Chapter 3 Consumer Behaviour QUESTIONS AND ANSWERS TO END-OF CHAPTER MATERIAL Hands-on…apply your knowledge Changing Technology and Consumer Purchase Behaviour Assignment The opening vignette on Yellow Pages Group describes how technology has affected consumer behaviour. Online and mobile technology allows consumers to conduct their information search and evaluation of alternatives prior to visiting a retail or service provider. Yellow Pages Groups helps organizations venture into the world of digital marketing. Yellow Pages Group adapted as the needs of consumers have adapted over the years. Reflecting on how technology has evolved in your lifetime and new technology products on the rise, provide a prediction of how consumers will be searching for information in the next five, 10 and 15 years. Answer: These assignments give students the opportunity to apply chapter material to a real-life example, using the chapter’s opening vignette as a foundation. There are no specific answers. In the next five years, consumers will increasingly rely on AI-powered search engines and voice assistants for instantaneous, personalized information. In ten years, augmented reality (AR) will likely transform how people interact with and evaluate products in a more immersive way. By fifteen years, advances in neural interfaces and advanced AI might enable direct brain-to-digital communication, making information retrieval and decision-making almost instantaneous. Video Clip...Questions Review the Yellow Pages Group videos on CONNECT and answer the following questions: - Where are the majority of consumers searching for information before they make purchases? Answer: The majority of consumers are using the Internet before making purchases. - What percentage of consumers prefer ads that are locally relevant? Answer: Four out of five (or 80%) of consumers prefer ads that are locally relevant. - What is Smart Digital Display? Answer: Smart Digital Display allows you to promote your brand to audiences online that are ready to make a purchase. - How have the Yellow Pages Group advertisements explained the change in how consumers search for information? Answer: The video offers an analogy of a placing flyers on a parking lot of cars to advertise a product. Smart Digital Display would allow the person placing the flyer to know which car had an owner ready to purchase his or her product. Infographic ... data analysis The Infographic entitled “The New Multi-Screen World” discusses the integrated access to information that consumers use to make purchase decisions. Reviewing recent articles in the Toronto Star, the Globe and Mail, and other reputable business sources, add one more section to the Infographic specifically about purchasing a laptop. Answer: This exercise will encourage students to use reputable sources to validate and build upon research shown to create the infographic. Laptop Purchasing Trends in the Multi-Screen Era Research Phase: 65% of consumers use smartphones and tablets to compare laptop specs and prices while browsing in-store. Decision-Making: 50% utilize desktop computers for in-depth research and customer reviews before making a purchase. Final Purchase: 40% complete their laptop purchase online via mobile apps for convenience and quick access. Post-Purchase: 70% check follow-up reviews and support information on multiple screens to ensure satisfaction. adAlyze 1. Does this ad get your attention? Answer: The ad captures attention with its clear, relevant data and visual impact, highlighting how multi-screen behavior influences laptop purchases. The statistics are compelling and offer actionable insights into consumer habits. 2. What are some of the benefits of using the product highlighted in this ad? Answer: Using this toothpaste claims to help consumers have healthy gums. 3. How long would it take you to make a decision whether to use the product in this ad? Answer: It would take me a few minutes to review the key features and benefits presented in the ad, along with checking online reviews and comparisons. If the product meets my needs and has positive feedback, the decision could be made swiftly. QUESTIONS AND ANSWERS TO ONLINE ACTIVITIES: APPLYING MARKETING CONCEPTS AND PERSPECTIVES 1. Assume that you are going to purchase a candy bar, a pair of shoes, and a new computer. Identify the steps in the purchase decision process you would use to purchase each one, and determine how the process differs for the three items. Answer: The level of involvement will change with each item. Candy bars are often spontaneous or impulse purchases and so the search for information and evaluation of alternatives is often very limited or non-existent. With a pair of shoes the level of involvement is slightly higher and so an individual may spend more time on information searching and discovering alternatives. A new computer represents a substantial financial outlay and so the level of involvement is much higher. Information seeking would take a much longer period for most people as they attempt to become knowledgeable about the different parameters of purchasing a computer. The search for alternatives would also be much lengthier as the individual finds the system that is correct for them in terms of features as well as price. The final step, post-purchase behaviour is also lengthy when a greater cost is involved. One is not so demanding of a candy bar than one would be of a computer and its ability to satisfy ones needs. 2. Suppose research at Panasonic reveals that prospective buyers are anxious about buying high-definition television sets. What strategies might you recommend to the company to reduce consumer anxiety? Answer: Strategies Panasonic might adopt in order to reduce uncertainty perceptions by prospective buyers include: a. Focus promotional activities on the benefits of better picture, higher quality, and greater enjoyment from watching in the comfort of your own home. b. Create ads showing ease of operation to produce a higher-quality picture. c. Provide high customer service at point of purchase. 3. Assign one or more levels of Maslow’s Hierarchy of Needs and the motives described in Figure 3-4 to the following products: (a) life insurance, (b) cosmetics, (c) Maclean’s, and (d) hamburgers. Answer: 4. With which stage in the family life cycle would the purchase of the following products and services be most closely identified: (a) bedroom furniture, (b) life insurance, (c) a Caribbean cruise, (d) a house mortgage, and (e) children’s toys? Answer: QUESTIONS AND ANSWERS TO ONLINE ACTIVITIES: DISCUSSION FORUM Assume that you are the marketing manager for one of the major automobile manufacturers. You want to develop a clear picture of consumers, and the decision process that consumers go through in making a vehicle purchase decision. Using Figure 3-3, create a picture of consumers, including the influences on them, and the decision process they go through in purchasing a brand new car for the first time. Identify how the automobile manufacturer will use this information in their marketing. Answer: These discussions are meant to generate class discussion and a lively debate of issues raised, as well as a general review of the opening case or concepts discussed within the chapter. There are no correct or incorrect answers. To understand first-time car buyers, consider their decision process: need recognition, information search, evaluation of alternatives, purchase decision, and post-purchase behavior. Influences include personal factors (budget, lifestyle), psychological factors (motivation, perception), and social factors (family, peer opinions). The manufacturer can leverage this by targeting ads based on financial options, highlighting features that align with first-time buyers’ needs, and ensuring positive post-purchase support to enhance brand loyalty. Consumer Decision Process for First-Time Car Buyers: Influences: Personal preferences, budget, family needs, brand reputation, online reviews, and dealership experience. Decision Process: 1) Need recognition; 2) Information search (online research, dealership visits); 3) Evaluation of alternatives (comparisons, test drives); 4) Purchase decision; 5) Post-purchase evaluation (satisfaction, support). Marketing Use: The manufacturer can tailor marketing strategies by addressing key influences, offering comprehensive online information, enhancing dealership experiences, and providing strong post-purchase support. QUESTIONS AND ANSWERS TO ONLINE ACTIVITIES: INTERNET EXERCISE Visit the Strategic Business Insights (SBI) website at http://www.strategicbusinessinsights.com/vals/presurvey.shtml, click on the link “VALSTM Types” on the right, and read the descriptions. Which segment do you think you fall into? Return to the original page and scroll down to the bottom of the page and click on “Take the survey” and find out whether you guessed correctly. Does the description of your segment describe you in some way? (Note that this is a very simple and stripped-down version of the firm’s psychographic test; the long version contains over 200 questions.) This questionnaire will give you a flavour for the type of questions asked to determine psychographic characteristics. Review the description of the segment that you are in and then click on the other segments on the site to find out how your segment relates to others. In this chapter, we discussed VALSTM as well as some of the cluster categories offered by PRIZM C2? Compare them and then take on the marketing analyst’s role: 1. What companies that you are familiar with could best use this type of information? Answer: In reality this information is very useful to almost any type of business; however, only one with a fairly sophisticated marketing department would be able to use it to its greatest benefit. The fact that this system measures values and attitudes could very useful for not-for profit organizations such as charities. The Lifestyles aspect of the tool would be useful for anyone from a fast food chain to a large car manufacturer. 2. If you were the marketing manager of Wal-Mart which cluster category would you begin targeting and why? Answer: Wal-Mart would not generally focus on the cluster categories shown as they would tend to attract price sensitive consumers. You could argue that the Urban Young may fall into that category as Wal-Mart’s cheaper pricing would appeal to their life stage. However, their progressive lifestyles may have them outgrow Wal-Mart as their incomes increase and their tastes change. BRING IT TO LIFE: VIDEO SYNOPSIS & TEACHING SUGGESTIONS YELLOW PAGES GROUP: SMART DIGITAL DISPLAY Synopsis Yellow Media, a leading digital media and marketing solutions company owns and operates a network of properties including Yellow Pages Group, its flagship company, as well as RedFlagDeals.com, Canada411.ca, Wall2Wall Media, and Canpages. This corporate behemoth has had to adapt to the changing needs of consumers over the past 100 years. Understanding how the company’s strategy changed helps understand how consumer behaviour has changed. The video “Connect with more Consumers” discusses how consumers search for information before making purchases. Teaching Suggestions 1. Ask your students what online technology products they currently use. Ask some of the students to describe their purchase decision process to buy technology products using the steps described in Figure 3–1 (problem recognition, information search, evaluation of alternatives, purchase decision and post-purchase behaviour). 2. Technology products are available through many channels, including: catalogues, online retailers and retail stores. Ask your class to create a list of the channels they use, and the benefits (e.g. product information, connectivity and add-on products, services and warranties, rebates and payment terms, etc.) they seek from each channel. Now ask your students to think of something else they want to purchase which will require evaluation (e.g., car, clothing, technology product). Ask them to describe their purchase decision process and how their current online technology is used in this process. BRING IT TO LIFE: VIDEO CASE – PRINTOUT YELLOW PAGES GROUP: SMART DIGITAL DISPLAY The length of time it takes a consumer to go through this purchase decision process depends on the magnitude of the decision. Deciding on what toothpaste to purchase takes less time and research than choosing a new laptop or mobile device. It is the role of marketers to help facilitate consumer decisions by providing support and guidance through all stages of the purchase decision process. To see how marketers do this, let’s consider an organization whose services act as a catalyst to consumer decision making. Yellow Media, a leading digital media and marketing solutions company owns and operates a network of properties including Yellow Pages Group, its flagship company, as well as RedFlagDeals.com, Canada411.ca, Wall2Wall Media, and Canpages. This corporate behemoth has had to adapt to the changing needs of consumers over the past 100 years. Understanding how the company’s strategy changed helps understand how consumer behaviour has changed. “Once upon a time, it was easier for consumers to find local business information,” Nick Gaudreau, Chief Marketing Officer of Yellow Pages Group reflects. “It was the Yellow Pages directory – a physical publication delivered to each household.” When Canadians recognized that they had a need, they would use the directory to find an answer to that need. The company’s logo stems from an old company slogan, “Let Your Fingers Do the Walking through the Yellow Pages.” Although the digital revolution seems to have begun suddenly, Nick remembers the change to be more gradual. “The digital revolution began in the late-1990s and in 2008, the print business at Yellow Pages Group was still relatively stable. Our company was delving into online media, but the paper business was still going strong.” The management at Yellow Pages Group observed that consumers were behaving differently and adjusted their solutions and businesses accordingly. “All of sudden, consumer behaviour changed,” recounts Nick. “And the smartphone meant you always had the opportunity to be connected.” Fingers were now walking on screens rather than through paper directories. “The process to find information was easier with smartphone technology and consumers were getting used to instant gratification from their searches.” With his background in traditional and digital marketing as well as product development, Nick was able to witness the change in consumer behaviour first hand. The digital transformation of consumers may be perceived as a threat to many businesses, but Nick sees this change as opportunities for many businesses and established a track record in digital transformation. “Who would have thought 10 years ago that one-third of all local searches was going to be done on smartphones?” Nick asks. What used to be a straightforward for businesses has now become more complex and strategic, and a thriving business for Yellow Pages Group. “It is no longer just about ensuring your name is in the directory. You have to be certain that your name is present when the right customer needs to see it.” “Traditionally, consumers made decisions through awareness, consideration, evaluation and purchase,” Nick continues. “Today, consumers are still subject to awareness, but by the time they reach the evaluation and purchase stage, they may have been in contact with 14 touch points of research. There is a lot more information to access and process for a decision than ever before. And, it is easier to get.” The fact that the consumer decision-making process evolved required Yellow Pages Group to embark on one of the largest corporate transformations ever attempted. With 100 per cent of its revenues coming from print in 2008, Yellow Pages Group has embraced the digital revolution and now generates close to 50 per cent of its revenue from digital sources. Epilogue Nick believes that small and medium sized businesses can receive a great deal of value from the services offered by Yellow Pages Group. “Business owners want to focus on what they do best – their business operations. We support them through their advertising strategy. Every day there is something changing with respect to technology and small business can be completely overwhelmed with trying to keep up.” Yellow Pages Group helps businesses build websites and offers digital media services to help businesses keep up with the fast-paced evolution of technology. “Since developing a local digital advertising approach can be complex, Yellow Pages Group sees small and medium-sized businesses as an underserved market. Nick summarizes his company’s value proposition as “you take care of your clients and we will run your marketing for you.” “There is a huge opportunity in local advertising,” explains Nick. “It is potentially a $10 billion market.” The vision over the next five years is for Yellow Pages Group to capitalize on this opportunity with more marketing and media solutions for our ever-changing consumers. Questions 1. Why do you believe that Nick Gaudreau – Chief Marketing Officer of Yellow Pages Group estimates the local advertising market as $10 billion? Answer: Nick Gaudreau estimates the local advertising market as $10 billion because of the vast and growing demand for localized digital marketing solutions among small and medium-sized businesses. The shift to digital platforms and the need for effective local advertising create a substantial market opportunity. Additionally, the increasing complexity of digital advertising and the ongoing evolution of technology highlight the significant potential for growth in this sector. 2. What general benefits do companies like Yellow Pages Group offer to Small Business Owners? Answer: Companies like Yellow Pages Group offer small business owners several key benefits: they handle complex digital marketing tasks, allowing businesses to focus on their operations; they provide expertise in building and managing digital advertising strategies; and they help businesses stay competitive in a rapidly evolving technological landscape. This support simplifies marketing efforts and enhances visibility in a crowded digital marketplace. BRING IT TO LIFE: VIDEO CASE WORKSHEET YELLOW PAGES GROUP: SMART DIGITAL DISPLAY Name: Section: The video will show how Yellow Pages Group helps businesses understands consumer behaviour. Please answer the following questions once you have watched the video and read the case: 1. Why do you believe that Nick Gaudreau – Chief Marketing Officer of Yellow Pages Group estimates the local advertising market as $10 billion? Answer: Nick Gaudreau estimates the local advertising market as $10 billion due to the substantial and growing demand for targeted digital marketing solutions among small and medium-sized businesses. The shift from print to digital advertising and the increasing complexity of marketing in a digital age highlight the significant revenue potential in local advertising. The evolving consumer behavior and the need for effective digital presence drive this large market opportunity. 2. What general benefits do companies like Yellow Pages Group offer to Small Business Owners? Answer: Companies like Yellow Pages Group offer small business owners several benefits: they simplify and manage digital marketing efforts, provide expertise in creating effective online advertising strategies, and help businesses navigate the complexities of digital technology. This support enhances their online visibility and competitiveness, allowing business owners to focus on their core operations while optimizing their marketing presence. BRING IT TO LIFE: VIDEO CASE – ANSWERS TO QUESTIONS YELLOW PAGES GROUP: SMART DIGITAL DISPLAY 1. Why do you believe that Nick Gaudreau – Chief Marketing Officer of Yellow Pages Group estimates the local advertising market as $10 billion? Answer: Consumers prefer advertising that is more meaningful to them. The Internet has allowed organizations to get a better understanding of consumer behavior through their online viewing habits. Powered by this information, companies can now work with local advertising experts to make the best use of their marketing dollars. 2. What general benefits do companies like Yellow Pages Group offer to Small Business Owners? Answer: Small business owners may have limited resources. However, they still need to have their message heard develop a brand. Companies that can help them consumer buying habits will allow them to spend their resources wisely. BRING IT TO LIFE: NEWSFLASHES SYNOPSIS AND DISCUSSION QUESTIONS Three interesting NewsFlashes are included in this chapter. Discussing these newsflashes in class can bring the material to life for the students in an interesting, relevant, and timely fashion. They can be used as ice-breakers to launch into a relevant subject. Many of the topics are interesting to students and may be familiar. A. LOGOS INFLUENCE BEHAVIOUR Marketers know that a logo encapsulates consumers’ feelings about the company that are formed over time. The sentimental brand association of a logo can be so powerful that it inspires consumers to take actions they might not have otherwise intended to take. According to a new University of Toronto study, even a glimpse of a fast-food logo can make a person more impatient and impulsive with money. Apple, IBM, McDonald’s, and KFC are examples of logos that evoke responses. Questions 1. When you think of the four companies discussed in this example, what associations come to mind? Answer: Students should provide a variety of responses including expensive, quality, and convenience. There is no correct answer and it is important to explore why these responses were shared and how these associations affect consumer behaviour. For Apple, associations include innovation and premium quality. IBM evokes a sense of reliability and technology leadership. McDonald's brings to mind fast, consistent service and comfort food. KFC is linked with flavorful, hearty meals and Southern-inspired cuisine. Each logo triggers specific emotional and behavioral responses based on these associations. 2. Give some examples of logos that elicit positive associations and those that elicit negative associations. Answer: Students should provide a variety of responses including expensive, quality, and convenience. There is no correct answer and it is important to explore why these responses were shared and how these associations affect consumer behaviour. For example, if someone suggests Lexus as a logo eliciting a positive association, encourage the student to share what it is about the company or logo that generates the association. Also, ask how that association would affect his or her purchase decision. Positive associations: Nike's logo inspires feelings of athleticism and success, while Starbucks' logo evokes a sense of premium coffee and comfort. Negative associations: Enron's logo may remind people of corporate scandal and unethical practices, and Volkswagen's logo has been tainted by the emissions scandal, affecting perceptions of trustworthiness and reliability. B. WORDS GO A LONG WAY The Word of Mouth Marketing Association (WOMMA) is the official trade association for the word of mouth marketing industry. Recently WOMMA developed a code of ethics for the use of word of mouth marketing. These guidelines are meant to protect the consumer when word of mouth marketing is used as a marketing tool to influence consumer’s opinions. Questions 1. Assume you are being paid by an agency to promote one of Molson’s brands. On your day off, you go to a restaurant and order the beverage you are promoting. A customer at another table asks how you like the drink. According to WOMMA’s code of ethics, what should you do? Answer: The WOMMA’s ethical foundation ensures that individuals promote an environment of trust between the consumer and the marketer. It is essential for individuals to clearly and completely identify themselves. Before answering the customer’s question, it is important that you disclose that you are being paid to promote one of Molson’s brands. 2. When you consider buying a large ticket item, how much do you rely on word of mouth from family, friends etc., versus doing research yourself on the product that you want to buy? Answer: Students should provide a variety of responses and place varying weights on the opinions of friends, family and celebrities. They may discuss the value they place on the value they place on company Web sites versus independent Web sites offering opinions of products and services. When buying a large-ticket item, I rely on word of mouth from family and friends for personal experiences and trusted opinions. However, I also conduct thorough research myself to compare features, prices, and reviews to make an informed decision. Combining both sources of information helps ensure a balanced and well-informed purchase. C. Beyoncé criticized for Pepsi partnership Over the years, Pepsi has had many advertising spokespersons. These celebrities have been paid to promote Pepsi’s products. In 2013, Beyoncé announced her role as global brand ambassador for Pepsi. The process to create a global advertising campaign that met her image’s needs and the image needs of Pepsi was arduous It involved a great deal of collaboration between the pop singer and the soft drink company, but eventually their collaboration paid off. Once announced, however, news of this partnership drew criticism to both Beyoncé and Pepsi as the sugary drinks, if consumed excessively, could be detrimental to long-term health. In fact, some critics went as far to state that she was a hypocrite in being part of the a national fitness campaign prior to signing her deal with Pepsi. Questions 1. Describe how opinion leadership affects consumer decisions? Answer: Individuals who have social influence over others are called opinion leaders and are more likely to be important for products that provide a form of self-expression. For example, automobiles, clothing, and club memberships are products affected by opinion leaders, but appliances usually are not. Having social influence for a consumer product like a soft drink is important to companies that rely on repetitive purchases of their products. 2. How has reading this Marketing News Flash affected your opinion of Beyoncé and Pepsi? Answer: Students should provide a variety of responses including a positive effect, negative effect or indifference. This could lead to a healthy debate. One strategy to explore this further would be to divide the class into groups of differing opinions. In groups, they can generate at least three reasons as to why they chose that point-of-view. Reading this Marketing News Flash has made me more aware of the potential conflict between endorsing a sugary drink and promoting fitness. It highlights the complexity of celebrity endorsements and the impact they can have on public perception, affecting how I view both Beyoncé and Pepsi's brand integrity. BRING IT TO LIFE: NEWSFLASH PRINTOUT AND WORKSHEET Name: Section: LOGOS INFLUENCE BEHAVIOUR Marketers know that a logo encapsulates consumers’ feelings about the company that are formed over time. The sentimental brand association of a logo can be so powerful that it inspires consumers to take actions they might not have otherwise intended to take. According to a new University of Toronto study, even a glimpse of a fast-food logo can make a person more impatient and impulsive with money. “The logo activates associations with the brand,” explains study co-author Chen-Bo Zhong, professor of organizational behaviour and human resource management at the university. In one part of the study, the fast-food group saw logos of McDonald’s and KFC; the control group instead viewed pictures of two generic low-priced dinners. Afterward, they were all asked if they would like to receive a higher amount of money in one week or a lower amount of money immediately. Those exposed to the fast-food logos were much more likely to want the money immediately. “Fast food seemed to have made people impatient in a manner that could put their economic interest at risk,” the study concludes. A 2008 Duke University study found people who looked at the Apple logo scored higher on a creativity test than those who had looked at an IBM logo—presumably because they were reflecting the differing brand traits they associated with those logos. The stronger the brand “personality,” the stronger the association, Mr. Zhong said. In the case of fast food, logos from popular chains such as McDonald’s promote associations with fast food, namely relating to immediate gratification and saving time. Recent research from the University of Michigan found children as young as three can recognize brand logos and products. Children viewed logos of 50 brands across 16 product categories including fast food, toys, electronics, and apparel, and were asked questions about the brands. The results showed that a majority of the children recognized logos of fast-food restaurants. Questions 1. When you think of the four companies discussed in this example, what associations come to mind? Answer: When thinking of Apple, associations include innovation and high-end technology. IBM evokes reliability and corporate strength. McDonald's suggests quick, convenient meals and comfort food. KFC is associated with flavorful, hearty Southern-style dishes. Each logo triggers specific emotional and behavioral responses tied to these brand traits. 2. Give some examples of logos that elicit positive associations and those that elicit negative associations. Answer: Positive associations: Nike's logo symbolizes athletic excellence and motivation, while Disney's logo evokes feelings of magic and family-friendly entertainment. Negative associations: Volkswagen's logo has been tainted by the emissions scandal, and Theranos' logo is linked to the company's fraudulent practices. Each logo triggers distinct emotional responses based on brand reputation and past actions. BRING IT TO LIFE: NEWSFLASH PRINTOUT AND WORKSHEET Name: Section: THE POWER OF WORD OF MOUTH One of the most powerful forms of marketing is the result of one of the most natural activities: talking. Word-of-mouth marketing is an extraordinary tool for marketers to use as they spread their brands, as it is the most effective form of marketing available—and the simplest. The Word of Mouth Marketing Association (WOMMA) is the official trade association for word-of-mouth marketers and is a coalition comprised of top marketers who are interested in learning how to encourage and utilize word of mouth while respecting and protecting its integrity. WOMMA aids its members with the implementation of word of mouth using training, best practices, standards and metrics, and mainstreaming. WOMMA provides outreach and education, aids marketers in creating sustainable word-of-mouth programs, creates accountability for practices, and works at bringing word of mouth into the centre of the marketing world. WOMMA’s mission is to improve word-of-mouth marketing by “Promoting ‘best practices’ to ensure more effective marketing; protecting consumers and the industry with strong ethical guidelines; evangelizing word of mouth as an effective marketing tool; and setting standards to encourage its use.” Recently, WOMMA developed a code of ethics for word-of-mouth marketing. These guidelines are meant to protect the consumer during the use of and participation in word-of-mouth marketing. The code focuses on openness between consumers, advocates, and marketers; advocates are encouraged to be open with consumers about their relationship with the marketers. Advocates are also encouraged to be honest with their opinions about the products that they are marketing and to disclose their identity to the consumers. WOMMA created the code of ethics in order to help marketers see what practices they should be supporting and to allow the word-of-mouth industry to set clear standards for itself. Questions 1. Assume you are being paid by an agency to promote one of Molson’s brands. On your day off, you go to a restaurant and order the beverage you are promoting. A customer at another table asks how you like the drink. According to WOMMA’s code of ethics, what should you do? Answer: According to WOMMA's code of ethics, you should disclose that you are being paid by the agency to promote the Molson brand. Be honest about your opinion of the drink, even if it is not entirely positive, and clarify your relationship with the brand to ensure transparency. This maintains trust and integrity in word-of-mouth marketing. 2. When you consider buying a large ticket item, how much do you rely on word of mouth from family, friends etc., versus doing research yourself on the product that you want to buy? Answer: When considering a large-ticket item, I heavily rely on word of mouth from family and friends for trusted, personal experiences and recommendations. However, I also conduct my own research to verify the product’s features, compare options, and read reviews. Balancing both sources ensures a well-rounded and informed decision. BRING IT TO LIFE: NEWSFLASH PRINTOUT AND WORKSHEET Name: Section: BEYONCÉ CRITICIZED FOR PEPSI PARTNERSHIP Over the years, Pepsi has had many advertising spokespersons. These celebrities have been paid to promote Pepsi’s products. In 2013, Beyoncé announced her role as global brand ambassador for Pepsi. The process to create a global advertising campaign that met her image’s needs and the image needs of Pepsi was arduous It involved a great deal of collaboration between the pop singer and the soft drink company, but eventually their collaboration paid off. Once announced, however, news of this partnership drew criticism to both Beyoncé and Pepsi as the sugary drinks, if consumed excessively, could be detrimental to long-term health. In fact, some critics went as far to state that she was a hypocrite in being part of the a national fitness campaign prior to signing her deal with Pepsi. When asked to give her perspective on the conflict, Beyoncé addressed the question below: Some were critical at your participating in a Pepsi campaign after you moved your body for childhood obesity. Where is the balance between your career objectives and your philanthropy? “Pepsi is a brand I've grown up seeing my heroes collaborate with. The company respects musicians and artistry. I wouldn't encourage any person, especially a child, to live life without balance.” Questions 1. Describe how opinion leadership affects consumer decisions. Answer: Opinion leadership influences consumer decisions by shaping perceptions and behaviors through trusted endorsements. Leaders like Beyoncé can sway public opinion and consumer choices based on their credibility, personal values, and visibility. 2. How has reading this Marketing News Flash affected your opinion of Beyoncé and Pepsi? Answer: Reading this Marketing News Flash has made me more critical of the alignment between Beyoncé’s advocacy for fitness and her endorsement of a sugary drink. It highlights the tension between personal values and commercial partnerships, affecting how I view both Beyoncé's and Pepsi's brand integrity. BRING IT TO LIFE: IN-CLASS ACTIVITY INSTRUCTIONS–BUYING PROCESS FOR STARBUCKS COFFEE Learning Objective To illustrate the consumer buying process when buying coffee. Description of In-Class Activity The reason for the activity is to relate the consumer buying process to purchasing a cup of Starbucks coffee. The instructor provides a mini lecture on Starbucks and students are then asked to answer 7 questions. This activity can be successfully conducted individually or in groups. Estimated class time: 20 minutes. Preparation before Class Become familiar with the following terms which are referred to in this in-class activity: Evaluative Criteria: Factors that represent both the objective attributes of a brand and the subjective ones a consumer uses to compare different products and brands. Evoked Set: The group of brands a consumer would consider acceptable from among all brands in the product class of which he or she is aware. Purchase Decision Process: The stages a buyer passes through in making choices about which products and services to buy. In-Class Implementation • Relevant Chapter Content - Prior to conducting this in-class activity, you will need to review the following with your students. ○ Go over the steps of the consumer purchase decision process. ○ Explain the definitions of evaluative criteria and evoked set, since these words appear in the questions. • In-Class Instructions ○ Give students the following background mini-lecture: Starbucks Coffee Company is the leading retailer, roaster, and brand of specialty coffee in the world. with more than 16,000 retail locations in North America, South America, Europe, the Pacific Rim, and the Middle East. Coffee is a commodity. People can buy a cup of coffee almost anywhere in the world or make it themselves. With most commodities, firms cannot charge a premium price. However, Starbucks does charge a higher price for its cup of coffee because it has created and delivered a brand promise to serve only the finest coffee. As a result, it has captured almost 7 percent of the U.S. coffee market. Starbucks introduced the Starbucks Card. This “smart card,” which comes in denominations of $5 to $500, is designed to improve customer service by shortening checkout lines. These cards also enable Starbucks to obtain advanced sales, allowing the firm to earn interest on the unused balances. Moreover, customers will be able to order their coffees by cell phone or via the Internet, thus eliminating any wait time. Finally, some businesses are using it to reward employees. ○ Give out the handout and worksheet to get their ideas on the decision process they use to buy a coffee. ○ Here are the questions and suggested answers: 1. What triggers the decision to buy a cup of coffee? Is it a need? A want? Answer: Thirsty, saw an ad, part of a routine, etc. 2. How do you seek information about the purchase of a cup of coffee, knowing that coffee is a commodity? Answer: Use past experiences recalled from memory (internal search). Also you may ask family and friends, or watch commercials. 3. What evaluative criteria do you use when deciding to purchase a particular coffee brand? Answer: Taste, price, location, convenience (wait time), atmospherics (comfortable), service, etc. 4. What is your evoked set of coffee brands? Answer: Make at home: Maxwell House, etc. Buy at retailer: Starbucks, Timothy’s, etc. 5. When and where do you buy a cup of coffee? Answer: I typically buy a cup of coffee in the morning or mid-afternoon, either from a local café or a drive-thru near home or work. Convenience and proximity often influence my choice, and I prefer places that offer a quick, efficient service. 6. With respect to the purchase of your last cup of coffee, did you experience any cognitive dissonance? If dissatisfied, what was deficient? Did you tell anyone? Will you go back? What marketing activities could be undertaken to reduce this? Answer: Marketers have several options regarding the kinds of activities they can do (e.g., redesign the product, rework the advertising message or retrain salespeople if the product is being oversold, improve customer service, offer refunds, etc.) 7. Do any of you use a Starbucks Card now? What are the benefits to you? What are the benefits to Starbucks? Answer: The principal benefit to consumers is convenience, since the card is designed to speed up the check-out process. For Starbucks, the card encourages repeat purchases and brand loyalty and Starbucks receives consumers’ money in advance in the face amount of the card. • Handout – Distribute the handout and worksheet for students to complete. • Evaluation – Collect the worksheets from this activity for evaluation purposes. BRING IT TO LIFE: IN-CLASS ACTIVITY BUYING PROCESS FOR STARBUCKS COFFEE – HANDOUT Consumer Purchase Decision Process Stages • Problem recognition • Information search • Evaluation of alternatives • Purchase decision • Post-purchase behaviour Questions 1. What triggers the decision to buy a cup of coffee? Is it a need? A want? Answer: The decision to buy a cup of coffee is often triggered by a want—craving for flavor or caffeine boost—though it can be perceived as a need for a daily routine or energy. 2. How do you seek information about the purchase of a cup of coffee, knowing that coffee is a commodity? Answer: I seek information through reviews, brand reputation, and personal preferences, even though coffee is a common commodity. 3. What evaluative criteria do you use when deciding to purchase a particular coffee brand? Answer: Evaluative criteria include flavor, price, convenience, brand reputation, and quality. 4. What is your evoked set of coffee brands? Answer: My evoked set includes brands like Starbucks, Tim Hortons, and local specialty roasters. 5. When and where do you buy a cup of coffee? Answer: I buy coffee in the morning or during a break, typically from nearby cafes or drive-thru locations. 6. With respect to the purchase of your last cup of coffee, did you experience any cognitive dissonance? If dissatisfied, what was deficient? Did you tell anyone? Will you go back? What marketing activities could be undertaken to reduce this? Answer: If I experience dissatisfaction, it might be due to taste or service issues. I might share this feedback and could be hesitant to return. Marketing activities like improving consistency and customer service could reduce cognitive dissonance. 7. Do any of you use a Starbucks Card now? What are the benefits to you? What are the benefits to Starbucks? Answer: I use a Starbucks Card for convenience and rewards. Benefits to me include discounts and loyalty points, while Starbucks benefits from increased customer retention and data collection. BRING IT TO LIFE: IN-CLASS ACTIVITY BUYING PROCESS FOR STARBUCKS COFFEE – WORKSHEET Name: Section: 1. What triggers the decision to buy a cup of coffee? Is it a need? A want? Answer: The decision to buy a cup of coffee is typically triggered by a want for enjoyment or caffeine, though it can feel like a need if it's part of a daily routine. 2. How do you seek information about the purchase of a cup of coffee, knowing that coffee is a commodity? Answer: I seek information through online reviews, social media, and recommendations from friends, even though coffee is a widely available commodity. 3. What evaluative criteria do you use when deciding to purchase a particular coffee brand? Answer: Evaluative criteria include taste, price, convenience, quality, and brand reputation. 4. What is your evoked set of coffee brands? Answer: My evoked set includes Starbucks, Dunkin’, Tim Hortons, and local coffee shops. 5. When and where do you buy a cup of coffee? Answer: I usually buy coffee in the morning or during breaks, from cafes or drive-thru locations. 6. With respect to the purchase of your last cup of coffee, did you experience any cognitive dissonance? If dissatisfied, what was deficient? Did you tell anyone? Will you go back? What marketing activities could be undertaken to reduce this? Answer: If dissatisfied, it might be due to taste or service issues. I might provide feedback and consider alternatives. Improving quality and customer service could reduce dissatisfaction. 7. Do any of you use a Starbucks Card now? What are the benefits to you? What are the benefits to Starbucks? Answer: I use a Starbucks Card for rewards and ease of payment, gaining discounts and loyalty points. Starbucks benefits from increased customer loyalty and valuable purchase data. BRING IT TO LIFE: METRICS ASSIGNMENT USING PERCENTAGES CORRECTLY – WORKSHEET Name: Section: Look at the statistics in the Infographic below and answer the following questions. Questions 1. The infographic shows that consumers move between multiple devices to accomplish their goals. In fact, 90 per cent of people use multiple screens simultaneously. Assume that 81% of consumers browse the internet and 67% of consumers shop online using multiple devices. How many consumers would do both? Answer: To find the percentage of consumers who both browse the internet and shop online using multiple devices, multiply 81% by 67%: 2. Another statistic of the infographic is that 67 per cent of people that use multiple devices sequentially to shop online. Of the 67 per cent, 81 per cent of these individuals are shopping spontaneously. If there were a 100 people in a room, how many would be shopping spontaneously online? Answer: For the 67% of people using multiple devices sequentially to shop online, if 81% shop spontaneously: So, in a room of 100 people, approximately 54 would be shopping spontaneously online. BRING IT TO LIFE: METRICS ASSIGNMENT USING PERCENTAGES CORRECTLY – ANSWERS This exercise is to help students interpret the data in a way that is meaningful for them to apply to make marketing decisions. 1. The infographic shows that consumers move between multiple devices to accomplish their goals. In fact, 90 per cent of people use multiple screens simultaneously. Assume that 81% of consumers browse the internet and 67% of consumers shop online using multiple devices. How many consumers would do both? Answer: The solution to the problem uses the following reasoning: • 81% of people use multiple screens simultaneously to browse the internet • 67% of people use multiple screens simultaneously to shop online • The percentage of people who use multiple screens simultaneously to browse the internet and shop online is calculated by multiplying 0.81 times 0.67 which equals 0.54 • 54% is the percentage people who use multiple screens simultaneously to browse the internet and who online So an ad by Apple showing shopping and browsing on an iPhone and iPad and iMac may appeal to 54 out of 100 people. 2. Another statistic from the Infographic is that 67 per cent of people that use multiple devices sequentially to shop online. Of the 67 per cent, 81 per cent of these individuals are shopping spontaneously. If there were a 100 people in a room, how many would be shopping spontaneously online? Answer: The solution to the problem uses the following reasoning: • 67 people would be using multiple devices sequentially shop online. • 81% of the 67 people would be shopping spontaneously. • Rounding down to the nearest person, the number of people shopping online spontaneously would be 67 times 0.81 which equals 54 people Solution Manual for Marketing: The Core Roger A. Kerin, Steven W. Hartley, William Rudelius, Christina Clements, Harvey Skolnick, Arsenio Bonifacio 9781259030703, 9781259269264, 9781259107108
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