Consumer Rule. Wednesday, January 16, :47 PM. ADV 319 Page 2

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1 ADV 319 Page 2 Consumer Rule Wednesday, January 16, :47 PM What is Marketing According to American Marketing Association: Marketing is the activity, set of institutions, and processes for creating, communicating, delivering, and exchanging offerings that have value for customers, clients, partners, and society at large. Sufficiently vague? Why? It is not just about products, it is ideas, policies really anything you have to offer that is of some value to some people. And it is not just about selling, it is about developing, delivering, spreading messages, etc. Messaging is an important part of marketing Simpler Definition Putting the right product in the right place, at the right price, at the right time and telling people about it. *Product = offering (more than just goods). Service, idea Marketing Ps Consider the 4 Ps Product good, service (for PR the product = a relationship) Price - $, value, need Promotion PR, advertising my dept Key to this class Place distribution For the most part, aside from promotion, marketing is taught in the business school. Public Relations According to the Public Relations Society of America: Public relations is a strategic communication process that builds mutually beneficial relationships between organizations and their publics. Publics are similar to audiences. P to the R Uses mass media so it can reach mass audiences. Channels are either managed by the organization (org s newsletters or Websites, social media) or PR practitioners appeal to news media to talk about a relevant topic, event or offering. Our students learn how to identify important relationships, use an organization s channels to build relationships, and various tools that can build media attention that feeds those relationships. PR is taught in my dept. What is Advertising? Advertising is marketing communication intended to modify or maintain attitudes, beliefs or behaviors. Many ads are the result of paid message placement in various mass media channels. Our students learn how to plan the media placement, how to create the ads, who to reach with those ads, and how to plan and manage campaigns that include the ads. Advertising is taught in my dept. Marketing--PR--AD So these are our operating definitions and you now have some idea about what goes on in the Department of Advertising and Public Relations

2 ADV 319 Page 3 So We will focus on consumers this semester. They are the audience for the 3rd marketing P, promotion. We will learn how to better understand how an audience thinks, what they identify with, and what might impact their actions. Actions include buying, supporting, donating, voting, etc. Our Goal? What it is NOT. Our goal is not to answer the age-old question of why people act the way they do. Too complex, too many variables What it IS. To give you frameworks for understanding SOME factors that motivate people to act or think a certain way. In advertising and PR, we focus on learning how best to appeal to the people you need in a personally meaningful way at a specific moment in time. Mass communication PR and ADV are not magic. Like the ad says, ads can t make you act. But the concepts we will cover help identify the audience most receptive to your message, or the factors that can make an audience more receptive. Hey, You We will cover this semester. Consumers at the individual level Consumers at the social level Decision-making Cultural factors Some overlap with other classes? Possibly with Marketing 320F, possibly with other Adv/PR classes periodically. Consider this an advantage. On to the Readings Main themes that emerged: Consumer behavior is a process. Consumers use products and brands to define their identity. Consumers from different segments have different needs and wants. Consumer activities can be harmful. PR and "Consumers" For PR students, remind yourself that what is true of consumers is also true of stakeholders, members, donors, voters They have needs and desires, they act, they move on or evolve. What is a Consumer? The book focuses on consumers of products and services. A consumer is a person who identifies a need or desire, makes a purchase, and then disposes of the product. disposes of the product sounds funny Ah, but consumers and consumption support our economic system. Without sustained demand the economy virtually collapses. Important part of consumption If you never disposed of a product, you would never buy it again A Consumer is.. Segmented by demographics. Influenced by peer groups. Exposed to competing brands all seeking her loyalty. Actively evaluating products for what they deliver (in concrete and abstract terms) Segmenting Consumers: Demographics

3 ADV 319 Page 4 Demographics: statistics that measure observable aspects of a population, such as Age Gender Family structure Social class/income Race/ethnicity Geography US, Texas Demographics Need to be able to tell me how Texas compares with the U.S. on: Age Texas has more people under 5 & 18 years of age Texas has fewer people over the age of 65 Gender Pretty much matched on Gender Education Income Race/ethnicity: Hispanic White--more Black--less American Indian-same Asian--less Two or more races--similar Hispanic or Latin--MORE 38 vs 16 percent To find education and income Targeting Demographics Purpose not always to sell a product. Also used to reach people with important messages i.e. Reaching Low-Income Hispanics with Nutrition Assistance. Lifestyles Also called psychographics Personality Values Attitudes Interests Sense of self Sense of belonging Activities we do in our spare time Wine Consumers Who are wine consumers? Guesses in class Women Usually have more money than average customers I asked the Wine Institute. Credible data gathered by Yankelovich, well-known for quality research. Wine Wine consumers are more likely to identify as: Open to new experiences Following their path in life Information-savvy and confident consumers

4 ADV 319 Page 5 Desirous of intangibles, experiences and emotions Having their life priorities in order Eschewing brands as badges They care less about a brand, than the quality of the good Women account for the majority of wine purchases in most price segments. They enjoy wine in small, intimate gatherings and choose it for reasons that speak to enhancing an experience. Thinking Out Loud What are some products or services that are widely used by your social group? Apple, Nike, etc. Do these products or services help you form bonds with your group? Yes Are there any product or services you would avoid because of the social group you belong to? Yes Popular Culture Music, movies, sports, books, celebrities, entertainment Marketers influence preferences by making names/titles, etc., more accessible in memory. They create positive affect (positive feelings) about the choice, highlight linkages with lifestyle, etc. Consumer-Generated Content A.k.a. User-Generated Content or UGC. When everyday people voice their opinions or share information in a public online forum. Can be about products, brands, companies, etc. Also includes product reviews. The meaning of Consumption People often buy products not for what they do, but for what they mean Consumers can develop relationships with brands through: Self-Concept Attachment - Identity Interdependence - routine Nostalgic Attachment Love - warmth, passion Discussion What products are a part of your identity? Does any product enhance your identity? (Or feel like it does ) Consumer "dark side" Consumer terrorism Compulsive consumption Illegal activities Addictive consumption Consumed consumers The Story of Stuff--on the test Treat as homework This video presents a critical view of consumption in the U.S. and its global impact.

5 Perception Tuesday, January 22, :02 PM Learning Objectives from Chapter 2 Perception = 3-stage process raw stimuli enters à we make meaning Persuaders try to appeal to senses we won t be influenced by most Product design drives success or failure Subliminal advertising is ineffective, inefficient. We interpret stimuli using learned patterns and expectations. Marketers often use symbols to create meaning. Perception Perception is the process by which sensations are Selected, Organized, and interpreted. Like computers we undergo stages of information processing in which we input and store stimuli. We receive external stimuli or sensory inputs on a number of channels. The inputs our five senses detect are the raw data that begin in the perceptional process. Sensory receptors = eyes, ears, nose, mouth and fingers Basic stimuli = light, color, sound, odor, and texture Begins with stimulus Senses pull in information, orient us to the stimulus. We then allocate attention, engage senses more, and draw on cognitive resources to Select and focus in further on a piece of the available data. At that point we begin to organize data using preexisting knowledge or schemas. Schema = related information stored in memory forms a networked structure that we can use to organize and simplify incoming information. We interpret data through the schemas we have developed over time. Not objective We seek consistency with biases, needs, experiences Figure 2.1 Perceptual Process \ Figure 2.1 shows that there are three stages that make up the process of perception. These are exposure, attention, and interpretation. Orient, and allocate after exposure Brain refresher Brain Pop (only view this today in class) Each sense has its own area in the cerebral cortex for processing/storage. Vision and hearing take up the most space, smell and taste relatively little. (Image credit: Kathryn Born) ADV 319 Page 6

6 High tempo = more stimulating Low tempo = more relaxing Muzak Touch Haptic senses most basic of senses; we learn this before vision and smell Haptic senses affect product experience and judgment Kansei engineering is a Japanese philosophy that translates customers feelings into design elements Recent research found that participants who simply touch an item for 30 seconds or less had a greater level of attachment with the product. This connection in turn boosted what they were willing to pay for it. Some anthropologists view touch like a primal language. Researchers are starting to identify the role haptic sense plays in consumer behavior. Haptic senses appear to moderate the relationship between product experience and judgment confidence. Kinsei engineering helps marketers to understand how to design products to follow a consumer sense of touch. For instance, the Mazda Miata was designed to emulate the feeling of a horse and rider as one. Taste Flavor houses Chemical labs where they are designing flavors or how to mimic natural flavors Lab mouths Cultural changes determine desirable tastes Trends and fashions Our taste receptors contribute to our experience of many products. Coca-Cola and PepsiCo use the tongue to test the quality of corn syrups. A food item s image and the values we attach to it influence how we experience the actual taste. For instance, as consumer appreciation for ethnic foods increases, our desire for spicy food increases. Ethnic foods Mexican/Hispanic Food = 55% of market share Asian Food = 26% Indian Food = 1.2% Exposure Exposure occurs when a stimulus comes within range of someone's sensory receptors. We can orient, concentrate, ignore, or completely miss stimuli. 5 second ads Before your stimulus can react to changing it or turning away from it We notice stimuli that come within range for even a very short time if we choose. That s why Cadillac developed a 5-second commercial to illustrate that Cadillac s can go from zero to 60 in less than 5 seconds. Orienting Not in book The orienting response or reflex is the immediate response to a change in the environment (sound, smell, etc.) When that change is not sudden enough to elicit the startle reflex. Sensory Thresholds Absolute threshold: the minimum amount of stimulation that can be detected on a given sensory channel There are some stimuli that people cannot perceive. The absolute threshold is the minimum stimulation to be noticed. For example, the sound of a dog whistle is too high for human ears to detect it is beyond our auditory absolute threshold. The absolute threshold is an important consideration in designing marketing stimuli. Differential Threshold Detecting changes or differences between two stimuli Minimum difference is the j.n.d. (just noticeable difference) Example: packaging updates must be subtle enough over time to keep current customers, but convey an update The differential threshold is the ability of a sensory system to detect changes of differences between two stimuli. The minimum difference we can detect between two is the just noticeable difference of j.n.d. For instance, if we made a package smaller to cut our costs, we would want to make the change under the j.n.d. so that customers did not notice that they were getting less product for the price. Subliminal Perception Subliminal perception = stimulus is below awareness. Little proof that it occurs. Most researchers believe it is not much use in marketing. Subliminal Techniques Embeds: figures that are inserted into advertising by using high-speed photography or airbrushing. Subliminal auditory perception: sounds, music, or voice text inserted into advertising. Re: KFC example in book. What was it good for? Wall Street Journal article ADV 319 Page 8

7 Marketers can use both visual and aural channels to send subliminal messages, supposedly. Embeds are tiny figures that are inserted into magazine advertising via high-speed photography or airbrushing. These hidden figures supposedly exert a strong but unconscious influence on the reader. We can do something similar for auditory messages. However, there is no evidence to support that subliminal stimuli can bring about desired changes in behavior. Attention Attention is the extent to which processing activity is devoted to a particular stimulus We consciously allocate resources to this as our attention increases Consumers are often in a state of sensory overload Marketers need to break through the clutter Multitasking Attention refers to the extent to which processing activity is devoted to a particular stimulus. The allocation of processing activity can vary depending on the characteristics of the stimulus and the recipient. Although we live in an information society, consumers are often in a state of sensory overload. Sensory overload means consumers are exposed to far more information than they can process. Much of this comes from commercial sources. We are exposed to thousands of advertising messages each day in addition to the other types of stimuli we sense. This camera ad from Singapore reminds us that consumers do tune out stimuli. Selective perception, selective exposure and selective attention We scan for stimuli that meet our needs (perceptual vigilance). Look for things we need to pay attention to, ignore others We try to avoid stimuli that threaten our view (perceptual defense) Ignore things that threaten our views We habituate to stimuli when they are no longer novel and determined as not useful (adaptation) Stimulus Selection Factors We are more likely to notice stimuli that differ from others around them So, marketers can create contrast through: We are more likely to notice stimuli that differ from others around them. A message can create contrast in several ways including size, color, position, and novelty. Novelty means that the stimuli appear in an unexpected way or place to grab our attention. Interpretation Interpretation refers to the meaning we assign to sensory stimuli, which is based on a schema. Priming attempts to invoke a specific schema The meaning we assign to a stimulus depends on the schema, or set of beliefs, to which we assign it. In a process called priming, certain properties of a stimulus evoke a schema. This leads us to compare the stimulus to other similar ones. In this ad for Toyota, the living room evokes an image of a car because of the seat arrangement. Semiotics Semiotics = signs, symbols and assignment of meaning Marketing messages have three basic components: Object: the product Sign: the image Signified/signifier Interpretant: meaning derived from sign Educational video on semiotics produced by a student Sarah Jessica Parker example Perceptual Positioning Brand perceptions Part functional attributes, part symbolic attributes Perceptual map: map of where brands are perceived in consumers minds Used to determine how brands are currently perceived to determine future positioning How does a marketer determine where a product actually stands in the minds of consumers? One technique is to ask them what attributes are important to them and how they feel competitors rate on these attributes. This information is then used to construct a perceptual map. Perceptual Maps Lumene entering the UK market. The closest competitors are Aveeno and Origins. Lumene sits comfortably as a top brand when natural ingredients is of concern within the mass market sector. ADV 319 Page 9

8 ADV 319 Page 11 Learning and Memory Tuesday, January 29, :07 PM Learning Objectives How consumers learn. Conditioning. Learned associations. Classical & instrumental conditioning. Observing others behavior. How memory systems work. Associations. Products help us to retrieve memories. Measuring memories. Learning Here I deviate from the book: Learning is acquiring new (or modifying existing) knowledge, behaviors, skills, values, or preferences. Incidental learning: unintentional acquisition of the above. Marketers realize that long-standing, learned connections between products and memories are a potent way to build and keep brand loyalty. Learning is a relatively permanent change in behavior. Sometimes we learn when we don t even try. This is called incidental learning. Learning is an ongoing process. Psychologists who study learning use several theories to explain the learning process. We ll cover these in this chapter. Behavioral Learning Theories Assume that learning takes place as the result of responses to external events This is the "black box" The behavioral learning theories assume that the consumer is like a black box. The black box indicates that we really don t understand what happens in someone s mind. The slide shows Figure 3.1 which depicts this view. Types of Behavioral Learning Theories Classical conditioning An unconditioned stimulus (food) elicits a response (hunger). A neutral stimulus (bell) elicits no response. During conditioning the two are paired (food + bell). Afterwards, the formerly neutral stimulus (bell) has now become a conditioned stimulus and elicits a response (hunger) on its own. There are two theories which are types of behavioral learning theories: classical conditioning and instrumental conditioning. Instrumental Conditioning Aka operant conditioning Instrumental conditioning is also called operant conditioning. It means to condition behavior using consequences. It refers to voluntary behaviors, while classical

9 ADV 319 Page 12 conditioning works to condition responses to involuntary behaviors. Marketing Applications of Repetition Repetition increases learning More exposures increase brand awareness When exposure decreases, extinction(fade away) occurs However, too MUCH exposure leads to advertising wear out Counterexample: Celebrities Runs counter to extinction effect We usually remember when celebrities are tied to brands or products Conditioning effects are more likely to occur after the conditioned stimulus (CS) and the unconditioned stimulus (UCS) have been paired several times. Repeated exposures to the association increase the strength of the associations and prevent decay of these associations in memory. Many classic advertising campaigns consist of product slogans repeated often to enhance recall. The Rolaids campaign which asked, How do you spell relief? ROLAIDS is a personal favorite. But for this to work, the UCS must repeatedly be paired with the CS. Otherwise, extinction occurs. Extinction means that the association is forgotten. Even when associations are established, too much exposure can turn negative. In that case, the association may change in terms of whether it is perceived as positive or negative. That s what happened to Izod when its logo became too exposed on a variety of clothing and products. Marketing Applications of Stimulus Generalization Stimulus generalization: tendency to respond to similar stimuli once conditioned. Keys jangling instead of bell (Pavlov) Product line extensions Look-alike packaging for generics The process of stimulus generalization is critical to branding and packaging decisions that try to capitalize on consumer s positive associations with an existing brand or company name. Marketers can base some strategies on stimulus generalization. Family branding enables products to capitalize on the reputation of a company name. Marketers can use product line extensions by adding related products to an established brand. Licensing allows companies to rent well-known names. Distinctive packaging designs create strong associations with a particular brand. Companies that make generic or private-level brands and want to communicate a quality image often exploit this linkage when they put their products in similar packages to those of popular brands. Discussion Some advertisers use well-known songs to promote their products. They often pay more for the song than for original compositions. Why bother? Emotional connections Songs = memories Hoping Positive memories will now tie in with their brand How does this relate to learning theory? Cognitive Learning Theories Focused on the cognitions, not just the stimulus response of the behavioral learning theories. Looks at the black box. Cognitive learning theory approaches stress the importance of internal mental processes. This perspective views people as problem solvers who actively use information from the world around them to master their environments. Cognitive Learning Theories: Observational Learning Observational Learning We watch/observe others We model (reproduce) behavior we see.

10 ADV 319 Page 15 Information is stored in memory in bits and pieces Recall our discussion of schemas This chapter uses the term associative networks, which is similar An Associative Network for Healthy Living Spreading Activation As one node is activated, other nodes associated with it also begin to be triggered Associated nodes for a consumer: Brand-specific claims about the brand Ad-specific medium via which info arrives Brand identification name, colors Product category attributes of all brands in this category Evaluative reactions affect (emotion) Recall the Levi ad we just viewed Levels of Knowledge Individual nodes = concepts Two (or more) connected nodes = a proposition (has more complex meaning) Two or more propositions = schema We encode info that is consistent with an existing schema more readily Consumers learn service scripts US vs. other countries? What Makes Us Forget? Decay over time Interference & displacement Measuring Memory for Marketing Stimuli Recognition, aided recall Which of the following brands have you seen at Target? (then list them) Unaided recall Name brands you have seen at Target. Problems with memory measures Response bias People favor yes Give socially desirable answers Memory lapses Omitting - facts fall from memory Averaging - leaving out the extremes Telescoping - Inaccurate recall of time Illusion of truth effect - Repetition puts it in memory regardless The Marketing Power of Nostalgia Marketers may resurrect popular characters to evoke fond memories of the past Nostalgia Retro brand DDB Advertising says:[go to link on slide]