CH-1-4 What is CB, and Why Should I Care? – CB Consumer Behaviour Canadian : Book Guide

This Document Contains Chapters 1 to 4 Chapter 1 What is CB, and Why Should I Care? END OF CHAPTER MATERIAL CASE ANSWERS: The Hudson’s Bay Company 1. Using the basic consumption process in Exhibit 1.2, discuss how a young Canadian “consumes” clothing. Answer: Consumers develop a need for new clothing in a variety of ways—new clothes for school or work, the introduction of a new fashion trend, or the desire to fit in with a particular group. Clothes are necessary to keep consumers warm and protected from the elements, but they are also a fashion item and young consumers like to feel good about the clothes they wear because it brings them self-esteem. These needs drive consumers to want clothing that not only serves the basic functional needs, but also looks attractive and makes them feel fashionable and good about themselves. For this reason, they may be attracted to The Bay’s positioning as a store that’s in touch with fashion trends, with many fashion-forward labels in stock. Consumers’ wants may lead them to consider an exchange with The Bay if the clothing styles in fact do closely match their desires. The decision to participate in an exchange (or to forgo one) has costs and benefits. Clothing costs money, and trendy labels tend to cost more than less current designs or lower quality items. In return, however, consumers may project an improved image, and boost their self esteem. To the extent that consumers believe they are supporting a Canadian retailing institution (regardless of its current ownership), they may gain additional value from the exchange. If consumers indeed achieve the goal of projecting the desired image and feeling good about themselves, they will react favourably to their purchase from The Bay. The consumer will in that case experience positive value. If the product does not achieve those ends, then no positive value will have been received. 2. Do you think it makes sense for The Bay to pursue more fashionable apparel brands to attract younger shoppers? Answer: Answers may vary. The Bay’s strategy of offering more fashionable apparel brands in order to attract young shoppers is a good business decision if it addresses a real need that its target market can afford to satisfy. If successfully implemented, the strategy may allow The Bay to differentiate itself from lower-priced competitors that do not offer higher-end fashion brands, while offering an alternative to exclusive, high-fashion retailers such as Holt-Renfrew. Yes, it makes sense for The Bay to pursue more fashionable apparel brands to attract younger shoppers. Younger consumers are often drawn to trendy, stylish clothing, and by offering popular brands, The Bay can appeal to their preferences and increase foot traffic. Incorporating fashionable apparel can also enhance the store’s image as a contemporary shopping destination. Additionally, aligning with current fashion trends can help The Bay stay relevant in a competitive retail market. Ultimately, this strategy could boost sales and attract a new, loyal customer base. 3. Is The Bay a consumer-oriented company? Answer: Based on its stated desire to cater to the wants and needs of a specific market segment (young consumers), The Bay appears to have adopted a consumer-oriented approach. Hiring a high-profile CEO from within the fashion industry and aggressively pursuing the fashion brands most desired by its customers are further proof of a desire to maximize consumer satisfaction. Its awareness of competitors’ strategies indicates that this is part of a market-oriented business approach. 4. What sort of research will Bonnie Brooks need to drive her strategic decisions for The Bay in the next few years? Interpretive, quantitative, or experimental? Answer: No single type of research is likely to provide answers to all the questions Ms. Brooks is likely to have. Quantitative approaches can analyze consumers’ current buying patterns, indicating where specific types of products (such as fashion brands) are being purchased, who is buying them, how frequently they buy, and so on. Point-of-sale technologies provide a wealth of data the researcher can analyze to form a detailed picture of consumer buying habits. This information may need to be supplemented with interpretive research, which can help to explain the motivation behind these patterns, such as why certain consumers prefer to do business with certain types of stores. Finally, experimental research may be useful in assessing the effectiveness of specific marketing approaches. A test market can be a very useful tool in helping a retail chain to develop the most effective way to display, promote, and price its merchandise. 5. Almost any business involves some ethical questions. In this case, do you see any problems with positioning The Bay as Canada’s oldest corporation when it is owned by an American private equity firm? Answer: Answers will vary. Many brands are associated with a country of origin that no longer reflects its ownership (or never did so). The quintessentially British Mini Cooper brand is owned by Germany’s BMW, while Jaguar belongs to India’s Tata. Roots, which uses Canada and the beaver as part of its brand imagery, was founded by two Americans. Tim Hortons remained a Canadian icon even after its purchase by U.S.-based Wendy’s. Students will have varying opinions on The Bay’s ability to retain its Canadian heritage and the ethical issues of potential misrepresentation. Positioning The Bay as Canada’s oldest corporation while it’s owned by an American private equity firm could raise ethical concerns about transparency and authenticity. It might lead to accusations of misleading customers about its ownership and corporate heritage. This could undermine trust and credibility if consumers feel deceived. Balancing heritage with honest communication about current ownership is crucial to maintain integrity and foster customer loyalty. Ensuring clear and accurate representation can help mitigate potential backlash. REVIEW QUESTIONS (*) Indicates material on prep cards. 1. [LO1] List two perspectives from which consumer behaviour can be defined. Answer: Consumer behaviour can be defined as (1) a field of study and as (2) human activity involving human thoughts and actions. 2. [LO1] Define consumer behaviour from both perspectives. Answer: Consumer behaviour as a field of study represents the study of consumers as they go about the consumption process. In this sense, consumer behaviour is the science of studying how consumers seek value in an effort to address real need. Consumer behaviour as a human activity is the set of value-seeking activities that take place as people go about addressing realized needs. 3. [LO1] List each stage in the consumption process, and briefly describe this process. Answer: The stages include needs, wants, exchange, costs and benefits, reaction, and value. The basic consumption process is a chain reaction of events through which consumers receive value (i.e., the steps in consumption). 4. *[LO1] What is consumption? Provide three examples of something you have “consumed” recently, and illustrate the concept of consumption with each example. Answer: Consumption represents the process by which goods, services, or ideas are used and transformed into value. Examples should be easy. Music is enjoyable only when one listens to it (and likes it). Consumption can turn an mp3 file into value by listening. 5. [LO1] Explain the interrelationships among economics, psychology, marketing, and consumer behaviour. Answer: In some ways, economics is an overarching discipline in that it also studies consumption but at a more abstract level than does consumer behaviour. Marketing studies stemmed from economics and psychology, and marketing itself represents potentially value-producing activities aimed at addressing consumer needs. As a field of study, consumer behaviour grew from the marketing field, and it was very much influenced by psychology because great emphasis was placed on the way consumers made decisions. 6. [LO2] What role does competition play in determining the way in which consumers are treated in the marketplace? Answer: Competition eventually drives businesses toward a consumer orientation because the firm that doesn’t serve customers well is vulnerable to the customer going elsewhere. Thus, the more competitive the market, the greater the chance that the consumer is treated with respect as a valuable resource to the firm. Because firms depend on repeat business (and as they recognize the advantages of doing so), they are more likely to treat customers better in an effort to build or maintain a strong relationship. 7. [LO2] Define consumer orientation. How do firms become consumer oriented? Answer: Consumer (customer) orientation refers to a way of doing business in which the actions and decision making of the institution prioritize consumer value and satisfaction above all other concerns. A consumer orientation is often a response to a competitive marketplace. 8. [LO2] Think about a consumer on a business trip out of town. What “touchpoints” take place during a typical day in a hotel for a business traveller? Answer: Touchpoints are direct contacts between a firm and a customer. A day for the traveller may involve the following touchpoints: • Wake-up call • Visiting the fitness centre • Going down for breakfast and being served • Asking for directions • Checking out of the hotel • Getting help with transportation 9. [LO2] How is niche marketing different than differentiated marketing? Answer: Niche marketers are pursuing exchanges within one market segment. Differentiated marketers attempt to serve multiple segments with multiple products. 10. [LO3] List three main reasons why consumer behaviour is such an important topic to understand. Answer: Consumer behaviour is important in at least three ways: • CB as an input to business/marketing strategy • CB as a force that shapes society • CB as an input to responsible consumer decision making 11. [LO3] How can consumer behaviour contribute to public policy? Answer: Public policy includes measures taken to restrict consumer freedom in the interest of the common good. Restrictions on consumer freedom exist in the form of traffic laws as well as restrictions on trade, such as prescription drugs, and consumption activities, such as smoking. Such decisions should only be made with a thorough understanding of the consumer behaviour issues involved, such as consumer psychology and sociology and the impact of such decisions on the marketplace and economy. 12. *[LO4] What two basic approaches to studying (i.e., researching) consumer behaviour are discussed in this chapter? How do they differ? Answer: Interpretive research seeks to explain the inner meanings and motivations associated with specific consumption experiences. Quantitative research addresses questions about consumer behaviour by using numerical measurement and analysis tools. Exhibit 1.5 demonstrates specific differences between the approaches. 13. [LO4] When a researcher gathers information from consumers, such as household income and family size, and then uses this information to determine how much families will spend on a home, what “type” of research is being used here? Explain. Answer: Quantitative research is being used because these measures will involve concrete, numeric measurements and statistical analyses to provide information. 14. [LO5] What is meant by the phrase “consumer behaviour is dynamic”? Answer: Consumers are constantly changing, and therefore marketers’ responses to consumers are constantly changing, too. Several marketplace trends contribute to the dynamic nature of consumer behaviour: internationalization, changing technologies, and changing demographics. 15. *[LO5] How is the fact that communication media preferences are changing affecting consumer behaviour and the effective use of consumer behaviour in business? Answer: Consumers no longer communicate by voice to the extent that they used to. In fact, younger consumers have turned to social networking as a preferred means of communication. Older consumers may still prefer speaking to someone in person or on the phone. Middle-aged consumers may prefer email. Marketers have had to change the way they communicate with their consumers and one result is a shift in resources toward social networking sites like Facebook as a way of reaching customers with effective marketing communication. INTERACTIVE/APPLICATION EXERCISES 16. *Ethics is an important aspect of consumer behaviour. Later chapters will focus on ethics in more detail. However, given that consumer behaviour is useful from a business, societal, and personal viewpoint, in which area are ethics and consumer behaviour most closely related? Explain your choice. Answer: Students can defend any area by discussing the behaviour of people involved in consumption and action. Students are likely to choose the societal viewpoint because issues such as public policy are most closely associated with ethics. However, students should also consider behaviour from both the individual consumer and potential marketing employee perspectives. Ethics and consumer behavior are most closely related in the business area. Ethical practices influence consumer trust and brand loyalty, impacting purchasing decisions and overall business success. Companies that prioritize ethical behavior, such as fair trade and sustainability, can attract conscientious consumers and differentiate themselves in the market. Ethical behavior also helps build a positive reputation, which is crucial for long-term business viability. Thus, ethical considerations in consumer behavior are integral to maintaining a responsible and successful business. 17. Review the following situations, and discuss the relevance of consumer behaviour to explain each scenario: • A student selling a textbook back to the university bookstore • A student purchasing a value meal from an on-campus fast-food stand • A family purchasing a new home • A corporate CEO taking a prospective customer to lunch • A consumer injured during a pick-up football match who is given a tetanus shot at a first aid clinic • A consumer in a third-world nation who is considering the purchase of a battery operated television from a government-owned store Answer: Any activity involving consumer decisions that could lead to differing amounts of value is clearly relevant to consumer behaviour. The case of the injured football player is the least relevant scenario because the consumer has very little choice. 18. Do some research on the Internet on the following multinational companies: • Tesco • Auchan • Lotte Department Store • Walmart • Sephora • Exxon Based on the descriptions of these companies found on the Internet, which way of treating customers do you believe each has adopted? Which company would you argue is the most multinational? Answer: All of these companies are multinational in the sense that they have operations in multiple countries. Sephora and Exxon probably have operations in more countries than do the others. The answer to which orientation each company has adopted to deal with their customers should be related to the degree of competition as well as the potential amount of government regulation that each company faces. 19. The following is a way to get a little practice as an interpretive researcher. Find two consumers who are significantly older than you, two consumers slightly older than you, and two consumers substantially younger than you who will allow you to observe them while they browse the Internet. Collect some field notes that describe their behaviour as well as the discussion that you have with them during the exercise. Based on these interviews, prepare a brief report on the way people from different generations obtain value from their use of the Internet. Answer: Students should attempt to provide explanations of behaviour by interpreting what they see and what the consumer does. In observing consumers across generations while they browse the Internet, several patterns emerge: 1. Older Consumers: Tend to prioritize functionality and security, often sticking to familiar sites and showing a preference for straightforward, trusted platforms. 2. Slightly Older Consumers: Exhibit a mix of traditional and modern behaviors, exploring both familiar and newer sites, and showing an interest in user reviews and comparisons. 3. Younger Consumers: Frequently seek out the latest trends, prioritize social media and interactive content, and are more likely to engage with dynamic and visually appealing sites. These observations suggest that value from Internet use varies significantly by age, with older generations focusing on reliability and simplicity, while younger users emphasize trends and engagement. 20. *Team Exercise: Use the Internet to do a brief research paper on a current public policy issue in which consumer behaviour plays an important role. Develop an opinion on whether some type of new regulation or restriction might actually address the issue and create a better societal outcome. Prepare a brief skit to enact your issue, and summarize the ways in which knowledge of consumer behaviour can contribute to understanding the issue. Have some fun with this. Relate the consumer behaviours to the amount of competition involved and the fact that public policy has both advantages and disadvantages for consumers. Answer: Students tend to focus more quickly on the short-term advantages without considering the long-term market implications of regulations. Research Paper Topic: The Impact of Fast Fashion on the Environment Opinion on Regulation: Implementing stricter regulations on fast fashion, such as mandatory sustainability reporting and limits on waste, could drive companies to adopt more eco-friendly practices. This might lead to reduced environmental damage and encourage consumers to make more conscious choices. Skit Summary: The skit could feature characters representing consumers, fashion brands, and policymakers debating the pros and cons of new regulations. Consumers demand more sustainable options, while brands argue about costs and competition. Policymakers weigh the benefits of environmental protection against potential economic impacts. Consumer Behavior Insights: Understanding consumer demand for fast fashion and their response to regulatory changes can highlight how regulations could shift market dynamics, impact competition, and lead to more sustainable consumer practices. Knowledge of these behaviors helps in designing policies that balance economic and environmental interests. 21. Team Exercise: Interview at least five consumers from each of the following age groups: 10–15 years old, 20–29 years old, 35–45 years old, and over 55 years old. Ask the consumers what is their preferred method of communicating with a) friends, b) family, and c) businesses. Also, ask them what types of products they use to help them communicate with friends and family. Do the results suggest that they derive value from all communication technologies to the same degree, or do they use different technologies to communicate? Do you think the answers would be the same if you were dealing with consumers from Europe, Mexico, or Japan? How might firms cope with the dynamics of this situation? Answer: Students should focus on the dynamic nature of consumer behaviour in discussing the results of the interviews. The interviews reveal that communication preferences vary significantly by age group. Younger consumers (10-15 years old) prefer instant messaging and social media for friends and family, while older groups (35-45 years and over 55 years) may lean more towards phone calls and email. The types of products used, such as smartphones and tablets, also differ, with younger users favoring newer apps and older users relying on traditional methods. These preferences likely differ by region due to cultural and technological differences. For example, Europeans might prioritize email and social media, while Japanese consumers might use messaging apps more extensively. Firms can address these dynamics by segmenting their communication strategies and offering diverse channels to cater to various age groups and regional preferences. Tailoring their approach ensures effective engagement across different consumer bases. GROUP ACTIVITY Track consumption patterns in your class over the next week. Have students work in teams of two or as individuals if class size permits. This activity can also be used as a trimester- or semester-long project and will work best at the beginning of the term. Have students collect their receipts throughout the week and track all purchases from books to bottles of water. Students will meet in their groups during the second class and compare their purchase patterns. Students should present their findings in the following journal entry format. CHAPTER VIDEO CASE To view the video case ReadyMade Do It Yourself, go to the CB companion website www.icancb.com to select this video. In 2001, when Grace Hawthorne, CEO, and Shoshana Berger, Editor-in-Chief, came up with their idea for ReadyMade, there were no other publications with their unique do-ityourself (DIY) theme. ReadyMade was to be a magazine about fun and creative projects for the home. Since its development, the bi-monthly magazine has enjoyed a loyal subscriber base and continues to gain readership across the country. All issues include numerous do-it-yourself (DIY) projects, each rated by their level of difficulty, as well as several feature articles exploring the latest in innovation and design. In this video, pay attention to ReadyMade’s methods as they launched their magazine. Note also how ReadyMade uses its knowledge of its consumer base to tailor the product. Ask your students: 1. While the ReadyMade magazine was still in the design stages, very little research was done to determine whether an interested market existed. Did this adversely affect the magazine as it moved forward to publication? Explain. Answer: The founders of ReadyMade magazine did little formal research, but they were immersed in the lifestyles and expectations of their target market, which in essence, was themselves. Whether their subscriber base would have been larger at the outset had they done more research is difficult to say, but since launching, the DIY market segment has grown exponentially and perhaps carried them along. Perhaps ReadyMade’s founders were lucky, or perhaps they were inspired. CEO Grace Hawthorne remarked that their marketing plan was, in essence, “if [we] build it, they will come.” 2. How does the cover of ReadyMade magazine reflect the principles of packaging design as influenced by the known behaviour of its consumers? Answer: The cover of ReadyMade magazine is carefully designed to provide a new reader, with just one glance, an understanding of the magazine’s purpose: a dual-gender, youth spirited, DIY, project-related, home improvement guide. 3. To what extent does ReadyMade rely on opinion leaders to promote the magazine? Is this a successful tactic? Answer: ReadyMade heavily relies on peer-to-peer recommendations; those DIY peers are the opinion leaders in the DIY market segment and have generated new subscriptions. For the DIY market, relying on opinion leaders has proven a successful tactic. Chapter 2 Value and the Consumer Behaviour Value Framework END OF CHAPTER MATERIAL CASE ANSWERS: Rogers Communications Market Segmentation in Atlantic Canada 1. What benefits does Rogers Cable offer Atlantic Canadians? Provide examples of both hedonic and utilitarian value. Answer: With its mix of cable, wireless, and media businesses, Rogers can offer a unique blend of service offerings to consumers. Utilitarian value includes functional benefits such as billing simplicity and discounts through bundling of services and streamlined customer service with a single point of contact. Hedonic value may include breadth of content offered to entertain consumers through a variety of devices, potentially with higher quality than the competition’s, resulting in a more satisfying experience. 2. If the quality of Rogers Cable’s offerings is defined as Q = f(p, w, x,… z), what are the key characteristics (x, y, and z) that will determine Rogers Cable’s success? Answer: Key characteristics can include basic customer service issues such as speed of initial installation and subsequent repairs or modifications, quality of customer support centre, ease of use, convenience, reliability, breadth of programming, bundling, etc. 3. How might those key characteristics (x, y, and z) differ among the four target segments that Rogers has identified? Answer: The relative importance of each key characteristic may differ based on each target segment’s specific wants and needs. For example, the Francophone Families segment is more likely to be concerned with the amount of French-language programming available, while Midscale Older Adults / Seniors may have greater concerns with convenience and quality of customer support. Each segment is likely to desire a slightly different mix of programming options (suited to household composition and age, as well as education and income level). In each case, performance on the key characteristics identified will be evaluated against the competition, and also in relation to the price being charged. 4. What might a perceptual map of Rogers Cable versus iTunes look like based on two of these key characteristics? Answer: Students can choose characteristics such as price and breadth of programming, or price and convenience as the dimensions to build their perceptual maps. The important point is to clearly position each company in the appropriate quadrant, and to consider both utilitarian and hedonic value from the consumer’s perspective. Instructors may also encourage students to think about price elasticity in the market, as well as the price premium that can be demanded for a “superior” service offering. A perceptual map of Rogers Cable versus iTunes could plot "Content Variety" on one axis and "User Control" on the other. Rogers Cable would likely be positioned high on content variety but lower on user control, offering a broad range of channels but limited flexibility in viewing. In contrast, iTunes would be placed high on user control, allowing users to select and purchase specific content, while offering moderate content variety primarily focused on music and movies. 5. Go to www.environicsanalytics.ca and click on the “Lifestyle Lookup” link. By entering your postal code you can see which of Environics Analytics’ 66 PRIZM C2 segments you belong to. Does the segment overview accurately describe you and your neighbours? Answer: Answers will vary. Some students may find the segment descriptions to be very accurate, while others may feel the profile better describes their parents than themselves. The variety of answers presents an excellent opportunity to discuss the various segmentation characteristics (demographics, psychographics, geography), and their application to marketing strategy. If you explore the Environics Analytics Lifestyle Lookup and find your PRIZM C2 segment, you might see characteristics that resonate with you and your neighbors. These segments typically reflect demographics, behaviors, and preferences. Consider how accurately the description aligns with your community's lifestyle and values—this can provide insights into shared interests and commonalities among residents. ONLINE CASE ANSWERS Visit www.icancb.com to access the online case studies for CB. 1. Visit the CVS/pharmacy website (www.cvs.com). What other benefits does CVS provide to Extra Care customers? Provide examples of both utilitarian and hedonic value. Answer: Utilitarian value is provided when an object or activity allows something else to happen. Examples may include cosmetics, hair care products, hygiene products, and so forth. For instance, soap allows your face to become clean. Hedonic value is the immediate gratification that comes from some activity. Furthermore, hedonic value is emotional and subjective. Examples may include chocolate, candy, and other impulse items sold at CVS. 2. Suppose a major competitor launches their own customer value card program. How might CVS respond? What recommendations would you give CVS to improve the Extra Care program? Answer: Students may choose any number of ways in which to increase “value” and should refer to the Value Equation in Exhibit 2.2. Students may recommend improvements to benefits or to “what you get” such as quality, convenience, emotions, prestige, and experience. They may also recommend a decrease in what customers “give” or sacrifice including time, money, and effort. If a major competitor launches a customer value card program, CVS could respond by enhancing the Extra Care program with more personalized rewards and exclusive offers tailored to individual shopping habits. I recommend integrating advanced data analytics to better understand customer preferences, improving the user experience through a streamlined app, and introducing partnerships with local businesses for added value. Additionally, promoting unique health and wellness rewards could differentiate the program from competitors. 3. What are the advantages and disadvantages of not requiring personal information from customers for participating in the Extra Care program? Answer: The main benefit to CVS customers of not requiring personal information is privacy. The main disadvantage is that not having personal customer information limits the ability of CVS to improve the quality of their relationship with their customers. CVS can learn valuable information from customer purchases and consequently provide direct marketing (CRM) incentives, such as coupons, to build stronger relationships with customers. 4. What ethical issues would CVS need to consider before changing their Extra Care policy to require an address and phone number? Answer: Students should address privacy issues, such as identity theft and how to protect customer information in the Extra Care database against those threats. Another specific ethical issue for CVS is concern over pharmacy transactions. Prescriptions reflect a customer’s medical history and therefore elicit an even higher expectation of privacy. Before changing the Extra Care policy to require an address and phone number, CVS must consider privacy concerns and the potential backlash from customers who may feel their personal information is being mishandled. Transparency about how their data will be used is essential to maintain trust. Additionally, CVS should assess the impact on customer access and inclusivity, ensuring that vulnerable populations aren't disproportionately affected by such requirements. Compliance with data protection regulations is also crucial. REVIEW QUESTIONS (*) Indicates material on prep cards. 1. [LO1] What are the differences between internal and external influences on consumers? Answer: Internal influences are characteristics or traits inherent in the consumer. External influences come from outside the consumer such as culture, the environment, and time of day. 2. [LO1] How is the Customer Value Framework useful? Answer: The CVF represents consumer behaviour theory, which illustrates factors shaping consumption-related behaviours and ultimately determines the value associated with consumption. Thus, the CVF provides potential explanations for behaviour. 3. [LO2] List three examples of products you have consumed that provide high utilitarian value. List three examples of items that provide high hedonic value. Think of at least one product or brand that you would associate with both high utilitarian and hedonic value. Answer: Typical items possessing utilitarian value include fast food, mass transit (subway, bus ride), and cleaning products. Typical items possessing hedonic value include attending a sports event or an amusement park or going shopping in an exciting venue. 4. [LO2] What is the core concept of consumer behaviour? Define it and use an example from your own life to illustrate its meaning. Answer: Value is the core concept of consumer behaviour. Value is a personal (subjective) assessment of the overall net worth obtained from an activity. The core concept of consumer behavior refers to the study of how individuals make decisions to spend their resources, such as time and money, on consumption-related items. It encompasses factors like psychological, social, and cultural influences. For example, when I decided to buy a new phone, I researched various brands, considered my budget, and sought recommendations from friends. This process illustrates how personal preferences and social input shape my purchasing decisions. 5. [LO3] Define and distinguish marketing strategy, corporate strategy, and marketing tactics, and provide examples. You may consult the Internet for names of well known marketing firms. Answer: Corporate strategy deals with how the firm will be defined and sets general goals for the company. Marketing strategy deals more specifically with the way in which a company goes about creating value. Marketing tactics are ways in which the strategy is actually implemented in the marketplace. Walmart has a corporate strategy that emphasizes efficiency and low-cost operations. The marketing strategy is to provide consumers with a wide selection of goods that are placed on the market at low prices driven by low costs. Marketing management includes strategies such as low price guarantees and promotions that emphasize prices. 6. *[LO3] What is the total value concept? Can you use the total value concept to explain why Callaway Golf or Starbucks are such successful companies? Answer: The total value concept is practised when companies operate with the understanding that products provide value in multiple ways. Callaway Golf realizes that they aren’t really selling golf clubs so much as selling the advantage of a better golf experience. Therefore, experiences such as customer club fitting are integral in helping the consumer enjoy more value from their exchange with Callaway. Starbucks sells the coffee experience and not just the coffee. Thus, the atmosphere of the establishment along with things such as wi-fi access enhance the product and are important to deliver to customers even if it is a cost to Starbucks. 7. *[LO3] What is marketing myopia? How does it relate to the total value concept? Answer: Marketing myopia results when firms define themselves based on the product they produce rather than the value they provide. Firms avoid myopia when they practise the total value concept. 8. [LO4] In what way are market segmentation and product differentiation similar? How are the two concepts different? Answer: Both are marketplace conditions. Market segmentation is a marketplace characteristic determined by consumer preferences, whereas product differentiation is determined by perceptions of product alternatives. 9. [LO4] Consider the customers visiting a Cineplex movie theatre playing 18 different movies. Use this thought to illustrate both market segmentation and product differentiation. How do these two marketplace characteristics influence the value received by these customers? Answer: Market segmentation could be observed easily by noting the characteristics of the consumers that see each movie. From these observations, one might observe different demographic characteristics associated with different types of movies. Families may be more likely to see G-rated movies and thus have different demand curves than other movie consumers. Product differentiation is illustrated by the fact that few consumers go to the theatre with no movie preference in mind. In other words, the movies are not viewed by consumers as all being similar. Both marketplace characteristics influence consumers’ value perceptions by allowing a closer fit between the products offered and consumer preferences. Consumers therefore receive something more to their tastes. 10. *[LO5] What is a perceptual map? What are the dimensions of a perceptual map? Answer: A perceptual map is used to depict the positioning of competing products graphically. The dimensions of a perceptual map are simply the characteristics that help distinguish different brands or products from each other. For example, price is a commonly used dimension. Brands can be distinguished into low-priced, moderately priced, and high-priced alternatives. 11. [LO5] What is meant by product positioning? Answer: Positioning refers to the way in which a product is perceived by a consumer. Positioning can be represented by the amount and types of characteristics perceived by consumers and can be depicted on a perceptual map. 12. [LO5] List at least three ways in which a firm can use a perceptual map to analyze a given consumer market. Answer: When marketing analysts examine perceptual maps, they can identify competitors by seeing which brands are located in the same area on the perceptual map, identify opportunities for doing more business, and diagnose potential problems in the marketing mix. For instance, the analyst may realize that by changing the amount of some product characteristic, they can “move” closer to the ideal point of some segments and thus increase the competitiveness of their product. Alternatively, a new business may choose to position a product in a way that leaves it facing little direct competition. This can be done by “locating” the product as far away from other brands as possible. 13. [LO6] How do marketing firms assess the value of a given customer? Answer: Customer lifetime value (CLV) represents the approximate worth of a customer to a company in economic terms. Put another way, CLV is the overall, long-term profitability of an individual consumer. 14. [LO6—ETHICS] How do you feel about companies that give special perks like discounts or preferred seating to their “best” customers? Is this treatment fair? Answer: Even though this is mostly an opinion question, students should be using CLV concepts in their opinions. Do they believe it is fair that loyal airline customers get upgrades to first class or gain access to exclusive airport lounges where they enjoy free drinks in a comfortable and relaxing waiting environment? While offering special perks to "best" customers can enhance loyalty and reward engagement, it raises questions of fairness. Some may view it as a way to prioritize wealthier customers over others, potentially alienating those who spend less. However, if perks are structured inclusively, allowing all customers to access rewards through engagement, it can foster a sense of community. Ultimately, the fairness of this treatment hinges on how it’s implemented and communicated. INTERACTIVE/APPLICATION EXERCISES 15. *Interview three consumers from your town. Ask them how they believe the following companies provide value to consumers: • Home Depot • Apple • Chapters / Indigo • John Deere Answer: The main focus here is to foster a better understanding of how benefits lead to utilitarian and hedonic value. When interviewing consumers, they might express that Home Depot provides value through a wide selection of home improvement products and knowledgeable staff, aiding DIY projects. Apple could be seen as offering value through innovative technology and a seamless ecosystem that enhances user experience. Chapters/Indigo might be appreciated for their cozy atmosphere and curated selection of books and gifts. Lastly, John Deere may be recognized for its reliability and quality in agricultural equipment, supporting farmers in maximizing productivity. 16. From the list of companies in Question 15, use Internet resources (such as the Wilson Business Resource Database, Hoovers, or corporate sites) to learn about the corporate and marketing strategies of these companies. From your experience, does it seem that they truly understand the value that consumers desire from companies in their respective industries? Answer: The main focus here is to help students develop a working knowledge of the total value concept. Researching the corporate and marketing strategies of Home Depot, Apple, Chapters/Indigo, and John Deere reveals that each company aligns closely with consumer desires. Home Depot emphasizes customer service and DIY education, while Apple focuses on innovation and user experience. Chapters/Indigo creates a community feel through events and a diverse product range. John Deere’s commitment to quality and customer support reflects a deep understanding of agricultural needs. Overall, these companies appear to effectively grasp and deliver on the value consumers seek in their respective markets. 17. List 10 fast food restaurants. Consider what a typical lunch would be like at each place. Use their websites if you need to review the menu. Rank them from least to most expensive. Then, using the same 10 restaurants, rank them from the least to the most healthy. Form “dimensions” with these rankings and then create a perceptual map illustrating the fast-food market formed by these 10 restaurants. Answer: This exercise should result in a two-dimensional perceptual map with price as one dimension and healthiness as the other. Probe students to look for business opportunities within the perceptual map. 18. Interview several consumers, and ask them about their concerns when choosing a fast-food restaurant. Using these results, estimate the location of the ideal points for different fast-food markets on the perceptual map that you developed in Question 17. Then, prepare an executive summary (bulleted list) indicating potential opportunities that exist within this market. Also state which restaurants appear to have the best and the worst positioning, respectively. Answer: Adding the consumer ideal points should allow students to develop a better understanding of where different fast-food businesses should “move” on the perceptual map. For example, if consumers desire lower prices, perhaps a restaurant would lower their prices to “move” closer to this segment. 19. Assume that someone wishing to start a band in your town has come to you for advice on positioning the band to be a commercial success. Using the Customer Value Framework and your knowledge of positioning, what factors do you think would ultimately explain how or if the band will be successful? Some general advice on successful bands can be found at www.epinions.com. Answer: The main focus here is designing a product for an existing market segment. By changing certain characteristics (type of music played, media through which music is delivered, price), the band can move closer to or farther from market segments. 20. Review the Customer Value Framework. At first glance, what aspects of the Customer Value Framework do you believe are most relevant in helping you understand that consumer behaviour is useful to study so as to make you a better consumer? Answer: Any discussion about this topic is acceptable as long as students use terminology from the CVF. The Customer Value Framework highlights several aspects crucial for understanding consumer behavior, particularly the importance of perceived value, satisfaction, and the trade-offs consumers make. Recognizing how personal values, experiences, and expectations influence purchasing decisions can help me become a more informed consumer. Additionally, understanding the role of emotional and functional benefits allows me to evaluate products more critically. This awareness ultimately leads to smarter choices and enhances overall satisfaction with purchases. GROUP ACTIVITY *Have students interview other students in class to determine whether some students are members of a club, fraternity, or sorority; are working part time; or are engaged in other extracurricular activities. Then, have students pair up in groups to analyze how members of their organization are following Maslow’s hierarchy in regard to their purchases or activities outside of school. You may also want to incorporate a homework assignment in which each group finds a print ad that appeals to each of the levels of Maslow’s hierarchy. Is there overlap between levels? Is this good or bad? CHAPTER VIDEO CASE To view the video case E-Business at Evo, go to the CB companion website www.icancb.com to select this video. When professional skier Bryce Phillips began selling closeout ski equipment out of his garage in 2001, he was hoping to make a little extra money to fund his ski vacations. Things went well with the first garage sale, and soon he had a few employees and started selling snowboard, skateboard, and wakeboarding gear. Almost by accident, at age 20, Phillips had a company on his hands. He pulled some equity out of his house—and online retailer Evo was born. The company grew to 40 employees, then 60. Revenues came to nearly $6 million. Evogear.com became known worldwide by pros and amateurs alike looking for good deals on great stuff. They now offer all the top brands, closeouts, and used gear for every level and budget. All this success is quite surprising when you consider that buying skis or snowboards isn’t the kind of thing generally done online or through a catalogue. To get fully outfitted can cost $500 to $1,000, and most people need some expert help with their purchase. Through the design of the site and Bryce’s desire to create a community for like-minded people, rather than simply another online discounter, Evogear.com is shredding the competition. “Well, we want it to be functional, number one,” says Molly Hawkins, affiliate program manager at Evo. “If you go to some of our competitors’ sites, some of them look really cool” but, she says, “you try and navigate around their sites, they’re not as intuitive.” Evogear.com is easy to use and does look cool, but adding value for the shopper is key to their business. The site offers product reviews, user accounts with all your past and current orders and preferences, tonnes of links to affiliate sites, events, blogs—pretty much everything you would want in a website or a brick-and-mortar shop. “Aside from that,” Molly says, “the About Us page has played a huge role.” Evo has, from the beginning, wanted to create a community for lovers of water and snow sports, and the About Us page really offers the customer an “in” to the company: their mission, values, personal pages, and video clips by each employee. Customers love the idea that they can virtually “meet” their customer service person or buyer or Bryce himself. Hawkins believes this helped to legitimize the company in the beginning. “People would get excited to find that the person that they’re talking to or the people that they’re buying from are actual users of this gear that we’re selling,” she says. Being seen as legit and trustworthy is paramount in the land of e-commerce. You spend weeks searching for the best price on that new digital camera or gaming system and when it arrives, if it arrives, it was not what you thought you were buying. Often, there is little you can do. The people at Evo know where you’re coming from and want to make sure every purchase is stress-free. They have an easy return policy: just let them know what the problem is, from buyer’s remorse to a box of splintered skis, and they’ll make the switch. Once an order is placed, Evo’s distribution centre jumps to attention. Most orders are shipped fast, within a day or two of the order. If you’re not in a hurry, they’ll ship it ground for free, or overnight via a partnership with FedEx. Trust, value, and personal service are the key elements in Evo’s success, but word of mouth only gets you so far. Advertising is difficult for an e-business such as Evo, where keeping it simple with low overhead and a no-frills annual budget is what makes them able to pass the discounts on to their customers. Like many websites, they offer an affiliate program that places ads or links on other websites to drive traffic back to Evo. An affiliate program or pay-per-click program pays owners of other sites every time a user clicks on an ad. In addition to paying for each click, Evo sends a “thank you” gift of 12 percent of each completed sale at evogear.com originating from the affiliate site. To protect their brand, remain authentic to their consumers, and remain in good standing with their suppliers, Molly Hawkins and her team lay out some ground rules for each potential affiliate. Their site must be well designed, easy to navigate, and, most importantly, must not contain any references to gambling, sexually explicit material, hate speech, or racist content or any other inappropriate material. Sounds obvious, but being inadvertently connected with the most obscure, unseemly website could mean the end of their business. Ask your students: 1. Aside from offering good prices, how does Evogear.com offer value to the consumer? Answer: In addition to offering good prices, Evogear.com offers 24-hour online shopping convenience; personalization features, such a the “Package Builder” product-matching tool; relevant marketing offers based on user shopping habits; product reviews; order tracking; and ski-culture-related video “web episodes.” Evogear.com offers value to consumers through a curated selection of high-quality outdoor and action sports gear, ensuring that customers have access to the best brands and products. They provide expert advice and detailed product descriptions to enhance informed decision-making. Additionally, Evogear’s commitment to excellent customer service, including fast shipping and hassle-free returns, further enhances the shopping experience. Their community-focused approach, including engaging content and promotions, also adds value by fostering a sense of connection among outdoor enthusiasts. 2. Evo has opened a large brick-and-mortar store/community art space in Seattle, Washington. Go to culture.evogear.com/category/seattle/ to learn more about what the store offers. Do you think this store will distract from or enhance the website? Consider potential channel conflicts, pricing strategy, convenience, and consumer behaviour in your answer. Answer: Answers will vary. However, opening a flagship store in Seattle has helped Evo integrate its brand and retailing strategy with the broader ski and skate youth culture. The space is designed to unite local customers around shared interests in music, streetwear fashions, art, skiing, snowboarding, and skateboarding. Evo founder Bryce Phillips calls the brick-and-mortar retail store “the heart and soul of the company.” He explains that it serves as the physical location where local customers, supply chain partners, and sales reps can experience firsthand what the Evo brand is all about. The store supports Evo’s primary e-tailing business and does not cause channel conflict. In the world of e-business, channel conflict typically occurs when product manufacturers undercut the success of their retail partners by selling products directly to consumers through their own electronic storefronts. The new Evo brick-and-mortar store is likely to enhance the website rather than distract from it. The physical location can create a community hub that fosters brand loyalty and provides a unique shopping experience, which can drive online traffic. While there may be potential channel conflicts, such as pricing discrepancies, a well-coordinated strategy that aligns in-store and online offerings can mitigate this. Additionally, the convenience of in-person consultations and events can complement online shopping, encouraging consumers to engage with the brand across multiple channels. 3. Evo Founder Bryce Phillips says that e-commerce is yet in its infancy and has not attained its fullest marketing potential. What is Phillips’ vision for improving e-commerce, and do you agree with his perspective? Explain. Answer: Bryce Phillips says that e-commerce has focused too much on sales transactions and too little on creating loyal customers who connect emotionally with brands online. He explains that many online shoppers conduct quick searches on Google or at electronic storefronts but don’t get personally involved beyond that limited transaction. According to Phillips, that scenario doesn’t produce loyal customers. The Evo founder envisions an e-marketing strategy that combines hip content, social networking, interactive media, and blogs to engage and retain online customers for the long term. 4. What challenges does Evo have in operating its Web-based business? Answer: The video mentions a variety of challenges related to managing inventories, shipping errors, and understanding customers’ online viewing habits. Although not discussed in the video, Internet businesses face serious threats over privacy issues, safe online payments, fraud, and scams. Cybercrime is a serious financial and legal threat to e-businesses. PART 1 VIDEO CASE To view the Part 1 video case, go to the CB companion website www.icancb.com to select this video. North Face Shopping Experience Time: This video is between 5 and 7 minutes long. Concepts Illustrated in the Video • Value • Consumption • Consumer Value Framework • Relationship marketing • Relationship quality • Internal influences • External influences Synopsis Patrick, a medical school student, enters a North Face store. Today, he’s shopping for hiking gear for an upcoming trip to the Mount Washington area located in the Northeast. He’s planning his trip during the warm summer month of June. Andy, the North Face employee, shows Patrick a variety of jackets to fit his needs. The jackets all come with insulation, ease of entry, and have a lifetime warranty. Price is a concern to Patrick, so he asks Andy to show him alternative choices to the original fleece version selling for $150. Patrick finally settles for a jacket retailing for $79 and presents the store with a coupon for added savings. After Patrick’s hiking trip, he returns to the store to purchase the original jacket Andy recommended for $150! Ironically, the summit reached a record low of 10 degrees Fahrenheit in June. Teaching Objectives for the Video Case • Introduce students to the consumption process • Define consumer value and compare and contrast two key types of value Critical Thinking Questions—Suggested Answers 1. Explain what is meant by relationship marketing. How many touchpoints were illustrated in the video? Answer: Relationship marketing is the recognition that customer desires are recurring and that a single purchase act may be only one touchpoint in an ongoing series of interactions with a customer. In this video, we see two touchpoints between the customer and the store. 2. What is the value of a North Face jacket? Does the salesperson in the video clearly communicate the value of the jacket? Explain your answer. Answer: The value of the North Face jacket is the lifetime warranty, high quality products, and service one receives when shopping in the store. The salesperson clearly communicates the pros and cons of cheaper products not only by North Face but their competitors. 3. List the internal influences and external influences Patrick faced in purchasing the jacket. Answer: Internal influences included Patrick’s lifestyle, motivation, and personality. He’s a medical student and concerned about spending money. External influences included the timing of the purchases, possibly Patrick’s social class, and the store’s atmospherics. However, students’ answers may vary to this question. Chapter 3 Consumer Learning Starts Here: Perception END OF CHAPTER MATERIAL CASE ANSWERS: Does Sex Sell American Apparel? 1. Is sexual imagery an effective way to get consumers’ attention? Why or why not? Answer: Over time, sexual imagery in advertising has proven to be quite effective in capturing consumer attention—as the saying goes, “sex sells.” This is particularly true for products such as clothing, cosmetics, and fragrances, which are quite closely related to the consumer’s outward appearance and sexual attractiveness. In that sense, sexual imagery is not inappropriate, particularly for a young market segment that is concerned with its sexual appeal. However, when many competitors are using this same type of imagery, it becomes more difficult to differentiate the brand and stand out from the competition. The use of surprising or unexpected imagery may be more effective in helping the advertiser to stand out and attract attention to its message. In this instance, the socially conscious message from American Apparel’s earlier promotional strategy could prove to be more compelling. 2. Beyond getting attention, why would a brand like American Apparel want to connect itself so closely with sexual imagery? Answer: As mentioned above, American Apparel targets a young, fashion-conscious market segment. An attractive, sexy image is one of the benefits this segment seeks from its clothing purchases. Demonstrating the sex appeal of its clothing line is one way for American Apparel to persuade its target market to consider the brand. 3. Why might American Apparel have moved from its initially “socially conscious” message that required intentional consumer learning toward its current highly sexualized advertising? Is the company expecting consumers to engage in some unintentional learning? Answer: Unless they are highly involved with a specific product category, consumers are unlikely to expend the energy to undertake intentional learning about a company or brand. This may have been the reasoning behind the switch to a more obvious appeal strategy. By simply pairing the brand with powerful sexual imagery, American Apparel hoped to “condition” consumers to respond favourably to the American Apparel brand. This unintentional learning requires little effort on the consumer’s part, yet it can develop a strong association in the consumer’s mind between the brand and the sexual message of the advertising. 4. American Apparel has been struggling lately to remain financially viable. Is its advertising imagery to blame? Are consumers perceiving and learning the wrong things about American Apparel? Answer: Given American Apparel’s earlier success with its socially conscious strategy, it is entirely conceivable that the switch to a more mainstream sexual advertising appeal has diluted the brand’s image. While sexually explicit advertising has been very successful for other clothing manufacturers such as Calvin Klein and Guess, that position in the consumer’s mind is quite crowded, making it difficult for other brands to stand out while using the same strategy. If, at the same time, American Apparel continues to pay higher wages in order to manufacture its products in a socially responsible manner, then the company is making itself less competitive, while not leveraging the differentiation this business approach could provide. REVIEW QUESTIONS (*) Indicates material on prep cards. 1. [LO1] Define exposure in a consumer behaviour context. Provide five examples of marketing stimuli (products, advertisements, environments) that you have been exposed to within the last day or two. Answer: Exposure refers to bringing some stimulus within the proximity of a consumer so that it can be sensed with one of the five human senses (sight, smell, taste, touch [tactile], sound). Examples are endless: a radio ad with a familiar rock song that garners attention, a food counter at the mall providing samples of one of their dishes, new-car smells and the feel of rich leather seats when test-driving a car, a billboard with an eye-catching design, a banner ad with a person dancing, or a PA announcement of a price promotion during an athletic event. 2. [LO1] An adolescent consumer places a CD into a boom box. An adult nearby overhears this and has never before heard this particular sound. What steps does the consumer go to in trying to identify the “sound”? Answer: The consumer goes through the human perception process, which is sensing, organizing, and reacting. 3. [LO1] What three outcomes are possible as a consumer tries to “interpret” stimuli through the human perceptual process? Answer: Assimilation, Accommodation, and Contrast 4. *[LO1—LO6] Define learning within a consumer context. Provide an example of something you have learned as a consumer. Answer: Learning refers to some change in behaviour resulting from some interaction between a person and some stimulus. Consumers could have searched the Internet for prices on auto parts or off-season vacation destinations. 5. [LO1—LO6] A box feature in the chapter talks about watches that smile at you. Using the perceptual process, explain how a smiling product might lead to a more favourable reaction. Do you think that a smiling product would be equally effective for all types of products? How much could one change the time of a smiling watch and have it still look like a smile? Do you think any potential learning is due more to implicit or explicit memory effects? Answer: Mainly, a question to get the students to extend what they have learned here. The watch has to be seen and the position of the hands relative to the face have to be organized into a smile. This may cause a person to react by reproducing the smile or just causing an instinctively better reaction (in the next chapter, we will learn more about how schema congruity may play a role). The student should apply the JND when thinking about how much the time could change. These effects appear more consistent with implicit memory because few people would actually pay attention to the smile. Therefore, this is probably a pre-attentive effect. 6. [LO1—LO4] What do you think of the ethics of subliminal advertising attempts or sexually embedded advertising? Why do you believe that there have been so few legal actions aimed at stopping subliminal advertising? Answer: This is primarily an opinion question. Students generally develop the opinion that it is better to use a stronger, overt appeal than a weaker, less overt appeal. The question of whether subliminal advertising should be illegal is moot because of its limited effectiveness. Also, demonstrating intent to deceive would be difficult. 7. *[LO2] Ask a friend who has never studied marketing or consumer behaviour to flip through a popular magazine such as Sports Illustrated or People. Ask them to find examples of attempted subliminal persuasion. Have them discuss the ads and explain their choices. What do you think of their opinions? Answer: The main focus here is to see whether students can identify any examples at all. Have students detail their friend’s discussion. Did they succumb to the urban legends surrounding such effects? Asking a friend to identify examples of subliminal persuasion in a magazine like Sports Illustrated or People can reveal interesting insights. They might point out ads that use subtle imagery or messages, such as hidden brand logos or suggestive visuals that evoke certain feelings. Their interpretations can reflect how effectively these ads resonate with emotions or desires, even if they aren't immediately obvious. I think their opinions highlight the often subconscious ways marketing influences us, reinforcing the importance of studying consumer behavior to understand these techniques better. 8. *[LO3] Provide three examples each of how consumers might learn through explicit and implicit memory. Answer: Explicit memory—Using the Internet to find product information, consulting with a friend before a big weekend to find good places to go (developing knowledge), and learning from a product that performs poorly that you should not buy that brand again. Implicit memory—Classical conditioning efforts such as those used in advertisements, mere exposure effects as shown in ads or other media, and product placements. 9. *[LO3] How does the JND differ from the absolute threshold? Answer: The absolute threshold deals with the amount of strength of a stimulus, ranging from no strength at all up to the point when a person actually realizes that the stimulus is present. For example, how much citrus scent must be introduced into a room before someone can actually smell citrus? The JND deals with the change in stimulus. How much more citrus scent do you need to introduce to one room before someone realizes that the smell is stronger than the citrus scent in the adjacent room? This works for all senses. The Just Noticeable Difference (JND) refers to the smallest difference in stimulus intensity that a consumer can detect, while the absolute threshold is the minimum level of stimulus intensity needed for a person to perceive it at all. Essentially, the JND measures the perception of change, whereas the absolute threshold measures the initial detection of a stimulus. Understanding these concepts helps marketers design effective strategies to grab attention and convey messages. 10. [LO3] How might the JND apply to the following situations? • Radio advertising • Price promotion • Internet promotion • Quality control • International marketing Answer: Radio advertising—Changing the volume so that it can be noticed over other programming. Price promotions—Changing the price just enough so that it is noticed as a sale price. Internet promotion—Changing the size of banner ads so that they become noticeable. Quality control—Decreasing the level of acceptance for some product by a small amount so that no difference in quality is noticed. International marketing—Adjusting the quality of products sold in different markets so that no difference in quality is noticed relative to other products. 11. [LO4] Explain under what conditions a marketer might believe that an advertising execution involving mere exposure might effectively cause consumers to “learn” to like a product. How would a researcher test to see whether the mere exposure effect held for brand logos? Answer: A marketer might use mere exposure when the brand is unfamiliar or perhaps new and the consumer has little prior knowledge. To test mere exposure with brand logos, the researcher could develop 10 pictures of new logos and show them to subjects when embedded with 50 other logos. During the next week (or month), the researcher could show another grouping of 50 logos to the same subjects that contains the same 10 logos to which the subjects were previously exposed. Subjects should like the 10 original logos better, on average, than the newer logos based on the mere exposure effect. 12. [LO5] Define attention. What are ways that consumer attention can be enhanced? Answer: Attention is the purposeful allocation of information-processing capacity toward understanding some stimulus. Consumer attention can be enhanced in the following ways: • Stronger stimuli—With all things being equal, a consumer is more likely to pay attention to a stronger stimulus. Thus, a loud sound captures more attention than a quieter sound. A television commercial with louder volume than the rest of the programming will draw attention. • Learned responses—Consumers have hard-wired responses to many sights and sounds. For instance, have you ever reached for your phone when you heard a ring tone even though that ring tone was not available on your phone? Or, you may have reached for your phone when the sound of a phone ringing was played on a radio commercial. This is a learned response to a phone ringing. • Nudity—Partially nude or suggestive photographs are effective in getting consumers’ attention in most mainstream publications. Now, if the entire magazine contains photos of nudes, this type of attention may not be very effective. Bare skin will typically make a consumer pause momentarily. • Contrast—Contrasting stimuli are extremely effective in grabbing attention. In the past, a colour photo in a newspaper was extremely effective in drawing attention. However, a colour advertisement stands out less in today’s newspapers. A black and white image in a magazine filled with colour can also stand out. A period of silence in an otherwise noisy environment can attract attention.i Social outcasts also create attention because of the contrast with established social norms.ii • Consumers with strange hairstyles or who are dressed inappropriately for a given situation create attention. 13. [LO6] Compare and contrast the following terms: • Intentional learning • Unintentional learning • Behavioural learning • Information processing • Classical conditioning • Instrumental conditioning Answer: Intentional learning involves actively trying to learn something. Unintentional learning occurs without any effort. Behavioural learning is a type of unintentional learning such as occurs through classical conditioning. Information processing takes place in steps beginning with exposure and ending with the coding of something in memory. In contrast, traditional information processing results in explicit memory, meaning that the person was indeed trying to remember the stimulus. Classical conditioning is a type of unintentional learning that occurs as unconditioned stimuli are paired together with conditioned stimuli in such a way that the natural response from the former gets transferred to the latter. Instrumental conditioning is a type of unintentional learning involving reinforcement of behaviour through rewards and punishments to positive or negative behaviours. INTERACTIVE/APPLICATION EXERCISES 14. [ETHICS] Consider the ways in which subliminal persuasion would influence consumers if it had a significant effect on choice and consumption. Would an attempt to persuade consumers through subliminal persuasion be ethical? Explain your choice. Answer: This is a discussion question. However, students should focus on whether the consumer’s sovereignty is questioned. As long as the consumer maintains in control, subliminal persuasion should not present a problem. If the subliminal process could truly deceive consumers so that they behave irrationally, then an ethical question emerges. In reality, however, little evidence suggests that a concern is warranted based on the limited effectiveness of subliminal persuasion. If subliminal persuasion significantly influenced consumer choices, it raises ethical concerns about manipulation and autonomy. Using such tactics could undermine informed decision-making, as consumers may not be aware of external influences affecting their choices. This lack of transparency can erode trust in brands and the marketplace. Therefore, attempting to persuade consumers through subliminal means would generally be considered unethical, as it exploits psychological vulnerabilities without their consent. 15. [ETHICS] Given the way that mere exposure can influence likeability, are attempts to use the mere exposure effect through advertising or product placements in television shows and movies ethical? Explain your choice. Answer: The difference between mere exposure and alleged subliminal persuasion is that there is no attempt to deceive when using mere exposure effects. In fact, brand logos or products can actually be seen by an attentive consumer. Because the consumer is always in control, no ethical problem is obvious when using mere exposure techniques. 16. Interview several non–business major students. Ask them their opinions of subliminal persuasion. Follow up to include a question asking if they had ever been influenced to buy something through subliminal influences. Draw conclusions from these interviews. What are your thoughts on your findings? Answer: This is a discussion question. Students should be using key terms from the chapters to describe consumers. Interviewing non-business major students about subliminal persuasion revealed varied opinions; some believed it was an effective marketing tactic, while others were skeptical about its actual impact. Many expressed awareness of subtle advertising techniques but felt they could resist such influences. When asked if they had ever been swayed by subliminal messages, most couldn't identify a specific instance. These findings suggest that while students recognize subliminal persuasion, they feel somewhat empowered to make conscious choices, indicating a mix of skepticism and awareness about marketing strategies. 17. Mix a concoction of 10% 7-Up or Sprite (or similar clear beverage) and 90 percent apple juice. Have two different consumers try the concoction. For one, ask them to try this new “soft drink.” For the other, ask them to try this new “fruit drink.” Do you get the same reaction? Explain using material on cognitive categorization. Answer: This exercise is a good way to demonstrate the consumer perception process. The person who gets the “soft drink” will typically not like the mixed drink, but the person who gets the “fruit drink” will often like the concoction. In fact, a product named Slice was based on a small amount of fruit juice combined with lemon-lime soda. GROUP ACTIVITY *Get together with at least two other students from the class. Have one of the students play the beat the clock game for Chapter 3 while the others observe. (The beat the clock game can be found on www.icanbc.com.) Then, have another student try the beat the clock game for Chapter 1 and the third try to beat the clock for Chapter 2. Is there a winner (did one do better than another)? Are there any CEOs? Explain what is going on perceptually when playing beat the clock. How is explicit memory involved? Is there a way for implicit memory to play a role? Answer: An opportunity to apply the perceptual process in detail. In the "Beat the Clock" game, differences in performance across chapters may highlight varying levels of familiarity with the material, potentially leading to one student emerging as the winner. Perceptually, players rely on visual cues and cognitive processing, with explicit memory aiding in recalling specific facts, while implicit memory could influence performance through previously learned patterns and associations that enhance reaction times or recognition without conscious awareness. CHAPTER VIDEO CASE To view the video case Advertising and PR at Ogeden Publications, go to the CB companion website www.icancb.com to select this video. Ogden Publications of Topeka, Kansas, has been working in the green space for decades. Its most popular magazine, Mother Earth News, reaches about 1.85 million readers annually. It was started in 1970 around the time of the very first Earth Day and features projects you can do to reduce your impact on the environment. The company’s second most popular magazine, Natural Home, debuted in 1999. Natural Home is for those interested in “greening up” their suburban home. The key difference between the two magazines is that Natural Home is more focused on things one might buy—heating systems, cleaning products, appliances, and décor. Mother Earth’s readers tend to be a bit more hands-on with their projects. Ogden also publishes nine other magazines, including Motorcycle Classics for collectors and Utne Reader for alternative media junkies. On Ogden’s website, a quotation by publisher Bryan Welch makes the following claim: As the world’s largest publisher of magazines in the conscientious consumer category, Ogden Publications is deeply committed to the environment. Everything we do, from our editorial coverage to the ads we carry, offers readers the tools to live a healthy and sustainable lifestyle. Ogden Publications and Mother Earth News enjoy a reputation as an authority on sustainable living. This gives them a lot of street cred with their readers, but to potential advertisers, it’s pretty scary. Welch admits it has been a challenge explaining to advertisers and partners that we’re not “a bunch of holier than thou old hippies” ready to rip their product’s greenness to shreds. On the upside, according to a 2006 study by leading advertising and marketing research firm Signet Research, Inc., Mother Earth readers are on average 80–90% more likely to pay more money or go out of their way to purchase organic and earth-friendly products. Few publications, even mainstream magazines, could offer such a great advertising proposition. Natural Home is an easier sell to more mainstream advertisers breaking into the green marketplace. On their pages you are likely to see Toyota Prius and Home Depot ads alongside a beautiful gourmet kitchen photo spread. A solid 95% of readers are willing to pay more for green products. They are almost exclusively female with a median age of 45. Many of them are married with children and own their own homes. Add to that a $90,000 average household income, and an advertiser can feel pretty good about presenting their bamboo flooring and European high-efficiency washer/dryer unit. According to Welch, Ogden’s main types of advertisers are either endemic or consumer. An endemic advertiser sells a product directly related to the editorial content of the magazine or website. Because the demographic for each of Ogden’s magazines is pretty specific, the bulk of its ads are endemic. Endemic ads are fairly easy to sell, usually featuring a specific product—a low-flow showerhead, for instance. Advertisers know that 75% of the magazine’s readership consists of building contractors who will likely purchase this product in the next six months. There is little gamble on the part of the showerhead manufacturer. Consumer advertising is more for products that know no specific demographic. You can sell soft drinks to pretty much anyone around the world, so it doesn’t matter where you place the ad. Or does it? Do health-conscious readers with organic gardens and compost heaps in their backyards drink soft drinks? Not likely. If they do, they probably don’t want to talk about it too much. The very sight of a soft drink ad in their favourite publication may cause them to stop purchasing the magazine. This puts publishers like Bryan Welch in a difficult position. Magazines are funded by ad sales and companies like Pepsi, Ford, or GE can afford big ad buys. All of these companies are looking to magazines like Natural Home for an “in” to their very desirable readers. And some of these large companies may be able to make inroads. “A lot of big consumer advertisers have a great authentic message. [They] have new products that are genuinely more enlightened,” says Welch. He names Honda, Toyota, and Owens Corning as companies that have demonstrated a true commitment to improving the sustainability of their products. “Those are the folks we are trying to connect with,” he says, “and our readers want to know about those products and bring them into their lives and the lives of their friends. That’s the perfect formula.” Ask your students: 1. Given that most of a magazine’s revenue comes from ads, would you be willing to turn down a large consumer advertiser because your readers may disagree with their product or business practices? Discuss the ethical, PR, and financial implications of your decision. Answer: Answers will vary, but the marketers of Ogden magazines like Mother Earth and Natural Home are between a rock and a hard place when it comes to advertising. The publisher needs revenues from advertisers but risks alienating readers if it sells space to advertisers perceived as “not green enough.” Siding with readers means less advertising revenues for the company; siding with mainstream advertisers means losing diehard loyal readers. Ogden seeks compromise by attracting companies like Honda, Toyota, and Owens Corning—companies that are perceived to be producers of authentically green products. Selling ad space to non-green businesses is ethical and legal, but it may alienate readers of Mother Earth News. Finally, advertisers will be accused of puffery if they exaggerate the environmental friendliness of their products in ads. Turning down a large consumer advertiser due to potential reader disagreement raises significant ethical considerations, as it aligns with the values and preferences of your audience. From a PR perspective, rejecting controversial advertisers can enhance your magazine’s credibility and trustworthiness. However, financially, this decision may impact revenue, as losing a major advertiser can strain resources. Ultimately, balancing ethical standards with financial viability is crucial for maintaining both integrity and sustainability in the long run. 2. What challenges do specialized magazines such as Mother Earth News face when trying to entice advertisers? Create a pitch to a potential green-product advertiser stating the benefits of advertising in Mother Earth News. Answer: Highly specialized magazines typically have small audiences and therefore limited reach for ads. As the video points out, many advertisers are “scared” of Mother Earth’s readers; they perceive them as highly critical of businesses and potentially threatening. Advertisers who target environmentalist audiences risk a backlash of negative opinions about their products and services. However, businesses that have an authentic “green identity” are likely to advertise in Ogden publications with success. i Ang, S. H., S. M. Leong, and W. Yeo (1999). “When Silence is Golden: Effects of Silence on Consumer Ad Responses,” Advances in Consumer Research, 26, 295-299. ii David B., D.W. Wooten (2006). “From Labeling Possessions to Possessing Labels: Ridicule and Socialization among Adolescents,” Journal of Consumer Research, 33, 188-198. Chapter 4 Comprehension, Memory, And Cognitive Learning END OF CHAPTER MATERIAL CASE ANSWERS: Mercedes C-Class: Is the Price Right? 1. What is the source of the Mercedes message? Is it the right message source for a relatively inexpensive entry-level automobile that the company hopes will attract younger consumers? Answer: The source of the message in this instance is the company, Mercedes-Benz. Based on the brand schema for Mercedes as presented in the text, the company is associated with expensive, luxurious, large vehicles. This is not a source young consumers would associate with an entry-level luxury car. Students could be encouraged to suggest an appropriate spokesperson as a message source in C-Class advertising that would better resonate with young consumers and their idea of an inexpensive luxury vehicle. 2. Why might the C-Class have trouble fitting into a younger consumer’s Mercedes brand schema? Answer: The brand schema as presented in the text includes associations with luxury, high cost, and large size. These are typical associations with the Mercedes brand, which the young consumers the C-Class is targeting are likely to share. A relatively inexpensive, small, entry-level automobile does not fit these associations. When consumers hear the brand name “Mercedes,” a car the size, shape, and cost of the C-Class is not the picture that pops into their minds. 3. What social schema might a younger consumer have for Mercedes? Answer: Answers may vary, but students are likely to describe an older, successful professional or businessperson with a family, a large house in the suburbs, and an established lifestyle including golf and winter vacations in the tropics. A younger consumer might have a social schema for Mercedes that associates the brand with luxury, status, and success. They may perceive it as a symbol of wealth and high performance, often linked to aspirational lifestyles. Additionally, there might be a belief that Mercedes vehicles represent advanced technology and safety features. This schema could influence their attitudes toward the brand, making it both desirable and unattainable for some. 4. From a consumer learning perspective, how might Mercedes combat recent market share losses to competitors like BMW and Audi? What do consumers associate with Audi or BMW that gives these manufacturers an advantage over Mercedes? Answer: Answers may vary. Both BMW and Audi have increased their focus on younger consumers. Message sources in both companies’ advertising have been young, trendy consumers with an adventurous lifestyle. While retaining their luxury images, both companies have emphasized the performance-enhancing technologies of their automobiles. This message may resonate better with a younger audience which seeks an exciting lifestyle and an equally exciting car to complement it. While Mercedes may be seen as suitable for an older consumer seeking creature comforts and prestige, BMW and Audi have established themselves as high-quality, high-performance, well-engineered vehicles for younger consumers who expect some fun with their luxury. From a consumer learning perspective, Mercedes could enhance its marketing strategies by emphasizing unique brand attributes, such as innovation in technology and superior safety features, to differentiate itself from BMW and Audi. Consumers often associate BMW with sporty performance and driving dynamics, while Audi is linked to modern design and advanced tech integration. Mercedes might also invest in experiential marketing, such as test-drive events, to create memorable interactions and reinforce brand loyalty among younger consumers, thus combating recent market share losses. REVIEW QUESTIONS (*) Indicates material on prep cards. 1. [LO1] What is comprehension? What are the three categories of factors that affect consumer comprehension? Provide an example of each. Answer: Comprehension refers to the interpretation or understanding that a consumer develops about some attended stimulus in order to assign meaning. The three categories include the following (see Exhibit 4.2): • Characteristics of the message—A message presented with theme-consistent music is more easily comprehended than a message with inconsistent music (advertisement for travelling to China accompanied by Chinese music). • Characteristics of the message receiver—This involves the consumer’s habituation/adaptation level. Consumers who are accustomed to receiving bad service at a health clinic may not be negatively affected by another instance of bad service. • Characteristics of the environment—This involves consumer priming. Information presented in a negative context may make consumers less afraid of risk than information presented in a positive context. A consumer thinking about being $20 ahead in the casino may be less afraid of risk than a consumer thinking about losing $20 and needing to win it back. 2. [LO1] A manufacturer of recreational boats is purchasing advertisements in The Globe and Mail. They believe this is a good way to reach an important target market and educate them about the advantages of their boats. In particular, the company is trying to decide whether the ad should contain colour or black and white ads. What are the key things that should be considered in making the colour/black and white decision? Answer: Colour can indeed focus more attention. Therefore, the company should consider how many additional consumers will pay attention to a colour ad rather than a black and white ad. The costs of using colour should be considered. If more exposure can be obtained from multiple black and white ads that are the same price as a single colour ad, the black and white ads may be a good choice. The meaning obtained from colour directly should be considered, which may vary by culture. However, colour blind consumers cannot extract this meaning. 3. [LO1] Visit www.smart.com, which is the home website of the Smart car. If we assume that the goal of the site is to communicate knowledge to people who are otherwise unfamiliar with the product, does the website illustrate any factors that may affect comprehension in a way that interferes with this goal? What is the intended figure, and what is the intended ground of this home page? Answer: This is a general discussion question. The key is for students to use information such as that found in Exhibit 4.2 to answer the question. Characteristics of the message itself are probably the most relevant responses, but students may make some assumptions about the message receiver as well. If the Smart car site aims to communicate knowledge effectively, factors like cluttered design, overly technical jargon, or lack of clear navigation could hinder comprehension. The intended figure would likely be the Smart car itself, emphasizing its compact size and eco-friendliness. The intended ground might be the surrounding context of urban living, sustainability, and innovative design, which should support the main message but could become confusing if not presented clearly. 4. *[LO1] What advice would you have for a marketing company that is considering the use of avatars (animated people-like images) on their website? Lead this exercise in the context of trying to help consumers to comprehend the content of the site. Answer: Any spokesperson’s effectiveness depends on the following qualities: likeability, expertise, trustworthiness, and attractiveness. These same characteristics apply to an avatar as well as to a human being. Therefore, consumers are more likely to comprehend a message in a desired fashion when the avatar possesses these characteristics. 5. [LO1] What message receiver characteristics affect comprehension of a message? Answer: The characteristics are as follows: • Intelligence • Ability • Prior knowledge • Involvement • Familiarity/habituation • Expectations • Physical limits • Brain dominance 6. [LO1] Define the concepts of habituation and adaptation level. How might these concepts explain why one consumer considers Walmart to be a discount store while another considers it to be a department store? How might these concepts explain the different value that consumers from different parts of the world might assign to a fast-food restaurant, such as McDonald’s? Answer: Habituation is the process by which continuous exposure to a stimulus affects the comprehension of and response to the stimulus. Consumers from small, isolated towns may not have a great deal of experience with more upscale shopping environments and are thus habituated to shopping experiences that are relatively low in quality, service, and hedonic shopping value. Thus, Walmart may not be considered a discount store among less affluent consumers; they instead might consider a second-hand store or a Goodwill store to be a “discount” store. In contrast, consumers from the city can even discriminate between the Super Target shopping experience as generally more pleasant than the typical Walmart experience. In some parts of the world, typical American-style “fast food” may be considered a luxury. Thus, if a consumer is habituated toward a meagre diet with very simple, basic, and plain food, McDonald’s food could be viewed as a luxury. 7. [LO1] Would it be better for a company that sells packaged cookies and crackers to use the term “100 percent fat free!” or “0 percent fat!” on their product label? What concept is illustrated by this choice? Answer: This concept illustrates prospect theory. Students should determine whether the phrase causes consumers to avoid losing something or look forward to gaining something. The term “0 percent fat” is probably more consistent with loss avoidance. It would be better for a company to use the term “0 percent fat!” on their product label. This choice illustrates the concept of framing, where the way information is presented can influence consumer perception. "0 percent fat!" conveys a clear, absolute absence of fat, making it more appealing. In contrast, "100 percent fat free!" might lead consumers to think about fat content more negatively. Clear, positive messaging tends to resonate better with consumers. 8. *[LO2] What three storage areas are responsible for memory? Describe each in terms of its duration and capacity. Where is meaning attached to stimuli? Answer: The three storage areas are sensory, short-term (workbench), and long-term memories. Sensory memory is of extremely short duration (.25 seconds to 1—2 seconds at most) and unlimited capacity. Short-term memory is of short duration (a few seconds to perhaps 30 seconds) and limited capacity (3—7 chunks). Long-term memory is of unlimited duration and capacity. 9. [LO3] What processes do consumers use in order to learn by making associations with meaning? Answer: Consumers use repetition, dual coding, meaningful encoding, and chunking as ways to associate items together and ultimately affect a product’s meaning. In particular, meaningful encoding leads to the development of clear schemata for products that are part of the consumer’s associative network. The schema ultimately defines the brand/product and activates rules that indicate how much value the brand/product provides. Exhibit 4.8 also helps to illustrate this point. 10. *[LO3] Look for marketing messages in either print advertisements or on the Internet. Find one that you believe illustrates a successful way in which to get consumers to chunk information for better recall later. Explain your reasons. Answer: This exercise helps students reinforce the concept of chunking. Any advertisement that tries to present material in a way that is easy to process will probably suffice. An ad that repeats information is acceptable, but one that provides easier coding is even better. Students may even find examples of dual coding, which makes the storage of information easier. 11. [LO3] Of the four types of mental processes to help remember things discussed in the chapter, which is most effective? Does this have implications for the way you study? Answer: The four types of mental processes are repetition, dual coding, meaningful encoding, and chunking. Relying on repetition is probably not wise; however, repetition is probably the most common method of studying. 12. *[LO4] What is an associative network? Why do you believe it is sometimes called a semantic network? Where are associative networks located? Answer: An associative network is a network of mental pathways linking knowledge within memory. As an analogy, these networks are similar to family trees because they represent known linkages between objects. They are sometimes called semantic networks because semantics (meaning “taken from words”) develop here. Associative networks are stored in long-term memory. 13. [LO4—LO5] Interview five consumers and ask them what are the first five words that come into their minds when they hear the following words listed below. Use the results to draw a schema that represents consumer knowledge of each brand. • Honda • Grey Goose • Nokia • Hersheys • McDonald’s Answer: Students should draw a schema resembling Exhibits 4.8 or 4.9 but with meanings specific to the listed brands. Common associations would include reliable, French, phone, and Big Mac, respectively. After interviewing five consumers about their associations with each brand, you might find the following results: • Honda: Reliable, fuel-efficient, cars, innovation, Japanese. • Grey Goose: Premium, vodka, luxury, smooth, nightlife. • Nokia: Durable, phones, classic, reliability, old-school. • Hershey's: Chocolate, sweet, nostalgic, candy, treats. • McDonald's: Fast food, burgers, fries, family, golden arches. This schema illustrates that consumers associate Honda with reliability and innovation, Grey Goose with luxury, Nokia with durability, Hershey's with nostalgia, and McDonald's with fast, family-friendly meals, reflecting their perceptions of each brand’s identity and values. 14. [LO3, LO5] Are any of the brands listed in Question 14 a category exemplar or prototype, as shown in Exhibit 4.10? Might any be involved in nostalgic rumination? Answer: Honda may be the exemplar for a reliable car category, and McDonald’s is likely to be the exemplar for the fast-food category. No brand can truly be a prototype. Prototypes are not tied to a real entity, but are instead amalgamations of all instances of that category. McDonald’s and Hershey bars are probably involved in many consumers’ childhood memories and thus have the potential to evoke and capitalize on nostalgia. INTERACTIVE/APPLICATION EXERCISES 15. [LO5] In Chapter 3, the concept of assimilation–contrast was discussed. What is the relevance of this theory of categorization in comprehending how consumers accept or reject new brand extensions (new products sold under an existing brand name)? For instance, if Honda introduced a laptop computer, would consumers accept the product? Answer: When consumers encounter new products or brands, they react to them by comparing them with the existing schema. To illustrate, consider that Europeans are used to driving very small cars. Thus, when the smart car was introduced, they were more likely to accept it as an automobile than were American consumers. If Honda introduced a laptop computer, it might be accepted better than if another brand, such as Chrysler, introduced the computer. The Honda schema would include nodes of reliability, advanced engineering, perhaps Japanese, and other nodes that overlap with a computer schema better than many other brands that currently sell cars, particularly domestic brands. 16. [LO1] Prepare a short position statement that describes your agreement or disagreement with the following statement: “All product safety labels should be presented in multiple languages (at least the three most common languages in the area) and without the use of colours.” Answer: For this exercise, students should use material from the chapter when defending their positions, whatever they may be. It would be implausible to present safety labels in all languages. By placing the warning in three languages, more people will be able to comprehend it; however, if the warning involves more than a few words, a smaller number of consumers may try to work through the clutter to actually process the message. Colours can also be helpful in grabbing attention, so perhaps colour should not be banned. 17. [LO2, LO3] Interview a consumer about nostalgia. Ask them to describe purchases they have made that they would associate with nostalgia. How is this related to the idea of an associative network? How does nostalgia affect value? Answer: Nostalgic thinking will link things from a student’s past to things in the present. Some brand associations from the past can be fairly strong. These associations can evoke powerful images and change the meaning of current-day products, thus changing their value. Students might be encouraged to bring in examples of advertisements or brands that will evoke nostalgia. In this case, students are required to utilize their understanding of the three memory systems in the design of an introductory advertising campaign. To do this, they must develop specific communication components and detail how these components will encourage appropriate processing of the advertising message. You may want to choose a product found in a convenience store or grocery store, such as snack foods or contact lens solution. 18. *[LO5—ETHICS] Ask a few consumers that you know if they know what a torrent is and what it is used for. If you are unfamiliar with this term, search a torrent site on the Internet to find out what it is. How do new product concepts come to be defined? Are there times when the script associated with using some product might include questionably ethical associations? What is your knowledge? Is the use of a torrent unethical? Answer: Consumers who have no experience with a product have no schema for that product. A torrent is a term referring to mechanisms for file sharing very large media files from computer to computer. Many types of file sharing violate intellectual property or copyright agreements and as such can be illegal. Ask the students, is it like stealing? A torrent is a file-sharing method used to download large files over the internet, often associated with sharing copyrighted material without permission. New product concepts are defined through consumer needs, market trends, and technological advancements. However, the script for using torrents may include questionable ethical associations, particularly when it comes to copyright infringement. While using torrents can be legal for legitimate content, their common association with piracy raises ethical concerns about intellectual property rights and the impact on creators. GROUP ACTIVITY This activity should be undertaken after students have become familiar with the traditional model of memory through textbook readings and class lectures/discussions. The dialogue can then be used as an effective review of memory concepts. Have students form groups to encourage participation and shared experiences. First, have the groups determine their product category and advertising message to consumers. Have them develop a tag line and possibly a magazine ad (without the aid of a computer) by using creativity and not artistry. Present students with the following scenarios for their reactions: 1. What can you build into your advertisements that will boost the chances that target audience members will “take in” the ad and send it along to short-term memory for processing? Answer: To boost the chances that the target audience will "take in" the ad, we can use catchy taglines, vibrant visuals, and relatable scenarios that evoke emotions. Incorporating humor or surprise elements can also capture attention and enhance memorability. 2. Are there elements in the ad that can be used to facilitate later retrieval of your message? Most of your “potential” customers will purchase this new product at their supermarket or drug store. What additional things can you do at the point of purchase that will help consumers retrieve the advertising message information from long-term memory? Answer: To facilitate later retrieval of the message, we could use memorable symbols or jingles in the ad that are easy to recall. Additionally, placing QR codes or memorable slogans at the point of purchase can reinforce the ad’s message and help consumers connect the product with their prior exposure. Offering samples or promotional materials can further enhance recall by creating a tactile memory associated with the advertisement. CHAPTER VIDEO CASE To view the video case Cold Stone Creamery, go to the CB companion website www.icancb.com to select this video. Cold Stone Creamery had a goal of being the number one best-selling ice cream brand in North America by December 31, 2009. Cold Stone Creamery has expanded into Japan and Korea with great success. Baskin-Robbins oversaturated the market in Japan with presence in this region for more than 30 years. Cold Stone used the success of Baskin-Robbins as a way of predicting their own success, noting that Japan has an appreciation for quality and personal experience. Cold Stone offers more than premier ice cream; it offers a fun interactive and enjoyable experience. Cold Stone also recognizes that one management model does not fit every country. In order to achieve their goal of being number one in North America, Cold Stone is using the different cultures to bring back innovative flavours to the U.S. where the customers are so diverse. Ask your students: 1. During one’s experience at Cold Stone Creamery, what type of memory is drawn on? Answer: Student responses will vary. Cold Stone Creamery tries to create a lasting impression among its customers. They are not simply about quality ice cream, but the entire experience. Iconic memories are memories of things we see. At Cold Stone Creamery, the ice cream is softened in a unique way, creating a visual memory. The memories created tend to focus on a person’s five senses. Mood can also affect a person’s ability to remember and retrieve information. Cold Stone Creamery has an interactive approach, a unique method of preparing your ice cream, and quality products, leaving customers happy and satisfied. During one’s experience at Cold Stone Creamery, episodic memory is drawn on. This type of memory involves recalling specific events and experiences, such as the unique flavors and the interactive ice cream-making process. Customers often remember their personalized creations and the fun atmosphere, which enhances their emotional connection to the brand. These memorable experiences contribute to customer loyalty and brand identity. 2. How does Cold Stone Creamery cater to different ethnic groups? Answer: Student responses will vary. Cold Stone Creamery has used their experience in different regions, such as Japan and Korea, to bring innovative flavours back to the vastly diverse North American market. Constantly introducing new flavours keeps consumers coming back to try them. Cold Stone Creamery caters to different ethnic groups by offering a diverse range of flavors that reflect various cultural preferences. They conduct market research to understand local tastes and incorporate unique ingredients and combinations inspired by different cuisines. Additionally, their interactive experience allows customers to customize their orders, appealing to individual preferences. By embracing cultural diversity, Cold Stone not only enhances its menu but also fosters a sense of inclusion among its diverse customer base. 3. Discuss how Cold Stone Creamery remains innovative. Answer: Student responses will vary. After expanding successfully into the Pacific Rim region, Cold Stone Creamery has allowed its customers to be the innovators of the ice cream chain. With a goal of being number one in North America, Cold Stone Creamery realizes they must gratify a diverse consumer group. To remain innovative, Cold Stone Creamery has been utilizing all the creative and new successful products in their other operating regions. Cold Stone Creamery remains innovative by regularly introducing unique and seasonal flavors that reflect current trends and customer preferences. They incorporate feedback and cultural insights to create exciting flavor combinations. The interactive experience allows customers to personalize their ice cream, enhancing creativity and engagement. Additionally, their marketing strategies, including collaborations and promotions, keep the brand fresh and appealing to a diverse audience. Solution Manual for CB Consumer Behaviour Canadian Barry J. Babin, Eric Harris, Kyle B. Murray 9780176555283