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Chapter 05 - Communication and Consumer Behavior CHAPTER 05 COMMUNCATION AND CONSUMER BEHAVIOR OBJECTIVES To explain advertising communication and how it is used to persuade consumers to behave in a certain way. The successful advertising practitioner must understand the unique role advertising plays in the communication process and the way consumers behave in response to advertising communications. Ideally, this understanding results in the creation of effective advertising. (p. 122) After studying this chapter, your students will be able to: Slides 5–2, 5–3 1. Explain how advertising differs from the basic communication process. 2. Outline the consumer perception process and explain why advertising people say “perception is everything.” 3. Describe the fundamental motives behind consumer purchases. 4. Discuss the various influences on consumer behavior. 5. Explain how advertisers deal with cognitive dissonance. 6. Describe how a consumer’s level of involvement with a product influences the decision-making process and the advertising approach TEACHING TIPS AND STRATEGIES Using the opening vignette in the classroom The opening vignette offers focuses on an Internet failure, the Web site. The vignette provides the opportunity for you to discuss the difference between effective advertising and entertaining advertising. Although P is now history, there are many online sites that serve pet owners. Consider visiting several of these to start a discussion of how they are, or are not, offering value to individuals who would like to buy pet products online. A site for pet medicine products: A site for similar products that takes a very different approach: A site that shows individuals how to use a product that is generally not marketed to pet owners how it can help them control cat odor: http://66.155.122.114/default.aspx?ITEMID=3 A site for pet supplies that focuses on low prices: Other tips and strategies This chapter delves into consumer behavior and how advertisers use it to influence purchasing habits. Students can get a first-hand feel for the importance of culture by showing them examples of international ads and asking them how the ads are functioning to sell a brand. It can be difficult to figure out which motives are being addressed if the ad is developed based on culture-specific understanding. For reference groups and opinion leaders I review Sprite’s recent advertising efforts. For a brand that claims, “It’s all about your thirst,” Sprite has been happy to spend money on Grant Hill, Kobe Bryant, and now LeBron James for its advertising. If you are familiar with David Brook’s entertaining and insightful book, Bobo’s in Paradise, it provides some nice insights into social class in America. Brook’s primary contention is that traditional ideas of bourgeois and bohemian lifestyles have melded in the 1990s, leaving the new “bobo.” Bobos want money and a life dedicated to self-expression, leading to some interesting consumption patterns. Bobos believe it is fine to spend a lot of money on something, so long as it is practical. Starbucks attracts bobos by the thousands, since they are happy to spend $3 on a cup of coffee (need some caffeine to start the day). Spending money on an exorbitant living room is out (too ostentatious) but a family spending big bucks on a huge, stainless steel kitchen range is fine, even if it is never used. Similarly, the bobo avoids the snobbish implications of a Rolls Royce (too impractical) but may drop $100,000 on a Hummer (you never know when you might need an all-terrain, combat-ready vehicle!). In discussing subcultures I like to present some facts on teens, a group everyone recognizes as a global sub-culture. Students are surprised to find that MTV has better global penetration than CNN, and they enjoy hearing how marketers are endlessly mystified by the elusive nature of teen preferences. One of the questions that Maslow’s hierarchy of needs does not answer is “what makes someone buy something?” I ask the class this very question. The answers vary wildly, no differently from the responses you would have gotten if you had asked students, “Why are you getting a degree?” Answers would range from “My parents wanted me to” to “I want to make more money” to “My friends are here.” The problem that advertisers face becomes evident: they have to figure out what the majority of people want and then sell them on that benefit. There is an old maxim in sales: “Features tell and benefits sell.” If you look at effective advertising, you will usually see this. For instance, if Mercedes is advertising heated seats, they are more likely to push the idea that the seats are always warm (the feature). Yet, the benefit is what sells the seats: when it is cold and you walk out to your car, your seats won’t be cold like the rest of your car. Do you see the benefits? I recommend going over the different feature and benefit statements for the ads in this book with students. This will help students understand that all advertising is trying to create a position in the mind, using feature and benefit statements. One advertising campaign I like to share with students is Quaker State’s Slick 50 campaign. Before Slick 50, consumers didn’t believe that most car engine damage occurs in the first three seconds after ignition. Yet Slick 50 made this claim and positioned itself as the lubricant that could solve the problem. Feature: This product will protect your engine. Benefit: This means that your engine should last longer. Without the benefit statement, the advertising isn’t as effective. As a result of the advertising, sales took off. After all, even though it cost almost $20 a bottle, wasn’t that cheaper than a new engine? However, in 1996, the FTC issued a complaint against Quaker State because the claim that its product was better than regular engine oil was unsubstantiated. The company was required to pull the ads and to pay consumers at least $10 million. Dial used a theme in its antibacterial soap advertising campaign, suggesting that most Americans didn’t know that there were bacteria everywhere. Dial created a campaign telling consumers that germs are everywhere, and that you can get rid of them by using Dial antibacterial soap. A new category of soap was created by a simple advertising campaign with bacteria in mind. Now there are many different products with antibacterial protection. This is good advertising and marketing working together, but according to the FTC, companies advertising “antibacterial” or “antimicrobial” products must avoid implying that their products promote human health or stop the spread of disease. A new product or service might be phenomenal, but the challenge is to get consumers to understand the new product/service and to help avoid product or service failure. That is where advertising comes in. When I have discussions with students regarding this, they tend to be very surprised. Many times students believe that advertising is about coming up with the jingle or the phrase that helps the advertised product stand apart from others. That is a function of advertising, yet only a very small one. Web Resources for Enhancing your Lectures: Science Daily Consumer Behavior Encyclopedia of Psychology: Consumers http://www.psychology.org/links/Environment_Behavior_Relationships/Consumer/ Harvard Business School Marketing and Consumer Behavior http://hbswk.hbs.edu/topics/consumerbehavior.html Marcommwise Perception Demos http://psych.hanover.edu/KRANTZ/sen_tut.html LECTURE OUTLINE I. Vignette: The P story (pp. 123-124) Slide 5-4 P sockpuppet (p. 123) P was an award winning site designed to entice pet owners to buy food and supplies over the Internet. A nameless sock puppet became the first “breakout” character on the Web after TWBA\C\D created a $20 million campaign in 1999. Ultimately, however, sales at the site failed to materialize as predicted: $60 million in advertising generated only $13 million in revenue. The failure of P may have been due to a number of factors, including: A. The puppet’s entertainment value failed to drive traffic to the site. B. Competing sites built traffic with much smaller budgets. C. Heavy discounting in the face of lower than expected sales hurt profit margins. D. The site and its agency failed to understand the minds of pet owners. To succeed in business, a company’s top managers must understand the basic principles of marketing. Specifically, they must understand who their customers are, and they must listen and respond to their customers’ desires. In the end, even superior advertising can’t save a product that isn’t marketed correctly. II. Communication—What Makes Advertising Unique (p. 124) Exhibit 5–1 The human communication process (p. 125) (exhibit is on Slide 5–5) A. The Human Communication Process 1. Oral communication consists of: a. Source—the party who formulates an idea b. Encoding—translates the idea into a message c. Message—the idea to be sent d. Channel—a medium or set of media carrying message e. Receiver—the party who receives the message f. Decoding—interpret the message g. Feedback—a message that acknowledges or responds to the original h. Noise—the distracting cacophony of many other messages being sent at the same time by other sources. Evian ad (p. 125) B. Applying the Communication Process to Advertising (p. 125) 1. The source The source of a marketing message is the organization that has information it wishes to share with others. Spokespersons must appear to be knowledgeable, trustworthy, and relevant to the audience. 2. The message The message must be encoded in such as way that the receiver understands what is being communicated. This typically involves using words or symbols that are familiar to the audience. Semiotics is the study of how people use symbols, words, gestures and signs to convey meaning. 3. The channel The channel is the means by which the message travels from source to receiver. Channels can be personal (personal selling) or nonpersonal (mass communications). Honda CR-V ad (p. 126) 4. The Receiver The receiver is usually the consumer who encounters the advertising message. Advertisers must be concerned with how consumers will decode (interpret) a message. However interpretation is only partially determined by words and symbols in the ad. Other influences include the medium used to transmit the message and characteristics of the receiver. Another complication is that hundreds of other messages compete with the advertisement, which is referred to as noise. 5. Feedback and Interactivity (p. 126) Feedback is so important because it verifies that the message was received and understood. Feedback employs the same sender-message-receiver pattern, except that it is directed from the receiver back to the original source. Feedback can take many forms (e.g., redeemed coupons, telephone inquiries, visits to the store, requests for more information, increased sales, responses to a survey or an e-mail reply). Low responses to an ad indicate a break in the communication process. Feedback helps to determine where a break in communication is occurring. Customers can provide feedback, with interactive media, in the same channels as the sponsors. This creates more of a give-and-take relationship, which benefits both the customer and the sponsor. a Concept Check 5–1 Equate the elements of advertising to the steps in the human communication process. (p. 127) The source of a marketing message is the sponsoring organization. The message is the advertisement. The channel is the medium used to convey the ad. The receiver is usually the consumer who encounters the ad message. Feedback can be represented by redeemed coupons, store visits, sales, survey responses, email replies, etc. III. Consumer Behavior: The Key to Advertising Strategy (p. 127) Slide 5-6, Rolling Stone ad (p. 127) A. The Importance of Knowing the Consumer (p. 127) Advertisers spend a lot of money to keep individuals and groups of individuals (markets) interested in their products. To succeed, they need to understand what makes potential customers behave the way they do. Consumer behavior: the mental and emotional processes and the physical activities of people who purchase and use goods and services to satisfy particular needs and wants. B. Consumer Decision Process: An Overview (p. 128) Advertising’s primary mission is to reach prospective customers and influence their awareness, attitudes, and buying behavior. To do this, an advertiser must make the marketing communications process (discussed in Chapter 1) work very efficiently. The consumer decision-making process is a rapid evaluation program run by our mental computers the moment a medium delivers an advertising message to us. The fundamental building blocks are: Exhibit 5–2 Consumer Decision Process (p. 128) (exhibit is on Slide 5–7) 1. Personal processes (p. 129) govern the way we discern raw data (stimuli) and translate them into feelings, thoughts, beliefs, and actions. These are the perception, learning, and motivation processes. 2. Mental processes and behavior are affected by two sets of influences: a. Interpersonal influences include our family, society, and culture. b. Nonpersonal influences are factors often outside the consumer’s control e.g., time, place, and environment. 3. The final step typically requires yet another process, the evaluation of alternatives, in which we choose brands, sizes, styles, and colors. If we do decide to buy, our postpurchase evaluation will dramatically affect all our subsequent purchases. a Concept Check 5–2 Why is it important for an advertiser to understand the basic steps consumers go through in making a purchase decision? (p. 129) Advertising’s primary mission is to reach prospective customers and influence their awareness, attitudes, and buying behavior. To succeed, they need to understand what makes potential customers behave the way they do. This involves the study of consumer behavior: the mental and emotional processes and the physical activities of people who purchase and use goods and services to satisfy particular needs and wants. IV. Personal Processes in Consumer Behavior (p. 129) The first task in promoting any new product is to create awareness (perception) that the product exists. The second is to provide enough compelling information (learning and persuasion) about the product for prospective customers to make an informed decision. Finally, advertising needs to be persuasive enough to stimulate customers’ desire (motivation) to satisfy their needs and want
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