class7

Information Processing Model of CB: 

Information Processing Model of CB Interpretation: Perception Attitudes: Like/Dislike information Memory/Prior Knowledge Individual Consumer: Personality/Demogs Environmental Characteristics: Culture Stimuli beliefs Selection: Exposure/ attention… Choice

Individual Characteristics: 

Individual Characteristics Individual consumer characteristics Demographics: age, gender, income etc. Psychographics: Personality and Lifestyle Consumer segments separated on the basis of demogs/psychogs often differ in their consumer behavior Major Use: Segmentation and Targeting Examples: Age? Gender? Income? Our focus: Personality and Lifestyle

Personality and Lifestyle: 

Personality and Lifestyle Personality = deep seated, enduring patterns of behavior Several theories of personality: Psychoanalytic theory Trait theory There are others as well…

Psychoanalytic Theory: Founder?: 

Psychoanalytic Theory: Founder? Personality formed by interaction of three elements id (childlike drive -- must have it now!) superego (the conscience -- forbidding) ego (maintains balance) Theory says these elements are formed in childhood Later adult behavior based on these subconscious drives Used a lot in psychotherapy Also marketing….?

Psycho-analytic theory: Marketing Applications…: 

Psycho-analytic theory: Marketing Applications… Attitudes towards some products also sometimes explained by 'unconscious' feelings Failure of anti-cockroach tablets Failure of instant cake mix Used a lot in 1950’s… Not so much nowadays…. Although some advertising appeals are based on this theory….

Psychoanalytic Theory: Marketing Applications: 

Psychoanalytic Theory: Marketing Applications Some advertising is based on this theory The following ads target which element of personality…?

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Use of Sex The Use of Sex in Advertising

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Use of Sex The Use of Sex in Advertising

Psychoanalytic Theory: Marketing Applications: 

Psychoanalytic Theory: Marketing Applications Some advertising is based on this theory Sex appeals: appeal to id… How about superego? How to appeal? Some ads try to appeal to both id and supego… Luxurious But also practical…

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Overall, psycho-analytic theory has limited use in marketing…: 

Overall, psycho-analytic theory has limited use in marketing… Trait theory is more popular

Trait theory of personality: 

Trait theory of personality Doesn’t talk about unconscious urges… Personality = set of characteristics which can be measured by trait scales Introverted-Extroverted Dominant-Submissive Much more measurable than psycho-analytic theory Major use in marketing…

Trait theory: Use in Marketing: 

Trait theory: Use in Marketing Matching Product with Personality Basic Assumption: Brands, products, stores… have personalities too! Can describe them using 'human-like' traits… Nike = ??? Volvo = ?? Pacific Place Mall= ??

Research shows: People prefer brands whose personality matches their own!: 

Research shows: People prefer brands whose personality matches their own! So how to measure 'match' between brand and consumer personality? IFC mall vs. Diamond Hill Hollywood Plaza

Measuring Personality Match: 

Measuring Personality Match Rate yourself on the following traits… Snobbish 1 2 3 4 5 Tolerant Sophisticated 1 2 3 4 5 Down-to-earth Rate the IFC mall on the following traits… Snobbish 1 2 3 4 5 Tolerant Sophisticated 1 2 3 4 5 Down-to-earth How close is IFC mall to consumers’ self-concept? Distance formula…

Measuring Personality Match: 

Measuring Personality Match Rate yourself on the following traits… Snobbish 1 2 3 4 5 Tolerant Sophisticated 1 2 3 4 5 Down-to-earth Rate the Diamond Hill mall on the following traits… Snobbish 1 2 3 4 5 Tolerant Sophisticated 1 2 3 4 5 Down-to-earth How close is Diamond Hill to consumers’ self-concept?

So: major use of trait theory: 

So: major use of trait theory Measure match between brand and consumer’s personality Tells you which brand is preferred

Overall, personality theories do have some uses…: 

Overall, personality theories do have some uses… But problems as well It’s often hard to link personality to consumer behavior: too unimportant!! Personality can be hard to measure – even though scales have been developed There are still questions about whether these scales can really tap into an individual’s personality So lifestyle measures are often used in addition to personality measures

Lifestyle: 

Lifestyle Lifestyle = mode of living identified by: Activities (work, hobbies etc.) Interests (what kind of parties?) Opinions (political, social, etc.) Related to personality, but different: more observable (less deep) easier to measure Measured through AIO scales

AIO measures (agree/disagree): 

AIO measures (agree/disagree) I always shop for discounts (A) I always check prices of even small items (A) In my opinion, saving money is better than spending it (O) When I buy clothes, I look for fashion, not comfort (I) I like parties with a lot of music and talk (I) I like to be part of the latest trends (I) People who give similar responses to a set of similar scales are in the same segment; can be targeted

Important note about lifestyle: 

Important note about lifestyle Lifestyle trends change… Marketers need to keep track of lifestyle trends… Because product needs are closely related to lifestyles Some examples…. Working more at home instead of at office What product opportunties does this open up?

Lifestyle changes…: 

Lifestyle changes… Changing Lifestyle Trends in HK in the last 10 years…and Marketing implications? working at home instead of office Rise of women in work force Health Consciousness Environmentalism Less spare time So: need to track lifestyle changes! Will revisit this issue in the case today….

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Information Processing Model of CB: 

Information Processing Model of CB Interpretation: Perception Attitudes: Like/Dislike information Memory/Prior Knowledge Individual Consumer: Personality/Demogs Environmental Characteristics: Culture Stimuli beliefs Selection: Exposure/ attention Choice

Environmental Influences: 

Environmental Influences People around us (Reference groups) Culture

Reference Groups: 

Reference Groups Reference groups (or referent person) provide roles, standards and norms that directly influence attitudes and behavior (e.g, friends, neighbours) Example of how reference groups can influence our choices of what products and brands we buy? Keeping up with the neighbours… Professors and plasma tv

Reference Groups: 

Reference Groups 2 major types of reference groups: membership group (to which you actually belong) aspiration group (to which you want to belong) Previous example: aspiration group influence or membership group influence? Any example of how aspiration group can influence our product choices?

Advertising often uses reference group influence…: 

Advertising often uses reference group influence…

Ads featuring celebrity endorsers… aspiration group or membership group?: 

Ads featuring celebrity endorsers… aspiration group or membership group?

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Can some endorsers exercise a “membership group” influence?: 

Can some endorsers exercise a 'membership group' influence?

Ads featuring “typical” endorsers… membership group: 

Ads featuring 'typical' endorsers… membership group

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Watson’s 1: saleslady

One final note…: 

One final note… Reference group influence can sometimes be exerted in a negative way You buy a product because you DON’T want to be like a certain group Dissociative group Examples??

Who is a common dissociative group for the average teenager?: 

Who is a common dissociative group for the average teenager?

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Environmental Influences: 

Environmental Influences Culture

Culture: 

Culture Culture = set of values accepted by society as a whole US: individualism; materialism East: collectivism; harmony Values are learnt: how? What are typical gender roles? Where do we learn them?

Values differ across cultures: 

Values differ across cultures Value of time: how late is late? California: 19 minutes Brazil: 34 minutes Hong Kong??

The reason cross-cultural differences are important is….: 

The reason cross-cultural differences are important is…. Rise of Global Marketing What factors responsible for this…?

Several reasons for this rise …: 

Several reasons for this rise … Decrease of trade barriers (NAFTA; Europe; China; India) Market saturation in developed nations; huge market potential in others (China; India) Levis; McDonald’s; Coca-Cola… Worldwide media available (CNN; MTV) Universal trends in lifestyle: example??

Global marketing is a great opportunity…: 

Global marketing is a great opportunity… But it comes with its own problems… Cultures/Countries differ greatly!

Cultural Problems in Global Marketing: 

Cultural Problems in Global Marketing Customs Left hand drive cars in Japan Japan = steering wheel on right of car USA = left Values Marlboro Cigarettes: lone cowboy vs. group of cowboys Language 'Nova' car in Spain; Mazda 'Laputa' Parker Pen: 'it won’t leak in your pocket and embarrass you' Mexico: 'embarazar' Physical differences Mattel: Barbie dolls in Japan

So a lot of effort needs to be made in order to localize your global product….: 

So a lot of effort needs to be made in order to localize your global product…. Which brings us to the big debate in global marketing…

How to do Global Marketing: 

How to do Global Marketing Standardization: keep the same marketing strategy: Levis; Coke successful because of 'American' glamor Economies of scale (Levitt article) Localization: make major changes to strategy Maggi Noodles in India Will come back to this issue in case

Project Presentations: last class: 

Project Presentations: last class Next class: Presentations Presentation time: 10-15 minutes talk + 7-8 minutes questions Don’t exceed 15 minutes for your talk!!! During presentation: lay out the basic issue you are looking at What you found (Manager + consumer survey) Recommendations Q/A session very important Keep some of your slides for this part! Order of presentations…1 through 5

Project Report: 

Project Report Project Report: Due June 8th (Marketing Office: 4379) Max = 10 double-spaced pages Not including cover page, executive summary, appendices Cover page: Group number (1-5); name, student ID, email address of each member Executive Summary: one paragraph summary of key problem and your solution ATTACH BLANK COPY OF YOUR QUESTIONNAIRE!!!!

BREAK!!: 

BREAK!!

Case: McDonald’s in China: 

Case: McDonald’s in China

McDonald’s in China: 

McDonald’s in China What are the reasons for McDonald’s success in China, even though it’s a foreign cuisine (no rice/noodles/pork) and taste is not all that appealing? What are the major segments that McDonald’s has targeted? And how? ADS What lifestyle trends has McDonald’s exploited? Is its success based on standardization or localization? What advantages of Standardization?? SUMMARIZE Other foreign and local fast-food restaurants are already imitating their tactics. What are your suggestions for McD’s future in China (how to separate from competition)? Discuss pros and cons of each suggestion From a societal perspective, what are the pros and cons of multinationals entering in a big way (as is happening in China/India)? Ads