MKTG 330 Exam #3
Who's Living at Home?
- "Sandwich Generation" are adults who are caring for their parents & children - Boomerang children go off to college and then return to live at home after
Milgram Electric Shock Study
- "Teachers" instructed to teach "learners" by shocking them - Tested obedience to authority --> how far would people go in obeying an instruction if it involved harming another person - It is ingrained in us to obey authority
Word of Mouth (WOM)
- Any info about a company/product/brand transmitted by individuals to individuals - More reliable & trustworthy form of marketing - Influences ⅔ of all sales - Powerful when we're unfamiliar with the product category - Frequently spread online
Long-Term Orientation
- Attitudes towards time (Eastern vs. Western culture) - How forward-thinking a society is
Trends in U.S. Household Structure
- Cohabitation: same-sex households (girls living together after college) - Blended families - Divorce/Single-Parent families - Delayed Marriage - Dual-Career Families - Smaller or Childless families
Framing Effects
- Decisions are influenced by the way a set of choices is presented Rule #1: People act differently when something is framed as a loss vs. gain Losses = Risk-seeking Gaines = Risk-averse *People tend to be more sensitive to losses than to gains Rule #2: Losses loom larger than gains ex: we are more impacted by losing $10 than finding $10 Rule #3: Evaluations are driven by individual events, not total outcomes
Compliance
- Desire for rewards - Want to be liked - Assume others have more info than you
Message Appeal (Persuasion)
- Emotional Appeals (humor, sex, fear) - Elicit fear or anxiety by stressing negative consequences of engaging/not engaging in a particular behavior
Power Distance
- Extent to which power is divided amongst a society (low --> high) - How widely accepted the beliefs are - Low: no defined social classes; blurred lines - High: defined social structures; fine lines
Glocalization
- Marketing strategy that's designed to appeal to multiple cultures at the same time - Implementation should be local even though the entire strategy is global ex: KFC created different commercials for America, Australia, and the U.K.
Multicultural Marketing
- More promotion-centric than glocalization - Strategies used to appeal to a variety of cultures at the same time ex: Volkswagen commercials always have 2 guys in them, promoting LGBTQ subculture
Masculinity vs. Femininity
- Not related to gender; related to traits - Masculine: power, dominate (ex: Japanese) - Feminine: patient, calm, caring, communication (ex: Scandinavians
Attitude
- Overall evaluation that expresses how much we like/dislike something - Learned - Enduring (not as long-lasting as personalities) - Can be held towards objects, issues, people, actions, products, ads
Theory of Reasoned Action (TORA) or Behavioral Intentions Model
- Predicts the probability that a consumer will act in a certain way/make a purchase - Expressed as a %
Green Marketing
- Promotions-centric - Marketing efforts to produce, promote, & reclaim environmentally sensitive products - Sustainability is much more broad and is a strategy
Reference Groups
- Provide "norms" and determine what is (un)acceptable behavior 1. Primary vs. Secondary Groups 2. Aspiration, Identity, & Dissociative Groups 3. In-Group vs. Out-Group
Negative WOM
- Rapid spreading online - More memorable than positive WOM (ex: United Airlines video) - Determined Detractors: People who have a strong dislike towards a product & will do anything they can to spread negative WOM (ex: Ihatechipotle.com)
Prospect Theory
- Situational Influence plays a major role in how we make decisions - Segregate Gains: car descriptions list out attributes separately - Integrate Losses: car dealers list price in one lump sum (this is why we hate itemized tuition bills bc it feels like you're paying for more)
Persuasion
- Specific attempts to change attitudes Techniques: 1. ATO approach/Multi-Attribute Attitude Model (MAAM) 2. Elaboration Likelihood Model (ELM)
Uncertainty Avoidance
- The degree to which a society feels about change (low --> high) - Low: risky, okay with change - High: avoid uncertainty, fear the unknown
Culture
- The way in which a society behaves Different levels - Macro (American culture vs. Asian culture) - Subcultures (East coast, Western PA, Philly vs. Pitt) - Social classes - Reference groups (friends, family, social media following) - Family
(Cognitive) Dissonance Reduction
- When thoughts/attitudes ≠ behavior, we suffer from cognitive dissonance - Results in buyer's remorse - This is why car dealerships call you a week or so after you make a purchase, to try to reduce dissonance and make sure you don't have regret
Types of Shopping (4)
1. Acquisitional Shopping --> you have a list and want to get in and & get out 2. Epistemic Shopping --> shopping to collect info/knowledge about something 3. Experiential Shopping --> you just enjoy the act of shopping 4. Impulsive Shopping --> not planned
Promotional Strategies (3)
1. Admirational strategy: concentrate on highly visible, widely admired figures (ex: athletes or performers) 2. Membership strategy: focus on "ordinary" people whose consumption provides informational social influence 3. Avoidance strategy: focus on undesirable people using competitor's product (ex: Dell vs. Apple)
Behavior (is a combination of)
1. Dispositional Factors (internal) - Genetics - Personality - Attitudes 2. Situational Factors (external) - Sensory stimulation - Rewards/punishments - Actions of others
Where does Culture come from?
1. Ecological Factors --> what is desirable/valuable to a civilization 2. Traditions --> how a culture shifts/changes over the years
Household Purchase Rles
1. Gatekeeper: restricts limit/flow of info going into the home (wifi, tv) 2. Decision Maker: make the ultimate decision 3. Influencer 4. User 5. Purchaser
What does Culture do?
1. Gives meaning to objects 2. Gives meaning to attributes 3. Facilitates communication
Source Effects on Persuasion
1. Source Credibility (perceived expertise & trustworthiness) 2. Attractiveness (physical) 3. Likeability 4. Meaningfulness (most important!) - Match-up hypothesis: there has to be a meaningful connection between who's telling the info & the brand itself
Factors that weaken Attitude-Behavior Relationship
1. Time 2. Specificity of attitude measured 3. Environment 4. Impulse situations
Functions of Attitudes
1. Utilitarian Function: Way to justify minimizing punishments & maximizing rewards 2. Knowledge Function: Quick, easy decisions from a consumer perspective - ex: when Dave's weed wacker stopped working, he developed a negative attitude towards the brand and changed the way he made decisions about what brand to buy in the future 3. Value-Expressive Function: Using a product/brand to express your values - ex: we wear PSU shirts when we travel 4. Ego-Defensive Function: Attitudes towards yourself justify decisions you make - ex: buying $100 jeans even though you know it's too expensive
Goods vs. Services
4 Differentiating Factors 1. Simultaneous Production & Consumption ex: shipping a FedEx package 2. Heterogeneity/Homogeneity - Services: different experience each time; heterogeneity - Goods: consistent every time; homogeneous 3. Perishability - Services: highly perishable - Goods: not as perishable; they can be stored 4. Tangibility - Services: intangible (but, insurance companies are creating campaigns to make their services more tangible) - Goods: tangible
Persuasion Technique #1
ATO approach/Multi-Attribute Attitude Model (MAAM) 1. Change beliefs ex: 5-hour energy 2. Add new beliefs ex: general mills added "made with whole grain" label 3. Change evaluations ex: car dealership started highlighting miles per gallon in their ads so consumers began to weigh that attribute with more importance
ABC Approach to Attitudes
Affect (feelings) --> I get goosebumps @ PSU football games Behavior (actions) --> I chose to come to PSU for school Cognition (thoughts) --> PSU's business school > OSU's business school
Aspiration, Identity, & Dissociative Groups (#2)
Aspiration: Groups we admire & desire to be like; fulfill ideal self (ex: sorority) Identity: Groups to which we currently belong (ex: PSU) Dissociative: Groups we don't want to belong to (avoidance behaviors)
Multi-Attribute Attitude Model #1
Attitude-toward-Object (ATO) - We can quantify consumer attitudes - Attitudes are a function of 1) Beliefs about a product having/not having attributes and 2) How important those attributes are to us as a consumer - Uses the negative (-) scale
Starbucks Positioning
Before Problems Target Market - High income, highly educated, older age - Consumers interested in gourmet coffee & its culture Positioning - "Third Place" --> the place between work & home The Marketing Mix - Very little promotion - All stores company owned - Dark roasted European coffee with aroma - Higher price than avg. coffee After Problems Target Market - Anyone & everyone - "On-the-go" people - Lower age, income, & education levels Positioning - Get a good cup of coffee quickly (drive-thru changed the game) The Marketing Mix - Experimenting with TV ads for the first time ($$) - Coffee/food/music/books - Still high prices - Franchises & licenses
Geurilla Marketing (unconventional, new, creative)
Branded Entertainment - Company creates the entertainment by themselves ex: BMW created short films with plots, McDonald's game on large screen in city Product Placement - Brand is embedded in the entertainment - Must be a part of the story line Buzz Marketing - Any effort to get people talking about your brand Viral Marketing - WOM transmits like a virus Stealth Marketing - Marketing to people without them realizing
Children as Decision Makers
Children make up 3 distinct markets 1. Primary market 2. Influence market 3. Future market - Kids are growing older younger
Message Construction (Persuasion)
Conclusions - Does the brand draw the conclusion or do we allow the consumer to make the decision for themselves? - Low involvement tells the consumer what the conclusion is - High involvement allows consumer to draw conclusion Complexity - High involvement consumers can digest complex info - Low involvement consumers have a harder time Information Placement - Should the bulk of the info be placed @ the beginning, middle, or end? - Side effects in the middle bc of primacy/recency effect Comparative Ads - Comparing brands
Innovations
Consumers perceive as new and it has an effect on existing consumption patterns Degrees of Newness: 1. Continuous (Incremental) Innovation: No new behaviors must be learned 2. Dynamically Continuous Innovation: Only minor changes in behavior are required for use (ex: portable music player --> MP3 player) 3. Discontinuous (Radical) Innovation: Requires consumer to learn entirely new consumption patterns to use product (ex: microwave)
Persuasion Technique #2
Elaboration Likelihood Model (ELM) 2 types of consumers with regard to purchases: 1. High Effort/High Involvement (they care) --> use Central Route 2. Low Effort/Low Involvement (they don't care) --> use Peripheral Route
Cultural Distance
Extent to which countries differ in cultural values
Brand Community
Group of people whose relationships exist bc of their shared interest/loyalty to a brand or product ex: Jeep created a website for people to post pics on their Jeeps ex: Harley Davidson organized rides on the weekend to engage their community
Central Route
High Effort/High Involvement (they care) --> Central Route - Critical scrutiny (investigation) of a persuasive communication to determine the merits of the arguments
Hierarchy of Effects
High-involvement: CAB - car Low-involvement: CBA - toilet paper Experiential: ABC - going to a party Behavior influence: BCA - situations @ hand; getting an oil replacement bc the warning light came on *involvement is how much we care
Socialization
How you learn about culture - Enculturation: how a person learns their own culture - Acculturation: process of learning/adapting to another culture (ex: studying abroad, coming to PSU)
Multi-Attribute Attitude Model #2
Ideal Point - Exists bc of the limitations of the ATO model - Takes away the negative (-) - Requires more questions
Adding/Deleting Alternatives to Choice Set
In the 1980's, everyone was gifting bread makers. When Williams Sonoma added a more expensive bread maker to the catalog, sales doubled on the average-costing one. Reference Point Effect: "I don't want the cheap or expensive one, so I'll take the one in the middle"
In-Group vs. Out-Group (#3)
In-Group: Identity group; Group to which a person perceives he/she belongs Out-Group: All other groups - View in-group members more favorable - Greater complexity for in-group schemas (more variability for in-group members, less extreme overall evaluations) - Out-group homogeneity
Peripheral Route
Low Effort/Low Involvement (they don't care) --> Peripheral Route - Rely on judgmental heuristics, surface level
2 Types of Families
Nuclear Family: typical American family (mom, dad, 2 kids) Extended Family: household that includes grandparents, cousins, etc.
Sleeper Effect
Occurs bc the memory of the source can decay more rapidly than the memory of the message ex: a commercial or song that you hear over and over again
Consumers who have power of WOM (3)
Opinion Leaders - For specific product or product category - Consumers who have great influence on the behavior of others related to product adoption & purchase - Generalized vs. Monomorphic/Polymorphic experts (expertise tends to overlap across similar categories) The Market Maven - Type of consumer responsible for WOM - Influence spreads across the board, not just 1 specific product category ex: Ellen DeGeneres, Oprah Winfrey The Surrogate Consumer - A marketing intermediary who's hired to provide input into purchase decisions ex: financial advisor, interior decorators, stockbrokers
Asch Study
Participants were asked to select the line closest in line to length X. When cohorts gave obviously wrong answers, more than 1/3 of the subjects conformed and agreed with the incorrect choices. Depends on group size: 7 is optimal.
Primary vs. Secondary Groups (#1)
Primary - Frequent contact - Direct, face-to-face interactions - More effective/influential than secondary Secondary - Less frequent - Indirect contact (ex: online class, virtual interactions)
Why we engage in (+) and (-) WOM
Product-related conversation factors - High involvement with product (pleasure) - Knowledgeable about product (impressing others) - Genuine concern for others (avoid wasting $)
Situational Influences
Purchase Task - If it's a gift, you're more likely to seek variety - If it's for your own use, you consistently purchase the same thing Social Surroundings - Mere presence effect: people don't even have to say anything to influence our behavior Physical Surroundings - Atmospherics: colors, aromas, music, crowding in stores - The avg. consumer prefers to visit restaurants/stores with some level of crowding (not too much or too little) Temporal Effects - Time pressure, time of year, time of day Antecedent States - The consumer's mood is the most influential - Amount of cash on hand Personality types: - Impulsivity describes how susceptible we are to immediate rewards - Action-oriented --> high capacity to self-regulate (not as impulsive) - State-oriented --> low capacity to self-regulate (impulsive)
Hofstede's Core Societal Values (CSV)
READ IN BOOK! - All of these values are measurable - Countries are one or the other 1. Individualization vs. Collectivism 2. Power Distance 3. Long-Term Orientation 4. Masculinity vs. Femininity 5. Uncertainty Avoidance
Types of Social Power (5)
Referent: Just desirable to be a part of a group; All encompassing (ex: The Kardashians) Legitimate: Power derived from social structure (ex: a cop or firefighter) Expert: Power that comes from having knowledge that others don't Reward: Power to give incentives/rewards for engaging in a behavior Coercive: Power to punish for engaging in a behavior
Individualization vs. Collectivism
Refers to the strength of the ties that people have to others within their community
Attitudes and Behavior
Sometimes... Attitude ≠ Behavior ex: Most of us think going to church is good (attitude) but most of us probably don't go to church (behavior)
Quartet of Institutions (the Big 4)
The social institutions that are most responsible for transmitting culture 1. Family 2. Religion 3. Education 4. Media
Warren Harding Effect
There is a link between our attitudes and how we behave
Values, Norms, & Sanctions
Values: Widely held beliefs Norms: Rules (written or unwritten); generally accepted ways of behaving ex: wear blue & white to a psu fball game, you take a pic at the lion shrine, you participate in thon Sanctions: Punishments that exist due to violating norms or values
Diffusion Process
Way in which new products are adopted and spread throughout a marketplace
Starbucks Case Study
~Trouble Brews at Starbucks~ PROBLEM: With rapid expansion, Starbucks lost its "coffee romance" atmosphere and consumers were confused. WHO - CEO Jim Donald was replaced by Howard Schultz (he had the original vision of SB) in an effort to restore the vision: unlock the romance of coffee with an Italian spirit - SB was to be the "Third Place" between home and work where people gather WHAT - Stock price fell - SB collided with Dunkin & McDonalds when they introduced the drive thru - SB lost site of who they were, customer's perceptions changed and saw SB as more of an "on-the-go" place, not a "Third Place" - SB finally learned to listen to their customers - Was/is Starbucks a good or a service? WHERE - Seattle - Hub & spoke store placement strategy
