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Marketing Communications Summer School Lecture 2
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MKTG6005 Marketing Communications
Summer, 2010
Lecture 2Influencing Consumer and
Stakeholder Decisions(2)
11/0 1
Law 10 5
Influencing Consumer & Stakeholder
Decisions
Chapter F5
& F6Kitchen,
Kim and Schultz 2008
“Discussion Points Trial”Please read this paper
and come prepared with some discussion
points
Today’s Objectives
Flesh out any issues related to the subject
Get Facebook working to our needs
Marc Omms is the facebook name
Communications
How do they work?
Can they really influence consumer decisions and purchase?
Habits…..moderating cognitive decisions?
Stable Markets
Kitchen, Kim and Schultz (200), ‘Integrated Marketing Communications: Practice Leads to Theory”, Journal of Advertising Research, December, 531-546.. (NOTE: to be read for the discussion “trial”)
Assign research topics, and meet your new group and exchange numbers
Feedback for Marketers (Criteria for success, are the ads working?)
Source: Belch, Belch, Kerr & Powell, Advertising & Promotion, 1st ed.
How Ads Work –
Debatable From East 1997……..
Advertising Awareness
Might indicate the strength of advertising
Channon (1985) notes advertising for Cadbury's Fudge that was very effective on sales - little effect on
awareness
Broadbent and Colman (1986) found little relationship between ad awareness and sales effectiveness in a study of eighteen campaigns in the confectionery market
McQueen (1991) found that recall scores for ads had little or no relation to the sales impact revealed by copy tests
And an ad may produce brand recall without itself being recalled
Explaining Ad Effects
AIDA: Attention -
Interest -
Desire -
Action
The Lavidge and Steiner Model Awareness
↓
Knowledge ↓
Liking ↓
Preference ↓
Conviction ↓
Purchase
Problems With Hierarchical Models:
These models combine the logic of pre-conditions with a less explicit implication of psychological process which is more contentious
Not appropriate for familiar brands, categories (Ehrenberg 1974). Krugman (1965) shallow processing, not reasoned
Not empirically supported: IRI research did not support ad recall or brand attitude change measures of effect (Lodish and Lubetkin 1992)
But any ad effect is going to be weak and not easy to find
Conversion and Reinforcement
The ATR Model (Ehrenberg, 1974)
Leaky bucket idea. Ads as defensive, little leakage, main force on take-up is product appeal, ads have weak effect and operate after purchase to remind routine purchasers
Awareness ↓
Trial ← Advertising
↓ Reinforcement
↓
Repeat Purchase
Psychological Process IssuesInvolvement and Processing
High involvement more likely to fit the sequential model, low involvement, the ATR model
Batra and Ray:
Low involvement, operating on brand salience.
Any attitude change is consequential High involvement, dissonance process, behaviour
led High involvement, Ajzen and Fishbein (1980),
ideas led The Elaboration-Likelihood Model
Peripheral and direct routes to persuasion:
Direct route creates internal elaboration of arguments, anchoring beliefs. High involvement
Peripheral, based on associations, no elaboration. Low involve’t
Relating Ads to Purchase
Degree of Involvement. If the purchase is involving, does the ad have to be more persuasively argued? Car ads on TV
Necessary Content. What needs to be in the ad that will be re-kindled in the purchase context?
The Five Communication Effects (Rossiter and Percy 1987) Advertising →
Category need
→
Brand awareness
→
Brand attitude
→
Brand purchase intention
→
Purchase facilitation
Relating Ads to PurchaseCategory Need
Most people do not buy the brands they see advertised. Ads must relate consumer motives to the brand/category
Brand Awareness
Cued memory. Recall or recognition of brand.
Recall needed when brand not present, buyer initiated,
Recognition needed when product present and observable, sales context initiated, eg Overall effect of pack important
Recognition advertising requires visual media;Brand Attitude
The brand must be preferred to other brands in the same price range.
Relating Purchases to Ads
R&P distinguish between negative condition avoidance (aspirin) and positive benefit (a novel, wine). The first needs informational copy, the second `transformational' - a more personally relevant and emotionally charged approach
Purchase Intention
A self-instruction to buy. Needed for one-off purchases from outlets used rarely, eg the purchase of a water purifier or a new mattress. Less important for supermarket goods where the purchase context may remind
Purchase Facilitation
Actions often depend upon facilitating factors, eg credit card purchase of cinema tickets. Ads need to answer questions about cost, where to buy, ease of installation
Evaluating The Rossiter
And Percy Approach
Presented as a logical, cognitively based account.
The sequence is: Brand awareness →
Brand attitude →
Brand purchase intention →
Purchase
BUT leaves aside mechanisms such as: direct associations (music, Gorn) framing availability effects exposure effects affect primacy (Fazio)
Securing Attention And Understanding
Some campaigns much more effective than others (Levi)
Problem of `relevant attention' (dissonance work, Fazio and Zanna, Chapter 7)
Classifying Purchase
Ad effectiveness will be conditional on a number of factors
Widely held view that the ad should relate to the purchase situation. The Rossiter-Percy Grid
TYPE OF MOTIVATIONInformational Transformational(Negative motivations) (positive
motivations) aspirin a new novel
TYPE OF DECISIONLow Involvement High
Involvementroutine industrial products/cosmetics (search and conviction
required)Brand Loyals New Category UsersRoutinized Favorable BrandExperimental or RoutinizedOther-brand Switchers Other-brand Loyals
Classifying Purchase
Ad effectiveness will be conditional on a number of factors
Widely held view that the ad should relate to the purchase situation. The Rossiter-Percy Grid
TYPE OF MOTIVATIONInformational Transformational(Negative motivations) (positive motivations)
aspirin a new novel
TYPE OF DECISIONLow Involvement High Involvementroutine industrial products/cosmetics (search and conviction required)Brand Loyals New Category UsersRoutinized Favorable Brand Experimental or
Routinized Other-brand Switchers Other-brand Loyals
Evaluating The Rossiter
And Percy Approach
Presented as a logical, cognitively based account.
The sequence is: Brand awareness →
Brand attitude →
Brand purchase intention →
Purchase
BUT leaves aside mechanisms such as: direct associations (music, Gorn) framing availability effects exposure effects affect primacy (Fazio)
Securing Attention And Understanding
Some campaigns much more effective than others (Levi)
Problem of `relevant attention' (dissonance work, Fazio and Zanna)
The FCB Grid
Source: Belch, Belch, Kerr & Powell, Advertising & Promotion, 1st ed.
Figure 7.2 The elaboration likelihood modelSource: Based on Aaker et al. (1992). From Fill 4th ed.
Figure 6.6 Promotional strategies for different levels of involvement
From, Fill 4th ed.
Classifying Purchase –
Another view
The Sales Effects Of Advertising Over Time
Repeated exposure may give diminishing returns because of habituation (serial coffee ads reduce habituation).
Adams (1916), Burnkrant and Unnava (1987) showed more effect from three different ads than from the same ad three times
Implications Of Response Curve
Affects ad schedules, media use and coverage targets
Diminishing returns favours coverage over frequency. More media, more time slots to gather more people.
Also favours spreading ads over time - drip rather than burst.
Also favours more varied copy, Jones' Evidence
Which Brands Respond Best To Advertising?
Those with a large user group
Those with a large fairly loyal following (Raj 1982)
New products
Those with category growth potential, eg food and confectionery (but not toothpaste and detergent)
The Importance of Ad Research
Media spending has been a declining proportion of the A&P budget
Now evidence shows that ads give a better return when the long-term effects on sales and the price-support function are included
Trade promotion usually fails to cover costs
Research may help raise support for media advertising
How do ads work? Recognition Processes
Seek to understand the processes which draw attention to recognition - why??
Human Processing: in our brains, memory & processing are distributed as part of the structure with interconnection via neuronal links
Stimulus can set off many simultaneous activities in the brain.
Recognition must occur when this activity converges onto a particular structure
Dominant stimuli is the fastest
Ambiguity (response competition) delays recognition
Recognition
Response competition increases with cognitive difficulty; caused by stimuli - unexpected, incongruous, blurred, changing, complex
Problem for mass communications - response competition gets the most attention, but is often disliked and hard to understand
MERE EXPOSURE
Zajonc showed that exposure increased liking for the stimulus
this process may operate in brand name acceptance & low-involvement advertising
Mere Exposure cont’
Zajonc (1980) showed that thought & feeling responses are relatively independent; feelings may occur before knowledge
Preferenda (feeling) was processed faster that discriminanda (cognition)
May be parallel processed
There can be affective response without recognition (Marcel, 1976)
Some alternative debate: recognition is only one part of cognitive processing & other parts may underpin evaluative response
Schemata
Structures or moulds of thought that are needed for recognition, selection, classification, inference & memory (chunking of information)
Images, Roles (Yuppie, wimp),
recognition is aided when incoming stimuli are aggregated into ‘chunks’ that relate to schema
Ads use schema (e.g about class, sex diffs, young execs)
Ads may be designed to revise ideas or change the schema used to assess the product
eg. The BUGAUP Campaigns & cigarettes
Stable Markets: Brands & Buying
Brands “behave” in certain ways
Possible to predict this behaviour (under certain conditions)
Sources of Data (e.g Panel Data)
Research Indicates
Over long periods most markets change slowly;
Over short periods sales may fluctuate quite substantially in response to promotions but usually return to an equilibrium level
Over medium terms (eg a year) they are quite stable because fluctuations average out and long-term change is small
Single Brand Purchases
Effect of Last Purchase
Not much effect of recency
Kuehn (1962) found some first-order effect but Bass et at (1984) found mostly zero-order
Definitions
The penetration, b, is the proportion of possible households who buy at least once in a period. (Think b for buyers)
The purchase frequency, w, is the average number of purchases made by those who purchase at least once in a period. (Think w for weight). The reciprocal of the inter- purchase interval
Single Brand Purchases
These variables are linked by the sales equation: m=bwwhere m is the mean population purchase rate. (m for mean)
We usually assume that households buy one unit each purchase occasion but we can use a multiplier to correct for multiple purchase (or to convert volume to value)
ExampleAmong 26 students on a marcoms course, 16 drank beer in
the student bar over a week. What is the weekly penetration for beer drinking in the student bar?
Single Brand Purchases
b = 16/26 = 0.62
Given that the frequency of drinking beer, w, was 3.23 what was the mean drinking rate m, for the whole group?
m = bw= 0.62×3.23 = 2.0
Do We Buy Brands at Regular Intervals?
Newspapers, cigarettes are bought daily, shopping trips often weekly
But most brands are bought at approximate random intervals because of brand alternatives, variable consumption rate, stockpiling, and forgetting
Single Brand Purchases
There is often a `dead period' after purchase
with the purchase pattern approximates to a Poisson distribution over periods longer than the mean interpurchase interval
Do Some People Buy More Than Others?
There are consistent differences between people. The distribution across people is a Gamma pattern. Relatively few heavy buyers account for a large fraction of sales
Single Brand Purchases
Table 3.1. Quarterly sales of Kellogg's Corn Flakes in the US (from Ehrenberg and Goodhardt, 1979)
Out of 100 purchasers, the number buying:Pen% Freq One Twice 3 4 5 6+ Total20 2 .1 55 22 8 5 5 5 100
Giving sales of: 55 44 24 20 25 42 210
Majority do not buy even Nabisco Corn Flakes in the period
Most buyers are light buyers
Single Brand Purchases
55% are responsible for only 55/210 sales
Fits heavy half : the light 50% responsible for about 80% sales
Longer periods include more light buyers and the ratio becomes more extreme (moving towards 80/20)
Repeat Purchase.
Many people do not buy every period.
"lapsed" and "new" buyers are mostly light buyers.
heavy buyers are more likely to be repeat purchasers
New and lapsed buyers have to have the same purchase pattern in stationary markets. Repeat rates for new buyers are not much more than 1.5
Repeat purchase of a brand depends on the purchase
frequency.
Single Brand Purchases
A change in penetration has little impact on repeat purchase (the number of repeat purchasers is affected).
Changes in purchase frequency has a substantial effect on repeat purchase
NBD (Negative Binomial Distribution) Theory
Based on individual purchase Poisson and across- consumer Gamma distributions
Programs calculate either from aggregate statistics (NBD), or from raw data (BUYER).
For program NBD you need:
the penetration,
the purchase frequency,
the period
ExampleAmong 26 students on a marcoms course,
16 drank beer in the student bar over a week.
What is the weekly penetration for beer drinking in the student bar?
Example
b = 16/26 = 0.62
Given that the frequency of drinking beer, w, was 3.23 what was the mean drinking rate m, for the whole group?
m = bw= 0.62×3.23 = 2.0
NBD –
very applicable
Milk: 1 month, r=0.884; b=.98; w=3.9
Another NBD
Eggs: 1 month, r=0.876; b=.89; w=2.62
Discussion Time
Kitchen, Kim &Schultz (200), ‘Integrated Marketing Communications: Practice Leads to Theory”, Journal of Advertising Research, December, 531-546.. (NOTE: to be read for the discussion “trial”)
Break into groups (ideally, people you haven’t worked with before)
Discussion Points
Prepare a set of 5 discussion questions for each of the 5 class readings
Look at:
Clearly related to the readings (demonstrated knowledge of the week’s reading)
Introduced something new to the discussion (e.g. related to another theory, example of application in industry)
Ability to Stimulate Discussion
Clear and Concisely Phrased
Implications for Marketing Practice (if any, explain)
The Blue Sky Perspective – future directions
Submit at the start of class
Random marking of assessment…….