Chapter 14 Consumer Decision-Making and Diffusion of Innovations REVIEW AND DISCUSSION QUESTIONS 14.1 What kinds of marketing and sociocultural inputs would influence the purchase of: (a) a TV with a built-in VCR; (b) a concentrated liquid laundry detergent; and (c) fat-free ice cream? Explain your answers. (a) A TV with a built-in VCR: Marketing inputs: • Product features and benefits: Emphasizing the convenience of having a built-in VCR, highlighting the space-saving aspect, and promoting the ease of use. • Pricing strategy: Offering competitive pricing or bundling discounts to make the product more attractive compared to buying a TV and VCR separately. • Promotion: Advertising campaigns focusing on the nostalgia of VCRs, targeting consumers who value simplicity and all-in-one solutions. • Placement: Ensuring the product is available in stores where consumers are likely to shop for electronics, with prominent displays and demonstrations. Sociocultural inputs: • Technological trends: Appeal to consumers who value retro technology or who are looking for a simpler alternative to modern media devices. • Lifestyle preferences: Targeting consumers who prefer integrated, space-saving solutions in their homes. • Economic factors: Offering a cost-effective option for consumers who may not want to invest in separate TV and VCR systems. (b) Concentrated liquid laundry detergent: Marketing inputs: • Product efficacy: Highlighting the effectiveness of the concentrated formula in cleaning clothes and removing stains. • Environmental benefits: Emphasizing the reduced packaging and transportation footprint compared to traditional detergents. • Pricing strategy: Offering value for money by showcasing the higher number of washes per bottle compared to traditional detergents. • Promotion: Utilizing social media and advertising to educate consumers about the benefits of concentrated detergents and dispelling myths about their effectiveness. Sociocultural inputs: • Environmental awareness: Targeting consumers who prioritize eco-friendly products and are willing to pay a premium for sustainable options. • Health consciousness: Appealing to consumers who are concerned about the chemicals in traditional detergents and prefer gentler alternatives. • Convenience: Highlighting the smaller packaging and easier storage of concentrated detergents for consumers living in smaller spaces. (c) Fat-free ice cream: Marketing inputs: • Health benefits: Emphasizing that the product is lower in fat and calories compared to traditional ice cream, appealing to health-conscious consumers. • Flavor variety: Offering a wide range of flavors to cater to different tastes and preferences. • Promotion: Utilizing social media and influencer marketing to target health-conscious consumers and promote the product as a guilt-free treat. • Packaging: Using attractive packaging to appeal to consumers looking for a premium ice cream experience. Sociocultural inputs: • Health and wellness trends: Targeting consumers who are focused on maintaining a healthy diet and lifestyle. • Dietary restrictions: Appealing to consumers who may be lactose intolerant or have other dietary restrictions that prevent them from consuming traditional ice cream. • Indulgence without guilt: Positioning the product as a satisfying treat that can be enjoyed without the guilt of consuming high-fat ice cream. 14.2 Define extensive problem solving, limited problem solving, and routinized response behavior. What are the differences among the three decision-making approaches? What type of decision process would you expect most consumers to follow in their first purchase of a new product or brand in each of the following areas: (a) chewing gum, (b) sugar, (c) men’s aftershave lotion, (d) carpeting, (e) paper towels, (f) a cellular telephone, and (g) a luxury car? Explain your answers. 1. Extensive problem solving: • Definition: A consumer decision-making process characterized by a high level of involvement, significant effort, and extensive information search and evaluation of alternatives. • Example: Buying a new car for the first time, where the consumer researches various brands, models, features, and prices before making a decision. 2. Limited problem solving: • Definition: A consumer decision-making process that involves moderate effort and information search, typically for familiar products or brands. • Example: Buying a new brand of toothpaste, where the consumer may compare prices and read a few reviews but does not extensively research all available options. 3. Routinized response behavior: • Definition: A consumer decision-making process characterized by low involvement, minimal effort, and automatic purchase decisions based on habit or brand loyalty. • Example: Buying a specific brand of milk or bread that the consumer has purchased many times before without considering other options. Differences among the three decision-making approaches: • Extensive problem solving involves a high level of involvement and effort, while routinized response behavior requires minimal effort and is based on habit or loyalty. • Extensive problem solving usually occurs for complex, expensive, or infrequently purchased products, while routinized response behavior is typical for low-cost, frequently purchased items. • Limited problem solving falls between these extremes, involving moderate effort and occurring for products that are somewhat familiar to the consumer. Expected decision process for first purchase of a new product or brand: • Chewing gum: Routinized response behavior, as most consumers have a preferred brand that they purchase without much thought. • Sugar: Limited problem solving, as consumers may consider price or brand reputation but are unlikely to extensively research sugar brands. • Men's aftershave lotion: Limited problem solving, as consumers may consider factors like scent, brand reputation, and price but are unlikely to extensively research all available options. • Carpeting: Extensive problem solving, as purchasing carpeting is a significant investment and consumers are likely to research various brands, styles, and prices. • Paper towels: Limited problem solving, as consumers may consider factors like price, absorbency, and brand reputation but are unlikely to extensively research all available options. • Cellular telephone: Extensive problem solving, as purchasing a cell phone involves considering features, plans, prices, and brands before making a decision. • Luxury car: Extensive problem solving, as purchasing a luxury car involves significant investment and consumers are likely to research various brands, models, features, and prices. 14.3 Assume that this coming summer you are planning to spend a month touring Europe and are, therefore, in need of a good digital camera. (a) Develop a list of product attributes that you will use as the purchase criteria in evaluating various digital cameras. (b) Distinguish the differences that would occur in your decision process if you were to employ compensatory versus noncompensatory decision rules. (a) Here is a list of product attributes that you might use as purchase criteria when evaluating various digital cameras for your trip to Europe: 1. Image Quality: Resolution, sensor size, and low-light performance. 2. Zoom Range: Optical zoom range and digital zoom capability. 3. Size and Weight: Portability and ease of carrying during travel. 4. Battery Life: Ability to last through a day of sightseeing without recharging. 5. Durability: Build quality and resistance to dust and moisture. 6. Ease of Use: User-friendly interface and accessibility of controls. 7. Connectivity: Wi-Fi, Bluetooth, or NFC for easy sharing and transferring of photos. 8. Lens Options: Compatibility with different lenses for versatility. 9. Brand Reputation: Reliability and customer service of the camera manufacturer. 10. Price: Affordability and value for money. (b) The decision process would differ if you were to employ compensatory versus noncompensatory decision rules: • Compensatory Decision Rules: With compensatory rules, you would evaluate each camera based on all attributes, and a camera that performs well in some areas could compensate for shortcomings in others. For example, if a camera has slightly lower image quality but longer battery life, you might still consider it a good choice overall. • Noncompensatory Decision Rules: Noncompensatory rules involve setting minimum standards for certain attributes. If a camera fails to meet these standards, it is eliminated from consideration, regardless of its performance in other areas. For example, if you have a minimum requirement for image quality, any camera that falls below this threshold would be excluded from your consideration, even if it excels in other aspects. In the context of purchasing a digital camera for your European tour, using compensatory rules might lead you to prioritize certain attributes over others based on their importance to you, while noncompensatory rules would involve setting minimum acceptable standards for key attributes and eliminating options that do not meet these standards. 14.4 How can a marketer of a very light, very powerful laptop computers use its knowledge of customers’ expectations in designing a marketing strategy? The marketer should be aware of what the consumer expects from the laptop computer, because if the product fails to operate as the consumer expects it to, he or she might return it, not buy products under that brand name again, and spread unfavorable word-of-mouth about the company. The promotion for the computer must not build up unrealistic expectations about the product by promising, for example, an easy-to-use product (because virtually all personal computers are complex products and users must spend a considerable amount of time learning how to operate them properly). The positioning approach used must be designed to deliver benefits that are congruent with those consumer needs and expectations uncovered by research studies. 14.5 How do consumers reduce postpurchase dissonance? How can marketers provide positive reinforcement to consumers after the purchase in order to reduce their dissonance? Marketing strategies to reduce postpurchase dissonance include: (a) ads which reassure buyers that they made the right choice; (b) reassuring messages and text within the instruction manuals; (c) extensive warranties, guarantees, and service; (d) a mechanism to obtain further information about the product (e.g., an 800 number, a corporate service center); (e) postpurchase contacts with buyers by mail or phone (e.g., a “welcome back” postcard mailed by a travel agent to a client returning from a vacation that was arranged by the same travel agent). 14.6 Sony is introducing a TV with a 65-inch Ultra HD TV wide screen that has over 8 million pixels (compared with 2 million on most HDTVs) with an advanced signal processing system. The TV’s introductory price is $10,000. a. Who should be Sony’s initial target market? What are the target consumers’ demographics and psychographics and how can Sony locate and reach them? Innovators are the initial target market for the new TV model. These consumers are venturesome, open to new ideas, eager to try new products, perceive less risk in adopting new offerings, and are more socially integrated than other consumers. In terms of personality traits, these individuals are open-minded, inner-directed, and like exciting and new concepts (i.e., high optimum stimulation level). You will want to share the characteristics of innovators with students prior to assigning the question. b. How would you identify the innovators for this product? Panasonic should derive the definition of consumer innovators from the status of its new product. Thus, those consumers who purchase the new TV-model within a designated period of time following the product’s introduction are defined as the “innovators.” The company should study the characteristics of these consumers (including the data from the warranty cards that purchasers of the new product have filled out) and use the knowledge gained to develop marketing strategies for the introductions of other electronic innovations. c. Is the new model a continuous, dynamically continuous, or discontinuous innovation? Explain your answer. Most student should identify the new model as continuous since it does not require a change in behavior from the consumer. Students may make the argument that it is dynamically continuous based on the innovativeness of the images and the price, which may require a lifestyle adjustment/change in regular consumption patterns. 14.7 Describe how Sony can use the “five product features that affect adoption” in order to speed up the diffusion of its new TV model. a) Relative advantage—degree to which potential customers perceive a new product as superior to existing substitutes. Sony can emphasize features that differentiate the TV from existing offerings. If consumers do not feel that the additional pixels justify the $10,000 price tag, Sony can consider redesigning the TV to include attributes that consumers feel are more valuable or lower the price. b) Compatibility—degree to which the customer feels the new product is consistent with their present needs, values, and practices. Sony can emphasize the use of the new product for needs and values that are important to consumers, such as social needs or ego needs, in its communications. c) Complexity—degree to which a new product is difficult to understand or use. Complexity is especially important in dealing with technological fear. Sony can emphasize that, in spite of its functionality, it is as easy to use as any other television. d) Trialability—degree to which a new product is capable of being tried on a limited basis. Sony can work with retailers and/or run events where consumers can try the product. e) Observability—ease with which a product’s benefits or attributes can be observed, imagined, or described to potential consumers. Sony might identify opinion leaders in affluent neighborhoods and have them host parties around television-based events (e.g. the Super Bowl; the Academy Awards) so consumers can try the product. HANDS-ON ASSIGNMENTS 14.8 Identify a product, service, or style that was recently adopted by you and/or some of your friends. Identify what type of innovation it is and describe its diffusion process up to this point in time. What are the characteristics of people who adopted it first? What types of people did not adopt it? What features of the product, service, or style are likely to determine its eventual success or failure? Product/Service: Plant-based meat alternatives (e.g., Beyond Meat, Impossible Foods) Type of Innovation: Discontinuous innovation - a new product or service that represents a significant departure from existing offerings. Diffusion Process: 1. Awareness: Initially, a few friends tried plant-based meat alternatives after hearing about them through social media, news articles, or recommendations. 2. Interest: Positive experiences and environmental concerns led to increased interest among our social circle. 3. Trial: Some friends tried plant-based alternatives at restaurants, while others bought them from grocery stores to cook at home. 4. Adoption: Over time, more friends adopted plant-based alternatives, influenced by health, environmental, and ethical considerations. Characteristics of Early Adopters: 1. Innovators: Friends interested in trying new foods, health-conscious individuals, and those concerned about the environment were early adopters. 2. Open-Mindedness: People willing to experiment with new tastes and dietary choices were more likely to try plant-based alternatives. Types of People Who Did Not Adopt: 1. Traditionalists: People resistant to change or who prefer traditional meat-based diets. 2. Skeptics: Individuals skeptical about the taste, nutritional value, or sustainability of plant-based alternatives. Features Determining Success or Failure: 1. Taste and Texture: Plant-based alternatives must closely mimic the taste and texture of traditional meat to appeal to a wider audience. 2. Price: Affordability is crucial for mass adoption. 3. Availability: Plant-based alternatives need to be widely available in restaurants and grocery stores. 4. Health and Environmental Benefits: Continued education about the health and environmental benefits of plant-based diets can drive adoption. In conclusion, the diffusion of plant-based meat alternatives among my friends followed a typical adoption curve, starting with innovators and gradually spreading to a larger audience. Success will depend on factors such as taste, price, availability, and continued education about the benefits of plant-based diets. Instructor’s Discussion The objective of this exercise is to demonstrate that the concepts discussed in this chapter are highly applicable to the student’s own behavior and immediate social system. Some of the information (characteristics of people who adopted it) should be introduced in advance, but the features should be related to Roger’s five factors that affect the rate of diffusion. 14.9 Identify five friends who have recently purchased a new model of cell phone (with some features that they consider to be “new”). Arrange to interview each of the individuals, one-at-a-time. Ask them the following questions, and another you think is appropriate: a) Why did you select this cell phone over other cell phones that you were looking at or considering? b) Do you currently like the phone for the same reasons that you purchased, or have you found other reasons why you particularly like it? 1. Selecting Friends: • Choose five friends who have recently purchased a new model of cell phone with features they consider to be "new." 2. Interview Questions: • Why did you select this cell phone over other cell phones that you were looking at or considering? • Do you currently like the phone for the same reasons that you purchased, or have you found other reasons why you particularly like it? • What other features or aspects of the phone do you find appealing or useful? • How has your experience been with the phone so far? Any notable pros or cons? • Would you recommend this phone to others? Why or why not? 3. Conducting the Interviews: • Schedule individual interviews with each friend, ensuring a comfortable and private setting for the conversation. • Ask the questions in a conversational manner, allowing your friends to elaborate on their responses. • Take notes during the interviews to capture key points and insights. 4. Analyzing the Responses: • Look for common themes or trends among your friends' responses. • Identify any patterns in their reasons for selecting the phone and their overall satisfaction with it. • Note any additional reasons they have discovered for liking the phone, beyond their initial purchase reasons. 5. Reporting Findings: • Summarize your findings from the interviews, highlighting key insights and interesting anecdotes. • Consider how these insights can inform your understanding of consumer behavior and decision-making in the context of purchasing new technology products. Instructor’s Discussion This exercise gives students a great chance to converse about something important to them while using important concepts related to innovations and the diffusion process. S.TA.R. PROJECTS Ethical Issues in Consumer Behavior S.T.A.R. Project #1 As a consumer behavior expert for a nationwide clothing manufacturer you have been asked to address a consortium of Better Business Bureaus via a nationwide interactive TV/Satellite hookup. When you arrive at the TV studio where the broadcast will occur you learn that the sponsors have also invited a speaker from Ralph Nader’s consumer organization to address the same audience. This speaker will contend that consumers should use an economic view in consumption decisions. Your presentation was to assert that consumers primarily use a cognitive view in making their decisions. As the unannounced “debate” begins, your fellow speaker labels your company as being one that dupes consumers through mass media advertising and plays on the consumers’ emotions and passivity (addiction to mass media for information) to sell products. Considering the response and the ethics of what was just done, formulate a response to support your position with respect to the cognitive view of consumer decision making. How could you ethically come out of this “debate” on top? In response to the unexpected labeling of my company as one that dupes consumers through mass media advertising, I would emphasize the importance of understanding consumer behavior and decision-making processes. 1. Clarify the Cognitive View: I would clarify that the cognitive view of consumer decision-making focuses on the rational and logical processes that consumers use to evaluate products and make purchase decisions. It involves information processing, comparison, and evaluation of alternatives based on personal preferences, needs, and values. 2. Address Emotional Appeal: While emotions can play a role in consumer decision-making, especially in advertising, it is not the sole or primary driver. Cognitive processes, such as evaluating product features, price, and quality, also significantly influence consumer choices. 3. Ethical Considerations: I would emphasize that my company values ethical marketing practices and respects consumer autonomy. We aim to provide accurate information and create meaningful connections with our customers, rather than manipulating emotions or exploiting vulnerabilities. 4. Value of Information: Highlighting the value of information in the cognitive view, I would explain that our advertising aims to inform consumers about our products, their features, and benefits, empowering them to make informed choices that align with their needs and preferences. 5. Engage in Constructive Dialogue: Instead of engaging in a confrontational debate, I would seek to engage in a constructive dialogue with the other speaker and the audience. I would acknowledge the importance of economic perspectives in consumption decisions and emphasize the complementary nature of both cognitive and economic views in understanding consumer behavior. 6. Emphasize Consumer Empowerment: Ultimately, I would emphasize that our goal is to empower consumers to make choices that are best for them, based on their own cognitive processes and personal values, rather than seeking to manipulate or deceive them. By addressing these points, I would aim to ethically come out of the "debate" on top by showcasing my company's commitment to ethical marketing practices and consumer empowerment through the cognitive view of consumer decision-making. Instructor’s Discussion This scenario asks students to consider their actions when placed in a difficult role. First, the debate was unannounced and, therefore, preparation for a debate would be minimal. Second, the speaker that students would be matched against has an aggressive agenda. Lead students through a response format. Should they attack, be submissive, be explanatory, take the high road, or refuse to participate? This might be good training for the unexpected encounter. S.T.A.R. Project #2 The power of the Internet can be abused. Abuse is really a matter of perspective, however. For example, if a consumer or an organization were to openly criticize a company, its marketing practices, or products/services, the company could make the claim that the consumer or organization was treating it (the company) unfairly and using the cover of freedom of speech to harm its reputation and business. From the consumer’s or an organization’s standpoint, the criticism might be deserved and it was (is) exercising its constitutional right to complain and seek redress over some perceived wrong. The Internet has proved to be a useful vehicle for making such statements about companies. Your assignment is to research two such complaint Web sites (Web Pages That Suck at www.websitesthatsuck.com and the Stealing Home Coalition at www.homedepotsucks.com). Review the Web sites, examine the ethics of their behavior and the issues involved and then write a short position paper that takes a stance on the usefulness (or harmfulness) of such Web sites. Be sure to review the ethical issues involved. Position Paper: Ethical Considerations of Complaint Websites Complaint websites, such as Website That Suck and the Stealing Home Coalition, serve as platforms for consumers and organizations to voice their grievances and criticisms about companies' marketing practices, products, and services. While these websites can be useful in providing a forum for individuals to express their opinions and seek redress for perceived wrongs, there are ethical considerations that must be taken into account. Usefulness of Complaint Websites: 1. Consumer Empowerment: Complaint websites empower consumers by providing a platform to voice their concerns and hold companies accountable for their actions. 2. Transparency: These websites promote transparency by highlighting issues and concerns that may not be widely known, encouraging companies to address them. 3. Market Feedback: Complaint websites can serve as a form of market feedback, helping companies identify areas for improvement and enhance customer satisfaction. Harmfulness of Complaint Websites: 1. Potential for Abuse: There is a risk that complaint websites can be abused by individuals or organizations with malicious intent, spreading false or exaggerated claims to harm a company's reputation. 2. Legal and Reputational Risks: Companies may face legal and reputational risks as a result of negative publicity on complaint websites, even if the claims are unfounded or exaggerated. 3. Lack of Accountability: Complaint websites may lack accountability mechanisms, allowing for the spread of misinformation or unfair criticism without consequences. Ethical Issues Involved: 1. Freedom of Speech: Consumers and organizations have the right to freedom of speech, but this right must be balanced with ethical considerations, such as the accuracy and fairness of their statements. 2. Fairness and Accuracy: Complaint websites should strive to be fair and accurate in their criticism, avoiding misleading or defamatory statements. 3. Responsibility: Both consumers and organizations have a responsibility to use complaint websites responsibly and ethically, ensuring that their actions do not harm others unfairly. Conclusion: In conclusion, complaint websites can be a useful tool for consumers and organizations to express their grievances and seek redress. However, ethical considerations, such as fairness, accuracy, and responsibility, must be taken into account to ensure that these websites serve their intended purpose without causing harm or spreading misinformation. It is essential for both users and operators of complaint websites to uphold ethical standards and promote constructive dialogue in addressing issues and concerns. Instructor’s Discussion This is a sensitive issue, however, the students should find the information useful and informative. One site claims to educate through its “trashing” of Web sites and the other Web site claims to be a platform for curing a wrong and environmental danger. Whether or not these claims are true, it should make for a useful discussion. This exercise can be combined with (1) above for discussion purposes. Individual Star Projects S.T.A.R. Project #3 Your task is to go on a prepurchase search via the Internet. The product category is up to you. You can either search for a product via the Internet that you will eventually purchase in a store or the search can be for a product that would be purchased online. Once you have completed your prepurchase search, list the factors that impacted your search. Is the Internet a good way to search for products? Comment. Lastly, write a summary report about your experience and whether you thought it was beneficial or not. Be sure to describe your successes and failures encountered during the search process. For my prepurchase search, I decided to search for a new laptop that I would eventually purchase online. I chose this product category because it involves a significant investment and requires careful consideration of various factors. Factors that Impacted My Search: 1. Price: I had a specific budget in mind and looked for laptops within that range. 2. Specifications: I considered the processor, RAM, storage capacity, and other technical specifications based on my needs. 3. Brand Reputation: I looked for reputable brands known for their quality and reliability. 4. Reviews and Ratings: I read reviews and ratings from both experts and users to gauge the performance and reliability of different laptops. 5. Warranty and Support: I considered the warranty period and the availability of customer support. 6. Design and Features: I also considered the design, weight, and additional features such as touchscreen capability and battery life. Is the Internet a Good Way to Search for Products? Yes, the Internet is an excellent way to search for products, especially for items like electronics where specifications and reviews are crucial. It allows for easy comparison of products, access to a wide range of options, and the ability to read reviews from other users. Summary Report: My experience searching for a laptop online was beneficial overall. I was able to find a laptop that met my requirements within my budget. The Internet provided me with access to a wide range of options, and I could easily compare prices, specifications, and reviews. However, I encountered some challenges, such as navigating through the overwhelming amount of information and ensuring the reliability of certain reviews. Despite these challenges, I believe that the Internet is a valuable tool for conducting prepurchase searches, as it provides access to information and resources that can help make informed decisions. Instructor’s Discussion This assignment asks students to use the Internet to do a prepurchase search and then to comment on their experiences. The assignment also affords students the opportunity to review the situational factors described in the chapter. Pick a few students to discuss their experiences while on their search. Try picking one student who has never searched for products via the Internet (yes, there will be some) and one student who is an experienced Internet searcher and shopper. Contrast the information provided by these two students. S.T.A.R. Project #4 Consumer decision rules, even though you use them every day, are often difficult to understand. Before beginning this assignment, review the consumer decision rules found in the chapter. Your assignment is to design your own new BMW (see the design feature at www.bmw.com). As you design your new car, consider the decision rules that are impacting and formulating your decisions. Once you have designed your new car, download a picture of the car and list all the features you have included in your ideal car (another download feature of the Web site). Write a short summary report that describes what you did, what decision rules you used, and how these rules influenced your overall decision process. Discuss your efforts with the class. Show your new car. For my new BMW design, I considered several decision rules to create my ideal car: 1. Compensatory Decision Rule: I weighed the importance of each feature, such as performance, comfort, and design, and selected options that best balanced these factors. 2. Satisficing Decision Rule: I aimed to select features that met my minimum criteria for each category, ensuring that I was satisfied with the overall package. 3. Heuristic Decision Rule: I relied on shortcuts or rules of thumb, such as choosing popular features or options recommended by experts, to simplify the decision-making process. 4. Lexicographic Decision Rule: I prioritized certain features, such as safety and technology, over others, ensuring that these key factors were met before considering other options. Features Included in My Ideal BMW: • Model: BMW X5 • Exterior Color: Mineral White Metallic • Interior Color: Ivory White Vernasca Leather • Wheels: 21" M Y-Spoke Bi-Color Wheels • Engine: 4.4-liter BMW M TwinPower Turbo V8 • Technology: BMW Live Cockpit Professional, Head-Up Display, Parking Assistant Plus • Comfort: Panoramic Glass Roof, Heated and Ventilated Front Seats, Ambient Lighting • Safety: Driving Assistant Professional, Active Protection, Surround View Camera System Summary Report: Designing my new BMW was an exciting experience that allowed me to consider various decision rules to create my ideal car. I used a compensatory decision rule to balance performance, comfort, and design features, ensuring that my selections met my overall preferences. Additionally, I relied on heuristics and prioritized certain features, such as safety and technology, to simplify the decision-making process and ensure that my key criteria were met. Overall, the BMW design tool provided a comprehensive platform to explore options and create a customized vehicle that aligned with my preferences and needs. Instructor’s Discussion This assignment lets students have some fun designing their own luxury car and at the same time learn about decision rules. As students complete the assignment be sure to have them show their new car, explain what decision rules were used, and how the rules influenced their decision-making process. The results are often surprising. S.T.A.R. Project #5 Gillette (see www.gillette.com) has a policy that 40 percent of sales must come from products introduced within the past five years. Wouldn’t it be great if all companies followed a similar doctrine and objective? Gillette has been considered to be an innovative company for almost a century. Following the policy above is one of the reasons that it has an innovative reputation. Your assignment is to go to the Gillette Web site, pick a product from the Gillette inventory, and trace how the product either has or should be diffused through our market system. Use any of the tools, ideas, or suggestions provided by the chapter to carry out your assignment. Write a short report that summarizes your attempt and findings. For this assignment, I selected the Gillette Fusion5 ProGlide Razor from the Gillette website (www.gillette.com) and traced how the product could be diffused through the market system. Diffusion Process: 1. Innovators (2.5%): The product is first adopted by innovators who are eager to try new shaving technologies and are willing to pay a premium for the latest features. 2. Early Adopters (13.5%): Early adopters, influenced by the innovators' positive experiences and the product's marketing campaigns, start to purchase the Fusion5 ProGlide Razor. 3. Early Majority (34%): As the product gains traction and positive reviews, the early majority begins to adopt it, attracted by its performance and benefits over older razors. 4. Late Majority (34%): The late majority follows suit, adopting the Fusion5 ProGlide Razor as it becomes more mainstream and widely available in stores. 5. Laggards (16%): Laggards, who are hesitant to change and prefer traditional razors, may eventually adopt the product as it becomes the norm, or they may stick with their current razors. Marketing Strategies: 1. Product Features: Highlighting the advanced features of the Fusion5 ProGlide Razor, such as the FlexBall technology and precision trimmer, to attract early adopters and early majority. 2. Advertising: Utilizing advertising campaigns to create awareness and build excitement around the product, showcasing its benefits over competitors. 3. Word of Mouth: Encouraging positive word of mouth through influencer partnerships and customer testimonials to drive adoption among the early majority and late majority. 4. Distribution: Ensuring wide distribution in retail stores and online platforms to make the product accessible to a broader audience. 5. Pricing: Offering competitive pricing and promotions to attract price-sensitive consumers and drive adoption across all segments. Conclusion: The Gillette Fusion5 ProGlide Razor can be successfully diffused through the market system by targeting different consumer segments with tailored marketing strategies and emphasizing the product's innovative features and benefits. By following a systematic approach to diffusion, Gillette can ensure that the Fusion5 ProGlide Razor maintains its innovative reputation and continues to be a preferred choice among consumers. Instructor’s Discussion This project is left wide-open deliberately. It should be a good gauge of what students have learned about innovation and diffusion. You may modify in any way you see fit. There is ample information on the Gillette Web site to pursue the development of any one of several products. Small Group Projects S.T.A.R. Project #6 Your group’s assignment is to pick a product category such as personal computers, clothing, cars, or recreation. Using your chosen category, chart, outline, or diagram how consumers make purchase decisions in the chosen area. Focus on need recognition, prepurchase search, and evaluation of alternatives. Lastly, your group should pick a “reporter” to summarize your group’s findings for the entire class. For our group's assignment, we chose the product category of personal computers and outlined how consumers make purchase decisions in this area: 1. Need Recognition: • Trigger: Need for a new computer arises due to a slow performance, outdated technology, or specific requirements (e.g., gaming, work). • Identification: Consumers recognize the need for a new computer through personal experience, recommendations, or advertisements. 2. Prepurchase Search: • Information Sources: Consumers gather information from online sources (websites, forums, reviews), retail stores, and recommendations from friends or family. • Factors Considered: Performance (speed, processing power, graphics), features (operating system, storage, connectivity), price, brand reputation, and warranty/support. 3. Evaluation of Alternatives: • Consideration Set: Consumers narrow down options based on budget, preferred brands, and key features. • Comparison: Consumers compare alternatives based on specifications, reviews, and perceived value. • Decision: Final decision is influenced by factors such as price, brand loyalty, perceived quality, and additional features. Summary: In the personal computer category, consumers typically recognize the need for a new computer when their current device no longer meets their requirements. They then engage in a prepurchase search, gathering information from various sources to understand the available options. During the evaluation of alternatives, consumers consider factors like performance, features, price, and brand reputation to make an informed decision. Reporter's Summary: Our group outlined the consumer decision-making process for personal computers, highlighting the importance of need recognition, prepurchase search, and evaluation of alternatives. Consumers in this category prioritize factors like performance, features, and price when choosing a new computer. Instructor’s Discussion This assignment is a good summary for the group experience and the basic substance of the course and text. Add product categories for a large class to ensure that every group has a separate discussion area. Use this as a basis for discussion on how the product and its importance to the consumer effects the way they make decisions. S.T.A.R. Project #7 Your group’s assignment is to explain the levels of consumer decision making. Review the material in the text on extensive problem solving, limited problem solving, and routinized response behavior. In order to explain the levels, construct examples that differ from those presented in the text. Next, show how your examples could become one of the other forms. What would need to change in the purchase environment for the change(s) to occur? How would this change (changes) impact the strategic decision making of the manufacturer(s) of your product example(s)? Write a short summary report that outlines your group’s findings. Discuss your findings with other class members. Note the similarities and differences with other groups. Levels of Consumer Decision Making: 1. Extensive Problem Solving: This occurs when consumers are faced with a high-involvement purchase decision and have little to no prior experience with the product or service. They invest significant time and effort in gathering information, comparing options, and evaluating alternatives. For example, buying a high-end camera for professional photography. 2. Limited Problem Solving: This occurs when consumers have some experience with the product or service but still need to gather additional information to make a decision. They may consider a few alternatives but do not extensively research all options. For example, choosing a new restaurant for dinner based on online reviews and recommendations from friends. 3. Routinized Response Behavior: This occurs when consumers are familiar with the product or service and have a well-established decision-making process. They often make purchase decisions out of habit or loyalty to a particular brand. For example, buying the same brand of toothpaste or cereal consistently. Examples: • Extensive Problem Solving: Buying a new smartphone with advanced features, comparing specifications, reading reviews, and visiting stores to test different models. • Limited Problem Solving: Choosing a hotel for a weekend getaway based on price, location, and amenities, but not extensively researching every hotel in the area. • Routinized Response Behavior: Buying a particular brand of coffee because it's familiar and has always been satisfactory, without considering other brands. Transformation Examples: • The smartphone purchase (extensive problem solving) could become routinized response behavior if the consumer becomes loyal to a specific brand and no longer considers other options. • The hotel choice (limited problem solving) could become extensive problem solving if the consumer starts traveling more frequently and seeks out more luxurious or unique accommodation options. Impact on Strategic Decision Making: • Manufacturers may need to adjust their marketing strategies based on the level of consumer decision-making. For products requiring extensive problem solving, manufacturers should focus on providing detailed information, reviews, and demonstrations. For products in routinized response behavior, maintaining brand loyalty through promotions and consistent quality is key. Summary: Consumer decision-making varies based on the level of involvement and experience with the product or service. Understanding these levels is crucial for manufacturers to tailor their marketing strategies and meet the needs of consumers at different stages of the decision-making process. Instructor’s Discussion This project will aid the groups to summarize the decision-making process shown in the text and give further reinforcement to learning associated with the levels of consumer decision making. Pick the best examples and have student groups discuss their examples in class. Solution Manual for Consumer Behaviour Leon G. Schiffman, Leslie Lozor Konuk, S. Ramesh Kumar 9789332555099, 9780134734828
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