MAR4803 Exam 2

What are the 6 facets in Susan Fournier's Consumer-Brand Relationship Quality scale?

(a) love and passion, (b) self-connection, (c) interdependence, (d) commitment, (e) intimacy, and (f) brand partner quality.

Why are consumers becoming more skeptical of celebrity- and mega-influencers?

- 52% of millennials say this Why? - Trust and investment in influencers has been growing rapidly and it's possible that we've hit a peak - Blurring lines between sponsorships and authentic recommendations - Mega and macro-influencers are becoming bigger, more popular, more similar to celebrities and traditional media brands

How do customers differ that would lead companies to utilize this strategy?

As with Feather, many people may be too small or not necessarily need all services provided by a company. So, offering a tiered system where people can pick the plan that they want could help attract more customers who will eventually level up in the tier system.

Role of marketing communications in information search EXAMPLES

Example: clinique sale representatives call out to shoppers, inviting them to learn more about the cosmetics and allowing them to try it Example: direct mail from an airline parts supplier provides detailed specifications and usage test results to Boeing's purchasing manager and engineers

Role of marketing communications in evaluation of alternatives EXAMPLES

Example: dell's website offers a comparison chart that allows shoppers to see differences in features among models Example: progressive insurance compares their rate quote with other insurance companies to ensure customers can choose the best deal

What were the conclusions of Tuchman, Shapiro and Hirtsch's study of large brands and their weekly TV advertising strategies?

Intro: - Examined more brands across a range of consumer-packaged goods - Existing benchmark: average ad elasticity is .15 or .2 The % change in quantity sales that result from a given percent change in advertising Results: - Also used DMA border strategy where they were able to match 288 consumer packaged goods brands across these 2 data sets - Ad elasticity: the median brand in the data has an ad elasticity of .01% (meaning doubling the amount of advertising is only a 1% increase in sales and not 15-20%) - ROI: only 11% of brands have a positive ROI of total advertising in the period

What is the undesirable placebo effect?

When products/services have price discounts, it leads consumers to think that the product/service is undesirable because it's on sale/discounted. This leads consumers to think that it wasn't a popular product or of quality.

What did we learn from Wadhwa & Zhang's research discussed in class?

consumers evaluate products with rounded numbers more favorably when: the decision context is driven by feelings and the item is purchased for hedonic purpose

What is cost-plus pricing?

cost-plus pricing is also known as cost-oriented pricing and is when you apply a set markup to either the cost of production or what you buy the product for

What is the recommendation for how Social Media should be used re: listening vs pushing the brand? Why?

- 80% interaction, listening - 20% pushing the brand (contests, information, coupons, deals) Why?: - Connections: knowing there is a real person on the other end who listens -> BUT brands reply to only 1/20th of social messages that require a response (huge missed opp) - May lead to being seen by consumers as a: -> Legitimate source/ expert -> Funny, connected to pop culture, trendy - Brand not perceived as too pushy

What is the psychological power of influencers?

- 92% of people say they trust the recs of influencers they follow on social media MORE than commercial messages from brands - 40% of millennials believe their favorite influencer understands them better than their own friends do - 49% of consumers rely on influencer recommendations for purchases - 82% highly likely to act on an influencer's recommendation

Why are influencers influential?

- Attractiveness and likeability -> Celebrity status -> Referent power- consumers like them, want to emulate them -> Approachable personality, likable personality -> Sometimes physical attractiveness -> Halo effect - Perceived expertise -> Informational influence because they are experts in a -> product category -> More influential if the brand/product matches influencers expertise -> Particularly true for high-involvement products - Familiarity and similarity -> Makes the influencer more persuasive -> Posts are viewed as WOM product reviews

What are the advantages of radio advertising?

- Has the largest reach with Gen X (40-55) - Benefits of local radio: > Selective targeting > Understanding each radio station's audience profile High geographic and demographic selectivity > Expose your ad repeatedly > More memorable: sound is more effective than written ads > Time-efficient -> Can take 2-3 weeks to plan (short in comparison to others) > Cost-effective

What is Rhetorical Skill?

- Rhetorical skill is the ability to tell a story - Before promoting commercial messages, influencers must engage their followers with content that is customized to their channel and the audience

Which part of the funnel do the different types of influencers tend to influence?

- The more popular the influencer the more perceived expertise and cultural capital - The smaller influencers have accessibility and authenticity

What 3 roles do influencers play?

- content creator: translating messages through their authentic voice, weaving brand into their own life story - Media Channel: influencers become content disseminators, communicating brand messages through their own networks and providing new channels - Endorser: the most important role. Their communications provide a personal recommendation of the brand

creative appeals - sexual

-"sex sells, under some conditions" -Positive effect for low involvement consumers, opposite effect w/ high involvement -Sex appeals most effective when the actual product relates to sex -Typically backfires if used in unrelated product categories

How did each type of authenticity correlate to higher ratings and WTP?

-Category based authenticity - if found authentic because of how it fits within a category, customers are more likely to give it a higher star rating, but not willing to pay more -Values based authenticity - increased willingness to pay more for the meal, but not willing to give it a higher star rating

How does consumption establish switching costs?

-Establishes switching cost by making it more difficult for a firm to switch to an alternative when their consumption rate of the product/service/technology is high within the business -Take into consideration the training costs a firm would have to pay for if they decided to go with a new software instead of just upgrading, the higher the consumption is within a firm both in terms in the number of people using the product/service and the length of time the firm has been using the product/service increases the switching costs

How does framing affect consumer decisions?

-Framing provides a consumer with context during their purchasing decisions. -It can influence a consumer's buying decisions into buying a higher tiered product or the product in general because the consumers get context into what the product's value is compared to other options. -This is true in the good-better-best pricing strategy in which the service or seller provides their consumers with context as to what their product/service options are.

Personally selling importance

-Help diagnose consumers' problems and actively customize product or service solutions for them -Either serve as order takers or cross-sell or upsell customers -Can serve customers at point of purchase or can prospect for new customers

How does a Pay-what-you-want vs Pay-it-forward strategy affect WTP?

-Pay-what-you-want (PWYW) was found to have higher WTP with PWYW strategy when ½ of the payment went to charity -People invited to pay-it-forward in the museum study paid 65% more than those who PWYW (people think others paid more than they did, increases our willingness to pay)

How did Peloton reframe their pricing and why?

-Peloton introduced good and better products in september 2020 as well as started offering a monthly payoff option for consumers that can afford Peloton equipment over time. -This introduction of price variation was intended to introduce more potential members by giving more affordable options, and more advanced options for affluent potential members or current members looking for an upgrade. the monthly payment options it allows the consumers to pay off the bike over time which is more financially understandable for most people. -made prices comparable to the gym so that people can validate what they pay for the bike

According to "Pricing & the Psychology of Consumption", Why does drawing attention to price affect use and future consumption? What are some examples?

-People are more likely to consume a product when they're aware of the cost -Common pricing practices (bundling costs, season tickets, etc.) all mask the amount the buyer has spent, decreasing the likeness that the consumer will actually use the product/service, therefore decreasing the likeness that the consumer will repurchase -higher consumption=higher sales

What are the managerial recommendations for linking price and consumption?

-Practice yield management -Managers can run operations more effectively if they appropriately anticipate demand and make price decisions that follow these anticipations -Time payments to maximize consumption -Psychologically link payments to benefits -Reduce consumption when appropriate

How does the timing of payment matter?

-Price timing strategies (like paying beforehand, or way after) that mask the sunk cost are less likely to be consumed -If they payment occurs close to point of consumption or point of purchase than that product/service is more likely to be consumed -Theatre ticket study - consumers who had paid for the $50 ticket the day before and then got sick were 50% more likely to attend the play (even tho they were ill) than those who had paid for the ticket at the time of reservation (6 months ago)

what are recommendations for price gaps between G-B-B levels?

-Take advantage of the compromise effect. -Many people tend to avoid the extreme options and choose the middle option 74% of drinks that are sold around the world are medium

Why are micro-influencers viewed as being particularly influential?

-They know their content, know their niche, and most importantly know their audience. - Recommendations seem genuine and authentic, but are targeted towards a very specific market. - Higher levels of engagement (5.7%) -when messages seem specifically tailored for someone, they are more likely to pay attention.

Hunger games: transmedia storytelling

-Transmedia storytelling is a technique that allows a story to unfold across multiple media platforms and that solicits the active participation of fans and end users in the story's expansion across these media -Strives for continuity of the narrative of the story as it expands across multiple channels, giving fans an immersive experience in the story

Fear's boomerang effect

-Viewers disengaged from processing the messages, which diminished their emotional responses responses -Combination of graphic images and frightening messaging deemed to be too much for consumers to handle -ex. gory graphics on cigarette cartons, people ignored imaging rather than cigarettes

Creative appeals - Humor

-can reduce customers' resistance by putting them in a good mood -Respond negatively if humor deemed appropriate -Wear out quickly, jokes become repetitive -Can distract attention from product

Two types of authenticity were examined in "The Kind of Authenticity Customers Will Pay More For"

-category based authentic in the sense that its representative of a specific social category or genre (how well it fits in a social category) -Values based authenticity. Authenticity derived from values and its roots can be found is existential philosophy and social psychology.

What makes influencers influential with their followers?

-expertise in specific sphere -trustworthiness -attractiveness and likeability (it pays to be hot) -familiarity and similarity

What do companies gain from event marketing and sponsorship?

-generate earned media and to create associations between the brands and pop culture -Sponsorships can enhance a company's reputation as a responsible, thoughtful member of the community and can work to engage consumers desire to form a relationship with it.

consumer behavior plays

-helps shift customers from deciding to buy to actually buying -customers have single-option aversion and tend to delay choice -get overwhelmed by too many choices

Creative appeals - Fear

-instinctual fight-or-flight response -Use human desire to avoid physical or psychological pain and distress -Shown to increase persuasion -Must be just the right amount of fear evoked

Risks of influencer marketing

-reputational risks: lack of fit, inauthenticity of message, bad behavior, other brands they are endorsing, if too many endorsements -legal risks: required transparency about commercial relationships -financial risks: influencer fraud, mostly buying fake followers -societal risks: belief it is damaging to society, struggle to understand when a post is sponsored

What are 4 reasons that influencer marketing is important to businesses?

1. Consumers react differently to advertising when they are online - The advertising is softer, less overt, and more authentic advertising approaches 2. Influencers are good at creating this type of content that "blends into their environment by matching the format of surrounding content 3. Targeting - Most influencers audiences= highly targeted because they specialize in a particular topic or niche area - Followers opt in because they are similar in: -> Age or stage of life -> Location -> Interests, aspirations - Allows brands to locate and advertise directly to their target audience -> Access to niche communities -> Cost-effective 4. Attention - Influencer posts garner more attention than ads from a brand itself - Ads that fit the surrounding mood and content increase motivation to watch ad - Repeated posts: -> Gradually introduce new products -> Serve as reminder advertising

What are the 5 categories of social media influencers?

1. Nano-influencer - 0-10k - "The Newcomers" - Followed mostly by friends and acquaintances - High accessibility to followers and high perceived authenticity - Often have the highest engagement rates of all influencers - It May be lucrative to brands because they do not always require payment or may accept samples - Very proactive because they approach brands - Best for 2. Micro-influencer - 10k-100k - "The Rising Star" - Vast majority of all influencers - More localized audience - Income from affiliate links or occasional brand - partnerships - Multiple brands - Often rely on insta stories and videos (connect with followers, perceived as accessible and authentic) - Best for (lecture 18 slide 24) 3. Macro-influencer - 100k-1M followers - "The Sweet Spot" - Successful but no celebs - Strong engagement and dominant within their domains (travel, food) - Provides substantial brand exposure to a large # of followers - Command a lower price (around 5000 per post) - Most bang for your buck 4. Mega-influencer - 1m+ - "The Everyday Celebrity" - Celebrities within social media but only with their followers - About $50k per post - Brand partnerships often closely aligned with their image 5. Celebrity Influencer - 1m+ - "The Rich and Famous" - Tend to form weak brand connections May carry high levels of perceived expertise - BEST for top-of-the-funnel goal of building branding awareness - Requires high paycheck

4 classic elements of storytelling

1. The message 2. The conflict 3. The characters 4. The plot

offensive plays

1. aimed at generating growth and revenue (adding a 'best' option)-adding levels to the fast pass 2. adding a "best" offering can also boost the entire brand (patron added a new type that lifted the whole brand) 3. adding a lower-priced 'good' option (good for price sensitive consumer)

3 approaches of GBB

1. offensive plays 2. defensive plays 3. consumer behavior plays

What are the advantages of working with micro-influencers and nano-influencers?

Higher accessibility and authenticity

Storytelling activating different parts of our brains

Appeals used can evoke emotion which creates strong resignation with a brand, creating a longer lasting memory.

match-up hypothesis

Consumer will respond to influencer marketing when consumers perceive a close fit between the influencer (and their personal brand) and the brand's marketing message

Hunger games: Transmedia storytelling vs. Cross-platform marketing

Cross platform: -consistent message across many platforms -message may change slightly depending on target market Transmedia: -uses different platforms to advantage -shares different content on each platform -encourages customer to use each platform to learn full story -relies on user generated content

What is a good-better-best pricing strategy

Customers differ in the level of functionality they need so offering a line of products and services better meets customers' needs and allows firms to not give away a lot of value. ii. Example: Allstate has levels of insurance: Value, Standard, Gold, and Platinum plans

Role of marketing communications in post-purchase assessment EXAMPLES

Example: Oral B's print ads remind consumers to change the brush head on their electric toothbrush every three months Example: Neiman Marcus sales associates mail thank you notes to customers

Role of marketing communications in problem recognition EXAMPLES

Example: advertising for latisse eyelash treatment made women realize they didn't have to live with "inadequate eyelashes" Example: Taco Bell's billboards remind drivers that they should stop for a break

Role of marketing communications in purchase decision EXAMPLES

Example: in-store signet and prominent end-aisle displays direct consumers to the newest Cheerios line extension Example: coupon in newspaper encourages consumers to buy Yoplait yogurt this week instead of next week

What are the implications of highlighting the price paid by consumers with respect to two-part revenue streams?

In regards to two-part revenue streams it's important to practice price strategies that mask how much money a consumer is spending but to make sure that each transaction is separated (instead of price bundling for example). Firms that have two-part revenue streams, like movie theatres, would have greater profits if consumers were unaware how much they already spent for they would be more inclined and more easily persuaded to spend more on things like food and memorabilia.

What did we learn from Anna Tuchman's e-cigarette advertising study?

Intro: - Examined the impact of advertising on e-cig sales - Concern that e-cig advertising will hinder existing tobacco efforts and renormalize cigs in society Tuchman utilized border strategy in the study: - Delineates local tv markets (DMA's) by grouping counties based on: their predicted interest in TV program content and the quality of over-the-air TV signal - Firms buy local advertising based on DMA level - All households in given DMA see the same tv programs and ad content - This study tested two DMA's that are right next to each other to see if the ads influenced if people bought e-cigs Dependent variables: - Total number of cartridges of e-cigs sold - Total number of packs of cigs sold by stores in each market each week Results: e-cig advertising: - Increases demand for e-cigs - Reduces demand for traditional cigs - Reduces demand for smoking cessation products Conclusion: - Advertising worked: the ads DID increase demand for the advertised product - In absence of e-cigs, demand for traditional cigs would increase

How does price bundling affect the perception of sunk costs and therefore consumption?

Price bundling masks the sunk cost consumers spend of a product/service and therefore reduces the likeness of it being consumed

Role of marketing communications in each decision making stage

Problem Recognition - Help identify new problems and needs and/or remind consumers of existing needs Information Search - make consumers aware of a product and educate them about its features and benefits Evaluation of Alternatives - assist consumers in making comparisons among solution options Purchase Decision - prompt customers into making the purchase Post-Purchase Assessment - Encourage product usage and make consumers feel good about their purchase decision

What did Brucks et al.'s research show about advertising effects on children?

Question studied: how childhood advertising exposure can create biased product evaluations that persist into adulthood Showed Frosties and Coco Pops in two groups: - Younger group who saw both brands as kids - Older group who ONLY saw Frosties as kids Dependent variables: - Evaluated their feelings towards the advertising characters - Evaluated healthfulness of the cereals Findings: - Exposure to advertising in childhood can lead to enduring biased product evaluations - Participants who were exposed to both of the cereals saw both of them as equally healthful - Participants who experienced advertising for one product in childhood, but experienced advertising for another product in adulthood...demonstrated biased product evaluations for the childhood product by rating it as more healthful than the adulthood product - Shows that child advertising can be beneficial in the long run - But raises concerns with how we see the health of products

What kinds of value do Glossier customers get when they are a part of the brand community?

Social - they're able to flaunt the brand around and use it as a symbol of their style/preferences ex. Glossier sweatshirts, posting products on social media Informational - customers get the inside scoop on upcoming products and beauty hacks Communication - there's an open line of communication between what the consumer wants in a product and the research and development team, having their opinions valued by the brand in terms of product feedback

What is guerrilla marketing? What are the pros and cons?

Strategy to promote a brand in an unconventional or potentially controversial way Aims: - Produce great results for cheap - Grab public attention in a more personal and memorable way Characteristics of guerrilla marketing: - Imaginative and surprising but in a very hip or antiestablishment way - Is experiential and draws in the target audience - Take risks in what it aspires to accomplish (even if it may piss some people off) - Often is not 100% approved by the establishment Guerilla marketing is great for: - Generating brand awareness - Interest in an organization, product service, or idea - Creating word of mouth or leading to viral marketing When to use Guerilla Marketing: - To create an experience that embodies the spirit of the brand - Capture the organization's authentic voice - Express what is unique about your brand identity - Build your brand - Generate awareness

How good is consumers' knowledge of the market with respect to prices?

Study done that asked people if they can recall the price of an item when they put it in their cart. Results: less than 50% were able to give an accurate answer, most underestimated price, more than 20% could not even guess

What is prestige pricing and how does it affect consumers' emotions?

Using .00 for regular pricing is known as prestige pricing. Usually used in higher end and boutique stores because it is processed more fluently and therefore encourages reliance on consumer feelings

Why is J&J using micro-influencers for one campaign but macro-influencers for another?

Using nano and micro-influencers: - They identified specific teens through social and local news stories - Rationale- these teens resonate with their peers during a time when social media is covered with fake followers and questions are growing about how real influencer endorsements are Using macro-influencers: - Working with bigger name influencers for its startup C and C to gain popularity and brand name -> Particularly because it wasn't putting paid traditional media behind the launch

What do strong levels in each facet result in?

a) love and passion - brands are irreplaceable & unique, consumers miss the brand if not used in a while and feel anxiety when the brand is not available b) self-connection - brand allows expression of an important aspect of the self c) interdependence - the brand is a part of rituals in life and interactions are emotionally important to the consumers d) commitment - consumers are committed even when facing adversity and may derogate competing brands e) intimacy - consumers share personal information with the brand and expect the brand to respond to their messages and respond with products meeting their needs f) brand partner quality - dependable, adherence to rules / expectations, trustworthy, reliable

pull strategy

designed to build demand with end consumers so that their desire for the product brings them to point of sale, targeting the users of the product as the audience Example: company using advertising to attract attention of customers to a new product. Customers go to retailer and request it, causing retailer to request product from manufacturer, pulling it through distribution chain

push strategy

designed to motivate distribution channel partners or intermediaries to sell the product to consumers, targeting the sellers of a product (retailers, wholesalers, distributors) as the audience. Example: companies may pay retail partners trade promotion fees to push their products, using end-aisle displays, prominent shelf locations or encouraging salespeople to mention

Paid Media

firm controlled media including television, print, radio, outdoor or online advertising where company maintains complete control of message content and delivery

Owned Media

firm controlled media including website, social media channels, company owned retail stores and catalogs

Earned media

not purchased, earned through public relations outreach to the press, social media outreach and viral campaigns, and event marketing

Defensive plays

prevents companies from having to discount

How do prices ending in "9" affect consumers' behavior? When are they most effective?

study showed that changing price from 34 to 39 increased sales by 33% while changing price from 34 to 44 had no change in demand.