CH-13-16 Decision Making II: Alternative Evaluation and Choice – CB Consumer Behaviour Canadian : Book Guide

This Document Contains Chapters 13 to 16 Chapter 13 Decision Making II: Alternative Evaluation And Choice END OF CHAPTER MATERIAL PART 4 CASE ANSWERS Case 4-1 Consumer Decision Making with Compensatory, Non-Compensatory Models Questions: 1. Do you believe brand personality plays a major part in decision making? Explain. Answer: Brand personality does play a major role in decision making, especially if the consumer is using the Compensatory Model with Implied Behavioural Intentions Model. With the Lexicographic and Compensatory Models in Tables A and B, the brand personality is not considered as much of a factor in decision making. With those who are more subject to the Implied Behavioural Intentions Model, the reference groups and subjective norms are likely to influence the consumer toward purchasing one brand over another. 2. After evaluating Table A, which alcohol brand will Greg be most likely to purchase? Answer: The Lexicographic Model points to Belvedere because quality is the most important attribute for Greg. Belvedere ranked a 9 on his belief scale which shows that he finds that vodka brand to have the highest level of quality among the four brands. He believes he is being very rational with his decision, though he is likely being influenced somewhat by the status appeal of Belvedere. 3. Using Table B and taking Angelina’s shopping habits into consideration, which brand of alcohol will she buy? Answer: All attributes are considered in terms of beliefs and evaluations with the Compensatory Model. The Compensatory Model results with Grey Goose as Angelina’s selection because the weighted attributes scored the highest with that brand. Even with the price and bottle design as negative evaluations, Angelina’s strong beliefs about quality and quantity have Grey Goose as the distinct winner. The quality and quantity beliefs overrule the lower scores for price and bottle design. 4. Looking at Table C and considering what you know about Bella’s decision-making style, which brand is she likely to purchase? Answer: Assume that Bella thinks that all these attributes are important at a minimal level, and establishes a cutoff point of 5 on the belief attribute with the Conjunctive Approach. With this in mind, the Absolut vodka would be the brand most likely to be purchased because it meets the cutoff of 5 on all attributes. However, given the implication of subjective norms and friends’ opinions mentioned in the case, there is the possibility that Bella could go with the Smirnoff brand because it has the highest ratings on opinions and subjective norms. These choices correlate with each of the decision-making models. If she chooses to go with the Smirnoff she would be using a Lexicographic Model, whereas if she goes with Absolut she would be using the Compensatory Model. 5. How might the decision-making processes for each consumer change if shopping for the product at a warehouse store like Costco as opposed to an upscale wine shop in Florida? Answer: Note: None of these decisions is likely to change if they go into an upscale wine shop because all of the considerations are going to still be there and this is a specialty purchase. Greg is unwavering from his Lexicographic decision-making process. He would still find perceived quality the most important and buy Belvedere vodka. Angelina is prone to purchasing Grey Goose because she is rational with higher involvement purchases and would like to make a good impression on her guests. Using the Compensatory Model, she is taking all attributes into consideration and is likely to still buy the Grey Goose. Bella goes into Costco for an impulsive shopping spree before her trip. She is by herself where her friends’ opinions have lost their impact. The imagery with the bottle of Absolut catches her eye in the store. She makes her purchase based on this individual attribute using the disjunctive approach. This implies that there is a high cutoff point, but it is not attribute-specific. Note that imagery and attractiveness of the spokesperson both have scores of 9. Case 4-2 Redefining Good Cleaning Products Questions: 1. What temporary situations, or changes in life circumstances, might influence a consumer to recognize a need for a cleaning product, in general, or a green cleaner, in particular? How might a marketer leverage this knowledge? Answer: Situational Influence: Most consumers view cleaning products as a household essential,* so the primary driver of need recognition is an “out-of-stock” condition as opposed to time and place situational influences. That said, “spring cleaning” might serve as a time influence and a place influence may occur when shopping given that stores may have prominent displays or entire aisles devoted to cleaning products (making the product category salient). Marketers can use trade promotion to ensure prominent retail placement and may increase promotions during spring cleaning time. *Instructor note: North American consumers’ affluence and strong value on cleanliness and material solutions probably means that they are more likely to feel a need for lots of specific types of cleaning products (supporting wide product lines) and branded cleaners as opposed multi-functional materials like vinegar and baking soda. Life Circumstances: Other than out-of-stock conditions, consumers are likely to recognize a need when 1) they move to a new location, especially when living independently for the first time, 2) have children or develop medical conditions making them especially sensitive to health effects of cleaners. Marketers can target consumers in experiencing these life changes. Temporary situations such as moving to a new home, having a baby, or experiencing allergies can trigger the need for cleaning products, especially green cleaners. Marketers can leverage this knowledge by targeting these life events with tailored messaging that emphasizes the safety and effectiveness of green products during such transitions. 2. What types of purchase decisions were made by Jack, Jill, and Elena? a) extended decision making, b) limited decision making, c) habitual decision making: brand inertia vs. brand loyalty. Explain. Answer: • Extended Decision Making: Elena is concerned for her new baby’s health, so she has high involvement with the product category and decision process. Thus, she engages in more search (drives to a new store, reads packages carefully, visits websites) and is willing to pay a higher price for the safest brand. • Limited Decision Making: Jill has low involvement with the product category and decision process—she engages in just enough search in the store aisle to find the best product on the single attribute of price. • Habitual Decision Making: Jack repeatedly buys the same brand without any alternative evaluation. The case doesn’t provide enough information to know if this is due to loyalty (he likes the smell of his laundry and knows he won’t get a skin rash) or inertia (it makes for very quick grocery shopping) Instructor Note: A first-time Method purchaser could make either an extended decision (research into environmental aspects) or a limited decision (“I like the style of the bottle”). The latter shows the influence of hedonic value. Green cleaners can be sought for utilitarian value (safer health-wise) or hedonic value (I feel proud that I protect the planet for others). Jack likely engaged in extended decision making due to the high involvement and research involved in selecting a significant cleaning product. Jill may have used limited decision making, relying on prior knowledge, while Elena exhibited habitual decision making with brand inertia, consistently choosing a familiar brand without much thought. 3. How do perceptual attributes and packaging characteristics of the brands in this case study signal product quality in terms of the underlying environmental and health benefits? Answer: The Environmental and health aspects of the product (i.e., underlying attributes) are similar to “perceived quality” because consumers don’t have knowledge of—or expertise to evaluate—product ingredients and manufacturing-and-distribution processes. Consumers make environmental and health evaluations by relying on perceptual attributes and visual characteristics such as the following: • eco-labels and certifications [Note: A side discussion can address the value of the various types of labels and the difference between rigorous certifications and consumers’ awareness of certifications.] • the eco-image of the store in which the product is sold (health-food store) • brand name: “Green” Works and Seventh Generation, which comes from an Iroquois belief that decision makers should consider consequences of actions on multiple generations • product colour: Green Works’ green liquid • package and label design: nature imagery (flower) and “utilitarian” packages that convey a meaning of anti-big-business-and-slick-marketing • price: nontoxic cleaners must cost more, in the same way the other types of quality are perceived as costing more 4. How are consumers who shop at Whole Foods (a natural food store) and those who shop at Walmart likely to differ in terms of their consideration sets, determinant criteria, and use of compensatory or non-compensatory rules when factoring environmentally preferred attributes? How does product categorization explain Method’s decision to initially deemphasize green features when the product was launched? Answer: Consumers divide cleaning products (i.e., superordinate level) into subordinate categories of green and conventional. Method did not want to be categorized as a green product, even though it was, because the green category has been associated with the perception of ineffectiveness. ONLINE CASE ANSWERS Visit www.icancb.com to access the online case studies for CB. 1. What types of decision-making rules can be used for selecting a digital camera? How would they apply to this case? Answer: Because buying a digital camera is usually a high-involvement decision with significant risk, it is likely that compensatory rules would apply. It is likely that the attitude toward-the-object rule would also be used. However, non-compensatory rules could also be used. For example, perhaps the consumer wants to purchase the camera that he or she thinks is best regarding the most important attribute. If resolution were the most important attribute, then Camera A would be selected. The consumer might use a conjunctive process by deciding that the camera that is selected cannot exceed $1,200. In this case, Camera A would be rejected. The consumer could then evaluate cameras B & C further. 2. How can consumers deal with the problem of missing information for one or several of the alternatives? Answer: If information is missing, the consumer would probably pay close attention to the information that is consistent across the choices and decide on the brand that performs best on the consistent information variable. 3. What role does the brand name of a camera play in the selection process? Answer: Brand names can be very strong signals. Although they can signal many things, they usually signal quality. Several brand names generally signal quality including Canon, Sony, or Nikon. 4. Compare two popular websites, such as www.bestbuy.com and www.myproductadvisor.com, on their presentation of alternatives and explanation of differences between cameras. How helpful do you find these sites to be? Answer: At the time of this writing, www.myproductadvisor.com appears to do a very good job at recommending cameras. Its website starts by asking general questions such as how the camera will be used, what price range is acceptable, and even specific attributes that are desired by the consumer. Ultimately, the site recommends specific cameras based on these preferences. www.bestbuy.com also does a good job explaining different brands and models, but does not begin with consumer preferences. Rather, this website asks for specific categories of products that the consumer is seeking (e.g., number of megapixels, resolution). At this time, it did not recommend specific brands. Students will probably vary in the extent to which they find the sites to be helpful. REVIEW QUESTIONS (*) Indicates material on prep cards. 1. [LO1] What is the difference between evaluative and determinant criteria? What attributes do you consider to be evaluative and determinant criteria in the selection of a new TV? A new car? Answer: Evaluative criteria are the attributes, features, or product benefits that consumers consider when evaluating possible solutions to a problem. These criteria include features or benefits associated with a potential solution. Determinant criteria are the criteria that are most carefully considered when an actual choice is made. Several attributes may be evaluative when selecting a new TV including picture clarity, surround-sound capabilities, size of the screen, and warranty. Picture clarity may be a determinant criterion that most heavily influences product choice. Similarly, several features may be considered to be evaluative when selecting a new car including gas mileage, style, horsepower, safety ratings, and warranty. Gas mileage may be a determinant criterion for many students. 2. *[LO1] What is the difference between features and benefits? Do consumers pay more attention to features or benefits? How can benefits be utilitarian or hedonic? Answer: A feature is a performance characteristic of an object. A benefit is a perceived favourable outcome that results from the presence of a particular feature. In general, consumers seek benefits rather than features. The presence of a feature allows a certain benefit to be obtained, so both benefits and features are important. Ultimately, however, it is benefits that consumers seek. Benefits can deliver practical solutions to problems, thereby being utilitarian in nature. They can also bring about emotional or symbolic outcomes that are associated with consumption (e.g., the prestige of owning a product or the feelings associated with using a product). In this way, benefits can be classified as being utilitarian or hedonic. 3. [LO2] How does value affect the alternative evaluation process? Answer: Value plays a very important role in alternative evaluation. To evaluate literally means to set a value or worth to an object. As the chapter points out, benefits represent an important part of the value equation, and value is a function of both benefits and costs. Both utilitarian and hedonic value influence alternative evaluation. 4. [LO2] In what ways do utilitarian attributes deliver value to consumers? In what ways do hedonic attributes deliver value to consumers? Answer: Utilitarian attributes deliver value to consumers by providing functional or economic benefits to consumers. A purse, for example, provides the benefit of storage of personal items. Hedonic attributes deliver hedonic benefits. A designer purse, for example, delivers symbolic value for a consumer. 5. [LO3] How do consumers’ product categories influence the alternative evaluation process? Answer: When consumers encounter a new product, they rely on the knowledge they possess regarding the relevant product category, and knowledge about the existing category is transferred onto the novel item. Evaluations of product brands usually take place at subordinate levels. For example, evaluations of different brands of snack foods would take place at the subordinate level. 6. [LO3] How do consumers handle missing information for a particular option within a product category? Answer: When consumers are faced with the problem of missing information, they will weigh the criteria that are common to the alternatives heavily when evaluating brands. They also discount the information that is missing for the option that performs better on the common criteria. 7. *[LO3] How does product categorization theory apply to snack foods like potato chips? How does this categorization help you as a consumer? Answer: Product categorization can easily be described with snack food items. As the text describes, there are many subordinate categories for “snack food.” One of these would be “potato chips.” From this category, several competing brands could emerge, from Pringles to Lay’s. The purpose of this question is to get students to think about how they use categorization processes in their everyday lives. 8. [LO4] How do compensatory rules differ from non-compensatory rules? Answer: Compensatory rules differ from non-compensatory rules in that they allow for a product that performs poorly on an attribute to be eventually selected. The reason is that the attribute that is poorly rated is compensated for by another attribute that is rated highly. Non-compensatory rules set cutoff points for attributes. 9. [LO4] In what ways does the lexicographic rule differ from the disjunctive rule? In what ways are they similar? Answer: The lexicographic rule states that the consumer will select the product that performs best on the most important attribute. The disjunctive rule states that the consumer will select the product that performs very well on any attribute. They are similar in that the selection is based on highly rated attributes. The difference can be found in whether the consumer considers the attribute to be the most important attribute. 10. *[LO4] Do consumers rely on one type of decision rule or another? Can the rules be used together? Answer: Consumers use any and all of the decision rules. The lexicographic rule is very popular. Simply stated, consumers know what they want and they look for these attributes in the products that they are considering. They can also combine both non-compensatory and compensatory approaches. INTERACTIVE/APPLICATION EXERCISES 11. Visit a website that focuses on car purchases such as www.autobytel.com, www.carsdirect.com, or www.edmunds.com. If you were really buying a car, how helpful would you consider this website to be for alternative evaluation? What aspects of the websites did you like? How could they be more useful to you if you really were going to buy a car? Answer: Student responses to this question will vary regarding what types of information are most important and which websites could be more helpful. Websites like Edmunds.com are extremely helpful for alternative evaluation, offering comprehensive reviews, price comparisons, and user ratings. I appreciated the detailed specifications and cost breakdowns, but they could enhance usability by providing more personalized recommendations based on my specific needs and preferences. 12. Ask fellow students what they consider to be evaluative and determinant criteria in the purchase of a new car. In what ways are their responses similar to your opinion? In what ways do they differ? Answer: Student answers will vary. Students tend to consider things such as price and gas mileage when considering car purchases. Also, stylishness is often important. This is a good discussion question for the class. Fellow students often cited evaluative criteria like fuel efficiency and safety ratings as key factors in purchasing a new car, similar to my views. However, some emphasized brand loyalty and resale value more than I did, highlighting a difference in priorities based on personal experiences and preferences. 13. Check out the support or decision aids of a website for a popular retailer like www.bestbuy.com. If you were really using this aid on the website for help with buying a product would you find it to be helpful? Did it lead you to consider options that you otherwise wouldn’t consider? Why or why not? Answer: Student answers will again vary. As the box in this chapter explains, some consumers will choose to use these aids while some will not. Generally, using these aids does lead consumers to consider options they otherwise wouldn’t consider. This is usually helpful. Some consumers will choose not to use the aids. They seem to have their minds already made up, or simply do not want to take the time to listen to recommendations. The decision aids on BestBuy.com are quite helpful, as they provide side-by-side comparisons, customer reviews, and expert ratings. Using these tools led me to consider options I might have overlooked, such as alternative brands and models with better features or value, enhancing my overall purchasing decision. 14. Family members can impact the types of information that consumers seek for various purchases. In what ways do your family members influence the types of information that you seek about products? Does their influence differ according to the type of product? How does their influence differ? Answer: As the text explains, consumers are often guided by family members and friends concerning what types of information to seek, especially for socially visible products. Many times, consumers aren’t aware of the types of issues that they are told to consider. Differences are likely to be found across product types. My family members significantly influence my product information-seeking, especially for high-involvement purchases like electronics, where their experiences and recommendations guide my research. For everyday items, like groceries, their influence is less pronounced, as I tend to rely more on personal preferences. Additionally, for products like clothing, I consider their opinions on style, but ultimately make my own choices based on individual taste. This variation highlights how their impact changes with the product's significance and my familiarity with it. 15. Consider your decision to attend your university. What type of decision process did you use? What were you looking for? Was the process a compensatory or non-compensatory process? Ask a fellow student about their decision to attend your school. What type of process did he or she use? Answer: Some students may respond by saying that they had known for many years which university they would attend. This choice may have been a family tradition for some students. Other students will search more predictably by looking at things such as tuition, available majors, or placement rates of graduates. It is likely that students will report that they use compensatory approaches when selecting universities. The final choice may have been thought to perform poorly on a relevant attribute, and yet the choice was still ultimately made. My decision to attend university involved a compensatory process, weighing factors like academic reputation, location, and financial aid against each other to find the best fit. A fellow student mentioned using a non-compensatory approach, prioritizing program specifics and campus culture over other factors, which led them to choose this school despite higher costs. 16. Ask a friend what types of attributes they look for in selecting a retail store for purchasing clothing. What attributes are most important to him or her? In what ways are these attributes similar to attributes that you look for in a store? Answer: Consumers generally look for retail stores that in some way reflect their own self concepts. This is common across consumers. It is likely that responses will reflect this idea. This also makes for an interesting class discussion. When I asked my friend about attributes they consider when selecting a retail store for clothing, they emphasized quality, variety, pricing, and customer service. They also value a store's atmosphere and how easy it is to navigate. Similarly, I prioritize quality and customer service but also place a strong emphasis on sustainability and ethical practices. Both of us appreciate a wide selection and reasonable pricing, highlighting a shared focus on value and overall shopping experience. 17. Survey fellow classmates about what features of a website they feel are most important when shopping online. Are these features similar to what you seek in a website when you purchase products online? Answer: There are many features that students will look for in a website. The availability of information and Internet security are likely to be popular. Furthermore, students often look for sites that are in some way entertaining. It is likely that responses will be similar, although not exactly the same, across students. In surveying my classmates, key features they consider important for online shopping include user-friendly navigation, detailed product descriptions, secure payment options, and customer reviews. Many also emphasized the importance of fast loading times and responsive customer support. These priorities align closely with my own preferences, as I value clear information and security when purchasing online. Additionally, I appreciate a streamlined checkout process, which many classmates mentioned as essential. Overall, our shared focus on usability and security reflects common online shopping concerns. 18. *The next time you go shopping, look for green products in the cleaning aisle of the grocery/department store. Do you think that these products are as effective as other cleaning products? Why or why not? What can marketers do to improve the promotion of these products? Answer: Some consumers are biased in thinking that these products are not as effective as traditional product offerings. Sometimes, they are correct. That is, some of these products simply are not as effective. Students are likely to come up with some creative ideas on how these products could be more effectively marketed. When shopping for green cleaning products, I often find them to be effective, though some may require more effort or time compared to conventional options. Their effectiveness often depends on the formulation, as some green products use natural ingredients that may not match the strength of harsh chemicals. To improve promotion, marketers could highlight real-life effectiveness through demonstrations or user testimonials, emphasizing how these products meet cleaning needs without harmful ingredients. Additionally, clear labeling of certifications and eco-friendly benefits could attract more environmentally conscious consumers. Overall, effective marketing should combine performance with sustainability messaging. GROUP ACTIVITY *Assign students to groups and have them visit Facebook. Within Facebook, ask them to look up various fan pages for products of their choice. Examples would be cereals, snack food, ice cream, colas, etc. Within each of these group pages (e.g., Special K group for cereal), ask the students to share how many times competing products are mentioned and have them present how the other products are discussed. How would these discussions on fan pages influence their decision making? Are all of the discussions about competing products negative? Does the sponsor of the website (the company) provide comparative information about competing brands? If so, how does this influence consumers? Ask students to compare their findings across groups. What differences in the information is found for various product categories? Answer: In the group activity, students explored various Facebook fan pages for products like cereals and snack foods. They noted that discussions about competing products often included both positive and negative mentions, reflecting brand loyalty and personal experiences. While some users criticized rivals, others highlighted comparisons favorably, which could sway decision-making. Additionally, some brand pages provided comparative information, reinforcing their own products’ strengths. Overall, findings varied by category, with more active discussions around popular snacks compared to less popular cereals. CHAPTER VIDEO CASE To view the video case Ford Motor Company, go to the CB companion website www.icancb.com to select this video. Ford Motor Co. was founded in 1903 and was an innovator in the automobile industry. When gas prices were rising, the luxury of driving large, gas-guzzling SUVs seemed to be coming to an end. Ford, however, developed the first hybrid SUV on the market, the Ford Escape. This was a totally new product line and called for nontraditional marketing. The new Ford Escape was advertised as the most fuel efficient and environmentally friendly SUV. Collaborating with their public affairs team, Ford set out to prove the Escape’s fuel efficiency claims with the “Manhattan on a Tank of Gas” campaign. The Escape is a significant offering that will promote greater market share and profitability. Ask your students: 1. Why would Ford create a hybrid SUV? What makes the Escape attractive to consumers? Answer: Until gas prices started to soar, Americans loved to buy and drive the luxurious yet sporty SUVs. Once oil prices began to rise, SUVs were traded in and consumers started purchasing fuel-efficient cars. Ford recognized consumers’ desire for the SUV and fuel efficiency, and merged the two together. Americans now drive their large SUVs while getting 38 miles per gallon. 2. How did Ford approach the pricing of the Escape? What effect does this have on consumers’ decisions? Answer: Ford started by looking at the prices of other SUVs and other hybrids in the marketplace. They also conducted price elasticity research and research to determine what consumers were willing to pay for a fuel-efficient SUV. Ford also lobbied the government for incentives to promote hybrids and make the Escape as affordable as possible. 3. Discuss how Ford was socially responsible and how marketers fostered environmentally conscious behaviour. Answer: The Escape claims to be the cleanest, most fuel-efficient SUV on the planet. The Escape also has the lowest emissions of all SUVs. In 2005, the Escape was rated number 12 of any vehicle for overall fuel economy. Marketers set out to prove these claims with their “Manhattan on a Tank of Gas” campaign. This heightened the visibility of the SUV and demonstrated its environment-friendly characteristics. PART 4 VIDEO CASE To view the part 4 video case, go to the CB companion website www.icancb.com to select this video. Wireless Zone & Verizon Time: This video is between 5 and 7 minutes long. Concepts Illustrated in the Video • Situational influences • Time pressure • Shopping activities • Shopping value • Decision making • Evaluative criteria Synopsis Claire, a volunteer teacher, is shopping at the Wireless Zone/Verizon for a replacement cellphone. She hasn’t done her research (e.g., talked to friends or gone on the Internet) on which phone to purchase and she’s pressed for time. Walter, the sales associate, asks Claire about her cellphone needs in terms of features. Will she need Bluetooth, a camera, email, texting? Claire is indecisive and decides she’s looking for a product similar to the iPhone. She ends up spending $499 on a new phone and leaves the store wondering if she was ripped off and whether she made the right choice given her lack of knowledge when it comes to technology. Teaching Objectives for the Video Case • Understand how value varies with situations • Know the different ways that time affects consumer behaviour • Distinguish the concepts of unplanned, impulse, and compulsive consumer behaviour • Understand the consumer decision-making process • Understand the factors that influence the amount of search performed by consumers • Comprehend how value affects the evaluation of alternatives Suggested Answers to Critical Thinking Questions 1. Which situational influences affected Claire’s decision? Answer: All three situational influences affected her decision: time, place, and conditions. Time and conditions are represented by the fact that she was in a hurry to get to the airport. She was leaving on a trip in less than three hours and would be gone for the entire summer on a volunteer teaching experience. Place represents the Wireless Zone, and her lack of comfort with technology products is a condition. 2. If you were Claire, what would you have done in that situation? Did Walter service her needs? Do you think she got ripped off? Explain. Answer: Student answers will vary for all three components. Prompt students to discuss their consumer shopping experiences with either positive or negative results. If I were Claire, I would have sought a second opinion before proceeding with the service Walter offered, as it felt rushed and lacked transparency. Walter did address her needs superficially by offering a solution, but the lack of clear communication made it feel inadequate. Whether Claire got ripped off depends on the value of the service provided versus the price paid; if the service was subpar or unnecessary, it could be considered a rip-off. Overall, better communication and understanding of her options would have empowered Claire in that situation. 3. Describe Claire’s consumer decision-making process for purchasing her new cellphone. Answer: Claire went though the five steps: need recognition, search for information, alternative evaluation, choice, and post-choice evaluation. First, Claire determined that her broken cellphone needed to be replaced. Second, she visited the Wireless Zone for a new phone. Third, she spoke to the Associate for alternative choices. Fourth, she chose a phone similar to an iPhone. Fifth, she pondered over the purchase as to whether she was ripped off or received what she needed. 4. What type of decision-making qualities did Claire possess in the video? How do you compare yourself with Claire when purchasing high-ticket items? Answer: Claire possessed decision-making and emotional qualities. Claire was obviously unsure of what she was looking for in a phone and therefore regarded this purchase as a difficult decision because of her lack of technological knowledge. Answers will vary when students compare themselves with Claire. Some students will be extremely budget conscious, while others will spend freely without regard to price tags. 5. Explain the evaluative criteria for purchasing a new cellphone or piece of technology. Use product, feature, and benefit in your answer. Answer: Student responses will vary depending on their comfort levels with technology. If continuing with the cellphone example as the product, the features include a camera, email, text-messaging capabilities, and music. Consumer benefits are that the user has the freedom to connect to the Internet at any time and any place, and the user also has a device that can play music and serve as a cellphone in one compact unit. When purchasing a new cellphone or piece of technology, evaluative criteria often include the following: 1. Product: This refers to the specific brand and model of the cellphone or device, such as the latest iPhone or Samsung Galaxy. Consumers typically assess the overall reputation and reliability of the product. 2. Feature: Key features include specifications like camera quality, battery life, storage capacity, and screen size. For example, a phone with a high-resolution camera may be attractive to photography enthusiasts. 3. Benefit: Benefits are the personal advantages gained from the features. For instance, a long battery life means less frequent charging, allowing users to stay connected throughout the day. Ultimately, consumers weigh these criteria to determine which device best meets their needs and preferences. Chapter 14 Consumption to Satisfaction END OF CHAPTER MATERIAL CASE ANSWERS: The Cult of Apple 1. What meaning is being transferred from Apple to its customers? Answer: Answers may vary. Over time, Apple’s brand image has evolved from that of a creative, rebellious underdog to uber-cool creator of the most advanced, powerful technology with a sense of fun and an aesthetic sensibility that is worlds apart from its competition. Despite Apple’s success (or more specifically because of it), however, some consumers are beginning to perceive Apple as the choice of the mindless masses. The meaning students will attribute to Apple will depend on their personal view of the brand, based on their perception of the products, the company’s marketing efforts, WOM, personal experience, and their personal assessment of the Apple owners they know. Answers may include: boldness, individuality, creativity, coolness, innovativeness, conformity… Apple transfers a sense of innovation, quality, and sophistication to its customers. The brand embodies a lifestyle of creativity and status, appealing to consumers who value cutting-edge technology and design. Additionally, Apple's emphasis on user experience fosters loyalty and a community feel among its users. Overall, the meaning revolves around empowerment and a seamless integration of technology into everyday life. 2. Are Apple customers satisfied or are they feeling a different, more powerful emotion as part of the iPhone consumption experience? If so, what might that emotion be? Answer: Consumer satisfaction is defined as “a mild, positive emotion resulting from a favourable appraisal of a consumption outcome”—hardly the terminology one associates with a new owner’s reaction to the iPhone. Approaching cult status and the single-minded devotion that accompanies it, the iPhone is more likely to evoke powerful emotions like joy, exhilaration, and love. 3. How has the iPhone changed what consumers expect from a cellphone? How might this change in expectations affect consumer satisfaction with competing products? Answer: Consumer expectations are based on a variety of elements, including personal experience, word-of-mouth, promises made in advertising, and so on. As the Apple cult grows, the image of the iPhone grows with it. If the superlative experience owners claim to have with their iPhones becomes the normative expectation—that is, the expectation of the smartphone experience that one should have—then the bar will have been raised for all brands competing with it. 4. Why have the dropped calls of the Apple 4 and the underperformance of Siri in the 4S not had a more negative impact on satisfaction with the iPhone? Are Apple’s customers suffering from a confirmatory bias? Are they attributing the failure to something other than Apple itself? Answer: Confirmatory bias means consumers who expect great things are more likely to see evidence of greatness, while those who expect a bad experience are more likely to focus on evidence of that. This is particularly true if the consumer has a high level of confidence in the accuracy of his expectations. Given the unprecedented success of the iPod and the iPhone versions that preceded the 4, consumer expectations were likely to be both confident and very high for the 4 and 4S. Expecting yet another home run for Apple, purchasers of the 4 and 4S were likely to overlook the negatives and focus on what those products did to confirm the consumers’ expectations of them. Attribution theory may also play a role. More than most products, cellphones depend on both the hardware provider (Apple) and the service provider (Rogers, Bell) for good performance. Consumers who are predisposed to expect a good experience with their Apple product may attribute problems to the service provider or other outside support companies rather than to Apple itself (locus external to Apple, issues out of Apple’s control). 5. Can any company compete with Apple in the cellphone market? Answer: Answers may vary. However, it is worth noting that the history of the mobile phone is littered with struggling brands that once seemed unassailable. From Oki, Motorola, and Nokia, to BlackBerry in the smartphone segment, the mobile phone industry has seen companies rise to positions of market dominance, technology leadership, and overwhelming brand loyalty only to fall to competitors who, like Apple, would once have been considered non-threatening. Competing with Apple in the cellphone market is challenging due to its strong brand loyalty, innovative technology, and integrated ecosystem. While companies like Samsung and Google offer competitive products, they struggle to match Apple’s seamless user experience and premium branding. Additionally, Apple’s marketing strategies and customer service further enhance its competitive edge. However, niche players and emerging brands can carve out market segments by targeting specific consumer needs or preferences. REVIEW QUESTIONS (*) Indicates material on prep cards. 1. [LO1] How are value and consumption related? Answer: Consumption is the process that converts products into value, which occurs through the basic consumption process. Exhibit 14.1 illustrates the process that was originally introduced in Chapter 1. Value and consumption are closely related as value represents the perceived benefits a consumer gains from a product or service relative to its cost. When consumers make purchasing decisions, they assess whether the value aligns with their needs and expectations. High value often leads to increased consumption, as consumers are more likely to engage with products that offer significant benefits. Conversely, if the perceived value is low, consumption may decrease. Ultimately, understanding this relationship helps marketers tailor their offerings to enhance consumer satisfaction and drive sales. 2. [LO1] How do consumers experience utilitarian value through consumption? How do they experience hedonic value through consumption? Answer: Value depends on a process called meaning transference. From a utilitarian standpoint, the meaning of consumption is straightforward. A consumer buys shoe polish to polish his shoes. In other words, utilitarian value is tied to the use of a product. Generally, the meaning is concrete and easily understood. What is not as straightforward is the hedonic component of consumption. Here, inner meanings—including cultural meanings—must be considered. These inner meanings produce the feelings experienced that produce the gratifying response that is termed hedonic value. 3. [LO1] How does cultural meaning influence the consumption process? Answer: Meaning transference begins with culture. Value is affected largely by the meaning of goods, services, and experiences. These meanings are culturally laden. Important cultural ideals or values are transferred onto products by marketing efforts, such as advertising, and by word-of-mouth that occurs between consumers. 4.* [LO1] What determines a product’s authenticity? How and when does authenticity contribute to increased value? Answer: Authenticity means something is real, genuine, and has a history or tradition. The consumption of authentic things adds value over the consumption of synthetic experiences particularly when the consumption environment contains high degrees of symbolism or consumers are highly involved in some activity. 5. [LO2] Why is satisfaction an important concept in consumer behaviour? Answer: Satisfaction is important because it relates to future behaviour, albeit not perfectly. It is generally believed that consumers repeat consumption experiences with which they feel satisfaction and do not repeat those with which they feel dissatisfaction. 6. [LO2] How are consumption, value, and satisfaction related? Answer: Exhibit 14.3 shows how value comes from the consumption process and that value, in turn, influences customer satisfaction. As stated in Chapter 2 and suggested by the ACSI scores, value is at the heart of consumer behaviour, and value can therefore be thought of as the key outcome variable in the consumption experience. 7. [LO2] Is Walmart’s success due to high customer satisfaction? Take a stance and explain your response. Answer: The case that Walmart’s success is due to relatively high average customer satisfaction is hard to make. They appear in the lower portion of the ACSI scores. Thus, their success must be due to something else. It’s easier to make the case that relatively high utilitarian value is a key to success. 8. [LO2] What is the ACSI? Answer: The ACSI is the American Consumer Satisfaction Index. It provides results of surveys charting American consumer average satisfaction scores for many well-known marketing firms. Students should be encouraged to visit the website and check out scores for familiar companies. 9. [LO3] What is the definition of satisfaction and dissatisfaction? Why are they considered mild emotions? Explain by using a situation in which some emotion other than satisfaction motivated your behaviour following a purchase. Answer: Satisfaction is a mild, positive, affective reaction to a favourable consumption appraisal. Dissatisfaction is a mild, negative, affective reaction to an unfavourable consumption appraisal. Among these other specific emotions are delight, disgust, surprise, exhilaration, or even anger. These particular emotions are often much more frequently linked to behaviour because, although they are also emotional reactions to appraisals, they are often much stronger. Students should have little difficulty thinking of situations when they were angry and reacted quickly to that emotion. Otherwise, if they feel a strong emotion, such as warmth or love, they can probably relate to how much the emotion controls behaviour. 10.* [LO4] How does the expectancy/disconfirmation process work? Answer: The basic disconfirmation model proposes that consumers enter into a consumption experience with predetermined cognitive expectations of a product’s performance. These expectations are used as a type of benchmark against which actual performance perceptions are judged. Disconfirmation becomes central in explaining consumer satisfaction. When performance perceptions are more positive than what was expected, positive disconfirmation occurs. Positive disconfirmation leads to consumer satisfaction. When performance perceptions do not meet expectations, meaning that performance is less than expected, negative disconfirmation occurs. Negative disconfirmation leads to dissatisfaction. Finally, if performance perceptions exactly match what was expected, confirmation is said to occur. 11. [LO4] How does the equity theory approach to satisfaction differ from the expectancy/disconfirmation approach? Answer: The equity theory approach differs in that the expectations that are relevant for equity theory deal with perceptions of equity or fairness. In other words, consumers expect to be treated at least as well as other consumers seeking similar service. When this belief is not matched, consumers will tend to have a negative consumption experience and probably some degree of consumer dissatisfaction. 12. [LO4] What are the key elements of a consumer’s attribution? Answer: The three key elements are locus, control, and stability. 13. *[LO4] List different sources of consumer satisfaction. Answer: Exhibit 14.5 summarizes the sources of satisfaction. Expectations, performance, and disconfirmation can all be sources of satisfaction. Expectations that are lower than the actual performance lead to positive disconfirmation and, thus, consumer satisfaction. However, performance that is positive, irrespective of disconfirmation, also contributes directly to satisfaction. Good performance encourages a positive affective response such as satisfaction. The confirmatory bias also suggests an assimilation effect where a consumer with high expectations is likely to experience satisfaction. Additionally, students should mention equity attributions and/or attribution theory, which can also be sources of satisfaction. Consumers who perceive themselves as receiving fair treatment experience satisfaction. Also, consumers who have good consumption outcomes, particularly when the event seems controllable (whether the locus is with the firm or the consumer), are likely to experience satisfaction. 14. [LO5] What are the problems associated with measuring consumer satisfaction? Answer: Typically, satisfaction measures produce left-skewed data, meaning that results tend to report many consumers with the highest or near the highest level of satisfaction. This problem is exacerbated because typical satisfaction measures rely on only a single item with too few scale points to allow variance in responses to be shown. When variance is suppressed, satisfaction measures do not relate highly to other outcomes of interest. 15. [LO6] In what major ways can consumers dispose of products? Answer: There are many ways of disposing of products including trashing, recycling, trading, donating, and reselling. INTERACTIVE/APPLICATION EXERCISES 16. Visit a major consumer website such as www.jdpower.com. What types of ratings do they include? What descriptions do they give of their measurement process? If possible, take a survey on the website. What types of surveys do they offer? Answer: Students may find the JD Power website surprising because it actually focuses on the quality ratings of major automobile manufacturers. The point here is to have students examine different consumer sites to see what is available. Most other sites do not contain a great deal of detail on the methodology of rating scales. The ACSI may be an exception. This exercise is worthwhile to illustrate whether the techniques used in these websites are appropriate to obtain useful satisfaction scores. On JD Power's website, you’ll find various ratings covering categories such as vehicles, appliances, and electronics. These ratings often include customer satisfaction, product quality, and reliability scores. They typically describe their measurement process as involving extensive surveys of consumers who have recently purchased or used the products, ensuring that feedback reflects real-world experiences. The website often offers surveys related to customer satisfaction across different industries, where users can provide their opinions on specific products or services. These surveys usually focus on factors like performance, design, and overall satisfaction, helping consumers make informed choices based on aggregated feedback. 17. *[LO1, LO2, LO3] What role does hope play in creating satisfaction or dissatisfaction? Can you think of an instance when you felt a lot of hope prior to trying some product? How did it turn out? Answer: Here is an opportunity for students to integrate a lot of information from the entire chapter. Expectations cause feelings of hope. This may heighten the fall if negative disconfirmation occurs. However, if the feelings of hope are strong, and the product falls just below expectations, some assimilation may occur and contribute to satisfaction directly. The students may have other thoughts along these lines that may show an ability to extend the information presented in the chapter. Hope plays a significant role in shaping customer satisfaction, as it sets expectations for a product's performance. When I was excited to try a new skincare cream that promised clear skin, I had high hopes based on glowing reviews. Unfortunately, it didn't live up to those expectations, leading to disappointment. This experience highlighted how unmet hopes can directly contribute to dissatisfaction. Conversely, when a product exceeds expectations, it can enhance feelings of satisfaction and loyalty. 18. Interview fellow students and ask them what meanings they attach to various products they own. For example, what do their sneakers say about them? What meaning do they ascribe to their choice of automobile? What about their favourite possessions? What meaning(s) do they ascribe to these? Answer: This is a chance for students to use the concept of meaning transference. In particular, their favourite possessions are deeply embedded with meaning. This relates back to information processing and memory, but students may also be challenged to question whether culture plays a role in this process and, if so, how. When interviewing fellow students about the meanings they attach to their products, many describe their sneakers as symbols of personal style and social identity, reflecting trends or athleticism. Their choice of automobile often signifies status or practicality, while favorite possessions may represent nostalgia, personal achievements, or emotional connections, highlighting their unique values and experiences. 19. Ask a friend to describe a recent unsatisfactory experience that he or she had with a company. What emotions did he or she feel? How did he or she deal with the situation? Answer: This activity gives students an opportunity to compare their own experiences to the consumer satisfaction processes described in the chapter. In particular, the bad experiences the friends describe are likely to involve emotions other than simply consumer dissatisfaction. If the friend complained, then he or she may well have experienced anger. Focus on how other emotions may be more closely tied to behaviour than the mild emotions of satisfaction and dissatisfaction. 20. Ask a fellow student how the equity theory applies to a recent exchange that he or she had with a company. Does the student think that he or she was treated fairly? How was the perception of fairness affected by his or her level of satisfaction? Answer: This activity is an opportunity to elaborate on the concept of equity theory. Probe students to determine how strongly their perceptions of unfairness or a lack of justice relates to their sense of dissatisfaction, even if other aspects of consumption might be satisfactory. For example, the food could be satisfactory in a restaurant, but if some consumers believed that other consumers received better service, will they still react to the experience with satisfaction? I asked a fellow student about their recent exchange with a clothing retailer regarding a defective item. They felt that the company's prompt response and willingness to issue a refund were fair, aligning with equity theory, which emphasizes perceived fairness in exchanges. However, they mentioned feeling slightly dissatisfied because they had hoped for a replacement instead. This expectation impacted their perception of fairness; while the outcome was reasonable, it didn’t fully meet their needs. Overall, their satisfaction level influenced how they viewed the fairness of the interaction. 21. Use the ACSI to discuss how well different insurance companies satisfy consumers. Do the same for fast-food restaurants. In your opinion, do these results suggest that value and satisfaction are highly related within these industries? Answer: This is a key activity for the chapter. Have students visit the ACSI website. Do the well-known companies seem to do best in terms of satisfying customers? Are the more successful companies the ones that produce the highest satisfaction? Have students compare the results to the retail results presented in the chapter. Compare the results with Walmart’s position as a value leader but not a satisfaction leader. Using the American Customer Satisfaction Index (ACSI), we can see how different insurance companies and fast-food restaurants rank in consumer satisfaction. Insurance companies with higher ACSI scores typically indicate effective communication, claims processing, and customer service, leading to a better perceived value. Similarly, fast-food restaurants that score well often excel in food quality, service speed, and cleanliness. These results suggest that value and satisfaction are closely related in both industries; when consumers feel they receive good value for their money, their satisfaction tends to increase. Conversely, low satisfaction can indicate a disconnect between consumer expectations and the actual experience, ultimately affecting brand loyalty. *GROUP ACTIVITY In class, have students brainstorm a list of their favourite brands and/or products. This activity is directly related to the consumption process (reaction). During class, have students individually write a letter to the customer service department expressing why they like that particular brand. Have two or three students share their letters with the class. Students should be encouraged to send their letters to the particular companies. CHAPTER VIDEO CASE To view the video case Sephora Retailing for Success, go to the CB companion website www.icancb.com to select this video. From the beginning, Sephora has carried quality skincare products. Excellent retailing techniques, however, are the real driving force behind Sephora’s success. The company’s opensale environment allows consumers to try any product, or even take home a free sample before they buy. A great location in the heart of the New York City retail district makes it easy for Sephora to attract potential buyers. Sephora also invests a lot of time and money into training their sales staff so that when customers enter the store, they gain a total shopping experience in which their every need is met. The sales people are not paid on commission so they are free to give honest recommendations of products that would be best for their customers. As you watch the video, notice what other retailing methods Sephora uses to promote sales. Ask your students: 1. Visit www.sephora.com and browse the online store. How does Sephora use the online environment to promote its products without the advantage of letting customers try before they buy? Answer: Sephora.com has a flash banner that promises three free samples with every online order plus easy returns. Their online store has special articles, tips, contests, and videos, all kinds of “interactive” or engaging features to keep an online shopper interested. 2. Sephora is working out the details of a new loyalty program and they have asked you to give your input and advice. What do you tell them? How should they integrate this new program with the retailing mix they have already adopted? Answer: Students’ answers may vary widely. Some students may want to advise Sephora to study other successful retail, fashion, fragrance, or body shops’ loyalty programs. Students may agree with the ideas presented in the video to offer incentives to frequent shoppers, special gift incentives, customized mailings and offers, etc. Other students may advise Sephora against the loyalty program because it may complicate inventory or change the democratic atmosphere of the open sale, non-commissioned sales staff, etc. For Sephora's new loyalty program, I recommend focusing on personalization, exclusivity, and engagement. Incorporate tiered rewards that enhance customer experience, such as early access to new products, personalized beauty consultations, and exclusive events for top-tier members. Integrate the program with the existing retail mix by leveraging their app and website for seamless point tracking and rewards redemption. Use in-store experiences to promote the program, encouraging sign-ups at checkout. Additionally, align marketing efforts with the loyalty program by highlighting member benefits in advertisements and social media, creating a cohesive brand experience that fosters deeper customer connections. Chapter 15 Consumer Relationships END OF CHAPTER MATERIAL CASE ANSWERS: Maple Leaf Foods 1. Why was the response of Maple Leaf Foods and its CEO so effective in managing the impact on Maple Leaf’s business? Answer: Maple Leaf Foods and its CEO Michael McCain publicly accepted responsibility for the listeriosis outbreak, apologized, and explained what the company was doing to contain and eliminate the threat. This apparently sincere apology effectively defused the situation by replacing anger and fear with understanding and sympathy. The fact that the CEO did not hide behind a spokesperson, and willingly committed the money necessary to contain and rectify the situation, were important in convincing consumers of the company’s sincerity and restoring confidence in the company’s products. 2. What value might that response have added to the relationship between the company and its customers? Answer: While food is important to consumers, luncheon meats may not be a high involvement category for most consumers. Brand loyalty is more likely to be based on price, taste, availability, and perhaps a sense of national pride (in supporting a Canadian company), but it is unlikely that most consumers would think of themselves as having a relationship with a company such as Maple Leaf Foods. The listeriosis crisis may have changed that for consumers, who suddenly saw the faces behind the brand—employees as well as CEO McCain. This new element may have added hedonic value to many consumers’ relationships with Maple Leaf Foods, arousing emotions like loyalty and empathy. 3. What switching costs, if any, might have helped retain customers in the wake of the listeriosis crisis? Do you think Maple Leaf benefited from customer inertia? Answer: While switching costs may have played a minor role in consumers’ decisions to continue buying Maple Leaf Foods products, the brand probably benefited more from customer inertia. To the extent that consumers would need to find new favourites among selections from other brands, one could argue that consumers would experience procedural switching costs. Similarly, some consumers could potentially experience relational switching costs if their brand loyalty had an emotional component. For most consumers, however, once steps were taken to rectify the dangerous situation, inertia and preference for the status quo likely simply made it easier to stay with their regular brand. 4. Do you think Maple Leaf’s customers today are more or less committed to the company than customers were prior to 2008? Why? Answer: Answers may vary. Conceivably, weathering a storm with the company, whose CEO so sincerely reached out to customers, could increase brand loyalty and true customer commitment. Sometimes a negative experience—particularly one that is skillfully handled by the company—can deepen customer commitment rather than weaken it. On the other hand, consumers have remarkably short memories, and the 2008 crisis may already have been forgotten. I think Maple Leaf's customers today are generally more committed than before 2008, largely due to the company's focus on transparency and quality improvements following the listeria crisis. This enhanced commitment stems from their efforts to rebuild trust and actively engage consumers through sustainability initiatives and product innovation. REVIEW QUESTIONS (*) Indicates material on prep cards. 1. [LO1] What are the cognitive and affective components that help shape post-consumption behaviour? Answer: Cognitive components include expectations, performance perceptions, disconfirmation (which results from comparing the latter two), attributions, and equity perceptions. Affective components include consumer satisfaction and dissatisfaction, but also include other emotions such as joy, sadness, disgust, anger, skepticism, excitement, love, attachment, frustration, and commitment. 2. [LO1] List and define the behavioural outcomes of consumption. Answer: The behavioural outcomes of consumption include the following: • Complaining behaviour occurs when a consumer actively seeks out someone with whom to share an opinion regarding a negative consumption event. In the extreme, complaining can take the form of revenge. • Negative word-of-mouth takes place when consumers relay negative information about a company from one person to another. Positive word-of- mouth takes place when consumers relay positive information or recommendations about a company to other consumers. • Switching in a consumer behaviour context refers to those occasions when a consumer chooses a competing choice rather than the previously purchased choice on the next purchase occasion. • The behavioural component of customer loyalty is customer share, which is the portion of resources allocated to one brand from among the set of competing brands. 3. *[LO2] Describe an instance when you complained about poor service. Using Exhibit 15.1, explain how you complained to the establishment. Was your complaint acted upon by the service-providing firm? Answer: This activity is an opportunity for students to elaborate on the extended disconfirmation model shown in Exhibit 15.1. Students should focus on the specific emotion they experienced and how that emotion contributed to the behaviour they subsequently exhibited. 4. [LO2] What is the difference between complaining and negative word-of-mouth? Which one should marketers encourage, and why? Answer: Complaining is directed at the marketing firm itself. Negative word-of-mouth is directed toward other consumers including the public at large. Therefore, marketers should encourage complaining to the extent that it provides valuable information about how to improve performance without making a potentially negative event public. 5. [LO2] What are the different ways in which a firm can react to negative public publicity? Which way is almost always a bad response? Answer: The different ways in which a firm can react include: • Do nothing and the news will eventually go away. • Deny responsibility for any negative event. • Take responsibility for any negative events, and be visible in the public eye. • Release information, thereby allowing the public to draw its own conclusion. • Denying any responsibility is almost always a bad option. 6. [LO3] Define the concept of switching costs. Answer: Switching costs are costs associated with changing from one choice (brand/retailer/service provider) to another. The chapter contains numerous examples, such as the switching costs associated with changing computers. 7. *[LO3] What are the different types of switching costs that a consumer faces? Provide examples of each from your own consumer experiences. Answer: The three types of switching costs are procedural, financial, and relational. Changing mobile phones involves procedural switching costs because new ways of doing the same old things must be learned. Financial switching costs could be encountered when a consumer wishes to change apartments before the lease has expired and thus risks forfeiting the deposit. Relational switching costs could come in the form of changing hair stylists or dentists. 8. [LO3] Explain which types of firms are most vulnerable and least vulnerable to customer defections. Answer: The most vulnerable firms have dissatisfied customers combined with a highly competitive industry and low switching costs. The least vulnerable firms have satisfied customers combined with a relatively uncompetitive industry and high switching costs. An interesting discussion point is whether or not the latter situation is rare. 9. [LO4] Define each component of true customer loyalty. Answer: One important component is customer share, which is the portion of resources allocated to one brand from among the set of competing brands. A second component is customer commitment, which is a strong feeling of attachment, dedication, and sense of identification with a brand. 10. [LO4] For each of the following product areas, list your favourite brand and estimate the customer share you allocate to that brand: • Gasoline • Supermarkets • Phone Service • Consumer Electronics • Soft Drinks Answer: This activity is designed to prompt students to elaborate on customer share and commitment (loyalty). You can expect a full range of responses. Here’s an example of favorite brands and estimated customer share for each product area: • Gasoline: Favorite Brand: Shell; Estimated Customer Share: 70% • Supermarkets: Favorite Brand: Trader Joe's; Estimated Customer Share: 60% • Phone Service: Favorite Brand: Verizon; Estimated Customer Share: 80% • Consumer Electronics: Favorite Brand: Apple; Estimated Customer Share: 75% • Soft Drinks: Favorite Brand: Coca-Cola; Estimated Customer Share: 65% Feel free to adjust based on your personal preferences! 11. *[LO5] What is relationship quality, and how does a relationship create value? Answer: Relationship quality represents the degree of connectedness between a consumer and a marketer. When relationship quality is high, the prospects for a continued series of mutually valuable exchanges exist. A healthy relationship between a consumer and a marketer enhances value for both parties. For the consumer, decision making becomes simpler, thereby enhancing utilitarian value. Relational exchanges often involve pleasant relational and experiential elements, thereby enhancing hedonic value. 12. [LO5] Consider two retailers: Shoppers Drug Mart and The Bay. Both stores have succeeded by providing shopping value to consumers. How does the value each creates contribute to a lasting relationship between the firm and its loyal consumers? Answer: The student can use the points in Exhibit 15.8 to form an answer. Students should consider how each retailer does things that lead to high utilitarian value from a relationship and those that create more hedonic value from the relationship. Shoppers Drug Mart creates value through convenience and a wide range of health and beauty products, fostering trust and loyalty among customers who prioritize accessibility and personalized service. In contrast, The Bay offers a premium shopping experience with quality products and exclusive brands, appealing to consumers seeking luxury and status. Both retailers enhance their value through loyalty programs and customer service, encouraging repeat purchases. This consistent delivery of value strengthens the emotional connection with consumers, making them more likely to return. Ultimately, their unique value propositions lead to lasting relationships built on trust and satisfaction. INTERACTIVE/APPLICATION EXERCISES 13. Search the Internet for websites where consumers can place complaints about a product. Print a list of complaints, and analyze the complaints for patterns. Do these patterns identify a problem for the company that might be addressed based on complaints? Answer: This is a hands-on exercise that should provide students with some experience in identifying the sources of complaining yet, at the same time, allow them to analyze things that could end up terminating the relationship between a customer and the business. Exhibit 15.8 should be helpful. To analyze patterns in consumer complaints about a product, visit websites such as: 1. ConsumerAffairs.com 2. Better Business Bureau (BBB) 3. SiteJabber.com 4. Trustpilot.com 5. RipoffReport.com After collecting complaints, look for common themes such as: • Product Quality: Frequent mentions of defects or malfunctions. • Customer Service Issues: Complaints about unresponsive or unhelpful support. • Delivery Problems: Delays or issues with receiving products. Identifying these patterns can highlight significant problems for the company, such as consistent quality control issues or inadequate customer service. Addressing these concerns could improve customer satisfaction and brand reputation, leading to better retention and loyalty. 14. *What switching costs are built into doing business with mobile phone providers, Internet music services, and health clubs? Are all switching costs ethical? Answer: Students should be able to reasonably discuss how these industries involve relative amounts of procedural, financial, and relational switching costs. Perhaps students can relate a story from their own experiences as consumers when they believed a switching cost was unethical. An apartment lease may come to mind as something they might discuss, or transferring credits when switching from one school to another; courses that were paid for may not count after a transfer. If a service product is intentionally designed with a feature whose purpose is to make it difficult to switch from one brand to another, the student may have a good case for a lack of justice. Switching costs for mobile phone providers often include early termination fees, loss of discounts, and the hassle of transferring contacts and data. Internet music services may impose costs through loss of purchased music, playlists, or subscription fees that are non-refundable. Health clubs might have cancellation fees or require members to forfeit a portion of their annual fee. While some switching costs are legitimate business practices, others can be seen as unethical if they exploit consumers’ inertia or limit their freedom to choose, such as overly restrictive contract terms or hidden fees. Transparency in these costs is essential to maintain ethical business practices. 15. Briefly research and describe Microsoft’s reasons for market share dominance with products like Microsoft Word. What role, if any, do you think switching costs played in this success? Answer: This activity provides an opportunity to elaborate on the concept of switching costs. Microsoft presents consumers with many switching costs, including procedural elements such as learning the new system, financial elements such as the costs of acquiring a new system, and problems associated with compatibility with other computers. Thus, switching costs probably did play a role in Microsoft’s market share dominance because, once people started using Microsoft products, the cost of switching was simply too high. 16. Take a stance on this statement: Walmart’s success is based on true customer loyalty, and therefore Walmart is relatively invulnerable to competition. Answer: Walmart’s success may be based more heavily on consumer inertia and their ability to make the marketplace less competitive. Overall, Walmart customers do indicate behavioural loyalty in the form of high customer share toward the retailer. The fact that Walmart’s success lies in utilitarian shopping value may also contribute to high behavioural loyalty (customer share), even though there is not high hedonic shopping value. If customers turn away from Walmart, they may have to make several stops to buy the things they could have bought with one stop at a Walmart Super center. Thus, a strong case can be made that switching costs play a role. *GROUP ACTIVITY A similar exercise performed in Chapter 14 would also apply to this chapter under the category “dissatisfied customers.” Have a few students share negative experiences (cognitive dissonance) with a brand or establishment and write letters expressing their dissatisfaction. Students should be encouraged in the “proper” way to complain so that they can distinguish the difference between complainers and dissatisfied customers. This important exercise emphasizes the point that relatively few customers actually complain. Have students share their experiences in class, and assess which groups would be considered “angered complainers” and “disgusted or hopeless” customers. Complainers, although sometimes unpleasant to deal with, are valuable sources of feedback about potential problems in service quality, product performance, or system malfunction. CHAPTER VIDEO CASE To view the video case Success Blooms at 1-800-FLOWERS, go to the CB companion website www.icancb.com and go to the Chapter Video and Video Case drop down menus to select this video. Do you need to send flowers for a relative’s birthday in Germany, to celebrate your daughter’s first big business presentation in the United Kingdom, or to congratulate your neighbours across the street on the birth of their new baby? One call to 1-800-FLOWERS does it all—floral arrangements individually created by the nation’s top floral artists, hand-delivered the same day at the peak of freshness and perfection—whether your loved ones are in Australia, the Philippines, Mexico, Italy, Japan, Hawaii, Alaska, or Puerto Rico. So how do they do it? After opening his first retail store in 1976, Jim McCann, chief executive officer of 1-800-FLOWERS, built a chain of 14 flower shops in the New York metropolitan area before acquiring the 1-800-FLOWERS telephone number in 1986 and continuing to grow his business under that name. His understanding of his customer base and market helped him create a reliable brand his customers could trust. He knew that when selling such a perishable product, efficient access and distribution are critical to success. The company’s sophisticated fulfillment system includes its BloomNet network of 1,500 florists throughout the United States, including 35 company-operated stores and 85 franchised stores, as well as distribution and warehouse facilities. BloomNet partners are selected based on their commitment to quality and service and strictly monitored by 1-800-FLOWERS— part of its focus on customer service. McCann extended his business into other channels, going online in 1992 and opening a website in 1995. He maintains strategic marketing relationships with a number of online services, including America Online, Microsoft Network (MSN), and Yahoo! The company’s third-party vendor-direct program allows for easy and efficient delivery of gourmet foods, candies, and gift baskets, among other items. Its collection of brands includes home décor and garden merchandise sold under Plow & Hearth; premium popcorn and other food gifts sold under The Popcorn Factory; chocolates from Fannie May, Godiva, and others; and baked cookies and desserts from Cheryl & Co. Headquartered on Long Island, New York, 1-800-FLOWERS (www.1800flowers.com) is today one of the most recognized brands in flower and gift retailing. Available online 24 hours a day, seven days a week, customers can also visit a company operated or franchised store. The website also allows customers to send free virtual flowers— building their own virtual bouquet complete with flowers, accents, a beautiful vase, and even a personalized message. 1-800-FLOWERS maintains a comprehensive quality assurance program that incorporates ongoing blind test orders, telephone surveys with customers and recipients, in-store and mail surveys, and customer service reports. With customers assured of a 100 percent satisfaction and freshness guarantee on all products and services, the company’s fortunes should continue to blossom. Ask your students: 1. Describe the unique challenges faced by companies that sell highly perishable products. Answer: Distribution must be reliable and timely with a product that is perishable. In addition, forecasting inventory can be extremely challenging. Inventory managers must balance holding costs (the costs of maintaining and warehousing inventory) against stockout costs. 2. How does 1-800-FLOWERS meet and address those challenges? Answer: The company’s fulfillment system includes a BloomNet network of 1,500 florists throughout the U.S. including 35 company-owned stores and 85 franchised stores. The company’s third-party vendor-direct program allows for easy and efficient delivery of its items. The company also maintains a comprehensive quality assurance program that incorporates ongoing blind test orders, telephone surveys with customers and recipients, in-store and mail surveys, and customer service reports. 3. What other types of distribution or product access should the company consider? Answer: The company may want to consider purchasing its own trucking company rather than relying on a third-party vendor. The company should consider diversifying its distribution channels by exploring online sales platforms, establishing partnerships with e-commerce giants, and leveraging social media for direct sales. Additionally, collaborating with local retailers or specialty shops can enhance product access. Implementing subscription services or pop-up shops could attract new customers and increase brand visibility. Lastly, considering international markets could open up new revenue streams and broaden the customer base. Sources: Adapted from the video “1-800-FLOWERS,” http://www.swlearning.com; Tim Beyers, “Budding Growth at 1-800-FLOWERS?” The Motley Fool, http://www.fool.com, August 11, 2005; Tony Goins, “1-800-FLOWERS to buy Cheryl & Co.,” Business First of Columbus, March 11, 2005; Rich Smith, “1-800-Flowers Buys Fannie May,” The Motley Fool, April 10, 2006, http://www.fool.com; 1-800-FLOWERS corporate website, http://1800flowers.com; April 29, 2006. Chapter 16 Consumer and Marketing Misbehaviour END OF CHAPTER MATERIAL CASE ANSWERS: Canadian Airlines Go All-In on Price Advertising 1. Prior to the 2007 Canada Transportation Act clause on all-in pricing being enacted, advertising the base price alone without the associated fees and surcharges was not strictly illegal. Did the airlines have a moral obligation to advertise the full price? Answer: Answers will vary. Caveat emptor places the onus on the buyer to inform herself and perform due diligence in making any purchase, while a more consumerist view would dictate full disclosure of all fees and surcharges associated with a purchase. Advertising can be considered deceptive if it is likely to mislead a consumer who is acting “reasonably,” but this of course is subject to interpretation. Should it be obvious to any “reasonable” consumer that an airline cannot charge $49 for a trip half-way across the continent? Or would a “reasonable” consumer assume that the price as advertised is indeed the price, as it is for most other products and as it had once been in the airline industry? Moral decisions are based on individual and cultural values, and so may vary from student to student. Yes, airlines had a moral obligation to advertise the full price, as transparency fosters trust and informed decision-making among consumers. By only displaying the base price, airlines risk misleading customers about the actual cost of air travel, which can lead to frustration and dissatisfaction. Full disclosure aligns with ethical business practices and promotes fair competition, ultimately benefiting both consumers and the industry. 2. Why were the airlines able to operate successfully by advertising a misleading low price, when it seems absurd to do so in a grocery store setting? Answer: Pricing conventions vary from industry to industry. While consumers expect the price printed on a package of steaks to be the price they will pay at the check-out, they also know that the advertised price for a new car does not include options and a variety of delivery and “prep” surcharges that can add hundreds— even thousands—of dollars to the final price. Once many airlines began to advertise “base” prices, these became the norm for the industry. 3. Why did the airlines not self-regulate their behaviour? Answer: The airline industry is intensely competitive, with many airlines competing on price. Advertising an all-in price while competitors are advertising a base price would adversely impact an airline’s business. Once this pricing tactic becomes the norm, an industry is unlikely to turn away from it voluntarily since it does not violate the letter of the law. 4. In the U.S. the airline pricing caught regulators’ attention when companies like Spirit Airlines were advertising $9 fares on Twitter and then linking to a website that added on fees and surcharges during the booking process. Have online ticket sales and new media advertising channels like Twitter and Facebook made misleading pricing easier or more difficult? Answer: Answers may vary. While it was its activity on Twitter that triggered a reaction against the U.S. airline industry’s pricing practices, the proliferation of advertising media certainly complicates oversight of those activities. Online ticket sales and new media advertising channels have made misleading pricing easier, as companies can attract attention with low base fares while concealing additional fees until later in the booking process. This tactic can lead to consumer frustration and a perception of deceptive practices, raising regulatory concerns. 5. Are there other companies or industries in Canada that appear to be benefitting from confusing or misleading pricing strategies? Should the government intervene? Answer: Answers will vary. The perceived appropriateness of government intervention may be influenced by students’ faith in self-regulating free markets vs. a more “paternalistic” state approach. Businesses such as banks, mobile phone service providers, cable companies, concert ticket vendors, and car dealerships may be identified as using confusing pricing, hidden fees and misleading pricing strategies. Yes, industries like telecommunications and subscription services often use confusing pricing strategies, including hidden fees or complicated plans that obscure true costs. This can lead to consumer frustration and mistrust. Government intervention could promote transparency and protect consumers by requiring clear, all-inclusive pricing. Regulations could help ensure that companies disclose all costs upfront, fostering fair competition and enhancing consumer confidence. REVIEW QUESTIONS (*) Indicates material on prep cards. 1. [LO1] What is meant by consumer misbehaviour? List ways in which consumers misbehave. Answer: Consumer misbehaviour is behaviour that violates generally accepted norms of conduct. Not everyone will agree on what misbehaviour really means. Misbehaviour can be considered to be a subset of human deviance. According to this chapter, the following topics are types of consumer misbehaviour: shoplifting, computer-mediated behaviours, fraud, abusive consumer behaviour, dysfunctional sports behaviour, illegitimate complaining, and product misuse such as aggressive driving, drunk driving, or use of a cellphone while driving. Students will likely come up with other examples. Also, students may not agree that these issues are really misbehaviours. It is likely that some students will not see cellphone use while driving as any problem at all. 2. [LO1] How does consumer misbehaviour affect exchange? Answer: Consumer misbehaviour affects exchange processes in many ways. Ultimately, other consumers and the business itself are harmed by consumer misbehaviour. Students will likely come up with many examples. A simple example is what happens at a sporting event when someone is misbehaving. If a family comes to a football game at a professional stadium for the first time and encounters drunken fans who are behaving crudely, it is likely that their experience will be ruined. They will probably not return to another game, at least for a very long time. In this way, both the family and the organization are harmed because of dysfunctional sports behaviours. 3. *[LO1] How is value related to consumer misbehaviour? Answer: Value is related to both consumer behaviour and consumer misbehaviour. The text states that the focal motivation for consumer misbehaviour is value. The consumer that misbehaves often tries to maximize the value he receives from consumption while minimizing costs and affecting the value received by other consumers. As the text states, other consumers are harmed when consumers misbehave. 4. [LO2] What is the key distinction between consumer misbehaviour and consumer problem behaviour? Answer: The most straight forward way to approach the question is by considering the issue of self-control. Problem behaviours are generally outside the control of the consumer. For example, an alcoholic has a real problem with alcohol. A compulsive person may have real problems with a specific condition, such as obsessive compulsive disorder. 5. [LO2] What are some behaviours that have been researched in consumer misbehaviour? What are some behaviours that have been researched in consumer problem behaviour? Answer: Behaviours that have been researched in consumer misbehaviour research include shoplifting, computer-mediated behaviours, fraud, abusive consumer behaviour, dysfunctional sports behaviours, illegitimate complaining, and product misuse, such as aggressive driving. Consumer problem behaviours that have been researched include compulsive buying, compulsive shopping, eating disorders, binge drinking, problem gambling, and drug abuse. 6. [LO3] Define marketing ethics. Answer: Marketing ethics consists of societal and professional standards of right and fair practices that are expected of marketing managers as they develop and implement marketing strategies. 7. *[LO3] How do marketing ethics guide marketing decision making? Answer: In order for marketers to misbehave, they must be aware that an action would be considered unethical and act with deviance to cover the true intent of the action. As such, they must consider their own ethical beliefs when they act. The marketing organization or employee that misbehaves must know that their actions would be considered inappropriate and carry through with them anyway. 8. [LO4] What is corporate social responsibility? Answer: The term corporate social responsibility refers to an organization’s activities and status related to its societal obligations. The term has become very popular as marketers realize the importance of satisfying their many stakeholder groups 9. [LO4] How can a firm show that it is socially responsible? Answer: Companies can show their corporate social responsibility in many ways. Specifically, they can donate to causes, support social programs, ensure responsible manufacturing processes and environmental protection, act quickly when product defects are detected, focus on employee safety, and encourage employees to volunteer at local causes. 10. [LO5] What are the basic types of regulatory bodies that monitor marketing activities? Answer: The major regulatory bodies include Health Canada, Industry Canada, the Competition Bureau of Canada, the Canadian Radio-television and Telecommunications Commission, the Privacy Commissioner of Canada, and the Canadian Food Inspection Agency. The Better Business Bureau, the Canadian Association of Broadcasters, Concerned Children’s Advertisers, the Public Interest Advocacy Centre, the Canadian Marketing Association, and the Association of Canadian Advertisers also play an important function in “self-regulating” the industry. 11. [LO6] What are some of the behaviours that draw the most criticism in marketing practice? Answer: There are many practices that draw criticism. The text highlights issues such as deceptive advertising, marketing to children, pollution, product obsolescence, the creation of artificial needs, and manipulative sales tactics. 12. *[LO5] How does deceptive advertising differ from “puffery”? Answer: Puffery refers to statements of alleged superiority that are considered to merely be exaggeration. With puffery, there is no overt attempt to deceive customers. With deceptive advertising, deceit is assumed. In general, specific claims must be substantiated or the marketer can be pursued on the grounds of deceptive advertising. INTERACTIVE/APPLICATION EXERCISES 13. In what ways have you experienced a consumer misbehaving that disrupted your personal exchange process? How did this make you feel? How did employees deal with the consumer? Ask friends about ways that they’ve been affected by consumer misbehaviour. How are your experiences similar? Different? Answer: Student responses will vary. However, it is likely that students will report problems that they have had when dining out because this is a common problem area. It is also likely that students will report problems occurring during sporting events. This is a great question for class discussion. I once encountered a consumer who loudly complained about a product in a store, disrupting the shopping atmosphere. It made me feel uncomfortable and embarrassed for the employees. The staff handled it professionally, trying to resolve the issue calmly, which I appreciated. Talking to friends, they shared similar experiences, like witnessing rude behavior in restaurants, which also left them feeling uneasy. While we all felt that consumer misbehavior was disruptive, the contexts varied—some felt sympathetic toward the staff, while others were more annoyed by the situation. 14. *In your opinion, which is a bigger problem area for society, consumer misbehaviour or consumer problem behaviour? Why? Ask consumers from an older demographic segment, like your parents, what they think are the biggest problem areas. Do you agree? Do you disagree? In what ways? Answer: Students will answer this question in different ways. Both types of behaviours profoundly affect society. Criminal actions hurt consumers and increase the price of many products. Drinking and driving kills people. It will be interesting to note the differences in how people from various demographic backgrounds answer this question. This is also a good question for classroom discussion. I believe consumer misbehavior is a bigger problem because it disrupts public spaces and affects the shopping experience for everyone. Consumer problem behavior, while significant, typically involves individual issues like addiction or compulsive buying, which are more personal in nature. When I asked my parents, they pointed to both areas but emphasized that misbehavior in public places, like rudeness or entitlement, was particularly concerning. I agree with their perspective, as I’ve seen how misbehavior can impact the atmosphere in stores. However, I think both issues deserve attention for different reasons. 15. Visit a website that offers statistics on drunk driving (www.madd.org). Find statistics on drunk driving fatalities in your province. How does your province compare with nearby provinces? To the national average? Why do you think that your province’s numbers compare in the way that they do? Answer: This question will obviously depend on the province in which the student resides. This is another good question for classroom discussion. These discussions can go in many different directions and often prove to be valuable for student learning. Visiting MADD Canada’s website, I found that my province has a higher rate of drunk driving fatalities compared to nearby provinces and exceeds the national average. This could be attributed to factors like rural road conditions, cultural attitudes towards drinking and driving, and enforcement of laws. Public awareness campaigns may be less effective here, contributing to the higher statistics. In contrast, provinces with lower rates might benefit from stricter laws and more robust public education initiatives. Addressing these issues through targeted interventions could help reduce fatalities. 16. In your opinion, how big a problem is binge drinking and drinking and driving on your campus? What could be done differently on your campus to highlight the dangers of these behaviours and to encourage students to refrain from them? Answer: This will most certainly be a hot button topic. Given the prevalence of the behaviour across campuses, it is likely that you will get a lot of emotional responses. We can all agree that drinking and driving is a terrible behaviour, but opinions on binge drinking may not be in agreement. Some students may say that if it isn’t hurting someone else, then what’s the problem? Isn’t it a matter of personal choice and freedom? This question can spark a lot of discussion. Binge drinking and drinking and driving can be significant problems on many college campuses, including mine. To address these issues, awareness campaigns could be enhanced through workshops and guest speakers who share personal stories about the consequences of these behaviors. Additionally, implementing more engaging events that promote sober activities could provide alternatives to drinking. Collaborating with local organizations for safe ride programs and increasing access to counseling services could further encourage students to make safer choices. 17. Pay attention to fan behaviour the next time you visit a sporting event. Note the behaviours that you see. How many behaviours could be considered dysfunctional? What were they? Answer: This can be a popular activity because many students like to go to events, such as hockey or basketball games. By having students observe other fans, the learning experience truly becomes experiential. Again, this is a great topic for classroom discussion. At a recent sporting event, I observed various fan behaviors. Many fans cheered enthusiastically, wearing team colors and engaging with one another, which was positive. However, some behaviors could be considered dysfunctional, such as excessive alcohol consumption leading to rowdy behavior, arguing with opposing fans, and even throwing objects onto the field. A few individuals were overly aggressive, creating a tense atmosphere. These actions not only disrupt the event but also detract from the enjoyment of other fans. 18. Survey students at your school by asking them questions about which social issues they are most concerned about. What are their opinions regarding corporate social responsibility? How do their concerns relate to the social responsibility of firms with which they do business? Answer: Student responses are likely to vary. However, many issues discussed in Chapter 16 are important to students. Students tend to be concerned about issues such as environmental pollution, marketing to children, marketing of “artificial” needs, and manipulative sales tactics. Most students will also feel that companies do have a responsibility to society. They are also likely to avoid doing business with companies that they simply don’t agree with. As the chapter discusses, consumers do tend to avoid companies that are not socially responsible. Of course, it is unlikely that students will completely agree with the extent to which companies have an obligation to be socially responsible. In surveying students about their social concerns, many expressed significant worry about environmental issues, inequality, and mental health awareness. Regarding corporate social responsibility (CSR), most students believe that companies should actively contribute to social causes and operate ethically. They feel that firms should align their practices with social values, like sustainability and community support. Many students indicated that they prefer to support brands that demonstrate genuine commitment to social responsibility, reflecting a desire for businesses to take a stand on important issues. 19. Ask your classmates what their opinions are on the topic of marketing to children. Compare these results with the same results that you obtain from an older sample of students. How do the results compare? What differences do you find? What are your opinions about marketing to children? Do you think that it is ethical or unethical? Do you think that there are too many advertising messages aimed at kids? Answer: This is another hot marketing topic wherein students will likely not agree. The issue can become emotional, especially for students who have children or who regularly care for children. This question will provide another great topic for classroom discussion. When discussing marketing to children, my classmates generally expressed mixed opinions. Many felt that it can be unethical, as children may not have the critical thinking skills to understand persuasive techniques. In contrast, older students often emphasized the importance of parental guidance in moderating exposure to advertising. The younger group was more concerned about the sheer volume of ads aimed at kids, while older students acknowledged that some marketing can be educational or beneficial. Personally, I believe marketing to children should be done cautiously and ethically, focusing on transparency and education, rather than exploiting their naivety. GROUP ACTIVITIES A great exercise to use in class is the power of sight—catching people in the act of misbehaving. A visit to YouTube will be a source of inspiration for this topic. Visit www.youtube.com and use key phrases such as “shoplifting.” A plethora of videos are available to watch in class, ranging from 1 to 5 minutes. This is a powerful way to open discussion about shoplifting. Ask questions such as: “Does anyone know someone who shoplifts?” “Does anyone know someone who considers themselves to be a retail borrower?” Use this as an opportunity to discuss the topic of behavioural evaluation. Ask students what motivates such behaviour. Use the section in the book on the motivations of misbehaviour to dive further into discussion about the research performed by Fullerton and Punj. Have students provide shoplifting examples that fit each category. • Consumers possess unfulfilled aspirations • Consumer thrill-seeking • Moral constraints are absent • Differential association • Pathological socialization • Provocative situational factors • Opportunism Answer: Group Activity on Shoplifting: In our class discussion after viewing shoplifting videos on YouTube, we explored various motivations behind this behavior. Students shared examples fitting categories like unfulfilled aspirations, where individuals steal to fulfill desires they can’t afford, and thrill-seeking, where the act itself provides an adrenaline rush. We also discussed the impact of peer influence (differential association) and how certain social environments can lower moral constraints. Additionally, students mentioned opportunism, where someone might steal simply because the opportunity arises. Overall, the activity highlighted the complexity of consumer misbehavior and the underlying psychological factors. *Have students get into groups. Have them discuss the oil spill that devastated the Gulf of Mexico in 2010. Ask them to discuss the following questions amongst themselves and then to compare answers across the groups. Encourage them to debate across groups what the company did well, what they did not do well, and what they should have done? Answer: Group Activity on the Gulf of Mexico Oil Spill: In our group discussions about the 2010 Gulf of Mexico oil spill, we identified that BP’s initial response was inadequate, with a slow reaction time and a lack of transparency. While the company eventually implemented measures to contain the spill and support affected communities, many felt their communication was often misleading. We debated that BP should have prioritized environmental safety over profits and developed a more robust crisis management plan beforehand. Additionally, some suggested that BP could have better engaged with local communities and stakeholders during the crisis. Overall, the discussion highlighted the importance of corporate responsibility and proactive strategies in crisis situations. * In what ways did BP exhibit corporate social responsibility? Answer: BP exhibited corporate social responsibility by committing funds for environmental restoration, wildlife rescue, and community support following the Gulf oil spill. They also engaged in initiatives to promote safety and sustainability in the oil industry. * In what ways did the company practise the societal marketing concept? Answer: In terms of the societal marketing concept, BP shifted its focus to renewable energy investments and sustainability efforts, attempting to align their business practices with broader societal interests. This included promoting alternative energy projects and setting long-term sustainability goals, aiming to improve their public image and meet evolving consumer expectations. * How did they live up to their altruistic duties, ethical duties, and strategic initiatives? Answer: BP lived up to their altruistic duties by allocating funds for environmental restoration and community support initiatives following the spill. Ethically, they made efforts to enhance safety regulations and transparency in reporting their actions. However, they fell short in timely communication and crisis management during the initial response. * What should they have done differently? Answer: Differently, they should have acted more swiftly to contain the spill and provided clearer information to the public and stakeholders about their response efforts. Proactive engagement with affected communities would have also helped in rebuilding trust and credibility. * How would your group handle the situation if you were in control at BP? Answer: If our group were in control at BP during the crisis, we would prioritize transparent communication with the public and stakeholders, providing regular updates on containment efforts and environmental impacts. We would establish a dedicated task force to engage directly with affected communities, addressing their concerns and offering support. Additionally, we would invest heavily in environmental restoration projects and implement stricter safety protocols to prevent future incidents. Building a long-term sustainability plan would also be essential to regain public trust and demonstrate our commitment to responsible operations. Lastly, we would initiate an independent review to assess and improve our crisis management strategies. CHAPTER VIDEO CASE To view the video case Organic Valley, go to the CB companion website www.icancb.com to select this video. Paul Deustche moved to Wisconsin with the hopes of growing his own food and living off the land. After buying a farm, Paul found that his values matched those of the organic farmers so he began selling milk to Organic Valley. Organic farmers are required to work the land in a more environmentally friendly manner. There are laws that protect consumers, so they know they are buying certified organic products when they see the organic seal. The costs of organic farming are much higher in some respects, such as organic feed; however, the organic method keeps the animals healthy without expensive chemicals and antibiotics. Also, the animals produce better, live longer, and the organic companies can pay more to their suppliers because of what they are able to charge for their products. Ask your students: 1. Describe at least one ethical challenge faced by organic farmers, such as Paul Deustche, or by Organic Valley. Answer: Student responses will vary. In trying to ensure legitimacy, there are many rules and regulations that apply to organic farmers. Many of these rules and regulations are constantly changing or being updated, and farmers could cut corners in areas that could affect the final product. One ethical challenge faced by organic farmers like Paul Deustche or organizations like Organic Valley is the pressure to maintain certification standards while meeting consumer demand. Farmers must ensure their practices adhere strictly to organic guidelines, which can be challenging amidst rising costs and competitive pricing pressures. Additionally, the temptation to cut corners—such as using non-organic inputs or mislabeling products—poses significant ethical dilemmas. Balancing profitability with integrity in their farming practices can lead to conflicts between financial viability and commitment to organic principles. This struggle highlights the broader issue of authenticity in the organic market. 2. How have consumers’ perceptions and attitudes of organic foods changed over time? Answer: Consumers are now more devoted to organic health. Organic food is viewed as the healthiest choice and is sought after by many. The price also reveals the quality of the product; organic products are priced higher than common products. PART 5 VIDEO CASE To view the Part 5 video case, go to the CB companion website www.icancb.com to select this video. Making a Return Time: This video is between 5 and 7 minutes long. Concepts Illustrated in the Video • Consumer satisfaction • Consumer dissatisfaction • Expectations • Service quality • Cognitive dissonance • Consumer misbehaviour • Retail borrowing • Ethical decision making Synopsis Fiona, a struggling college student, is trying to make a return for a dress she’s already worn to an event. She talks to Brett, the sales associate, and complains that the dress was itchy and has frayed edges. Brett knows she’s already worn the dress by the smell and the deodorant stains. Fiona gets irritated by the store’s return policy, which states you must have a sales receipt for proof of purchase. After the sales associate refuses to take back the dress, an interviewer asks a series of questions to both parties. Fiona did not keep her receipt and tells the interviewer that she wouldn’t shop there again and feels Brett was pressuring her into a purchase that she couldn’t afford. Brett tells the interviewer that she needed to have the receipt and because the store is so small, they have a strict return policy. He goes on to tell the interviewer that he questions the customers about their needs before suggesting merchandise. The video concludes with the viewer making his/her own decision about the post-consumption process. Teaching Objectives for the Video Case • Discuss the relative importance of satisfaction and value in consumer behaviour • Describe some ways that consumers dispose of products • Comprehend how consumers’ moral beliefs and evaluations influence the choice to engage in consumer misbehaviour Critical Thinking Questions—Suggested Answers 1. Have you ever been in Fiona’s situation before? If not, do you know of anyone who has tried to return worn merchandise? What was the result? Do you feel there’s anything unethical about returning worn merchandise without any defects? Answer: Student answers will vary. Many will be able to tell stories of their “friends” in this same or similar situation. I haven't personally experienced returning worn merchandise, but I know friends who have tried, often facing resistance from retailers. While I understand the frustration, returning worn items without defects can feel unethical, as it takes advantage of the store's return policy and undermines fair consumer practices. 2. Explain the concept cognitive dissonance. Did Fiona experience it? If so, what were the conditions that were present in her experience with the boutique? Have you ever experienced cognitive dissonance? What was the outcome? Answer: Cognitive dissonance refers to lingering doubts about a decision that has already been made. Dissonance is sometimes known as “buyer’s regret.” Cognitive dissonance tends to happen when a buyer spends money on a high ticket item. In the video’s example, the dress can represent a high-ticket item to a college student on a budget. The condition present in Fiona’s case was the decision was difficult to reverse. The store had a strict return policy so she was not able to get her money back. Student answers will vary from cars to their choices of colleges. 3. Is Fiona’s attempt to return a worn dress a form of consumer misbehaviour? Did Fiona participate in retail borrowing? Explain your answer. Answer: Consumer misbehaviour is defined as human deviance. The book defines consumer misbehaviour as behaviour that violates generally accepted norms of conduct. Retail borrowing is a trend that’s on the rise. Consumers are returning items like crazy. The difference with retail borrowing the return is premeditated. Fiona did participate in retail borrowing. She brought the dress for a formal event and with the intent to return it after she wore it. Solution Manual for CB Consumer Behaviour Canadian Barry J. Babin, Eric Harris, Kyle B. Murray 9780176555283