MIT 2306G Midterm.docx

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Department
Management and Organizational Studies
Course
Management and Organizational Studies 3321F/G
Professor
Selma Purac
Semester
Winter

Description
MIT 2306G Midterm # 1 Review UNIT ONE: Manipulating the Market: An Introduction Week 1 - The Story of Stuff and Mad Men’s Plantation Capitalism  Consumerism is zeitgeist of our culture We have moved away from making things personally to purchasing personally  Consumerism stems from the fear of society Industrial Revolution = Ford‟s assembly line, department stores are modeled off faith of consumerism We are trained to desire, it is our duty to buy  Raymond and Fatcher say that Greed is good (for capitalism) success is measured by material 9/11 - George Bush “stimulate the economy”  Annie Leonard - The Story of Stuff Are there flaws to her argument? Strong points? Planned obsolescence - Coffee cups etc, we will throw it out and buy another one Designed to make stuff break, but consumer has enough faith to buy again. Things are made so that they will eventually be thrown out. Perceived obsolescence - Change the design so people know its not new, for example an iphone or fashion in general. Convinces us to throw away stuff that is still perfectly useful just so we can have the next best thing.  We have more „stuff‟ but our happiness is declining because we have less leisure time Can be seen as a form of propaganda – Our national happiness is declining because we are working harder than ever but have no time for things that make us truly happy. We watch tv and shop – activities that are not truly fulfilling Purac’s Definitions  Planned obsolescence A material condition  Perceived obsolescence A psychological condition Consumer Capitalism  Consumer demand deliberately manipulated through mass-making Victor Lebow - “Price Competition in 1955” Consumption is way of life  Plantation Capitalism Master/Slave dynamic Few maintain power become wealthy at expense of the masses Mad Men  Culture that has raised consumerism to the height of spirituality  The “Man Men” are privileged position to tell culture what they should want and buy  Advertising becomes a corporate outlet for creativity - “business of lying” “Leading sheep the the slaughter house” Rejects the women frued person, campbell says use this to our advantage But Draper knows the consumer wants distraction and comfort - happiness is freedom from fear Pathos - playing on persuasive appeals on emotions - objects linked to emotion. Week 2 - Bernays, Market Manipulation, and the Psychology of Shopping – Readings: Gladwell’s “The Science of Shopping” The Psychology of Shopping  Psychology is at the centre of consumerism and consumer culture  100 years ago Freud found the psychoanalytic school of thought o Mind is built up of the id, ego, superego – central idea to the market o Id is governed by the pleasure principal (animal instinct and impulses) o Superego is the moral principal of the mind – when the id comes up with an impulse the superego counterbalances the impulse o Ego is the moderator between the id and the superego o Id and Superego = unconscious o Ego = conscious o Freud believes we have dangerous instinctual desires hidden inside of us, they are our „animal past‟  Presented it to the Vietnamese and they thought it was rubbish, until he proved his theory correct through WWI  First mechanized war – created horror that had never been seen before o Forced a major redefinition of life o Savage and archaic forces could be released if socially acceptable (under the conditions of war) o Humanity itself is believed to be civilized, but in WWI the savage aggressive behaviour was released o This confirmed Freud‟s beliefs  His ideas have been taken and adopted by the world of marketing  The split between the conscious and unconscious mind  Freud‟s nephew Edward Bernays (1891-1995) took these ideas to the marketplace  Father of PR o Crystallizing Public Opinion (1923) o You must understand how people think in order to predict their behaviour o His idea was to influence the masses without them knowing they‟re being influenced  Wilson – persuaded the American populace that war was a good idea and that they should enter war  Bernays was a member of the American pro-WW1 campaign  Played upon the emotions of the people through a slogan “make the world safe for democracy” o Selling the idea that Wilson is a hero who is going to bring an American democracy to Europe o People started to see him as a hero in the war - reconfigured himself as a liberator of the people o People were subject to influence – what about influencing them in times of peace??  Influence the masses without their knowledge  Propaganda has proven that this is possible, up to a certain point with certain limits  Bernays looked for things that appeal to rational emotions  It was believed that factual information is the best way to convince people  Bernays decides to appeal to the emotions instead  Tobacco company came to Bernays – had a problem that cigarettes were socially unacceptable for women to smoke in public, figure out a way to make it acceptable so we can make profit with both genders  Bernays said to connect the cigarette with the idea that women are challenging men by smoking in public because the cigarette is symbolic for a penis (women has her own penis?)  “Torches of Freedom”  New York Socialites start smoking their cigarettes in public – this made smoking for women socially acceptable (social figures people wished to emulate)  Smoking was linked to the idea of female liberation  People began to light up in solidarity  Doesn‟t actually make you more independent, but you feel more independent  You can persuade people to behave irrationally if you link products to emotional desire  Age old belief that smoking was not acceptable was broken through this psychological appeal  “An ancient prejudice has been removed”  Its about linking products to unconscious desires – Bernays was the one who realized you sell to feelings and engage emotionally with customers  “I think I‟ll feel better if I buy this”  Early products advertised as necessities o Ex. O‟sullivans Heels of New Rubber o Made a connection between rubber heels and health o Peter‟s Milk Chocolate – “A Vacation Necessity”  Shift from necessity to desire  “Happiness is the smell of a new car” - you desire it, rather than need it  “Eat more milk” – chocolate, Cadbury playboy bunny (chocolate placed with sexual desire)  How do we appeal to the masses based on emotion rather than logic?  Modern techniques of mass-consumer persuasion o i.e. celebrity endorsement  Bernays recognized how systematically you can endorse products through celebrities  If we link the product with individuals we desire we are more likely to purchase the products  Bernays used this idea to further political agendas as well o Calvin Coolech?? – Reputation as being boring, how do you sell him to the public? o Bernays linked Coolech to celebrities o Had celebrities visit the Whitehouse while Coolech was there – became the front page story o Reframing this dull boring guy in a positive light by associating him with celebrities o Celebrities as endorsements in the political arena  Vote for change – Pro Obama celebrity endorsed campaign  Third-party authorities o Institutions with respectable names but they are funded by the industries whose products are being evaluated (clearly biased) o Ie. Tobacco research companies in mad men o Provide press releases that can be copied and pasted by other media outlets  Authority figures o Ie. Doctors/dentists o This idea is mocked today because it is used so often and people fall for it  News written by the corporate PR firms o People will be swayed by the authorities  Bernays was hired to make Bacon increase sales in 1920 o Put bacon on sale, increased ads – nothing worked o Bernays ended up constructing a campaign around health (bacon and well- being) o Send a survey to doctors consisting of one question “Do you support a hearty or light breakfast” o Doctors support a hearty breakfast, not bacon o Bernays provides us with a vision of a hearty breakfast, consisting of bacon o Re-defining the way people think of the things they are putting in their mouths o “A man who orchestrated the commercialization of a culture”  Soldiers returning from war – depressed, traumatized o Psychologists used free association so people can come to terms with what they‟ve experienced  1946: Ernest Dichter o Psychological origins of focus group o Decided to take this same principal and apply it to products o Instead of talking about yourself, you talk about products o The birth of “The Focus Group” o About free associating with a product  First client – Betty Crocker o She doesn‟t actually exist ,she is a construction to create an image o Company interested in creating an instant cake mix o Decided to produce the cake mix and wait for the money to roll in o People said they‟d be willing to purchase it but didn‟t end up buying it o They hired Dichter to conduct a focus group to see how they associated with the product o Barrier that kept them from buying it was guilt – they felt like they were cheating o They feel deceptive – lying to family making them think they put a lot of effort into it o Dichter says you need to involve the consumer to a greater extent – the second she becomes involved with the product you can remove the sense of guilt o Tells them to add an egg- egg becomes unconscious symbol o Makes the woman feel like she is no longer cheating, she is participating  greater sense of accomplishment that gets rid of the guilt o Sales sky rocket o Principle of consumer interaction o Stress on consumers active roll when it comes to the product o We like to feel like active pariticpants rather than passive shoppers  In the world of electronics this same principle exists  Mass produced products, become personalized by you o Ex. World of warcraft endorsed by Chuck Norris o Element of personalization in world of warcraft “What‟s your game?” o Ex. Siri iphone 4S – interacting with another, personal assistant who recognizes your individual needs o Phone ends up being a reflection of the owner incredibly personalized o If you add your own „voice‟, you have a greater investment in that product  Consumerism and Politics o 1954 Bernays & United Fruit Company o PR (public relations) industries political involvement with Bernays o 1954: Bernays is hired to safeguard the interest of the United Fruit Company – present day Chiquita o Overthrow of an elected government that is shaped as a danger in the public eye o Install a military regime making the people think it‟s a pro-democratic movement o Use of propaganda and its intersection with government interests o Using techniques that are very much anti-democratic o Bernays was labelled an assassin of democracy o Fine line between persuasion, coercion and manipulation o “Good government can be sold to a community just as any other commodity can be sold” o Our minds are molded by men we have never heard of o Bernay believed people were fundamentally irrational and needed an elite to manage this bewildered herd of the populace o He didn‟t see it as undermining the individual will – but rather as a necessity for the greater good of the country o Engineering of consent (1947 essay)  Art of manipulating irrational masses- vulnerable to unconscious influence  People don‟t realize manipulation is taking place  Happy consumer – docile citizen  Bernays wanted passive consumers as opposed to active citizen  This seems contradictory in the democratic point of view o Propoganda  Unification through psychological manipulation  All about evoking an emotional response rather than a rational response  Signal responses (automatic, unthinking)  Ex. “Buy more liberty bonds, Must children die and mothers plead in vain”  Manipulating the truth to gain power and control the masses  Spinning things in a positive light o Ie. Fascist rise to power in Germany  Goebbels and Bernays  Provided tools for politicians to exercise mass control  Democracy is unwanted, don‟t want individuals thinking for themselves, all about the masses  Makes people think that they are a part of something greater by participating in these rallies  Irrationality can emerge in groups by appealing to people‟s emotions rather than rational thoughts  It is not propoganda‟s task to be intelligent, its task is to be successful  Bernays was disturbed by how his techniques were used  Social control, crowd psychology  Persuasion/coercion/manipulation/propaganda  Retail Geography  Our environments impact the way we shop o Ie. Ikea o Customer circulation patterns and product placement is the central concern of Ikea o Established in 1943 in Sweden – now the world‟s largest furniture manufacturer o First came to U.S. in 1985 o Renowned for its retail environment o Labyrinthine pre-planned consumer route o When Ikea opened in Saudi Arabia and a fire alarm went off 3 people were trampled because no one could find the exists o The longer you are in a consumer space the more likely you are to buy something o Principle of consumer interaction – you are invited to interact with the furniture o Invites you to play pretend ie. 500 (or w.e) days of summer clip o When you interact with the products it makes you want to take it home o We are meant to experience ikea as our own o The layout encourages impulse buying, youll put items in your basket that you „might‟ buy, but you can‟t backtrack through the traffic to put it back o Warehouse – allows you to buy furniture on the spot o Restaurant – relaxing aspect for people coming from further away o Buying the “Swedish experience” o Consumer interaction – value co-production (you build the furniture)  Malcom Gladwell “The Science of Shopping” o Paco Underhill o Started out as an urban geographer in New York and analyzed how people used public space o Took these principles to consumer spaces o Known as a retail anthropologist o Endless observations of people shopping – consumer interaction with products o He wanted to know what kind of behaviour results in a purchase o Global retail consulting firm Envirosell o Goal = make retail enviro more amenable (convenient) to shopper o Shoppers have a great impact on the act of shopping o Notices behavioural patterns and alters the shopping space to increase the likelihood of a customer to buy something  The Rule of the invariable right o Rule that we inevitably turn right when we enter a store o Linked to the importance of walking speeds o Peripheral vision is narrowed the closer you get to something, need time to slow down when approaching a store (ie. People don‟t wanna place their store next to a bank) o Roughly between 5 and 15 steps to adjust to the space and take in the setting  Decompression zone o Never put anything of value in the decompression zone because the consumer is too busy decompressing to notice the good o Put products to the right of the store and past the decompression zone  Rule of store-depth o Longer you spend in the store the more likely you are to buy something o You see all of the products and walk through the whole store to get to a product o Increases the chance of an add –on sale (impulse buy)  Its about getting people to spend more time in the store, not to bring more people into the store  Butt-brush factor o If a woman is analyzing a product and is brushed from behind she will put the item down and move on o Women have certain comfort zones – do not like narrow aisles  Importance of Petting o Interaction with the products o Ie. Sephora – makes items easily accessible and testable making purchase more likely  The marketers need to adapt o Gender considerations – women and men shop differently o Women are willing to do more work to shop, to move through the store to get to the female products o Stores will create separate entrances for men and women, providing males with the certainty that they don‟t have to uncomfortably go through the women‟s to get to the men‟s o Men are more likely to buy something when trying it on when women are more likely to only consider (women 25% likely to buy it, men 65% likely to buy it) o Women pay more attention to price, men buy something they like because it works o Women are less likely to impulsively buy – this is why accessories are placed by the fitting room so you‟ll try it and make sure it works o Men want shopping to be less work – clarity of offer, signs come in handy for this o Marketers need to accommodate to these gender differences  Consumer types (c-types) o Predicting the kind of products you would buy and the kind of pitch you would be most susceptible to o Ex. Of a consumer type – geek gods, denim dads, karma queen o New types of consumers emerge forcing marketers to accommodate constantly  Clothing stores o Selling an image & lifestyle o Retail environments “point-of-view” o Ie. Flagship stores: Polo vs. CK o They sell the power of employed ancestors – fantasy of wealth and luxury o Ie. Armani – products are limited, unique and admirable o All of this comes down to the principle of misdirection o We are being persuaded that are purchase means something more than it does o Every store promotes a culture that we feel a part of – shopping at a store is a lifestyle choice o Urban outfitters – promotes a consumer of culture  Blogs, music, photography etc. – none of this has anything to do with buying clothes, its all an emotional appeal  We desire these items because were convinced irrationally that they will influence our identities  This is how marketers target consumers  The methods themselves are intrusive, but consumers are not necessarily as pliable as the marketers think  Consumer demand for perfect retail conditions  Its about meeting the needs of the buyer o Contrary to Bernays – focused on passivity o Makes sense for sellers to conform to what buyers wants  Paco‟s active consumer vs. Bernay‟s passive consumer  “Slavish devotion to shopper‟s every whim” OR “undercurrent of manipulation”? Week 3 - Spaces of Consumption: J.G. Ballard’s Kingdom Come - Readings: Ballard’s Kingdom Come, “London Riots: Why the Violence is Spreading Across England”, “London Riots Put Spotlight on Troubled, Unemployed Youths in Britain” Grocery-Store Psychology  High impulse buying 60-70% of all purchases are impulse buys  Grocery enacts the principle of store depth  The deeper you go into a store the more likely you are to make a purchase, maximizing the time you spend in the store  Encourages shoppers to make a full retail circuit  Products are placed on the edges of aisles for people to notice them  Basics and brand named products are usually placed in the middle forcing you to go into the aisle – you pass every other product increasing your chances of buying it (ikea principle)  Product placement is a type of geography we tend to overlook  Product grouping – everything you need to make a certain meal all in the same place  Timed bakery smells – early in the morning, after work  Valued shopper cards – encouraging customer loyalty (key in Kingdom Come)  Signage o Ex. Soup – 79 cents a can no limit most people will buy 3 or 4. Once there is a limitation shoppers feel like they have to buy more because it‟s for a limited time only ie. Limit is 12, shoppers buy 7  Eye-level marketing o Stack products with the highest profit margin at eye-level o Sugary cereals are placed lower down so kids can see them  Irrational pricing – our brain automatically sees the first number ie. 4.99 (really closer to 5.00)  Sensory overload – happiness is the smell of a new car (if we feel good we are more likely to purchase)  Conditioning – shelves have become higher, cutting off peripheral vision making us more likely to move in a single direction eventually being exposed to everything in the store  Grocery store is one the best articulations about how space affects our purchase behaviour Kingdom Come  Ballard experienced the Japanese invasion and prison camps  Common themes o 1) world in ruin  Focuses on man-made landscapes, concerned with the darker side of humanity o 2) deviant psychologies  People are in a disturbed and obsessed society  Good deal of his writing is like a hallucination – bizarre and dream-like  Meant to be a warning for a possible human future  He is diagnosing society  Something real about the society he constructs  Anti-consumerist anthem  Work of philosophy, a novel of ideas rather than narrative  Difficult to figure out the motivation of the characters  Richard Pearson – investigating the death of his father who is gunned down by a mental patient who is later released  Encounters 3 different groups that signify different views on consumption and consumer culture  1 group – Goodwin, Sangster, Maxted o Want to create a fascist state to create chaos o This will cause authorities to get involved and ultimately get rid of the Metro Centre nd  2 group – increase sales at the Metro centre through a subversive ad campaign (Pearson)  3rdgroup – „crazies‟  Brooklands – completely disconnected from everything o No theatres, civic centres, churches o Metro centre is the center of everything and has replaced ^ o Lives are dominated by consumerism o At first, „feel-good‟ atmosphere when Pearson first arrives o Begins to see the dark undercurrent o Immigrant communities who don‟t take part in the consumerism are faced with violence and racial aggression  Anti-consumerist anthem  Atmosphere of anxiety o Ie. Chapter 1 o Bernaysian ideas o Anxiety that is relieved by shopping  Relationship between consumerism and Freud‟s Id concept  2 central spaces of the novel: o 1) suburbia  Begins with big box stores that require a lot of space  Houses are built around the stores where people begin to settle  Larger and cheaper houses in suburbia than downtown  Stores come to occupy the space first before the houses – represents a reversal of the traditional system and a shift towards a consumer based system  Defined according to the drive to consumer  Everyone lives in an eternal retail presence - consumerism dominates every aspect of their lives  The consumption is not real satisfaction  “The suburbs dream of violence” (3)  Spcace that is kept in check by shopping for now, but the consumers dream of vioenece  Docile cattle, consumer fulfillment = boredom = BOURGEPOSOE PSYCHOSIS  All desires are being fulfilled by consuming but in reality the consumers are bored and amuse themselves by acting out against immigrants  Inevitability – shopping is not always going to be enough to contain these people  Everyone in suburbia has become citizen of the mall – microcosm of the world  Symbol/icon of American culture o American Mall (movie) – the mall is a gathering place o 2) Metro Centre  Victor Gruen - Mall as utopian community oriented centre  Believed that through the mall you can unite people of disparate backgrounds  Mall set up to make you feel at home – couches, lighting etc.  Built in the middle of nowhere in order to expand the communal element – communal location  Mall as community – oriented centre  Sangster talks about the metro centre – consumerism as ritual (collective enterprise” (85) metro centre becomes the community  Mall becomes central to politics – the one thing that holds society together  Consumerism as ritual “collective enterprise” (85)  Consumerism as “new form of mass politics” (85)  theatrical, driven by emotion, attainable products are always the promise  Its about evoking emotional responses rather than rational responses  Mall as Monster (Cyclops)  1) Primal creature driven by animal instinct  2) Monocular vision = hunger and surveillance  Observation as power of subjection  i.e HAL in 2001: A Space Odyessy – HAL is represented as a single eye who represents surveillance on the ship, people on the ship are subjected to his power making them secondary to him  mall is linked to primitive monstrous appetites of the consumers  surveillance – Pearson can see the mall wherever he is, immigrants can see it from their homes. This suggests the power of the metro centre  Bentham‟s panopticon (Foucault) – prison with tower in the centre  The one watching is in control – people will modify their behaviour  Mall supporters become an extension of the panopticon – meant to watch what everyone else is doing  Metro centre is responsible for transforming the physical and mental geography of individuals  Psychological impact of Metro Centre o Influences them in the wrong way – training them to want more and more and making them violent when they can‟t get everything they desire o INFANTILIZES the populace o „we become young again when we walk through the malls doors‟ makes us feel like children because children are the best consumers: fundamentally ruled by the id o Rule of the id, childish demands o Policing element is very weak in children making the id stronger – endless desire for gratification o Sangster points out that the mall is a place that satisfies our childish desires – ruled by our ids o Metro-centre is open 24/7 giving the consumers no limits to shopping o Fear that the metro –centre will eventually be unable to satisfy the consumers – what will happen when this time comes? o Channels the id into an acceptable avenue? o Mall actually drains us of emotion and anger – zombifies the people, everyone becomes alike and equally emotionless  Artificiality of the consumer world, recognition that the comfort consumerism is meant to offer us is completely false – real life doesn‟t belong in this fantasy world (no room for death) o Unreal and enclosed simulation o Feel warmth and comfort from an artificial consumer light o Everything about consumer spaces is about the mediation of reality o Invited you to participate in the illusion o Everything is invented – all of the emotions, all of the reasons for living o People will realize their lives are empty and must find another way to channel their id  Imperial undercurrent o “empires of consumerism” (3) o Colonization as violent consumption o Unconscious desire for conflict of some kinds – sports allow the people of Brooklands to awaken from their docility o St. George‟s Cross – patron saint of England, icon associated w/ him – iron & red cross o St. George‟s cross replace the union jacks which represent unity o Shirts symbolise fierce nationalism – translated into intolerance o United Kingdom becomes socially disintegrated o Sports programs described as an exercise of ethnic cleansing o Community harasses immigrants to move out of the area to make more room for sport/recreational space o Hooliganism translates into Fascism o „primate species with an unbelievable need for violence‟ (103 *important passage)  Maxted: “Elective psychopathy” (p103ff)  Attempt to escape boredom of consumerism  “The danger is that consumerism will need something close to fascism in order to keep growing” (105)  Consumerism is like fascism – its about collective interests not about the individual, makes people think irrationally  Metro-centre is theatrical, spectacle – characteristics of Fascism  Ballard links Fascism to Hooliganism to Shopping  Fascism + hooliganism + shopping – instances where we choose irrationality and choose emotion over rationality  All representations of willed madness o i.e London, England riots 2011 – expressing a desire for the goods yet rioting against them o instigators – disaffected youth, unoccupied with nothing to do likely to *loiter (not participating in the economy) o unable to shop – shopping provides purpose o Order through consumption o Sports hooligans thriving on the energy of the Id – directing it toward consumer spaces  I.e Vancouver riots 2011  The Adman‟s experiment o Spearman decides to use Brookland as the ultimate consumer test o Recognizes the fact that he had a part in creating consumer culture o Promotes a faith in shopping
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