MAR 4333-521: MAR 4333-521 Promotion Management Fall 2003—Sarasota September 20, 2003 Perspectives of Consumer Behavior Rich Gonzalez University of South Florida


URLs (used today): URLs (used today) www.smirnoff.com www.diageo.com www.pny.com


September 20, 2003--Agenda: September 20, 2003--Agenda Quiz # 2 Consumer Behavior For September 27


For Today: September 20: For Today: September 20 Chapter 4- Perspectives on Consumer Behavior “Diageo Effort to Revamp Smirnoff Reflects 'Superpremium' Successes,”Deborah Ball, WSJ, September 5, 2003


For September 27: For September 27 Chapter 5- The Communications Process “RIAA Takes Off Gloves In Mounting Its Fight Against Music Thieves ,”Lee Gomes, WSJ, September 15, 2003


Last Time: Last Time National Assoc. Realtors—Benefits, Consistency Gateway--Inconsistency Examples of IMC In Ads—New Balance—”Fit” Example of Broad Objective—Ford Advertising & Media Biz Structure


Marketing Communication Requirements: Marketing Communication Requirements 1. Clearly Positioned 2. Directed to a Target Market 3. Created to Achieve Objective 4. Accomplishes Objective Within Budget Constraint Shimp 2003


Ford Brands: Ford Brands Jaguar Ford Lincoln Mercury Mazda Volvo Aston-Martin


Gateway: Gateway 9/09/03--Gateway Inc. …eliminating about 850 jobs … at the Sioux Falls, S.D., plant and an additional 100 workers will be laid off from North Sioux City, S.D. …in Kansas City, Kan. In addition to those 850 … will close its Hampton, Va., plant and lay off 450 … …save the company as much as $130 million a year… …cumulative losses of $1.73 billion since the fourth quarter of 2000.


Diageo: Diageo Biggest Vodka Brand? What Does James Bond Drink? 32% Market Share 6.8 Million Cases (2002) Up 8% in Volume #2 Competitor Behind By 2 Million Cases Worldwide Market Leader Since 1970s


Diageo Assignment: Diageo Assignment Why is Smirnoff in trouble? What is Diageo doing about it? List some promotional activities Your opinion on efficacy We’ll open the class on 9/20 discussing this.


Diageo--Smirnoff: Diageo--Smirnoff Smirnoff is in trouble because: Share is down to 32% (-36%) Superpremiums: BIG Success Marketing Wasn’t Effective Enough James Bond Dropped Them Relied On “Older” Customers Didn’t Get Younger Ones Class Discussion


Competitors?: Competitors?


Diageo--Smirnoff: Diageo--Smirnoff Diageo is doing: Parties with bartenders, salespeople, waitstaff Teaching specialty drinks Pitching “Neat” Changing Packaging New Commercials (J.Walter Thompson) Sponsoring Music Events Contest Forcing Participation/Consumption Class Discussion


Diageo--Smirnoff: Diageo--Smirnoff Diageo will (will not) be effective: Courting bartenders is a smart move Changing Package Is Risky Diageo Knows They Need to Change Marketing If commercials use “real people,” will be effective Must innovate to offset the long term trend toward less per capita consump. Class Discussion


Quiz 2 Q1: Quiz 2 Q1 1. The consumer decision process, consisting of several stages, begins with the problem recognition stage, then: A) terminates if the interpersonal determinants do not last. B) continues on to search and evaluation of alternatives stages. C) frequently gets cut short due to consumer attitudes. D) the next stage is purchase. E) proceeds to the search stage, then immediately to purchase. B: Chap 4 105


Quiz 2 Q2: Quiz 2 Q2 2. Attitudes are learned predispositions to respond to an object. Consumer attitudes are important to marketers because they represent positive or negative feelings ________ A) and desires. B) and discretionary income. C) and neutrality. D) which cannot be changed. E) and behavioral tendencies.   E: Chap 4 p 117


Quiz 2 Q3: Quiz 2 Q3 3. When consumers engage in information search, they often start with A) external search. B) sensation search. C) TV commercials. D) internal search. E) cognitive dissonance. D: Chap 4 p 112


Quiz 2 Q4: Quiz 2 Q4 4. A(n) _____________ is a group whose perspectives or values are being used by an individual as the basis for his or her judgments, opinions, and actions. A) decision team B) reference group C) purchasing agent D) lead example E) income group B: Ch 4 p 129


Quiz 2 Q5: Quiz 2 Q5 5. The various brands identified as purchase options to be considered during the alternative evaluation process is the consumer’s __________ Evoked Set Ch. 4, P116


Brand Equity: Brand Equity Awareness Loyalty Quality Associations


Promotional Mix: Promotional Mix Advertising Direct Marketing Interactive/Internet Marketing Sales Promotion Public Relations Personal Selling


Consumer Behavior: Consumer Behavior The process and activities people engage in when searching for, selecting, purchasing, using, evaluating, and disposing of products and services so as to satisfy their needs and wants.


It Would Be Logical: It Would Be Logical Are consumers and buyers like Mr. Spock?


The Consumer Decision Process: The Consumer Decision Process Problem Recognition Information Search Alternative Evaluation Purchase Decision


Slide26: An Integrated Model of the Consumer Decision Process Problem Recognition Search Alternative Evaluation Purchase Purchase Evaluation Purchase Act Interpersonal Determinants Cultural Influences Social Influences Family Influences Personal Determinants Needs and Motives Perception Attitudes Learning Self-Concept Feedback


Consumer Decision Process and Relevant Internal Psychological Processes: Consumer Decision Process and Relevant Internal Psychological Processes Problem Recognition Information Search Alternative Evaluation Purchase Decision Motivation Perception Attitude Formation Integration Decision Process Stages Psychological Processes


Sources of Problem Recognition: Sources of Problem Recognition Out of stock Dissatisfaction New needs or wants Related product purchase Market-induced recognition New products


Floppy Disk: Floppy Disk Benefits Costs Deficiencies


New Product: New Product Flash Drive (Thumb Drive) www.pny.com


Maslow’s Hierarchy of Needs: Maslow’s Hierarchy of Needs Physiological needs (hunger, thirst)


Pampers appeals to needs for love and belonging in this ad: Pampers appeals to needs for love and belonging in this ad


Las Vegas Convention & Visitor’s Bureau: Las Vegas Convention & Visitor’s Bureau View 4 Commercials What is the Objective? Good Taste or Bad Taste?


Las Vegas Convention & Visitor’s Bureau: Las Vegas Convention & Visitor’s Bureau Objective(s) Go to Vegas Go to Vegas and be BAD Lose your inhibitions Message: You won’t pay for your actions Class Discussion


Las Vegas Convention & Visitor’s Bureau: Las Vegas Convention & Visitor’s Bureau Comments Might offend some people A little risque Inconsistent with family positioning No mention of gambling YOUR mental image of what it is that “stays here” Class Discussion


Probing the Minds of ConsumersPsychoanalytic Theory & Motivation Research: Probing the Minds of Consumers Psychoanalytic Theory & Motivation Research In-Depth Interviews The consumer talks freely in an unstructured interview to obtain insights into his or her motives, ideas or opinions. Projective Techniques Methods allowing consumers to project values, motives, attitudes or needs on some external object. Association Tests Consumers respond with the first thing that comes to mind when presented with some verbal or pictorial stimulus. Focus Groups A group of consumers with similar backgrounds or interests discuss a product, idea or issue.


Information Search: Information Search Internal Search– information stored in memory External Search – actively seeking information from various sources Personal sources Friends, relatives, co-workers Market-controlled sources Ads, salespeople, in-store displays Public sources Print articles, news reports Personal experience Handling, examining, testing, using


Perception: Perception Stages in the perception process: Sensation Attending to information Interpreting information Responding to information The process by which an individual receives, selects, organizes and interprets information


The Selective Perception Process: The Selective Perception Process Selective Comprehension Selective Attention Selective Exposure


Evaluation of Alternatives: Evaluation of Alternatives Brand B Brand E Brand I Brand M Brand F


Toothpaste: Toothpaste Crest Colgate Aim Pepsodent Mentadent Close-Up Aquafresh Rembrandt Sensodyne Arm & Hammer UltraBrite


Evaluative Criteria: Evaluative Criteria Criteria - Dimensions or attributes of a product or service used to compare various alternatives Objective criteria - price, warranty, color, size Subjective criteria - style, appearance, image Consequences – outcomes that result from using a product or service Functional consequences – concrete and tangible Pyschosocial consequences – abstract, intangible


This ad focuses on the favorable consequences of using Top Flite golf balls: This ad focuses on the favorable consequences of using Top Flite golf balls


Consumer Attitudes: Consumer Attitudes Learned predispositions to respond toward an object—an individual’s overall feelings toward or evaluation of an object. Consumers may hold attitudes toward: Individuals Brands Companies Organizations Product categories Retailers Advertisements Media


Multiattribute Attitude Model: Multiattribute Attitude Model Attitudes are a function of: A = Σ Bi X Ei A = Attitude Bi = Beliefs about brands performance on attribute i Ei = Importance attached to attribute i N = Number of salient attributes considered by consumer


Ways to Influence or Change Attitudes: Ways to Influence or Change Attitudes Increase or change the strength or belief rating of a brand on an important attribute Change consumers’ perceptions of the importance or value of an attribute Add a new attribute to the attitude formation process Change perceptions of belief ratings for a competing brand


Integration Processes and Decision Rules: Integration Processes and Decision Rules Types of decision rules: Heuristics – simple rule of thumb rules that are easy to use and apply Buy least expensive brand Buy brand on sale or for which I have a coupon Affect referral rule – make decision on basis of overall affective impression or feelings about the brand Compensatory rules – evaluate the strengths and weaknesses of each brand Integration processes are the way product knowledge, meaning, and beliefs are combined to evaluate alternatives


Market leaders such as Budweiser appeal to consumer affect in their advertising: Market leaders such as Budweiser appeal to consumer affect in their advertising


St. Elizabeth Health Center: St. Elizabeth Health Center Objective: Increase Preference Reach Consumer On Emotional Level View 2 Commercials 1. Heart Surgery--Rational 2. Traumatic Potential—Emotional


St. Elizabeth Health Center: St. Elizabeth Health Center Consistent? Contrast? Effective? Class Discussion


Consumer Learning Processes: Consumer Learning Processes Cognitive Learning Consumers learn through information processing and problem solving Behavioral Learning Learning via association (classical conditioning) Learning via reinforcement (instrumental cond.) Modeling Processes Based on observation of outcomes and consequences experienced by others


Cognitive Learning Process: Cognitive Learning Process Goal


Classical Conditioning Process: Classical Conditioning Process Association develops through contiguity and repetition Unconditioned stimulus (waterfall)


This Brita ad uses classical conditioning: This Brita ad uses classical conditioning


Instrumental Conditioning Process: Instrumental Conditioning Process Behavior (consumer uses product or service)


External Influences: External Influences Subculture


The Hispanic subculture is a very important market in many parts of the U.S.: The Hispanic subculture is a very important market in many parts of the U.S.


Variations in ConsumerDecision Making: Variations in Consumer Decision Making Types of Decision Processes: Extended Problem Solving Limited Problem Solving Routine Response Behavior


Cholesterol-Free Half & Half: Cholesterol-Free Half & Half Objective: Introduce New Product View 2 Commercials 1. Rational Appeal 2. Emotional Appeal


Cholesterol-Free Half & Half: Cholesterol-Free Half & Half Do customers consider cholesterol content in food product purchase decisions? Effective? Class Discussion


End: End