FInal Exam Notes - Ch 9-15.docx

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Western University
Management and Organizational Studies
Management and Organizational Studies 1021A/B
Beth Lee

Chapter 7 – Attitudes  Attitude  a lasting general evaluation of people (including one’s self), objects, or issues  Attitude object  anything toward which a person has an attitude – tangible (brand of vodka) or intangible (drunken driving)  Lasting – tends to endure over time  General – applies to more than one momentary event  The functions of attitude o Functional theory of attitudes  Daniel Katz – to explain how attitudes facilitate social behaviour – attitudes exist BECAUSE they serve some function for the person o Utilitarian function  related to the basic principles of reward and punishment – if a person likes the taste of a cheeseburger they will form a positive attitude towards it – ads that stress straightforward product benefits o Value-expression function  express the person’s central values or self-concept – forms an attitude about the product based on what it says about him/her – highly relevant to lifestyles o Ego-defensive function  formed to protect the person either from external threats or internal feelings o Knowledge function  formed as a result of a need for order, structure, and meaning – when person is in an ambiguous situation and in confronted with a new product  The ABC model of attitudes o Affect  refers to the way a consume feels about an attitude object o Behaviour  involves the person’s intentions to do something with regard to an attitude object (intention does not always result in behaviour) o Cognition  refers to the beliefs a consumer has about an object o Emphasizes the relationship between feeling, thinking, and doing o Hierarchies of effects - relative importance of ABC will vary depending on consumer’s motivation with regard to the attitude object  The high involvement hierarchy  Cognition Affect  behaviour  Attitude – based on cognitive info processing  Problem solving process  The careful choice process often results in a type of BRAND LOYALTY  Buyer is motivated to seek out a lot of info, weigh alternatives and come to a thoughtful decision  The low involvement hierarchy  Cognition  behaviour  affect  Attitude – based on behavioural learning processes  Only collected minimal info and has an emotional response only AFTER consuming  Initially does not have a strong preference for one brand  Consumer’s choice is reinforced by good or bad experiences with the product after purchase  Consumers are not motivated to process a lot of complex brand-related info  involvement paradox: the LESS important the product is to consumers, the MORE important the marketing stimuli needs to be (packaging, jingles)  Zajonc’s model of hedonic consumption  Affect  behaviour  cognition  Attitude – based on hedonic consumption  Consumers act on the basis of their emotional reactions  Attitudes can be strongly influenced by product attributes irrelevant to the actual product quality  Emotional contagion  messages delivered by happy people enhance our attitude toward the product  Debate about the independence of cognition and affect – affective responses do not always require prior cognitions – independence hypothesis  Attitude toward the ad o In addition to forming an attitude toward a product, individuals are influenced by their evaluations of its advertising o Attitude object  the marketing message itself o Attitude toward the advertisement  defined as a predisposition to respond in a favourable or unfavourable manner to a particular advertising stimulus during a particular exposure occasion o Determinants – viewer’s attitude toward the advertiser, ad execution itself, mood evoked by the ad, degree to which the ad affects viewers’ arousal levels  Ads have feelings too o Ads evoke a large variety of emotional responses from disgust to happiness o 3 emotional dimensions have been identified in commercials: pleasure, arousal, intimidation o Specific types of feelings that can be generated:  Upbeat feelings – amused, playful  Warm feelings – affectionate, hopeful  Negative feelings – critical, offended  Forming attitudes o Attitudes can be formed through  classical conditioning, instrumental conditioning, or very complex cognitive processes  Levels of commitment to an attitude – the degree of commitment is related to their level of involvement with the attitude object o Compliance  at the lowest level of involvement, compliance, an attitude is formed because it helps gain rewards and avoid punishments from others  Very superficial - likely to change when no one is monitoring o Identification  occurs when attitudes are formed so that the consumer will then feel similar to another person of group – advertisers want consumers to imitate models in their ads o Internalization  hat a high level of involvement, deep-seated attitudes are internalized and become a part of the person’s value system – very difficult to change  Consistency principle o Consumers value harmony among their thoughts, feelings, and behaviours and they are motivated to maintain uniformity among these elements o The way an attitude object will be evaluated is how it fits in with the other, related attitudes already held by the consumer o Cognitive dissonance and harmony among attitudes  Theory of cognitive dissonance  when a person is confronted with inconsistencies among attitudes or behaviours, he/she will take some action to resolve this dissonance  People are MOTIVATED to reduce the negative feelings caused by dissonance by making things fit with one another – two COGNITIVE ELEMENTS are inconsistent with one another  The magnitude of dissonance depends on the IMPORTANCE and the NUMBER of dissonant elements  Dissonance reduction may occur by eliminating, adding, or changing elements  Can help to explain why evaluations of a product tend to increase AFTER it has been purchased (post-purchase dissonance) – people tend to find even more reasons to like something after it is theirs o Self-perception theory  Provides an alternative explanation for dissonant effects  Assumes that people use observations of their own behaviour to determine what their attitudes are, just as we assume that we know the attitudes of others by watching them  We maintain consistency by INFERRING that we must have a positive attitude toward an object if we have bought or consumed it  Relevant to low-involvement hierarchy since it involves situations in which behaviours are initially performed in the absence of a strong internal attitude  Buying a product out of habit may result in a positive attitude AFTER THE FACT  Helps explain the effectiveness of a sales strategy called the FOOT-IN-THE-DOOR technique  based on the observation that a consumer is more likely to comply with a request if he/she has agreed to comply with a smaller request  Especially useful for inducing consumers to answer surveys or donate money  LOW-BALL TECHNIQUE  person is asked for a small favour and is informed after agreeing to it that it will be very costly  DOOR-IN-THE-FACE TECHNIQUE  person is first asked to do something extreme (a request that is usually refused) and then is asked to do something smaller o Social judgement theory  Assumes that people assimilate new information about attitude objects in the light of what they already know or feel  Initial attitude  frame of reference, and new info is categorized around the existing standard  People differ in terms of the information they will find acceptable or unacceptable  latitudes of acceptance and rejection  Assimilation effect  messages that fall within the latitude of acceptance tend to be seen as more consistent with our own position than they actually are  Contrast effect  messages falling in the latitude of rejection tend to be seen as even FARTHER from our own position than they actually are  The more involved a person is with an attitude object  latitude of acceptance gets smaller – the consumer accepts fewer ideas that are removed from his/her position o Balance theory  Considers relations among elements a person might perceive as belonging together  Resulting attitude structures are called TRIADS  Each triad contains  a person and their perceptions, an attitude object, and some other person or object  People ALTER these perceptions to make relations among them consistent – want elements in a triad to be consistent  Elements go together in one of 2 ways:  They can have a UNIT RELATION – where in element is seen as somehow belonging to or being a part of the other (like a belief)  SENTIMENT RELATION – where 2 elements are linked because one has expressed a preference for the other  When elements in a triad are unbalanced, tension is created. Although the theory does not say WHICH route will be taken to eliminate the tension but is does predict that a change in perception is necessary o Marketing application of balance theory  When perceptions are balanced – attitudes are likely to be stable  When inconsistencies are observed – likely to observe changes in attitude  Forming a unit relation with a popular product may improve one’s chances of being included as a positive sentiment relation is other people’s triads  Useful in accounting for the widespread use of celebrities to endorse products – when a triad is not fully formed, an advertiser can creative positive sentiment between the consumer and the product by depicting a unit relation between the product and a well-known person  “balancing act”  heart of celebrity endorsements – hoped that star’s popularity will transfer into the product  Attitude models o A product can comprise of many attributes, some of which may be more important than others to particular people o People’s decisions to act on their attitudes are affected by other factors, such as whether they feel that buying a product would be met with approval by friends/family o Multi-attribute attitude model  Assumes that a consumer’s attitude (evaluation) of an attitude object will depend on the beliefs they have about several attributes of the object  Implies that an attitude toward a product or a brand can be predicted by identifying these specific beliefs and combining them to derive a measure of the consumer’s overall attitude  Attributes  characteristics of attitude object – researcher can include those attributes that consumers take into consideration when evaluation Ao – degree of freshness of produce at a grocery store  Beliefs  cognitions about the specific Ao – extent to which a consumer believes that a brand possesses a particular attribute – belief that Sobeys has the freshest produce  Importance weights  relative priority of an attribute to the customer – one student might stress low grocery prices while another might stress fresh produce o The Fishbein model  Most influential multi-attribute model – measures 3 components  Salient beliefs  those beliefs about the object that are considered during evaluation  Object-attribute linkages  probability that a particular object has an important attribute  Evaluation  of each of the important attributes  Assumptions the model makes that do not always stand:  We have been able to specify adequately all the relevant attributes  We will go through the process (formal or informal) of identifying a set of relevant attributes, weighing them and summing them – but sometimes attitude is formed by an overall affective response = affect-referral o Strategic applications of the multi-attribute model  Capitalize on relative advantage  if one’s brand is viewed as being superior on a particular attribute, consumers need to be convinced that this particular attribute is an IMPORTANT one  Strengthen perceived product-attribute links  sometimes consumers do not equate his/her brand with a certain product attribute – problem can be addressed by campaigns that stress the product’s qualities to consumers  Add a new attribute  marketers frequently try to create a position distinct from those of their competitors by adding a product feature  Influence competitor’s ratings  try to decrease the positivity of competitors – comparative advertising o Flaw with multi-attribute models – knowledge of a person’s attitude is NOT a very good indicator of behaviour – consumers can LOVE a commercial but still not buy the product  Using attitudes to predict behaviour o The extended Fishbien model  Theory of reasoned action  contains several important additions to the original Fishbien model – some of the modifications are the following:  Intentions versus behaviour: attitudes have both direction and strength o Helpful to distinguish between firmly held attitudes and those that are more superficial o Many factors may interfere with a person’s actual behaviour even if the consumer has sincere intentions o In some instances, past purchase behaviour has been found to be a better predictor of future behaviour than is a consumer’s behavioural intention o Some uncontrollable factors inhibit prediction of actual behaviour – getting mugged, losing your job, model you wanted is out of stock  Social behaviour o What we think others would LIKE us to do may be more crucial than our own individual preferences o Assess the extent to which people’s public attitudes and purchase decisions might be different from what they would do if they were in private o Subjective norm (SN)  effects of what people believe other people think we should do. Two factors – the intensity of a NORMATIVE BELIEF (NB) that others think an action should be taken or not taken and the MOTIVATION TO COMPLY (MC) with that belief  Attitude towards buying o Attitude toward the act of buying  focuses on the perceived consequences of a purchase o Knowing how someone feels about buying or using the product turns out to be MORE VALID than just knowing the consumer’s evaluation on the object itself o Buying condoms – might positively view the attitude object (safe sex) but act of buying may be negative because of the embarrassment and hassle  Obstacles to predicting behaviour in the Theory of reasoned action o Model was developed to deal with actual behaviour (taking a diet pill) not with the outcomes of behaviour (weight loss) that are instead assessed in some studies o Some outcomes are beyond the consumer’s control – might want a mortgage but cannot find a banker to give them one o Assumption that behaviour is intentional might be invalid in a number of cases – impulse buys, novelty seeking, sudden changes in one’s situation o Measure of attitude often do not correspond to the behaviour they are supposed to predict – very important to match the level of specificity between the attitude and the behavioural intention o Problem related to the TIME FRAME of the attitude measure – the longer the time between the attitude measurement and the behaviour it is supposed to asses, the weaker the relationship o Attitudes formed by direct personal experience with an Ao are stronger and more predictive of behaviour than those formed indirectly (through advertising) – ATTITUDE ACCESIBILITY perspective  behaviour is a function of a person’s immediate perceptions of the Ao in the context of the situation  Cultural roadblocks faced by the theory of reasoned action diminish the universality of this concept: o The model was developed to predict the performance of any voluntary act. Across cultures, some acts that might be voluntary in one culture might not In another (exams, entering military) o The relative impact of subjective norms may vary across cultures – Asian cultures  conformity and face- saving o The model measures behavioural intentions and thus presupposed that consumers are actively thinking ahead and planning future behaviours – consumers have a “linear” time sense (think of past, present, and future)  not held by all cultures o A consumer who forms and intention is (implicitly) claiming that they are in control of their actions – Muslim cultures tend to be fatalistic and do not necessarily believe in free will  Trying to consume o Theory of trying  states that the criterion of behaviour in the reasoned action model should be replaces with TRYING to reach a goal o Amount of control a person has over the situation, his/her expectations of success and failure , social norms related to attaining a goal, and his/her attitude toward the process of trying (how the action required to attain the goal makes him/her feel regardless of the outcome)  PAST FREQUENCY of the behaviour  RECENCY of the behaviour  BELIEFS of possibility of attaining the goal  EVALUATIONS OF CONSEQUENCES of either performing or not performing the behaviour  THE PROCESS to attain this goal  EXPECTATIONS OF SUCCESS AND FAILURE  SUBJECTIVE NOMS TOWARD TRYING- would people/public eye approve of this  Tracking attitudes over time – better than surveys because they are a snapshot at one moment in time o Ongoing tracking studies: attitude surveys at regular intervals using the identical methodology each time o Changes to look for over time:  Changes in different age groups  attitudes change as people age (life-cycle effect) – COHORT effects occur where members of a particular generation tend to share certain outlooks – HISTORICA effects occur as large groups of people are affected by profound cultural changes (9/11)  Scenarios about the future  provide valuable data about future behaviour and yield insights for public policy  Identification of change agents  social phenomena can change attitudes towards basic consumption activities – facilitators: make a certain action/behaviour easier; inhibitors: make a certain action harder (value of 2 paychecks in today’s economy” Chapter 8 –Attitude change and interactive communication  Attitude change  alteration of one or more of the cognitive, affective, and behavioural components of an attitude to facilitate a shift in actual behaviour  Interactive communication  two-way effect among consumers and media  Communication flows both ways – the consumer may seek info to learn more about these options  Persuasion  an active attempt to change attitudes – central goal of many marketing communications  Basic psychological principles that influence people to change their minds or comply with a request: o Reciprocity  people are more likely to give if they receive o Scarcity  items become more attractive when they become less available o Authority  we tend to believe an authoritative source more readily o Consistency  people try not to contradict themselves in terms of what they say and do about an issue o Consensus  often take into account what others are doing before we decide what to do – more likely to donate to a charity if they see a list of names of their neighbours who have  Tactical communications options: To craft persuasive messages a number of questions must be answered: o WHO will be depicted as using the scent in the ad? – source of msg helps to determine consumers’ acceptance of it o HOW should the message be constructed? –express product benefits o WHAT media should be used to transmit this msg? – sometimes WHERE something is said can be as important as WHAT is said – attributes of product should be matched with medium o WHAT CHARACTERICTICS of the target market might influence the ad’s acceptance?  The elements of communication o Communications model  specifies that a number of elements are necessary for communication to be achieved o A SOURCE must choose and encode a MESSAGE that must be transferred through a MEDIUM which is decoded by one or more RECEIVERS who then give FEEDBACK to the source  Updated view: interactive communications o Permission marketing  a marketer will be much more successful trying to persuade customers who have opted into their messages; consumers who have “opted out” of listening to the message probably weren’t good prospects in the first place o Traditional model was developed to understand MASS COMMUNICATIONS  info is transferred from the producer (source) to many consumers (receivers) o A message  perishable; it is repeated for a fairly short period of time and then it vanishes as a new campaign eventually takes its place o Traditional view  media exert powerful and direct effects on individuals – often used by those in power to brainwash and exploit individuals – receiver is basically a “couch potato” – passive  Uses and gratifications theory o Consumers are an active, goal oriented audience that draws on mass media as a resource to satisfy needs – what people do WITH their media o Media competes with other sources to satisfy needs and these needs include diversion and entertainment as well as info o Consumers now becoming PARTNERS in the communication process – their input is helping shape the messages they and others like the receive o Sender  Medium  Receiver o Remote controls and DVRs have revolutionized communications  New message formats o M-commerce mobile commerce – marketers promote their goods via wireless devices including cell phones, PDAs, iPods –in Asia, cell phones have become electronic wallets o Blogging  people post message to the web in diary form  Moblogging – on the go blogging from camera phone  Video blogging  Podcasting – creating your own radio show that people can listen to  RSS (really simple syndicating) – sign up to have updates send automatically to them  Flogs (fake blogs) – created by companies to generate buzz  Virtual worlds  Twitter – limited to 140 characters  Widgets – small programs that users can download that import live content o Levels of interactive response – two basic types of feedback:  First order response  direct marketing vehicles such as catalogues and TV ads are interactive  Second order response  does not have to immediately result in a purchase – response that is not in the form of a transaction  The source o Same words from different people can have very different effects o Possible to determine what aspects of a communicator will induce attitude change o Important source characteristics – credibility and attractiveness o EXPERTS are effective at changing attitudes toward utilitarian products that have high performance risk (vacuums) o CELEBRITIES are more effective when they focus on products that have high social risk (jewellery, furniture) o “typical consumers”  who are appealing sourced because of their similarity to the recipient are most effective when providing real-life endorsements for everyday products  Source credibility o Refers to the source’s perceived expertise, objectivity, and trustworthiness o The sleeper effect  Positive sources tend to increase attitude change in general, exceptions can occur  A source can be obnoxious or disliked and still manage to be effective at getting the product’s message across  After a while people appear to “forget” about the negative source and wind up changing their attitudes anyway  sleeper effect  Dissociative cur hypothesis  over time the message and the source become disassociated in the consumer’s mind – the message remains on its own in memory causing a delayed attitude change  Availability-valence hypothesis – emphasizes the selectivity of memory owing to limited capacity  Only obtained when the msg was encoded deeply o Building credibility  If the source’s qualifications are perceived as relevant to the product being endorsed  credible o Source bias  Consumer’s beliefs about a product’s attributes can be weakened if the source is perceived to be the victim of bias in presenting info  Knowledge bias  source’s knowledge about the topic is not correct  Reporting bias  source has the required knowledge but willingness to convey it accurately is compromised  The corporate paradox o The more involved a company appears to be in the dissemination of news about its products, the less credible it becomes o Consumer word of mouth is the most convincing kind of message o Buzz  word of mouth that is viewed as authentic and generated by customer o Hype  dismissed as unauthentic – corporate propaganda o BUZZ BUILDING is a strategy marketers are trying to use now  Source attractiveness o Source’s perceived social value o Can be seen from the physical appearance, personality, or social status, or his/her similarity to the receiver o Even dead sources can be attractive o What is beautiful is good – halo effect – individuals who are rated highly on one dimension are assumed to excel on others as well – an ad with a beautiful person has a higher chance of being NOTICED but not necessarily a high chance of being READ o Social adaptation perspective  information seen to be instrumental in forming an attitude will be more heavily weighted by the perceiver; we filter out irrelevant info to minimize cognitive effort o Star power: celebrities as communication sources  Famous faces capture attention in the brain than “ordinary faces”  Celebrities embody cultural meanings – they symbolize important categories such as power, social class, status  The celebrity image and the product image they endorse must be similar  match up hypothesis  Q-rating (quality) – considers 2 factors in surveys: consumer’s level of familiarity with a name and the number of respondents who indicate that a person, program, or character is a favourite – recognizes that mere familiarity with a celebrity’s name is not sufficient o Youtube and amateur advertising o Non-human endorsers – cartoon characters, mascots – avatars  manifestation of Hindu deities in superhuman or animal form – vuppets(cartoon type mascots and animals) and replicants(of real life people)  The message – single most important feature was whether the communication contained a brand differentiating message o Characteristics of the commercial message itself help determine the impact of that message on attitudes  Sending the message o Visual stimuli can economically deliver a big impact, especially when the communicator wants to influence the receivers’ emotional responses o However, images are not ALWAYS the best method o Verbal version  affects ratings on the utilitarian aspects of a product – more effective when reinforced by an accompanying picture – esp if picture Is framed (the message in the picture is strongly related to the copy) o Visual version  affects aesthetic evaluations o Verbal  most appropriate for high-involvement situations in print ads o More frequent exposures are needed to obtain the desired effect because VERBAL material decays more rapidly in memory o Visual images  allow the receiver to CHUNK information at the time of encoding = stronger memory trace which aids retrieval over time o Visual elements may affect brand attitudes in one of 2 ways:  The consumer may form inferences about the brand and change his/her beliefs because of an image  Brand attitudes may be affected more directly – strong positive or negative reaction elicited by visual o Vividness  Powerful descriptions or graphics command attention and are more strongly embedded in memory because they tend to activate mental imagery o Repetition  Multiple exposures to a stimulus are required for learning  People tend to like things that are more familiar to them, even if they were not that keen on it initially – mere exposure effect  Positive effects for repetition found in mature products  Repeating product info has been shown to boost consumers’ awareness of the brand even though nothing new has been said  Too much repetition  habituation – customer no longer pays attention to the stimulus because of fatigue or boredom  can cause advertising wear out  Two factor theory  proposes that two separate psychological processes are operating when a person is repeatedly exposed to an ad  Positive side: increases familiarity and thus reduces uncertainty about the product  Negative side: over time, boredom increases with each exposure  At some point the amount of boredom incurred exceeds the amount of uncertainty reduced = wearout  Advertisers can overcome this problem by LIMITING the amount of exposure per repetition – slightly varying the content of ads over time through campaigns that revolve around a common theme o Constructing the argument  One versus two-sided arguments  Supportive arguments  one or more positive attributes about the product or reasons to buy it  Two sided message  both positive and negative information is presented – can be quite effective but are not widely used  Refutational arguments  a negative issue is raised and then dismissed – can increase source credibility by reducing reporting bias  Two-sided strategy appears to be most effective when the audience is well-educated and when receivers are not already loyal to the product  Drawing conclusions  Consumers who make their own inferences instead of being spoon-fed for stronger, more accessible attitudes  BUT leaving the conclusion ambiguous increases the chance that the desired attitude will not be formed  All this depends on the consumers’ motivation to process the ad – if message in the ad is personally relevant, viewers will pay more attention and form inferences  BUT if the arguments are too complex or consumer is not motivated to follow, it is SAFER for the ad to draw conclusions  Comparative advertising  Strategy wherein a message identifies two or more specifically names or recognizably presented brands and compares them in terms of one or more specific attributes  Can lead to a decrease in believability and may result in source derogation (consumer may doubt the credibility of a biased presentation)  Effective in the case of NEW products  Types of message appeals o The WAY something is said can be as important as WHAT is said o Emotional versus rational appeals  Which approach to use depends on the nature of the product and the relationship consumers have with it  Recall of ad contents tend to be better for “thinking” ads than “feeling ads”  Sex-appeals o Female nudity in print ads generates negative feelings and tension among female consumers, while men’s reactions are more positive o Males dislike nude males in ads whereas females responded well to undressed males – not completely nude o Men and women shown 2 ads – one sexual and other non-sexual  Men tended to ignore the text and focus only on the woman in it  Women tended first to explore the ad’s text elements  Humorous appeals o Specific cultures have a different sense of humor and also use funny materials in a diverse way o Humorous ads do get attention o Dilemma  whether humour affects recall or product attitudes in a significant way o Humour can be EFFECTIVE when it provides a source of distraction – inhibits the viewer from counter- arguing o Humour is more effective when the brand is clearly defined and the funny material does not “swamp” the message o Subtle humour is usually better, as in humour that does not make fun of the potential customer  Fear appeals o Highlight the negative consequences that can occur if the consumer fails to change behaviour or attitude o “Slice of death approach”  applied to social risk issues by appealing to people’s anxieties about their careers or love lives o Most effective only when a MODERATE amount of fear is induced o Relationship between fear and attitude change is non-monotonic - Increasing levels of fear does not result in increased change – relationship is actually an inverted U-shaped curve o If the threat is too great, the audience tends to deny that it exists as a way of rationalizing the danger o MOST effective when the consumer is ALREDY afraid of the problem discussed in the ad o Threats should not be too excessive, and a solution to the problem should be presented o Works BEST when source credibility is high o Fear ads not that effective in getting teenagers to decrease their alcohol or drug consumption o More PRECISE measures of actual fear responses are needed before definitive conclusions can be drawn about the impact of fear appeals on consumption decisions  The messages as ART form o Advertisers can be seen a poets or literature experts o They rely on various literary devices to communicate these messages o Metaphor  involved the use of an explicit comparison - allow the marketer to activate meaningful images and apply them to everyday events o Resonance  form of presentation that combines a play on words with a relevant picture – uses an element that has a double meaning – like a pun where there is a similarity in the sound of a word but a difference in meaning o Forms of story presentation  Drama versus a lecture  Lecture  like a speech where the source speaks directly to the audience members in attempt to inform them about a product or to persuade them to buy it – counter-argumentation can occur  Drama  similar to a play or a movie – draws a viewer into the action – address the audience indirectly – interact w/ each other about a product in an IMAGINARY setting – involve audience emotionally  Transformational advertising  the consumer associates the experience of product usage with some subjective sensation o Emoticons  Virtual form on visual communication  The source versus the message o Which is most important – WHO said, HOW it is said or WHAT is said?  DEPENDS o Level of INVOLVEMENT will determine which aspects of communication are processed  The elaboration likelihood model o ELM assumes that once a consumer received a message, he/she begins to process it o One of two routes will be followed:  High involvement  central route to persuasion  Likely to think actively about the arguments presented and generate COGNITIVE RESPONSES to these arguments  Likely to involve a traditional hierarchy of effects  Beliefs are carefully formed and evaluated and strong attitudes that are then formed will be likely to guide behaviour  Message factors (content) will be important in determining attitude change – prior thoughts about a topic may result in more thoughts about the message and will also increase the number of counterarguments  Low involvement  peripheral route to persuasion  Taken when the person is not motivated to think about the arguments presented  Likely to use other cues in deciding on the suitability of the message  Product package, attractiveness of the source, or the context in which msg is presented  Sources of info outside the actual message content are peripheral cues because they surround the actual msg  When people do not care about a product, the stimuli associated with it INCREASE in importance o Support of the ELM Model  Study was done with university students where they were given 2 ads about beer with low alcohol content to analyze – one had a lot of detailed info and the other did not. 3 things were measured:  Message-processing involvement – those that were told that they would get beer at the end of this study and the beer would be available in stores near them showed high involvement while those who were not told about the gift and were told that the beer would be available really far showed low involvement  Argument strength – one ad used strong compelling arguments while the other listed only weak arguments  Source characteristics – although both ads had a picture, their relative social attractiveness was varied depending on the clothes they wore and the content surrounding the picture  High involvement subjects had more thoughts related to ad messages than did low involvement ones, who devoted cognitive activity to the sources in the ad  High involved customers look for the “steak” (strong, rational arguments) while low involved customers are more affected by the “sizzle” (colours and images used in the packaging or endorsements)  SAME communication variables can be both a central and peripheral cue, depending on the RELATION to the attitude object Chapter 9 – Consumers as Decision Makers  Decision making: the outcome of mental processes leading to a selection from one or more alternatives  Consumer purchase may be a response to a PERCEIVED PROBLEM  Consumer hyperchoice: a condition where the large number of available options forces us to make repeated choices that may drain psychological energy while decreasing our abilities to make smart decisions  Stages in consumer decision making: o Problem recognition o Information search o Evaluation of alternatives o Product choice o Consumption and learning  Perspectives on decision making o Rational perspective  People calmly and carefully integrate as much information as possible with what they already know about a product  Weight the pluses and minuses of each alternative  Arrive at a satisfactory decision  Relates the economics of information approach to the search process  we collect just as much data as we need to make an informed decision  Continue to search for information to the extent that the rewards of doing so (utility) exceeds the costs – collect the most valuable units of info FIRST – as long as the process isn’t too difficult or time-consuming o Consumers do not always go through this elaborate process for EVERY decision o Purchase momentum: occurs when initial impulses actually increase the likelihood that we will buy even more (instead of less as our needs are satisfied), almost as if we got “revved up” and plunge into a spending spree o Some of us tend to have a RATIONAL SYSTEM OF COGNITION  processes info analytically and sequentially using rules of logic – while others rely on an EXPERIENTIAL SYSTEM OF COGNITION  processes info more holistically and in parallel o Constructive processing  evaluation of the effort required to make a particular choice, and then chooses a strategy best suited to that level of effort required o Behavioural influence perspective  Consumer’s decision is a learned response to environmental cues – eg. Buying on impulse  Managers must concentrate on assessing the characteristics of the environment – physical surroundings, product placement o Experiential perspective  Stresses the Gesault, or totality, of the product of service – eg. Person’s choice in art or music  Marketers focus on consumers’ affective responses  Types of consumer decisions o Consider the amount of effort that goes into the decision each time it must be made o Continuum of buyer decision behaviour – habitual decision making  extended problem solving - many decisions fall somewhere in the middle and are characterized by LIMITED PROBLEM SOLVING o Low cost products  more expensive products o Frequent purchasing  infrequent purchasing o Low consumer involvement  high consumer involvement o Familiar product class and brands  unfamiliar product class and brands o Little thought, search, or time given to purchase  extensive thought, search, or time given to purchase Habitual Decision Making Limited Problem Solving Extensive Problem Solving  Extended problem solving o Correspond to the TRADITIONAL decision making perspective o Central to the self-concept – fair degree of risk o Collect info from memory (internal search) and outside sources (external search)  Limited problem solving o More straightforward and simple o Use simple decision rules to choose among alternatives – use cognitive shortcuts  Habitual decision making o Little or no conscious effort o Characterized by automacity o Efficient way to operate – allows consumers to minimize the time and energy spent on mundane decisions o Poses a PROBLEM when a marketer tries to introduce a NEW way of doing an OLD task  consumers must “unfreeze” their former habits  Characteristics of limited versus extensive problem solving   Limited Problem Solving  Extensive Problem Solving  Motivation  Low risk and involvement  High risk and involvement  Info Search  Little search  Extensive search  Info processed passively  Info processed actively  In-store decision likely  Multiple sources consulted prior to store visit  Alternative  Weakly held beliefs  Strongly held beliefs Evaluation  Only most prominent criteria used  Many criteria used  Alternatives perceived as basically  Significant differences perceived similar among alternatives  Purchase  Non-compensatory strategy used  Compensatory strategy used  Limited shopping time; may prefer  Many outlets shopped if needed self-service  Communication with store  Choice often influenced by store personnel often desired displays  Problem recognition o Occurs whenever a consumer sees a significant difference between their state of affairs and some desired/ideal state – problem can be small/large; simple/complex o A problem can arise in either of the following ways:  Need recognition – the quality of consumer’s actual state can move downwards (running out of gas)  Simply running out of a product  Buying a product that turns out not to satisfy needs adequately  Creating new needs  Opportunity recognition – the consumer’s ideal state can move upward (want a flashier car)  Exposed to different/better quality products  Person’s circumstance has changed (got a new job) – frame of reference shifts  Information search o Process in which a consumer surveys their environment for appropriate data to make a responsible decision o Types of information search  Pre-purchase search: explicitly search the marketplace for specific info after a need has been identified  Browsing: hunting for info and keeping track of developments just for the fun of it (veteran shoppers)  Ongoing search: maintain current info for future use  Pre-purchase Search  Ongoing Search  Determinants  Involvement with the product  Involvement in the purchase  Market environment  Market environment  Situational factors  Situational factors  Motives  Building a bank of info for future use  Making better purchase decisions  Experiencing fun and pleasure  Outcomes  Increased product and market knowledge leading  Increased product and market knowledge to  Better purchase decisions  Future buying efficiencies  Increased satisfaction with the purchase outcome  Personal influence  Increased impulse buying  Increased satisfaction from search and other outcomes  Internal versus external search o Internal Each of us already has in memory some degree of knowledge about many products  Scan our own memory banks to assemble info about different product alternatives o External  info is obtained from ads, friends, or people-watching  Deliberate versus “accidental” search o Directed learning  on a previous occasion we have already searched for relevant info or experienced some of the alternatives o Incidental learning  mere exposure over time to conditioned stimuli and observations of others results in the learning of much material that may not be needed for some time after the fact  Exposure to advertising, packaging, and sales promotions  Marketers benefit from steady, “low dose” advertising – product associations are maintained until they are needed o Sometimes no additional search is done – sometimes we go to retailers, catalogues, friends, family members, or consumer reports  Online Search o Many companies pay search engines to show ads to users who search for their brand names o Rarely specify brand names in queries – usually use only generic terms instead “hard drive” initially  then conduct a small flurry or brand name queries right before buying o New info shoppers  people who almost automatically search for info online before they buy just about anything  Tend to work in info-based jobs, are well educated, and fairly affluent  Conventional TV advertising no longer provides enough info  Search engine optimization (SEO)  the small army of consultants who help companies to “game” the search engines, ensuring that their links turn up near the top of the list when consumers go online o Women were almost twice as likely as men to say they responded in some way to a mobile ad they received o 18-24 year olds were the MOST responsive o Step toward integrating social media into our daily lives o Do consumers always search rationally?  The amount of external research undertaken for most products is SMALL – even though it would benefit the consumer  Rarely seek out unbiased info before making a purchase decision – especially with DURABLES even though they are SIGNIFICANT investments  When it comes to the purchase of symbolic items such as clothing  tend to do a fair amount of external search – mostly seeking opinions of peers  Variety seeking: just like to try new things – priority is to vary one’s experiences, as a form of stimulation to reduce boredom  Likely to occur when people are in a good mood or when there is little stimulation elsewhere in their environment  Sensory-specific satiety  the pleasantness of food just eaten drops while the pleasantness of uneaten foods remains unchanged – even though we have our favourites, we like to sample other possibilities o Might even switch to less-preferred options for the sake of variety o Select familiar brands when there is little info about competing brands and the decision is ambiguous o Mental accounting: biases in the decision making process  Decisions are influenced by the way a problem is posed (framing) and by whether it is put in terms of gains or losses  Sunk-cost fallacy  having paid for something makes us reluctant to waste it  Whether we focus on the present or the future is another way to frame an issue and influences the option we choose  Hyperopia  people who are so obsessed with preparing for the future that they can’t enjoy the present  Loss aversion  people place much more emphasis on loss than they do on gain  Prospect theory: model of choice – utility is a function of gains and losses, and risk differs when the consumer faces options involving gains versus involving losses – more willing to take risks when they perceive they’re using someone else’s resources  We value money differently depending on where it comes from  Unimportant characteristics of the choice situation can influence our selections  How much search occurs? o General rule  search activity is greater when the purchase is important, when there is a need to learn more about the purchase, and when relevant info is easily obtained and used o Younger better-educated people who enjoy shopping/fact finding  more info search o Women more inclined than men o Amount of info available  Don’t always use all the info available – too many combinations of attributes to process in STM o The consumer’s prior expertise  Novices who know little about a product should be the most motivated to find out more about it  Experts who are more familiar with the product category, should be able to better understand the meaning of any new product info acquired  But NEITHER search more – greatest search done by those who have MODERATE knowledge  Inverted U-shape relationship between knowledge and external search effort  The TYPE of search undertaken by people with varying levels of expertise differs as well  Experts  greater sense of what info is relevant so they engage in SELECTIVE SEARCH – more focused and efficient  Novices  rely on other’s opinions and non-functional attributes such as brand name and price – process info in a “top-down” manner – focusing less on details than on the big picture  People who have details about a product before they buy it do NOT expect to be as happy with it as someone who got only ambiguous info  blissful ignorance effect  want to feel like we have bought the RIGHT thing  The less we know about something, the easier it is to persuade ourselves that we like it  Perceived risk o The belief that the product has potentially negative consequences o May be present when the product is EXPENSIVE or is COMPLEX to understand o Run the risk of embarrassment if the wrong choice is made o Consumers with greater “risk capital” are less affected by perceived risks associated with the products o 5 types of perceived risk Buyers most sensitive to risk Purchases most subject to risk Monetary Risk Risk capital consists of money and property High ticket items that require substantial Those with relatively little income and wealth are expenditures most vulnerable Functional Risk Consists of alternative means of performing the Products or services whose purchase and use function or meeting the need require the buyer’s exclusive commitment and Practical consumers are most sensitive preclude redundancy Physical Risk Consists of physical vigor, health, and vitality Mechanical or electric goods, drugs and Elderly, frail, or in ill health are most vulnerablmedical treatment, and food and beverages Social Risk Consists of self-esteem and confidence Socially visible or symbolic goods – clothes, Insecure and uncertain are most sensitive jewellery, cars, homes, sports equipment Psychological Risk Consists of affiliations and status Expensive personal luxuries that may engender Lacking self-respect or attractiveness are most guilt, durables and services whose use sensitive demands self-discipline or sacrifice  Evaluation of alternatives o Most of the effort is in this stage o Identifying alternatives  More extended processing occurs in situations where negative emotions are aroused by conflicts among choices – difficult trade offs  Evoked set  alternatives actively considered during a choice process – products already in memory (the retrieval set) plus those prominent in the market  Inert set  alternatives that you are aware of but would not consider buying  Inept set  those alternatives that don’t enter the choice making process at all  Product is not likely to be placed in evoked set if it has been previously considered and rejected o Product categorization  Categorization  group in which product is places – determines the other products it will be compared with  Marketers want to ensure their product is correctly categorized in people’s minds  Levels of categorization  Groups occur at different levels of specificity – 3 levels: o Basic level category  MOST useful in classifying products – items at this level tend to have a lot in common but still permit a range of alternatives o Superordinate category  more abstract and broad o Subordinate category  often includes individual brands  Strategic implications of product categorization  Product positioning: success of positioning strategy often depends on the marketer’s ability to convince the consumer that their product should be considered in the GIVEN category  Identifying competitors: products and services that are quite different on the surface, compete with each other at the broad level (superordinate) – often faced with choices between non-comparable categories in which a number of attributes exist but are not directly related to each other – EASIER to compare when attributes of products overlap o Exemplar products  Judgements about category attributes tend to be disproportionally influenced by the characteristics of category exemplars  Brands that are strongly associated with a category get to “call the shots” by defining the criteria that should be used to evaluate all category members  Strongly discrepant brand might have a unique niche position within the category  Moderately discrepant brand might remain in a differentiated position o Locating products  Product categorization can affect consumers’ expectations regarding the places they can locate a desired product  If product does not fit properly in a category – ability to find or make sense of them can be affected  Product choice – selecting among alternatives o Can range from very simple and quick strategies to complicated processes with high cognitive effort o Feature creep  spiral of complexity within products (so advanced, overload of features, gizmos) o Philips – at least half of the products are returned because consumers can’t figure out how to use them o Companies often assumer the MORE features the BETTER  Evaluation criteria o Dimensions used to judge the merits of competing options o Criteria on which the products DIFFER carry more weight in the decision process o Determinant attribute: characteristics that are actually used to differentiate among choices o Procedural learning  person undergoes a series of cognitive steps before making a choice which results in the decision about which attributes to use o Marketer should communicate 3 things if they want to recommend a new decision criterion:  Should point out that there are significant differences among brands on the attribute  Should supply the consumer with a decision-making rule “if deciding between competing brands, then use this attribute”  Should convey a rule that can be easily integrated with the way decisions have been made in the past – otherwise recommendation might be ignored  Neuromarketing: How your brain reacts to alternatives o Uses functional magnetic resonance imaging (FRMI), a brain-scanning device that tracks blood flow as we perform mental tasks o Researchers have found that some regions in the brain are dynamic switchboards that blend memory, emotion, and biochemical triggers o Shape the way that fear, panic, exhilaration, and social pressure influence our choices o Sports cars  activate reward centres  Fusiform face area – governs face recognition – Porsche and Ferrari triggered activity in this area – reminded of faces when they looked at these cars o Pictures of celebrities triggered many of the same brain circuits as did cars, chairs, sunglasses, handbags – links our sense of identity to social image  Cool fools  brains responded INTENSELY to “cool” products and celebrities but not all to “uncool” images – likely to be impulsive or compulsive shoppers  Other extreme  brains reacted only to unstylish items – anxious, apprehensive, neurotic people o Cypermediaries  The biggest problem surfers face these days is narrowing choices NOT beefing them up  Cybermediary intermediary that helps to filter and organize online market info so that customers can identify and evaluate alternatives more efficiently – can take DIFF forms  Directories and portals such as Yahoo – tie together large variety of different sites  Website evaluators – reduce the risk to consumers by reviewing and recommending the best ones  Forums, fan clubs, and user groups – offer product-related discussions – KEY DRIVER of satisfaction and loyalty – higher proved satisfaction (by 5%) for those who saw customer reviews – allows products that aren’t “blockbusters” to sell more  The long tail  no longer need to rely solely on big hits to find profits – can also make money by selling small amounts that only a few people want  Intelligent agents – sophisticated software programs that use collaborative filtering technologies to learn from past user behaviour and recommends new purchases  Electronic recommendation agent  software tool that tries to understand a human decision maker’s multi-attribute preferences for a product category by asking to communicate them – more effective when they recommend a product based on UTILITARIAN attributed (not hedonic)  Brand advocates  people who supply these customer reviews  Reputation economy – don’t generate an income for these reviews but do it simply because they enjoy the process and want to boost their reputation as advisors  Heuristics: Mental shortcuts o Mental rules of thumb that lead to a speedy decision o Range from very general to very specific o Sometimes shortcuts are not in consumer’s best interest o Relying on a product signal  The aspect of the product that is VISIBLE acts as a signal for some UNDERLYING quality  Judging a car’s mechanical condition by its appearance  Covariation – judgements made through the associations among events when product info is incomplete – product quality linked to how long the company has been in business, country of origin, price, brand names  Sometimes consumer beliefs persist even when they are WRONG – people tend to only see what they are looking for o Market beliefs – is it better if I have to pay more for it?  Often form MARKET BELIEFS about relationships in the market – these beliefs then become shortcuts – even if they are inaccurate – that guide their decisions  Assumption of price-quality relationship = MOST COMMON MARKET BELIEF o Country of origin as a heuristic  Italian shoes, German cars, and French luxury goods  Country of origin can be a stereotype – a knowledge structure based on inferences across products – can be wrong but help simplify complex situations  Recent evidence says country of origin stimulates consumer’s interest to a greater degree – evaluates the product more carefully  When other info is available – tend to ignore country of origin info whereas NOVICES always rely on it  Ethnocentrism  tendency to prefer products or people of one’s own culture over those from other countries – feel it is wrong to buy products from other countries  Choosing familiar brand names: loyalty or habit? o Branding = heuristic o Assume that if so many people choose a product, it must be good nd o Zipf’s law – spend roughly TWICE as much of their budget on top choice brand than on 2 ranked brand, twice as much on 2 brand than on 3 , twice as much on 3 than on 4 th nd st  A brand that moves from 2 to 1 will see a much higher increase in sales than a brand that moves from 4 to 3 rd o Inertia – the fickle consumer  A brand is bought out of habit merely because less effort is required  If another product that is cheaper or is available when the original brand is out of stock – consumer will NOT hesitate to buy it  Low resistance to brand switching  Little or no underlying commitment to the product – couponing, point-of-purchase displays, noticeable price reductions can help “unfreeze” person’s habitual pattern o Brand loyalty – a friend, tried, and true  Inertia does NOT OCCUR if brand loyalty exists  For brand loyalty to exist  pattern of repeat purchasing is accompanied by an underlying positive attitude toward the brand  Initiated by OBJECTIVE reasons but after the brand has been around for a long time – can create emotional attachment  Inertia  passively accepts the brand  Brand loyalty  actively involved in decision making and emotional bonds created  Brand parity – consumers’ beliefs that there are no significant differences among brands  With too many alternatives to choose from – people are looking for CLEAR SIGNALS of quality = brand names  Decision rules o Divide decision rules into 2 categories:  Compensatory rules  imply that one good attribute can compensate for other poorer attributes  Non-compensatory  some poor attributes may eliminate the choice despite the strength of other attributes o Non-compensatory decision rules  Simply eliminate all options that do not meet some basic standards  Less familiar with product category or not motivated to process complex info – use this method  The Lexicographic rule  the brand that is the BEST on the most important attribute is selected  The elimination-by-aspects rule  brands are evaluated on the most important attribute but specific cut-offs are imposed  The conjunctive rule  processing the BRAND instead of an attribute – a brand is chosen if it meets all the cut-offs – failure to meet any one cut-off means rejection – rates negative data MORE HEAVILY  The disjunctive rule  develops acceptable standards for each attribute – usually higher standards than shopper’s minimum cut off for attributes o Compensatory decision rules  Give a product a chance to make up for its shortcomings – more involved in purchase decision  Simple additive rule the consumer merely chooses the alternative with the largest number of positive attributes BUT some attributes (even if positive) might not be that meaningful  Weighted additive rule  consumer also takes into account the relative importance of positive attributes – multiplying brand rating by importance weights Chapter 10 – Buying and Disposing  Buying: consumer acquisition of good, service, or experience  Disposing: divesting of objects once they have fulfilled their designated functions or they no longer reflect consumers views of themselves  Buying a car  most anxiety provoking and least satisfying retail experience  Issues related to purchase and post-purchase activities Antecedent States Purchase Postpurchase Environment Processes • situational factors • the shopping • consumer • usage contexts experience satisfaction • time pressure • point-of-purchase • product disposal • mood stimuli • alternative • sales interactions markets • shopping orientation  Situational effects on consumer behaviour o Consumption situation – factors over and above characteristics of the person and the product o Situational effects can be behavioural or perceptual o Study  participants woke up a little grumpy but soon entered a state of mild pleasure that increased by degrees throughout the day with occasional bouts of anxiety, frustration, and anger  Factors that MOST upset daily moods – poor night’s sleep and tight deadlines o The role a person plays at any time is partly determined by his/her situational self-image o By identifying usage situations – marketers can develop market segmentation strategies to position products that will meet specific needs arising from these situations  Physical and social surroundings o Pumping in certain odours in a Las Vegas casino actually increased the amount of money patrons fed into slot machines o The sheer presence of or absence of other patrons (co-consumers) in a setting can function as a product attribute – empty bar can cause people who just came in to leave o Presence of LARGE numbers of people increases arousal levels – consumer’s subjective experience of a setting is more INTENSE but depending on the interpretation of this arousal – it can be –ve or +ve o Density  actual number of people occupying a space o Crowding  psychological state - only if a negative affective state occurs as a result of this density o TYPE of consumers that are in a store = attribute  Temporal factors o More careful info search occurs when we have the luxury of taking our time o Economic time  a resource that must be divided among activities  Maximize satisfaction by allocating time to the appropriate combination of tasks  Timestyle – determined by individual’s priorities  Time poverty – believe that they are more pressed for time than ever before  Fastest countries are – Switzerland, Ireland, Germany, Japan, Italy  Slowest countries are – Mexico, Indonesia, Brazil, El Salvador, Syria  Poly-chronic activity  consumers do more than one thing at a time – eating on the run o Psychological Time  experience of time is subjective and is influences by our immediate priorities and needs – time categories:  Flow time – flow state is when one becomes so absorbed in activities, they notice nothing else – NOT a good time to be targeting people with ads  Occasion time – special moments when something monumental occurs (promotion, birth) – ads relevant to this will get undivided attention  Deadline time – any time when one is working against the clock is the WORST time to try and catch their attention  Leisure time – during downtime, most likely to notice ads and try new things  Time to kill – waiting for something to happen (waiting to board a flight) – bonus time where one is more receptive to commercial messages even for products not normally used o Study of how the timestyles of women are influenced and the following metaphors were created:  Time is a pressure cooker – often feel under pressure and in conflict – analytic and monochromic  Time is a map –engage in extensive info search and comparison shopping – analytic planners, future temporal orientation, and polychromic  Time is a mirror – loyal to products and prefer convenience-oriented products – analytic planners and polychromic – BUT past temporal orientation  Time is a river – go on unplanned, short, and frequent shopping trips – spontaneous and have a present focus  Time is a feast – motivated by hedonic and variety-seeking desires – analytic planners and present temporal orientation – time is consumed for sensory pleasure and gratification o Our experience of time is largely a RESULT of our CULTURE  Western consumers  time is a neatly compartmentalized thing – linear separable time – events proceed in an orderly sequence and different times are well defined “There’s a time and place for everything”  Query theory  the mathematical study of waiting lines – experience of waiting can radically influence perception of QUALITY – negative feelings aroused by long waits can turn people off  Ways to eliminate psychological waiting time – altering customers’ perceptions of the line’s length, provide distractions that divert attention away from waiting  Antecedent states – if it feels good, buy it o Mood or psychological condition can influence WHAT is bought and HOW product is evaluated o Spend more time in a grocery store if they have not eaten in a while o Pleasure and arousal – dimensions that determine whether a shopper will react negatively or positively to a store environment o The dimensions are pleasant/unpleasant and aroused/sleepy:  Pleasant and aroused = exciting  Pleasant and sleepy = relaxing  Unpleasant and aroused = distressing  Unpleasant and sleepy = gloomy o Happiness = high pleasantness and moderate arousal o Moods can be affected by store design, the weather, or other factors that are important to consumer o Hearing happy music or watching happy programs = more positive reaction to commercials and products o When positive mood  pay less attention to specifics of the message and rely on heuristic processing  Shopping: a job or an adventure? o People shop even when they don’t need to buy anything o An activity that can be performed for either utilitarian (functional) or hedonic (pleasurable) reasons o Women  emotional fulfilment in shopping o Men  demonstrate their expertise or ability to procure status items o Reasons for shopping  Hedonic shopping motives include the following:  Social experiences – go to spend their leisure time  Sharing of common interests – allow people with shared interests to communicate  Interpersonal attraction –central hangout spot for teenagers – controlled, secure environment for seniors  Instant status – make consumer feel important and they will come back  The thrill of the chase – relish the process of haggling and bargaining as a sport  Shopping orientation  general attitudes about shopping  Different shopping types:  Economic consumer – rational, goal oriented consumer who is primarily interested in maximizing the value of his/her money  Personalized consumer – a shopper who tends to form strong attachments to store personnel (I shop where they know my name)  Ethical consumer – shopper who likes to help out the underdog and will support locally owned stored against big chains  Apathetic consumer – one who does NOT LIKE to shop and sees it as a necessary but unpleasant chore  Recreational shopper – person who views shopping as a fun social activity (preferred way to spend leisure time)  E-commerce – clicks versus bricks o Experience of acquiring a good offline versus online can be very different o Companies can reach customers around the world no matter how far they are located from them o Competition now is not only from the store next door but also from thousands of websites o Selling directly to consumers online – can cut out the intermediary – retailer o 75% of online shoppers say that good customer service would make them shop at the site again o Some things online customers value:  Ability to click on an item to create a pop up window with additional details – size, colours, price, availability  Add an item to your cart without leaving the page  Ability to “feel” merchandise through better imagery and product descriptions  Ability to enter all data on one page instead of multiple checkout pages  Ability to mix and match product images on one page to see if they look good together o Pros and cons of e-commerce Benefits of E-commerce Limitations of E-commerce For the consumer For the consumer  Shop 24 hours a day  Lack of security  Less travelling  Fraud  Can receive relevant info in seconds from any  Can’t touch items location  Exact colours may not reproduce on  More choices of products computer monitors  More products available to less-developed  Expensive to order and then return countries  Potential breakdown of human  Greater price info relationships  Lower prices so that less affluent can purchase  Participate in virtual auctions  Fast delivery  Electronic communities For the marketer For the marketer  The world is the marketplace  Lack of security  Decreases costs of doing business  Must maintain site to reap benefits  Very specialized business can be successful  Fierce price competition  Conflicts with conventional retailers  Legal issues not resolved  Real time pricing  Retailing as theatre o Stores are going all out to create imaginative environments to provide entertainment that transport shoppers to fantasy worlds or provide other kinds of stimulation = retail theming o 4 basic kinds of themes:  Landscape themes – associations with images of nature, the earth, animals, and physical body – Bass Pro Shops  Marketscape themes – associations with human-made places – Venetian Hotel in Las Vegas  Cyberspace themes – images of information and communications technology – eBay  Convert a store into a being space – resembles a commercial living room where consumers can go to relax, be entertained, and hang out with friends – Starbucks – minipreneurs (one-person businesses) – offer work-centred being spaces o Pop up stores – temporary installations that do business only for a few days or weeks and then disappear before they get old  Store image o Stores may be thought as having “personalities” o Location, merchandise suitability, and the knowledge and likeability of the sales staff o Consumers evaluate stores in terms of both their specific attributes and a global evaluation or gesault o The shifting retail landscape  Health and beauty items = front store sales  Shoppers Drug Mart offering bread, cosmetics etc.  we go there for prescription drugs but can also buy several other products o Atmospherics  Careful store design increases the amount of space the shopper covers  Stimulating displays keep them in the isles longer  Decompression zone  area just inside a supermarket’s entrance – people tend to slow down and absorb their surroundings – promote bargains here  Atmospherics – conscious designing of space and its various dimensions to evoke certain effects in buyers – colours, scents, and sounds  Stores in red – feel tense; stores in blue – calmer feeling  Some stores are now selling their music collection so that consumers can recreate the store’s vibe at home  Brighter store light influenced people to examine and handle more merchandise  In-store decision making o 2 out of 3 supermarket purchases are decided in the aisles o People with lists are just as likely to make impulse purchases as those without them o Spontaneous shopping  Unplanned buying – occurs when a person unfamiliar with a store’s layout is under some time pressure or may be reminded to buy something by seeing it on the shelf  Impulse buying – occurs when a person experiences a sudden urge that he/she cannot resist  Impulse items are conveniently placed near check-out – gum, candy  Portable Shopper – personal scanning gun that allows one to ring up their purchases as they shop  Planners  know what products and specific brands they will buy beforehand  Partial planners  know they need certain products but do not decide on a specific brand until they are in the store  Impulse purchasers  no advance planning whatsoever o Point of purchase stimuli  Can be an elaborate product display or demonstration, a coupon-dispensing machine, or someone giving out free samples  POP explains why product packages increasingly play a key role in the marketing mix as they evolve from functional to fantastic  The salesperson o Attempts to influence buying behaviour o Exchange theory  stresses that every interaction involves an exchange of value; each participant gives something to the other and hopes to receive something in return
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