used Pet Day care (mil s)

Hor z%

Used Pet Groo ming (mil s)

Vert %

Total

7.1

HH subscribes to Cable

3.3

AMC

Hor z%

2-3 Vet Visit s (mil s)

Vert %

100.0

3.0

3.5

46.5

2.8

1.6

1.5

21.8

3.0

Animal Planet

1.6

23.1

Comedy Central

1.1

15.6

Cooking Channel

0.8

Discovery Channel

2.0

Food Network

Hor z%

4+ Vet Visit s (mil s)

Vert %

Vert %

Vert %

Hor z%

100.0

1.5

31.9

46.7

1.4

16.1

100.0

14.7

42.1

48.3

14.4

19.9

100.0

17.8

24.1

100.0

10.2

47.3

17.1

11.0

45.8

9.4

0.9

26.0

1.8

7.8

22.4

15.3

10.2

24.2

20.1

5.3

22.1

10.4

3.2

0.7

19.0

3.3

0.7

19.5

15.5

8.3

23.7

15.9

5.5

15.9

15.9

11.1

26.4

21.5

6.6

27.5

12.8

16.3

7.1

16.8

20.9

4.4

18.1

12.9

11.7

2.7

0.4

28.3

2.9

1.1

13.1

13.4

4.6

32.5

15.2

10.5

13.2

14.6

5.7

13.4

18.1

2.9

12.1

9.3

30.1

15.3

13.9

33.1

20.4

7.8

32.4

11.4

1.8

25.2

3.2

8.7

27.4

15.5

8.6

24.8

15.2

10.8

25.7

19.1

6.2

25.8

11.0

Fox News Channel

1.8

25.8

History Channel

2.4

33.7

1.3

10.2

31.8

1.6

11.9

37.4

14.9

10.4

29.8

15.2

12.4

29.5

18.2

6.9

28.8

10.2

15.6

11.9

34.1

15.5

15.3

36.3

19.9

8.8

36.5

11.5

HGTV

1.6

22.4

1.6

8.3

26.0

17.3

7.5

21.6

15.7

9.6

22.7

19.9

6.2

25.7

12.9

Syfy Weather Channel

0.4

11.8

1.0

1.0

27.9

1.3

5.3

16.6

13.6

6.0

17.1

15.3

8.0

19.1

20.7

4.2

17.2

10.7

10.6

33.2

14.3

10.7

30.9

14.5

13.4

31.9

18.1

8.4

34.7

11.3

Hor z%

1 Vat Visit (mil s)

Vert %

100.0

13.5

34.8

50.4

13.7

16.8

7.9

24.7

15.5

1.3

8.0

25.1

2.0

5.4

16.9

11.8

1.3

4.2

31.2

1.6

10.4

1.1

31.5

1.9

2.7

0.9

24.7

3.1

1.2

34.5

22.3

3.3

0.8

1.4

20.1

3.7

1.9

26.4

2.5

TABLE 3: Pet Food Buying and Cable Channel Viewing

Target

Disc ount Stor e (mil s)

Hor z%

Pet speci alty shop (mil s)

Vert %

Vert %

Total

22.8

100.0

9.6

53.2

HH subscribes to Cable

10.6

46.3

9.0

AMC

5.9

25.8

Animal Planet

5.9

25.7

Comedy Central

3.6

Cooking Channel

2.9

Discovery Channel

Hor z%

Vete rinar ian (mil s)

Vert %

Hor z%

100.0

22.5

10.2

100.0

4.3

25.9

48.6

22.1

5.2

50.8

4.4

11.5

12.2

22.9

23.9

2.4

23.1

4.6

11.3

13.6

25.5

26.2

2.8

27.1

5.3

15.9

10.7

9.0

16.9

26.6

1.7

16.8

5.0

12.6

9.2

6.9

13.1

22.2

1.3

13.1

4.3

7.5

33.0

11.0

17.0

32.0

24.9

3.4

33.0

4.9

Food Network

5.3

23.3

9.4

13.7

25.8

24.2

2.4

23.4

4.2

Fox News Channel

6.7

29.2

9.8

15.3

28.8

22.4

3.3

31.9

4.8

History Channel

8.6

37.8

11.2

18.2

34.2

23.8

3.7

36.2

4.8

HGTV

5.2

22.8

10.8

12.5

23.4

26.0

2.5

24.3

5.2

Syfy

4.1

18.0

10.6

9.0

17.0

23.2

2.0

19.4

5.1

Weather Channel

7.7

33.8

10.4

16.1

30.3

21.7

3.5

34.0

4.7

Going Global with CAPABLE JUICE Background You are the CMO (Chief Marketing Officer) for CAPABLE JUICE. CAPABLE JUICE is a company that sells a line of premium, all-natural juices.

CAPABLE JUICE is marketed as a tasty beverage particularly well-suited for people who emphasize health and wellness in their lives. To date, your company has only sold in the United States, but you are now preparing to make your first expansion into a foreign market.

Previous research has narrowed the candidate countries down to three. Regardless of which country is selected, it has already been determined that CAPABLE JUICE will be sold to local distributors who will then be responsible for selling to local retailers and, ultimately, consumers. Your Chief Financial Officer (CFO) has provided you some preliminary financial information, and you have also been handed a report created from the 2014 GfK Consumer Trends Global Consumer Survey. This survey reports information about each country. Importantly, it dives deeper and also segments consumers by their relative income and occupational status. In the United States, income and occupation have been important characteristics to identify CAPABLE JUICE consumers.

Your Goal: Review the data from the CFO and from the GfK consumer report. Then, make some preliminary financial estimates about the likely financial performance of CAPABLE JUICE. Based on your estimates, make some preliminary recommendations for CAPABLE JUICE's future international expansion.

The Data: •

•

About the data from the CFO: o PRICE: The CFO has provided you with the assumed sale price per bottle of CAPABLE JUICE. The price has been adjusted into US dollars and is assumed to be constant for each of the three countries and for any quantity of CAPABLE JUICE that is sold. o MARKET SHARE: The CFO has asked you to assume that CAPABLE JUICE will account for a specific percentage of the foreign market after a single year. For simplicity, that percentage is assumed to be the same regardless of which country you enter. The market for a country is defined as the quantity of fruit juices or fruit drinks sold in a given year.

About the GfK data: The GfK Consumer Trends Global Survey is a large survey of many countries. Results for each country are adjusted to be representative of the country's population that is 15 years or older. Each country has results for four different consumer segments from the combination of income (high/low ) and occupation (white collar / other occupation). o Size (000s): The estimated number of people (in thousands) who are in each segment of a country

o o o o o o o o o o o

% Country: The estimated % of the entire country that is comprised of people within a particular segment % Group: The "% Group" means the percentage of people within a segment who meet the criteria for a specific survey question Personal Values, Health and Fitness: The percentage of segment members who scored the 2 highest possible values on how important "health and fitness" were as part of their personal values.

Satisfaction with Primary Shopping Location: Availability of healthy foods and beverages: The percentage of segment members who scored the 2 highest possible values on how satisfied they were with the availability of healthy foods / beverages.

Drink fruit juice daily: The percentage of segment members who said they drink fruit juice "daily" Drink Fruit juice weekly: The percentage of segment members who said they drink fruit juice "weekly" Drink fruit drinks daily: The percentage of segment members who said they drink fruit drinks "daily" Drink fruit drinks weekly: The percentage of segment members who said they drink fruit drinks "weekly" Regularly eat healthy, nutritious foods for: physical health: The percentage of segment members who said this is a motivation to eat healthy foods.

Regularly eat healthy, nutritious foods for: mental / emotional health: The percentage of segment members who said this is a motivation to eat healthy foods.

Regularly eat healthy, nutritious foods for: appearance: The percentage of segment members who said this is a motivation to eat healthy foods.

ALL NUMBERS HERE ARE PLACEHOLDERS PENDING ACCESS TO GFK GLOBAL SURVEY DATA

Country

Germany

Income Group Occup.

Group Size (000s) % of Country % of Group

High

Ireland

Medium

USA

High

Medium

High

Medium

White Collar 500

Skilled Trades 1,000

White Collar 800

Skilled Trades 1,000

White Collar 300

Skilled Trades 400

White Collar 160

Skilled Trades 100

White Collar 8,000

Skilled Trades 8,000

White Collar 16,000

Skilled Trades 24,000

5%

10%

8%

10%

15%

20%

8%

5%

10%

10%

20%

30%

30%

60%

15%

20%

30%

40%

80%

10%

60%

45%

35%

45%

% of Group % of Group % of Group % of Group

30%

40%

80%

10%

40%

80%

30%

60%

15%

20%

10%

60%

5%

5%

20%

5%

20%

5%

5%

5%

20%

5%

5%

5%

10%

5%

5%

10%

5%

5%

10%

5%

5%

5%

10%

10%

10%

10%

10%

5%

10%

10%

10%

10%

10%

10%

10%

10%

Regularly eat healthy, nutritious foods for: physical health

% of Group

20%

5%

20%

30%

40%

60%

15%

5%

5%

5%

20%

20%

Regularly eat healthy, nutritious foods for: mental / emotional health

% of Group

10%

5%

5%

5%

20%

5%

10%

10%

5%

10%

10%

5%

Regularly eat healthy, nutritious foods for: appearance

% of Group

5%

10%

5%

5%

5%

5%

15%

5%

5%

5%

20%

20%

Personal Values: Health and Fitness

% of Group

10%

10%

10%

10%

10%

15%

5%

20%

5%

20%

5%

5%

Beverages sold per year to segment (000s)

13,688

20,075

51,100

29,200

21,353

16,060

4,088

2,008

467,200

160,600

438,000

657,000

Estimated number of annual fruit juice / drink beverages consumed per year by segment member Estimated Market Share within Segment Estimated Annual Sales (000s) Estimates Sales per Consumer

27.4

20.1

63.9

29.2

71.2

40.2

25.6

20.1

58.4

20.1

27.4

27.4

5% $513 $1.03

10% $1,506 $1.51

5% $1,916 $2.40

5% $1,095 $1.10

5% $801 $2.67

5% $602 $1.51

10% $ 307 $1.92

5% $75 $0.75

10% $ 35,040 $4.38

10% $ 12,045 $1.51

5% $ 16,425 $1.03

10% $ 49,275 $2.05

Personal Values: Health and Fitness Satisfaction with Primary Shopping Location: Availability of healthy foods and beverages Drink fruit juice daily Drink Fruit juice weekly Drink fruit drinks daily Drink fruit drinks weekly

Task 1: Understanding the Data: Before providing recommendations to the CFO, make sure you understand how to interpret the information presented in the table.

1. Which country has the segment with the fewest consumers in it? a. ANSWER: The country with the MIN value in row "Size(000s)" 2. Which country has the largest total number of potential consumers in it? a. ANSWER: The country with the MAX summation of the 4 segments "size (000s)" 3. Find the country that has the consumer segment that makes up the largest percentage of its total amount of consumers. What is that percentage? a. ANSWER: The country with the MAX value in the row "% of country" 4. Which segment prioritizes physical appearance as a motivation for eating / drinking healthy? a. ANSWER: The segment with the MAX value for the row "Regularly eat healthy, nutritious foods for: appearance"

TASK 2: Estimating Sales Using some assumptions provided by the CFO, you are tasked with estimating the annual sales (in $) for each segment in each country. To do so, you will need to make the following assumptions: •

Actual consumption: o When someone says they drink juice or drinks fruit drinks "daily," we assume they actually have 0.7 of that drink on a typical day. o When someone says they drink juice of drinks fruit drinks "weekly," we assume they actually have 0.1 of that drink on a typical day. o For all other answers, we assume that they don't drink the beverage at all.

•

Using the data provided by GfK and the assumptions above, what are total estimated number of fruit drinks & juices (combined) that are estimated to be sold to consumers of each segment in a typical year (365 days)? The answers have been provided to you for the first two columns. o CALCULATION:

▪

•

Annual Sales $ estimated per segment = [ (Segment Total Size)*(% daily drink)*(assumed daily consumption)+ (Segment Total Size)*(% weekly drink)*(assumed daily consumption)+ (Segment Total Size)*(% daily drink)*(assumed daily consumption)+ (Segment Total Size)*(% weekly drink)*(assumed daily consumption) ] According to these estimates, how many beverages would we assume a typical person in each segment consumes per year? o CALCULATION: ▪ Average yearly consumption per consumer = [For each segment, take the answers immediately above] / [total size of segment]

TASK 3: Estimating Sales The CFO is impressed with your initial estimates. She would like you to go even further and estimate the total sales expected within each segment after one year. Again, the CFO has provided you with some important estimates to help you make your calculations.

•

•

Financial Assumptions: o

(1) The per unit price sold to distributors will be $0.75, regardless of country or quantity sold.

o

(2) The estimated market share for sales depends on how much a segment sees health and wellness as being essential to their lives. If healthy and wellness is a priority for a segment, the CFO assumes a 10% market share is during the first year is reasonable. If health and wellness is not a major priority, the market share is assumed to only be 5%. Health and wellness is considered to not be a priority for a segment if less than [calculation: median value of row (Personal Values: Health and Wellness) ].

Question 1: Using the GfK data and the information provided by the CFO, what is the estimated annual sales for each segment? o

CALCULATION: ▪

Annual Sales $ estimated per segment = [ (Original Total Annual Sales Volume Estimate for Segment) *(Assumed Market Share)

*(Price per unit to distributors) ] •

Question 2: Which country, overall, has the highest estimated annual sales? o

•

[Answer = country with the max(estimated annual sales 000s for each of the four segments) ]

Question 3: Based on these estimates, how much money per consumer would we expect for each segment? o

CALCULATION: ▪ = (Annual Sales $ estimated per segment) / (total consumer size per segment)

Discussion and Debate: Based solely on the information that was analyzed, which country do you think CAPABLE JUICE should expand to? Why? While making its financial estimates, CAPABLE JUICE did not consider the impact of every GfK survey question reported in the table above. For example, CAPABLE JUICE did not consider if each segments' satisfaction with the availability of healthy foods and beverages at grocery stores might impact their market share within a given segment. From your perspective, how might CAPABLE JUICE incorporate the rest of the GfK information into their estimates? Which questions do you think may lead to you increasing or decreasing different estimates?

Think about other important consumer behavior factors that might impact the success of CAPABLE JUICE in a foreign market. What other important information do you think is pertinent for CAPABLE JUICE to know but was not present in the table above? Why?