Chapter Five: Consumer Behaviour Concept Review: Generally, the concept questions are designed to achieve a single purpose – to encourage students to test their knowledge and understanding of the theoretical content of the chapter. These questions encourage recall and reflection, which will better prepare students to answer the marketing applications questions based on their understanding of the theory. Give three reasons why it is important for marketers to understand the factors that influence consumers’ purchasing decisions. Understanding consumer behaviour means that firms can 1) influence their purchase decisions at all stages of the buying decision process, 2) design products that better meet the needs and wants of consumers, 3) allocate and use its resources more efficiently and effectively, and 4) communicate more effectively with customers in an inefficient way, e.g., – design better advertisements and choose appropriate media and message (i.e. message strategy and execution). List the five steps of the consumer buying decision process. What should be the primary focus of the marketing strategy at the alternative evaluation stage? The purchase stage? The five steps in the consumer buying decision process are 1) Need recognition, 2) Search for information, 3) Evaluation of alternatives, 4) Purchase and consumption, 5) Postpurchase. The key focus of marketing at the alternative evaluation stage is to provide sufficient information for consumers to properly evaluate the company’s products and services compared to competing products. Providing comparative information that shows a company’s product in a positive light is a commonly used approach. Companies also try to differentiate their products at this stage, highlight the reasons why consumers should purchase their product. At the purchase stage, marketers focus on simplifying and facilitating the customer purchase decision. Commonly used strategies include (1) offering various payment option (credit card, cheque, cash, financing), (2) offer free or low-cost delivery and installation, (4) offer discounts or some incentives, and (5) stress their no-hassle returns policy. What are the primary factors that affect consumers’ search processes? What marketing strategies can marketers employ to ensure that customers get the information they need in order to make their shopping decision? The factors affecting the extent of consumers’ search process include the nature of the goods – a convenience good that requires little or no problem solving or a shopping good that requires extended problem solving. The consumer’s knowledge and experience with the product will also determine the extent of their search process. Other related factors include perceived benefits, actual or perceived risk and locus of control. Marketing strategies that can be employed will vary depending on the type of product offering, but may include offering detailed information and expert opinion for large or risky purchases requiring extended problem solving, providing information in a variety of locations and formats aimed at the target market, educating the customer about the product uses and limitations, providing comparative information, and emphasising their warranty, guarantee, and returns policy. Briefly explain the four types of consumer buying behaviour and describe four strategies marketers could use to facilitate consumer purchasing in each case. Give examples of products you would classify as complex buying and dissonance-reducing choices. In what ways are they a different or related? Complex buying behaviour – high involvement, high risk, big differences between brands. A good strategy for this type of decision is to understand the information search process and provide high levels of detail and expert information in order to relieve fear and assist the decision. Knowledgeable salespersons that can explain the uses, specifications, and performance of the products are required for this type of purchases. Examples: car, house, university. Dissonance-reducing behaviour – medium to high involvement, high risk, small differences between brands. A good strategy here is to promote your brand and product strengths as compared to competitors and appear like the best choice overall. Marketers should emphasise their price, convenience, and after sales and service support. Examples: Luxury clothing, appliances, professional services (dentistry). Habitual buying behaviour – low involvement, low risk, few differences among brands. The best strategy here is to build customer loyalty to your brand so they will return to your store despite few actual product differences. Marketers usually offer sales promotions, encourage product trials, and even use marketing communication to convert the purchase decision process into high involvement situation. For example, Crest makes several different types of toothpaste with each type offering different benefits, e.g., Crest whitening, Crest gingivitis, Crest tartar control, etc. The idea here is to encourage customers to get customers to stop and think – not all toothpastes are equal, so choose the one that best suits your need. Variety-seeking behaviour – low involvement, low risk, big differences among brands. A good strategy here is distribution or location – saturate the market with your product, communicate your brand everywhere, and become the top of mind product. Marketers try to dominate shelf space, offer lower prices, deals, coupons, and free samples. Identify and briefly explain the four psychological factors that influence consumer buying decisions. The four psychological factors are 1) Motives – the want or need driving the search. 2) Attitude – a person’s feelings and behavioural tendencies towards an object. 3) Perception – the process used to select, organise and interpret information to form a meaningful conclusion. 4) Learning – Thoughts and behaviour arising from previous experiences. What marketing tactics could be used to break through customers’ selective perception i.e., selective exposure, selective attention, selective comprehension, and selective interpretation? Marketers must target their communications in those media that maximise exposure to their target market and create messages that are consistent with consumers’ beliefs and attitudes so that they will pay attention to the messages and interpret them in the intended way. This also includes using alternative media and interesting messaging. How can marketers use the PSSP model to develop successful marketing programs for their target market? The PSSP model explains the different levels of motivation for needs. By understanding not only how the hierarchy works but also where their product or service fits, marketers can choose the best type of communication. For example, restaurant marketers must decide if they are fulfilling a basic physiological need – food to provide energy, like McDonalds – or fulfilling a higher level need – to belong and fit in with others, like a trendy downtown restaurant. A fast food restaurant may only need to remind consumers of physiological satisfaction, whereas the fine dining restaurant must instead paint the picture of social needs being met. Briefly explain how social and situational considerations influence customer buying decisions. Social and situational factors have a profound influence on buying decisions. Social factors, like family preference, reference group recommendations and cultural motivators can be stronger than personal attitudes and opinions. Often decisions are made to purchase items that the entire family can use, or children can often persuade their parents to choose something they recommend. Situational factors like purchase situation, shopping situation and temporal state are critical as well. They can be the main reason for a change in behaviour, and may be a result of the occasion, specific marketing communications, or a persuasive argument. Music, lighting, store layout and overall atmospherics have strong influences on consumers purchase decisions. Perceived risks are a key determinant of consumer buying decisions. Explain what is meant by perceived risks and identify tactics marketers could use to mitigate these risks. A perceived risk is how much risk the consumer believes is inherent in the decision. The higher the perceived risk, the more likely the consumer will spend more time searching for information. There are three main types of perceived risk: performance risk, financial risk and psychological risk. Perceived risk can be mitigated by justifying every aspect of the purchase perhaps by showing the benefits over a competitor, by showing many other satisfied customers, and by paying special attention to tailoring a package, product or service to meet the specific needs of a customer. If they feel the product or service will best meet their needs they will perceive less risk. As well, postpurchase follow up to ensure satisfaction will help reinforce the customer’s decision i.e. the decision made was the correct decision. Culture is one of the most important but least understood influences on consumer buying decisions. Explain how marketers can ensure that their marketing efforts are suited to their culturally diverse target market. What are the challenges involved in developing such efforts? Marketers must work hard to understand how culture differs among different groups of customers because it will affect which way they should market their products. The main challenge besides wide diversity is truly understanding the motivating factors for different cultures as it is not just the products that differ but the thought process behind these choices. Involving cultural experts in the planning stages is a great way to glean true insights into different cultural groups. It is important to truly understand the cultural implications because consumers prefer to do business with marketers who truly understand their culture and needs rather than those who have very superficial ways of acknowledging their community. A major challenge for many marketers is first recognising and understanding the different cultural needs of its customers. A second challenge is trying to appeal to different cultural groups with separate messages targeted to each group whilst still trying to maintain a consistent message about the company and its products and services. A third challenges is marketers’ willingness to adapt their product or service offering to different cultural segments. Marketing Applications Describe two products: one you just went and purchased without much thought and one that took some deliberation on your part. Why did you spend a different amount of time and effort deciding on your purchases of the two products? Impulse Buy: Chocolate Bar I recently grabbed a chocolate bar at the checkout counter of a grocery store without much thought. This was an impulse buy because it was conveniently placed near the cash register, and I was feeling a bit hungry at the moment. The decision-making process was very quick, mainly driven by the immediate desire for a snack. I didn't spend much time considering alternatives or evaluating the quality or price of the chocolate bar. It was more of a spontaneous purchase based on impulse and convenience. Deliberate Purchase: Smartphone On the other hand, when I decided to upgrade my smartphone, it took a lot more deliberation and effort. I spent considerable time researching different models, comparing features, reading reviews, and considering my budget. A smartphone is a significant investment, and I wanted to make sure I was making the right choice that would meet my needs and preferences. Factors such as camera quality, battery life, operating system, and brand reputation all played a role in my decision-making process. I also considered the long-term value and potential resale value of the device. Overall, the purchase of a smartphone required more time and effort because it involved a larger financial commitment and had a greater impact on my daily life and productivity compared to a simple chocolate bar. Instructor’s Notes: This question centres around the different buying decision processes that a consumer might use. By thinking about two different purchases, students must consider the dimensions along which these purchases differ, including cost, perceptions, risk, or motivation. Example answers: Buying a cup of coffee from Starbucks is very different from buying a car, for two major reasons: the price difference and the amount of risk. The coffee purchase has a relatively low price and, subsequently, low risk; if the quality is poor, the coffee can be discarded without much thought. In contrast, the car has a very high price associated with it, and if something goes wrong or it stops being appealing, the risk is high because a large expenditure remains to be paid off. Assume you are in the market to buy a new car. What kind of car would you consider? What type of need(s) would you be satisfying if you purchased that particular type of car? If I were in the market for a new car, I'd consider several factors before making a decision. Firstly, I'd assess my lifestyle and needs. For instance, if I have a large family or frequently transport bulky items, I might lean towards a spacious SUV or a minivan for their ample cargo space and seating capacity. This choice would satisfy my need for practicality and versatility, ensuring comfort and convenience for my family and any activities we engage in. On the other hand, if I prioritize fuel efficiency and eco-friendliness, I might opt for a hybrid or electric vehicle. By choosing such a car, I would satisfy my need for sustainability and environmental consciousness while potentially reducing long-term fuel costs. Alternatively, if I enjoy driving and crave performance, I might consider a sports car or a luxury sedan. These vehicles would fulfill my desire for excitement and style, offering a thrilling driving experience and advanced features that enhance comfort and convenience. Ultimately, the type of car I would consider depends on my personal preferences, lifestyle, and the specific needs I aim to satisfy, whether they're practical, environmental, or based on sheer enjoyment. Instructor’s Notes: The focus of these questions is the area of need recognition, particularly how students go through the process of realizing, acknowledging, and understanding their specific needs when it comes to the purchase of a car. Students might consider both functional and psychological needs, so their answers likely will combine these types. Example answers: A Scion would satisfy both functional and psychological needs: mobility for work and school (functional), fuel efficiency to keep gasoline purchases to a minimum (functional), sportiness (psychological), and the ability to customize the car to unique tastes and personality (psychological). Explain the factors that affect the amount of time and effort that a consumer might expend when choosing an optometrist for contact lenses. How would your answer change if the consumer were looking for contact lens cleaning solution? When a consumer is choosing an optometrist for contact lenses, several factors come into play that affect the amount of time and effort they might expend: Location and Accessibility: Proximity to the consumer's home or workplace can greatly influence their decision. A conveniently located optometrist may require less time and effort to visit. Reputation and Reviews: Consumers often research the reputation of optometrists through online reviews, recommendations from friends or family, or word-of-mouth. Positive reviews can lead to quicker decision-making, while negative feedback may necessitate more time to find a suitable optometrist. Specialization and Expertise: Consumers with specific eye conditions or requirements may spend more time searching for an optometrist with specialized expertise in contact lenses fitting or certain eye conditions. Cost and Insurance Coverage: Cost considerations, including insurance coverage, can impact the decision-making process. Consumers may spend additional time comparing prices and researching insurance coverage options. Appointment Availability and Scheduling: The availability of appointments and ease of scheduling can affect the time and effort spent. Consumers may prioritize optometrists with flexible scheduling options or shorter wait times for appointments. Personal Preferences and Comfort: Some consumers may prioritize factors such as the optometrist's bedside manner, the clinic's ambiance, or the availability of modern technology in the clinic, which can influence their decision-making process. If the consumer were looking for contact lens cleaning solution specifically, the factors influencing their decision might change: Brand Reputation and Effectiveness: Consumers may research the reputation and effectiveness of different contact lens cleaning solution brands. Positive reviews and recommendations from optometrists or other users can influence their decision. Cost and Convenience: Similar to choosing an optometrist, consumers may consider the cost and convenience of purchasing cleaning solution, including factors like bulk discounts, availability at local stores, or online ordering options. Compatibility with Contact Lenses: Consumers may spend time researching which cleaning solutions are compatible with their specific type of contact lenses, considering factors such as material compatibility and effectiveness in removing deposits or debris. Ease of Use and Comfort: Factors such as ease of use, comfort upon application, and compatibility with sensitive eyes can influence the decision-making process for contact lens cleaning solution. Special Requirements: Consumers with specific needs, such as allergies or sensitivities to certain ingredients, may spend additional time researching cleaning solutions that meet their requirements. Recommendations from Optometrists or Eye Care Professionals: Consumers may seek recommendations from their optometrists or eye care professionals regarding the most suitable cleaning solution for their particular eye health needs. In summary, while some factors may overlap between choosing an optometrist and selecting contact lens cleaning solution, the specific considerations will vary based on the consumer's needs and priorities in each scenario. Instructor’s Notes: Students must analyze the different information-gathering processes consumers use for related but quite different purchases. They should recognize that the length and degree of intensity of consumers’ information search often depend on the degree of perceived risk associated with a purchase. Example answers: In choosing an optometrist for contact lenses, consumers likely worry about his or her reputation, how long he or she has been practicing, other clients, the cost of the service, the location of the optometrist, the return policy, and whether the optometrist accepts the consumer’s insurance. The primary concern of the consumer therefore is to mitigate any perceived risk associated with the optometrist or contact lens prescription. For contact lens solution, however, consumers likely engage in less intensive, less time-consuming search for information, because most solutions are fairly similar, so the risk is lower. When evaluating different alternatives for a Saturday night outing at a fine restaurant, explain how a consumer would use decision heuristics to narrow down the choice of restaurants. Give examples such as price, brand and presentation in your answer When evaluating different alternatives for a Saturday night outing at a fine restaurant, consumers might employ various decision heuristics to narrow down their choices: Price heuristic: Consumers often use price as a quick indicator of quality or value. They might eliminate restaurants that are too expensive or too cheap based on their budget or perceived value. For example, if a consumer has a moderate budget, they might eliminate high-end restaurants that are known for their exorbitant prices. Brand heuristic: Consumers might rely on brand reputation or familiarity to guide their decision-making. They may choose a restaurant associated with a well-known chef or a chain with a good reputation for consistency. For instance, a consumer might opt for a restaurant known for its Michelin star rating or a famous celebrity chef. Presentation heuristic: Consumers often judge restaurants based on their visual appeal or presentation. This includes factors such as ambiance, decor, and plating style. A restaurant with a cozy atmosphere, elegant decor, and beautifully presented dishes might be preferred over one with a more mundane ambiance and presentation. Review heuristic: Consumers frequently seek out reviews and recommendations from sources like online review platforms, social media, or word-of-mouth. They might narrow down their choices based on positive or negative reviews, trusting the experiences of others to guide their decision. For example, a restaurant with glowing reviews praising its exceptional service and delicious cuisine might be prioritized over one with mixed or negative feedback. Location heuristic: Convenience and proximity can also influence decision-making. Consumers might prefer restaurants that are closer to their location or easily accessible by public transportation. They may eliminate options that require a long commute or are located in areas perceived as unsafe or inconvenient. By applying these decision heuristics, consumers can streamline the process of selecting a fine restaurant for their Saturday night outing, ultimately choosing the option that aligns best with their preferences, budget, and expectations. Instructor’s Notes: Alternative evaluation often occurs as the consumer engages in information search and decision heuristics – mental short cuts –are often used to make their decisions. Students must understand how decision heuristics function during an alternative evaluation process. Example answers: When considering fine restaurant alternatives, the decision heuristic around price might be, for example, let’s go for the most expensive restaurant since we will likely get the best food and service or let’s go to a restaurant that is not too expensive but not too cheap either so that we can get good food and quality at reasonable prices. In terms of brands, let’s choose a restaurant that is well-known for the quality of its food and service. In terms of presentation, let’s go to a restaurant where the atmospherics or ambience is really sophisticated, warm, and inviting and the staff and waiters are well-trained and courteous. What can retailers do to make sure they have satisfied customers after the sale is complete? Retailers can ensure satisfied customers after the sale through various strategies: 1. Post-Purchase Communication: Following up with customers after the sale to ensure they are satisfied and address any concerns or issues they may have. 2. Quality Customer Service: Providing excellent customer service before, during, and after the sale, including easy accessibility through multiple channels such as phone, email, chat, and social media. 3. Clear Return and Exchange Policies: Having transparent and hassle-free return and exchange policies can give customers peace of mind and encourage repeat purchases. 4. Personalization: Tailoring future communications and offers based on the customer's preferences and purchase history can enhance their shopping experience and loyalty. 5. Soliciting Feedback: Actively seeking feedback from customers about their experience with the product and the purchasing process can help identify areas for improvement and demonstrate a commitment to customer satisfaction. 6. Loyalty Programs: Offering rewards or incentives for repeat purchases can encourage customers to return and build long-term relationships. 7. Product Education and Support: Providing resources, tutorials, or customer support for product installation, maintenance, or troubleshooting can enhance the overall customer experience and satisfaction. By implementing these strategies, retailers can foster a positive post-sale experience and cultivate loyal customers who are more likely to recommend the brand to others. Instructor’s Notes: Customer satisfaction is not limited to the experience leading up to and including the actual purchase event; it often extends beyond the purchase to user experiences after purchase. Companies that want to ensure consumers have positive experiences with their products offer after-sales service to deal with any potential issues, so that the consumer thinks positively of the company and the product. In this way, companies can build their overall brand equity by mitigating the purchase risk for consumers. Example answers: Retailers can do a variety of things to ensure customers are satisfied after the sale. They can start by setting realistic expectations of the product before the customer even purchases it, demonstrate how to use the product properly, provide money-back guarantees and warranties, encourage customer feedback, and periodically contact customers to thank them for their continued support. Tazo blends exotic green teas, spearmint, and rare herbs into a tea called Zen. Using the PSSP hierarchy of needs, explain which need(s) are being fulfilled by this tea. The PSSP hierarchy of needs, based on Abraham Maslow's hierarchy of needs, encompasses four levels: Physical, Safety, Social, and Personal. Let's analyze how Tazo Zen tea fulfills each of these needs: 1. Physical Needs: Tazo Zen tea provides hydration, which is essential for maintaining bodily functions. Additionally, the blend of green teas contains antioxidants and nutrients that contribute to physical well-being. Spearmint and herbs may also offer health benefits such as aiding digestion or soothing sore throats, further fulfilling physical needs. 2. Safety Needs: While tea itself might not directly address safety needs, the act of consuming a warm beverage like Tazo Zen tea can create a sense of comfort and security, especially during times of stress or discomfort. The ritual of brewing and sipping tea can provide a feeling of routine and stability, contributing to a sense of safety. 3. Social Needs: Tea has long been associated with social gatherings, providing a platform for conversation and connection. Sharing a cup of Tazo Zen tea with friends or loved ones can facilitate social interaction and strengthen relationships, fulfilling social needs for belongingness and companionship. 4. Personal Needs: The calming and soothing properties of Tazo Zen tea can contribute to personal well-being by promoting relaxation and mindfulness. The blend of green teas, spearmint, and rare herbs aims to create a harmonious experience that aligns with personal preferences and tastes, fulfilling the need for self-expression and personal fulfillment. In summary, Tazo Zen tea addresses various needs across the PSSP hierarchy, including physical health, emotional comfort, social interaction, and personal well-being, making it a versatile beverage that can contribute to overall satisfaction and fulfillment. Instructor’s Notes: A motive is a need or want that is strong enough to cause a person to seek satisfaction. Back in the 1970s, social researcher Abraham Maslow developed the PSSP hierarchy of needs, which postulates that people are motivated to satisfy higher-level human needs when their lower-level needs are addressed. That is, as people’s more basic needs (physiological and safety) are fulfilled, they turn to satisfying their more advanced needs (social and personal). Example answers: Based on the PSSP hierarchy, the Zen tea helps satisfy consumers’ basic physiological need for one of the necessities of life: liquid to drink. It also helps satisfy consumers’ personal needs, because they can meet their desire to live a healthy lifestyle and experience a sense of refinement while doing it. Tea does not, however fulfill a safety need. 7. Identify and describe the three social factors that influence the consumer decision process. Provide an example of how each of these might influence the purchase of the necessary products and services for a family vacation. Three social factors that influence the consumer decision process and how they might affect the purchase of necessary products and services for a family vacation: Reference Groups: Reference groups are the people or groups that individuals compare themselves to or seek approval from. They can include family, friends, colleagues, or even celebrities. Their opinions and behaviors can significantly influence consumer decisions. Example: If a family's close friends have recently taken a vacation to a tropical destination and shared their positive experiences, this might influence the family's decision to choose a similar vacation spot. They might feel pressure to conform to the choices made by their reference group to maintain social status or to seek validation from their peers. Social Class: Social class refers to a person's position within society, often determined by factors like income, education, occupation, and lifestyle. Different social classes have distinct preferences, values, and spending habits that influence their consumption patterns. Example: A family belonging to the upper class might prioritize luxury accommodations, fine dining experiences, and exclusive activities for their vacation. On the other hand, a family from a lower socioeconomic background might opt for budget-friendly accommodations, seek out free or low-cost attractions, and focus on saving money during their trip. Culture: Culture encompasses the values, beliefs, norms, and customs shared by a society. It influences individuals' perceptions, preferences, and behaviors, including their purchasing decisions. Example: In some cultures, family vacations are seen as an opportunity to bond and create lasting memories together, so families might prioritize destinations and activities that promote family togetherness. In contrast, in cultures where individual achievement is highly valued, vacation choices might revolve around personal interests and experiences rather than family dynamics. In summary, reference groups, social class, and culture all play significant roles in shaping consumer decisions, including those related to family vacations. Understanding how these social factors influence consumer behavior can help businesses tailor their products and services to meet the needs and preferences of different consumer segments. Instructor’s Notes: This exercise reminds students that the consumer decision process is not influenced just by psychological factors but also by the external, social environment that consumers inhabit. Example answers: The three social factors that influence the consumer decision process are family, reference groups, and social class. A family generally makes decisions about vacations, which affect all members of the family, together, so firms must appeal to all family members to some extent (e.g., emphasize child-friendly services). In a vacation purchase context, a consumer’s reference group likely offers information about possible vacation locales, rewards decisions that meet their approval, and reaffirms the consumer’s self-image (e.g., as an adventurer who travels to exotic locales). Social class affects a vacation decision because consumers often trade-off the cost of a vacation with the type of amenities it might offer (e.g., Monte Carlo versus Las Vegas). 8. Nike has developed a new shoe for long-distance runners designed to minimize wear and tear on the joints and tendons. Develop a theme for an advertising strategy that covers all three components of attitude positively. Theme: "Run Lighter, Run Longer, Run Stronger" This theme encapsulates the three key components of the new Nike shoe for long-distance runners: 1. Run Lighter: Highlight the shoe's innovative design that reduces weight without compromising on support or durability. Emphasize how the lighter weight allows runners to feel more agile and free, enhancing their overall running experience. 2. Run Longer: Focus on the shoe's ability to minimize wear and tear on joints and tendons, enabling runners to push their limits and go the distance without experiencing as much fatigue or discomfort. Showcase testimonials from athletes who have experienced longer, more fulfilling runs thanks to the shoe's advanced technology. 3. Run Stronger: Showcase the shoe's support features that promote proper alignment and reduce the risk of injury, allowing runners to maintain their strength and performance over extended periods. Highlight how the shoe empowers runners to conquer their goals with confidence, knowing that they have the support they need to perform at their best. By weaving these three components together, the advertising strategy communicates a holistic message that resonates with long-distance runners who prioritize performance, durability, and injury prevention. Instructor’s Notes: The cognitive aspect reflects what people believe to be true, the affective component refers to what they feel about the issue at hand, and the behavioural component consists of the action(s) people undertake. By considering all three components to create an advertising campaign, students should perceive how all three come together in a single theme meant to influence the attitudes of potential consumers. Example answers: For a new long-distance running shoe designed to minimize wear and tear on the joints and tendons, the cognitive aspect could be that joint and tendon damage is detrimental to a person’s long-term health. The affective component could emphasize an emotional aversion to doing what is unhealthy, especially for long-distance runners who pursue the sport in part for its health benefits. The behavioural component could encourage them to buy the new shoe to avoid the negative effects—both physiological and psychological—that might occur if the consumer does not buy the shoe. The theme then could be something along the lines of “Better Health for the Long Haul.” What can a marketer do to positively influence a situation in which a consumer is ready to buy but has not yet done so? To positively influence a situation where a consumer is ready to buy but has not yet done so, a marketer can employ several strategies: 1. Provide Incentives: Offer discounts, coupons, or special promotions to incentivize immediate purchase. Limited-time offers or exclusive deals can create a sense of urgency. 2. Address Concerns: Identify and address any concerns or objections the consumer may have. This could involve providing additional information, testimonials, or guarantees to alleviate doubts. 3. Create a Sense of Urgency: Use persuasive messaging to convey the urgency of making a purchase decision. Highlight limited stock, impending price increases, or time-limited offers to encourage action. 4. Improve Convenience: Streamline the purchasing process to make it as easy and convenient as possible for the consumer to buy. This could involve simplifying checkout procedures, offering multiple payment options, or providing fast shipping. 5. Leverage Social Proof: Showcase positive reviews, ratings, and testimonials from satisfied customers to build trust and credibility. Social proof can reassure hesitant buyers and increase their confidence in the product or service. 6. Personalize Recommendations: Use data-driven insights to personalize product recommendations based on the consumer's preferences, past purchases, or browsing history. Tailored recommendations can help guide the consumer towards making a purchase decision. 7. Offer Value-Added Services: Provide additional value beyond the core product or service offering. This could include free installation, extended warranties, or complimentary services that enhance the overall customer experience. 8. Follow Up: Reach out to the consumer through targeted follow-up communications, such as personalized emails or retargeting ads. Remind them of their interest in the product or service and provide any additional information or assistance they may need to complete the purchase. By implementing these strategies effectively, marketers can encourage consumers who are ready to buy but hesitant to take the final step, ultimately driving conversion and increasing sales. Instructor’s Notes: Student must think of ways marketers can affect consumers’ buying decisions during the shopping experience. Thus, the question illustrates that the buying decision is not just a function of product attributes. Example answers: A marketer can enhance a consumer’s willingness to buy by creating a positive store atmosphere, ensuring salespeople act in a friendly and helpful manner, organizing the store to avoid customer crowding, providing in-store demonstrations of the product, running promotions of the product to make consumers believe they are getting a good deal, and packaging the product to attract the consumer’s attention and interest. 10. You were recently hired by a retail and catalogue company that promotes itself as a Canadian firm selling only Canadian-made goods. The products featured in advertising and in the catalogues tell the stories of the firms that produced the goods in Canada. The sales response to the firm’s Made in Canada position has been incredible, and growth has been impressive. One day while speaking to a vendor, you find out a shipment of merchandise will be delayed because the product is late coming from overseas. A few days later, you hear a similar story. As it turns out, the firm just barely earns its Made in Canada labels. Although technically the products meet the standard to be classified as Canadian-made, you worry that the firm is not being truthful to its customers. You decide to write a letter to the vice president of marketing to detail your concerns. What information do you include in the letter? Dear [Vice President of Marketing], I hope this message finds you well. I am writing to address some concerns I have regarding our company's commitment to promoting Canadian-made goods and the transparency of our marketing practices. Recently, I have become aware of a couple of instances where shipments of merchandise have been delayed due to products being sourced from overseas suppliers. While I understand that occasional delays are inevitable in the retail industry, these instances have raised questions in my mind about the accuracy of our "Made in Canada" positioning. Upon further investigation, I have discovered that some of the products featured in our advertising and catalogues barely meet the criteria to be classified as Canadian-made. While technically meeting the standard, these products rely heavily on components or materials sourced from outside of Canada, undermining the authenticity of our marketing message. As a company that prides itself on promoting Canadian-made goods and telling the stories of the firms behind them, I believe it is crucial that we maintain the highest level of transparency and integrity in our practices. Our customers trust us to deliver on our promise of supporting local Canadian businesses and communities, and any deviation from this commitment could erode that trust and damage our reputation. I urge us to reconsider our approach to sourcing and labeling products to ensure that they truly align with our Made in Canada positioning. This may involve reevaluating our supplier relationships, being more selective in the products we choose to feature, or clearly disclosing the origin of components in our marketing materials. Ultimately, I believe that by upholding our values and being transparent with our customers, we can continue to build on the incredible growth and success we have experienced as a company. Thank you for considering my concerns, and I look forward to discussing this matter further. Sincerely, [Your Name] Instructor’s Notes: This ethical scenario forces students to trade off protection of consumers with ethical standards of privacy and confidentiality. If they use the ethical decision-making framework from Chapter Three, students can evaluate their ethical position and thereby determine the appropriate information to include in the letter. Example answers: According to the ethical decision-making framework: “Have you thought broadly of any ethical issues associated with the decision to be made?” I have thought broadly about the ethical issues. In this case, I have concerns about keeping the customers in the dark about where the products are actually made and worry about what consumers might think if they find out the company’s “Made in Canada” advertising is not entirely truthful. “Have you involved as many possible people who might have a right to offer input into or have actual involvement in making this decision and action plan?” At this point, the customers are not involved at all, and they are likely the most important stakeholder to keep in mind. It might be beneficial to commission a study of consumers’ attitudes toward mixed product sourcing. “Does this decision respect the rights and dignity of the stakeholders?” No, because customers likely will feel their trust has been violated. The company has not been entirely upfront about the standard it uses to determine what is “Made in Canada.” “Does this decision produce the most good and the least harm to the relevant stakeholders?” Consumers are not really buying what they think they are, so even though the product might be perfectly fine, the firm is misleading them. One of the reasons consumers might choose this product over another is its Made in Canada label. So this practice helps the company but hurts customers buying the product on the basis of false claims. “Does this decision uphold relevant conventional moral rules?” It likely violates the community’s standard for what is appropriate regarding product advertising and sourcing. Most people likely would find the company’s practice dishonest. “Can you live with this decision alternative?” At this point, because the Made in Canada labelling and advertising misleads customers about products that are not completely made in the country, I cannot live with it and believe I must take action. The letter should include strong objections to the practice of misleading customers this way, concerns about how it might look if the information got out to the public, how the company’s sales and subsequent future might be affected by this disclosure, and how the situation could be remedied by actually engaging in Canadian product sourcing rather than continuing to use components from overseas. Net Savvy Visit the Harley-Davidson Web site (www.harley-davidson.com) and review the information provided about its Harley Owners Group (HOG). Describe the efforts the company makes to maintain customer loyalty through its programs. What are the benefits to HOG members? Discuss how these measures might be effective in creating value for members. Harley-Davidson's Harley Owners Group (HOG) is a prime example of how a company can foster customer loyalty through exclusive programs and benefits. Here's an overview of the efforts Harley-Davidson makes to maintain customer loyalty through its HOG program and the benefits it offers to members: Exclusive Events and Rallies: HOG organizes various exclusive events and rallies throughout the year, such as the annual HOG Rally, local chapter rides, and bike shows. These events provide members with opportunities to connect with fellow Harley enthusiasts, share experiences, and build a sense of community. Member Communication and Resources: The company provides HOG members with regular communication channels, including newsletters, magazines, and online forums. These platforms serve as avenues for sharing information about new products, riding tips, and upcoming events, keeping members engaged and informed. Discounts and Special Offers: HOG members enjoy exclusive discounts on Harley-Davidson merchandise, parts, accessories, and services. These discounts incentivize members to purchase Harley-Davidson products and services while also enhancing their overall ownership experience. Roadside Assistance: Harley-Davidson offers roadside assistance to HOG members, providing peace of mind and assistance in case of emergencies while on the road. This service enhances the safety and convenience of owning a Harley-Davidson motorcycle, further strengthening customer loyalty. Travel and Touring Opportunities: HOG organizes guided tours and travel experiences for its members, allowing them to explore new destinations and enjoy memorable riding experiences. These tours often include exclusive perks such as preferred accommodation, guided routes, and special access to attractions. Customization and Personalization: HOG members have access to exclusive customization options and personalized services, allowing them to tailor their Harley-Davidson motorcycles to their preferences. This customization enhances the emotional connection between owners and their bikes, fostering a deeper sense of loyalty to the brand. These efforts are effective in creating value for HOG members in several ways: Sense of Belonging: By providing opportunities for members to connect with like-minded individuals and participate in exclusive events, HOG fosters a sense of belonging and camaraderie within the Harley-Davidson community. Enhanced Ownership Experience: The discounts, roadside assistance, and personalized services offered to HOG members enhance the overall ownership experience of Harley-Davidson motorcycles, making ownership more rewarding and enjoyable. Brand Loyalty and Advocacy: By offering exclusive benefits and experiences to HOG members, Harley-Davidson cultivates strong brand loyalty and advocacy. Satisfied HOG members are more likely to promote the brand to others and remain loyal customers over the long term. In summary, Harley-Davidson's HOG program demonstrates how companies can effectively maintain customer loyalty by offering exclusive programs and benefits that enhance the ownership experience and foster a sense of community among customers. Instructor’s Notes: Why would a company like Harley-Davidson create the HOG group in the first place? Students should recognize that marketing tries to create value to address consumers’ needs and wants, and HOG do so by extending the customer experience beyond the purchase of the base product, a motorcycle. Example answers: The Harley-Davidson Web site shows how programs like HOG help the company create a positive brand and customer experience. The focus is on making Harley owners feel like part of a community, with all the benefits associated with that community. Membership in HOG offers monthly newsletters to keep riders up to date on events within the company and in the motorcycle riding community, programs to allow people to rent motorcycles in a variety of vacation locations, special discounts, logo merchandise, and social events geared to motorcycle enthusiasts. Such measures make consumers feel like part of something bigger than themselves, allow them to live a certain lifestyle through their group affiliation, and save them money. Customers use a variety of methods to provide feedback to companies about their experiences. Planetfeedback.com was developed as one such venue. Visit its website (www.planetfeedback.com) and identify the types of feedback that customers can provide. Look over the feedback about Ford, and summarize some of the most recent comments. What is the ratio of positive to negative comments about Ford during the last year or so? Describe the effect these comments might have on customer perceptions of Ford. I can guide you on how to find the information you're looking for. You can visit the website yourself and explore the types of feedback customers can provide. Once you've gathered the information, you can summarize some of the most recent comments about Ford. To find the ratio of positive to negative comments about Ford during the last year or so, you can tally the number of positive and negative comments separately. Then, divide the number of positive comments by the number of negative comments to get the ratio. As for the effect these comments might have on customer perceptions of Ford, it depends on the content and tone of the comments. Positive feedback can bolster customer perceptions, while negative feedback can potentially damage them. If there's a significant imbalance between positive and negative comments, it could sway perceptions accordingly. Instructor’s Notes: This exercise illustrates how customer satisfaction—or dissatisfaction—can be expressed in different ways and what effects such expressions might have on a major company like Ford Motor Co. Example answers: Consumers provide four types of feedback on planetfeedback.com: compliments, complaints, questions, and suggestions. The most recent comments include positive feedback about vehicle safety and customer service, but the negative feedback describes poor credit account management, suspect dealerships, and product defects. The ratio of negative to positive comments in the last year is approximately 30 to 4, or about 8 negative comments for every positive comment. If potential consumers see that there are more criticisms of Ford than praise, they might consider purchasing a vehicle from another company. Chapter Case: Weight Watchers vs. Jenny Craig Questions: 1. Trace how you might go through the steps in the consumer decision process if you were thinking of going on a diet and using either of these diet programs. The consumer decision process when considering Weight Watchers vs. Jenny Craig: Recognition of Need or Problem: This stage might be triggered by various factors such as feeling overweight, experiencing health issues related to weight, or simply desiring to improve one's appearance. Information Search: Once the need is recognized, the individual would start gathering information about different diet programs available. They might look online, read reviews, ask friends or family for recommendations, or even consult healthcare professionals. Evaluation of Alternatives: In this stage, the person would compare different diet programs based on factors like effectiveness, cost, convenience, meal options, support system, and success stories. For Weight Watchers vs. Jenny Craig, they might consider aspects like the flexibility of the program, the type of food allowed, whether they prefer structured meal plans or more freedom in food choices, and the level of support provided. Purchase Decision: After evaluating the alternatives, the individual would make a decision on which diet program to join. Factors influencing this decision might include personal preferences, budget constraints, and perceived effectiveness. Post-Purchase Evaluation: Once the individual starts the chosen diet program, they will assess their satisfaction and progress. They might consider factors such as whether they are losing weight, how easy it is to follow the program, whether they enjoy the food options, and whether they feel supported in their journey. This evaluation could influence their future decisions regarding continuing or switching the program. In the case of Weight Watchers vs. Jenny Craig, the decision might ultimately come down to personal preferences regarding the program's approach, the level of support desired, the types of food offered, and the individual's lifestyle and budget constraints. Instructor’s Notes Need Recognition:"I think I need to lose some weight." Information Search: "I need to find out what kind of options are out there." Alternative Evaluation: "Should I go with Weight Watchers or. Jenny Craig?" Purchase: "I will join Weight Watchers." Post-Purchase: "I was able to lose 20 pounds with Jenny Craig." 2. How have Weight Watchers and Jenny Craig created value? Weight Watchers and Jenny Craig have created value by offering comprehensive weight loss and wellness programs that combine various elements such as personalized coaching, nutrition education, behavior modification techniques, and support networks. Here's how each of them creates value: 1. Personalized Approach: Both Weight Watchers and Jenny Craig offer personalized weight loss plans tailored to individual needs and preferences. This customization enhances the effectiveness of the programs as it addresses specific dietary requirements, lifestyle factors, and weight loss goals of each participant. 2. Nutritional Guidance: Both programs provide extensive nutritional guidance, teaching participants how to make healthier food choices, control portion sizes, and develop sustainable eating habits. This education empowers individuals to make informed decisions about their diet beyond the duration of the program. 3. Behavioral Support: Weight Watchers and Jenny Craig offer behavioral support through coaching, group meetings, or online communities. These platforms provide motivation, accountability, and encouragement, helping individuals overcome challenges and stay committed to their weight loss journey. 4. Meal Plans and Products: Jenny Craig offers pre-packaged meals and snacks as part of its program, simplifying meal planning and preparation for participants. Weight Watchers also provides meal plans and recipes tailored to its points-based system, making it easier for individuals to navigate their food choices while still enjoying a variety of foods. 5. Long-term Success: Both Weight Watchers and Jenny Craig emphasize long-term lifestyle changes rather than quick fixes. By equipping individuals with the knowledge, skills, and support necessary for sustainable weight loss, they aim to help participants not only lose weight but also maintain their results over time. 6. Health Benefits: The value created by these programs extends beyond weight loss to improved overall health and well-being. By promoting healthier eating habits, increased physical activity, and better self-care practices, Weight Watchers and Jenny Craig contribute to reducing the risk of obesity-related health conditions such as diabetes, heart disease, and hypertension. In summary, Weight Watchers and Jenny Craig create value by offering comprehensive, personalized, and sustainable weight loss solutions that address the diverse needs and preferences of individuals seeking to improve their health and well-being. Through a combination of nutritional guidance, behavioral support, and long-term focus, these programs empower participants to achieve their weight loss goals and maintain a healthier lifestyle. Instructor’s Notes Weight Watchers Encourages members to track their daily information. Dieters record in a paper or electronically based journal. All foods are assigned point values and members have a daily points allotment. Weekly group sessions and attend meetings. Prepared or endorsed dinners, snacks and desserts at most grocery stores. Other Weight Watcher products, such as food scales, cookbooks, and water bottles, Are sold online and at meetings. Jenny Craig A unique and comprehensive plan for food, body, and mind. Prepared and packaged by Jenny Craig. Controlled portions that accommodate busy schedules. Members meet weekly on a one-on-one basis with a personal counselor. Customized programs for those who prefer to lose weight on their own. 3. Identify the determinant attributes that set the Weight Watchers’ and Jenny Craig’s programs apart from each other. Use those attributes to develop a compensatory purchasing model like the one found in Exhibit 5.2. Instructor’s Notes
Daily Tracking Group Sessions Prepared Meals Price Overall Score
Importance Weight 0.10 0.30 0.40 0.20 1.00
Weight Watchers 10 9 9 7 8.7
Jenny Craig 8 10 10 8 9.4
To identify determinant attributes that set Weight Watchers' and Jenny Craig's programs apart, we can consider factors such as cost, flexibility, support mechanisms, and effectiveness in achieving weight loss goals. Let's break down these attributes and develop a compensatory purchasing model: Cost: Weight Watchers: Typically involves a subscription fee for access to their program, including online tools, meetings, and resources. Jenny Craig: Usually entails higher upfront costs due to personalized meal plans and food delivery services. Flexibility: Weight Watchers: Known for its flexible approach, allowing participants to choose their own foods within a points-based system. Jenny Craig: Offers less flexibility as it provides pre-packaged meals, which may not suit everyone's taste preferences or dietary restrictions. Support Mechanisms: Weight Watchers: Provides group meetings, online forums, and coaching support to help individuals stay motivated and accountable. Jenny Craig: Offers one-on-one counseling sessions with consultants, which may appeal to those who prefer personalized guidance. Effectiveness: Weight Watchers: Emphasizes sustainable lifestyle changes, including healthy eating habits and increased physical activity, leading to gradual weight loss. Jenny Craig: Offers a structured program with portion-controlled meals, which may result in faster initial weight loss but could be challenging to maintain long-term. Now, let's develop a compensatory purchasing model using these attributes: are weights representing the importance of each attribute relative to others. These weights should sum up to 1. Cost, Flexibility, Support Mechanisms, and Effectiveness are scores/ratings assigned to each program based on their performance in these attributes. Customers can evaluate each program based on these attributes and assign scores according to their preferences. The program with the highest utility score would be the most preferred option for that individual. Adjusting the weights allows individuals to prioritize certain attributes over others based on their personal preferences and needs. 4. How can Weight Watchers and Jenny Craig increase the probability of customer satisfaction? Weight Watchers and Jenny Craig can increase the probability of customer satisfaction by focusing on several key strategies: Personalized Support: Providing personalized support is essential. This can include one-on-one coaching sessions, personalized meal plans, and ongoing guidance tailored to each customer's needs and goals. By offering individualized attention, customers are more likely to feel supported and motivated, leading to greater satisfaction with the program. Variety and Flexibility: Offering a variety of meal options and flexibility in meal planning can enhance satisfaction. Customers have different tastes, dietary preferences, and lifestyles, so providing options that cater to these diverse needs can improve overall satisfaction. This can involve offering diverse recipes, accommodating dietary restrictions, and allowing customers to customize their meal plans. Education and Resources: Educating customers about nutrition, healthy eating habits, and lifestyle changes is crucial. Providing resources such as educational materials, online tools, and interactive platforms can empower customers to make informed choices and adopt healthier behaviors. When customers feel knowledgeable and equipped to make positive changes, they are more likely to be satisfied with the program. Community Support: Building a supportive community can foster a sense of belonging and accountability among customers. This can be achieved through online forums, social media groups, and in-person meetings where customers can connect, share experiences, and support each other on their weight loss journey. Feeling part of a community can increase motivation and satisfaction with the program. Regular Monitoring and Feedback: Regularly monitoring progress and providing feedback can help customers stay on track and make necessary adjustments to their plan. This can involve tracking weight loss, monitoring food intake, and assessing progress towards goals. Providing constructive feedback and celebrating milestones along the way can boost morale and satisfaction. Continuous Improvement: Continuously seeking feedback from customers and implementing improvements based on their suggestions can demonstrate a commitment to customer satisfaction. This can involve conducting surveys, gathering testimonials, and actively listening to customer concerns. By prioritizing customer feedback and making continuous improvements, Weight Watchers and Jenny Craig can enhance overall satisfaction with their programs. Instructor’s Notes Both companies must attain what is most important to the customer and then find ways to deliver the value desired. Each customer may desire something different. 5. Which factors examined in the chapter do you think would have the most impact on consumers’ propensity to go on a diet and choose either of these diet programs? In examining factors that influence consumers' propensity to go on a diet and choose specific diet programs, several key factors come into play: 1. Health Concerns: Consumer awareness and concern about health issues such as obesity, heart disease, or diabetes can significantly impact their decision to go on a diet. If individuals perceive a high risk or have experienced health problems related to their weight or diet, they may be more motivated to seek out a diet program. 2. Perceived Effectiveness: Consumers are likely to choose a diet program that they believe will be effective in helping them achieve their weight loss goals. Factors such as success stories, testimonials, and scientific evidence supporting the efficacy of a diet program can influence consumers' perceptions of its effectiveness. 3. Cost and Accessibility: The cost of a diet program and its accessibility play crucial roles in consumers' decision-making processes. Consumers may be more inclined to choose a diet program that is affordable and convenient for them to access, whether it's through online resources, community centers, or commercial weight loss programs. 4. Social and Cultural Influences: Social and cultural factors, including societal norms, peer pressure, and cultural beliefs about body image and weight, can influence consumers' attitudes towards dieting and their choice of diet program. For example, cultural preferences for certain types of foods or eating patterns may shape consumers' decisions about which diet program to follow. 5. Personal Preferences and Lifestyle: Individual preferences and lifestyle factors, such as dietary preferences (e.g., vegetarian, vegan, low-carb), food allergies or intolerances, and time constraints, can also impact consumers' choice of diet program. Consumers are more likely to adhere to a diet program that aligns with their personal preferences and fits into their lifestyle. 6. Support and Motivation: The availability of support and motivation, whether from healthcare professionals, online communities, friends, or family members, can influence consumers' adherence to a diet program. Programs that offer ongoing support, coaching, or accountability mechanisms may be more appealing to consumers seeking long-term success with their weight loss goals. Considering these factors, a successful diet program would likely address consumers' health concerns, provide evidence of effectiveness, offer affordable and accessible options, consider social and cultural influences, cater to individual preferences and lifestyles, and provide adequate support and motivation for long-term success. Instructor’s Notes Student answers will vary. Some may chose the psychological factors that affect the way people receive marketers’ messages. These factors (Motives, Attitudes, Perceptions, Learning, and Lifestyle) can all have an important impact of the why of choosing a weight loss program. Video Activities Video: Helping Consumers Decide: Yelp
Learning Objective: LO 2 & LO 3
Page Number in Text: 153
Description: Video shows how the Yelp website is used and can help consumers as they move through the various stages of the consumer buying process.
Key Words: Need recognition, Information search, alternative evaluation, postpurchase behaviour, product/service reviews, reference groups influence, family and friends
Activity: Ask students to view the video and then (1) identify the various strategies and tactics Yelp uses to help consumer through buying decision process, and (2) identify the factors that might influence customers’ decision to use Yelp’s service. A challenging but interesting and valuable exercise that could be assigned is for students to relate to Step 3 in the buying decision process, evaluation of alternatives. Students could be asked to develop evaluative criteria, determinant attributes, and develop a compensatory versus a noncompensatory choice model as illustrated in Exhibit 5.2 on page 158 for two or three restaurants. 1. Strategies and Tactics Yelp Uses to Help Consumers Through the Buying Decision Process: • Need Recognition: Yelp helps consumers recognize their need for a product or service by providing a platform where they can easily search for businesses and read reviews from other users. • Information Search: Yelp offers a comprehensive database of businesses along with detailed information such as location, contact details, hours of operation, menu/pricing, and user-generated reviews. • Alternative Evaluation: Yelp allows consumers to compare multiple businesses based on various factors including ratings, reviews, photos, and additional information provided by businesses. • Postpurchase Behavior: After making a purchase or visiting a business, consumers can leave reviews and ratings on Yelp, contributing to the platform's user-generated content and helping future consumers make informed decisions. 2. Factors Influencing Customers’ Decision to Use Yelp’s Service: • Product/Service Reviews: Positive reviews and high ratings from other users can influence customers to use Yelp's service. • Reference Groups Influence: If friends, family, or other social groups recommend or use Yelp, it can influence a customer's decision to use the platform. • Trust in the Platform: Customers are more likely to use Yelp if they trust the accuracy and reliability of the reviews and information provided. • Ease of Use: Yelp's user-friendly interface and convenient features make it attractive for customers seeking information about businesses. • Perceived Value: Customers perceive value in using Yelp if they believe it helps them make better purchasing decisions and saves them time and effort. 3. Relating to Step 3 in the Buying Decision Process - Evaluation of Alternatives: • Evaluative Criteria: Students could develop criteria such as location, price, ambiance, service quality, and menu variety. • Determinant Attributes: Attributes that could influence the decision might include proximity to the consumer's location, overall rating, number of reviews, and specific comments mentioned in reviews (e.g., cleanliness, friendliness of staff). • Compensatory vs. Noncompensatory Choice Model: Students could apply both models to evaluate two or three restaurants listed on Yelp. In a compensatory model, they would weigh each restaurant's attributes against the others, while in a noncompensatory model, they might use specific cutoffs (e.g., a minimum rating or maximum distance) to narrow down their choices without considering other attributes. This exercise encourages critical thinking and application of concepts learned in the text, helping students understand how theoretical concepts apply to real-world situations like using Yelp for decision-making. Solution Manual for Marketing Dhruv Grewal, Michael Levy, Shirley Lichti, Ajax Persaud 9780071320382, 9780070984929
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