Exam: 3hours, 19/50 =15. 2/40 (-31) Section A: MCQ (20m) Section B: Choose 2 from 3 Questions (15m each) 1. Describe the type of promotional message that would be most suitable for each of the following personality market segments: (a) highly dogmatic consumers, (b) inner-directed consumers, (c) consumers with high optimum stimulation levels, (d) consumers with a high need for cognition, and (e) consumers who are visualizers versus consumers who are verbalizers. Give an example of a promotional message for each segment.
Social character traits have shown that inner and other-directed consumers may have different preferences in terms of promotional messages. Inner-directed people prefer advertisements that stress personal benefits while other-directed people seem to prefer advertisements that feature social acceptance. (a) HIGHLY DOGMATIC CUSTOMERS: It is a personality trait that measures the degree of rigidity (versus openness) that individuals display towards unfamiliar and towards information that is contrary to their own established beliefs. Dogmatism: general tendency to be open or closed to new ideas and innovations.
A person who is high in dogmatism approaches the unfamiliar defensively while the person who is low in dogmatism will rarely consider unfamiliar or opposing beliefs. * more receptive is Ads for new products or services that contains an appeal from the authoritative figure. Marketer uses celebrities and experts to their new product advertising for making it easier for the potentially reluctant customers. * Highly dogmatic consumers are likely to respond favorably to a new product when the advertising message is presented in an authoritarian manner (e. g. celebrity endorsement or expert testimonials). * prefer traditional or established products rather than innovative ones. close minded towards unfamiliar and untoward information that is contrary to their own established beliefs * approach such information with considerable discomfort and uncertainty. promotional message most suitable would be endorsement or appeal from an authoritative figure. * New products need to be presented in an authoritative manner and that celebrities could be employed to reach dogmatic consumers who are more closed minded. For example: Colgate Dental Cream with Doctors and Experts endorsements. Anti-Polio Campaign featuring Amitabh and Sachin Tendulkar also useAuthoritative statements. The Cadbury’s brand took a beatng in sales after the worms were found in somepackets. Dogmatic Consumers stopped purchasing the Brand. Amitabh Bacchhanwas then used as Authority figure to reestablish Brand. b) Inner-directed consumers * tend to use their own values and standards in evaluating a new product * ads aimed at them should depict the attainment of personal achievement and satisfaction. ads that stress product features and benefits, which enable them to usetheir own values and standards in evaluating products * rely on their own inner values or standards in evaluating new products and are likely to be the consumer innovators. * other directed customers tend to look to others for guidance as to what is appropriate or what is inappropriate. * be prefer ads that stress product features and personal benefits ( enabling them to use their own values and standards in evaluating products whereas the other * For example: Surf Ad showing Shabana Azmi saving two buckets of water is an example of the same.
The latest from Surf Excel is currently running on television. This is the ad where many people are seen walking with two buckets full of water. They then pour it into a large reservoir. At this point none other than Shabana Azmi informs you what a great thing thissaving of water is for the country and implores you to use Surf Excel. * manufacturer of cameras who advertises to inner-directed consumers should stress the ability to take better pictures and the resulting personal satisfaction. c) Consumers with a high optimum stimulation level * more open to risk-taking, more likely to be innovative have a greater willingness to take risks, try products with many novel features, and shop in new retail outlets. * likely to respond favorably to promotional messages stressing more rather than less risk, novelty,or excitement. * to seek purchase related information and to accept new retail facilities. * For example: The exciting and exotic Vacation Campaign of Malasia-Truly Asia is positioning of Airways to sell the Asian Adventures. These enjoy thinking. They are responsive to that part of Ad that is rich in Information. The TATA-AIG Life insurance Ad showing Naseeruddin Shah giving informationthough Q&A will click for them. benefit of new product offering should not only consider functional features but also the risk, novelty and variety that the product offers. * place different promotional emphasis on particular age segments, as it may be worthwhile to reduce perceived risk for a market segment comprised primarily of older people, while it may not warrant it for a younger market segment. d) Consumers with a high need for cognition * ones who often crave or enjoy thinking. * responsive to ads that are rich in product-related information or description and are unresponsive to the auxiliary or contextual aspects of an advertisement. Need for cognition: stable individual difference in tendency to engage in and enjoy effortful cognitive activity. Individuals high in need for cognition enjoy thinking abstractly. * high-NFC individuals are likely to express more favorable ad attitudes, brand attitudes and purchase intention. * more likely to use message content as a basis for judgments * high NFC leads to the generation of inferences about omitted conclusions ), to less memory decay and greater resistance to counterarguments about products), and to longer processing and superior recall for brands and claims individuals who are high in need for cognition would be expected to be critical thinkers, and to not necessarily accept arguments found in media or elsewhere on face value. * should be more difficult to persuade, a phenomenon that can be investigated several ways. * high-NFC individuals did so only when the signal was accompanied by a substantial price reduction. * process information presented in the media more thoroughly than those who do not enjoy thinking as much, able to retrieve from memory more information * individuals with higher NFC, who are assumed to process information more extensively, would be expected to generate more thoughts. counterarguing and source derogations are prevalent in advertising and that support arguments are critical if persuasive messages are to have a chance of acceptance * high-NFC would be expected to engage in a wide range of media consumption activities, and would not necessarily be expected to differentiate between sources of information, such as news, advertising or entertainment. All would be stimulating. high NFC individuals are more likely to closely scrutinize the arguments contained in any message, campaign strategists must make sure that arguments are strong in order to cope with the higher resistance to messages by this group * appear to be the ones already predisposed to watch or listen to issue, image or financial advertising featuring long copy. The challenge for strategists thus is to enhance the already high motivation of high-NFC indivduals, by highlighting the relevance of messages, and to enhance the ability and opportunities to process such messages. Example: (e) consumers who are visualizers versus consumers who are verbalizers. * Verbal aggressiveness: tendency to insult and attack others’ self-concepts to achieve one’s objectives in an argument. * Visualisers (i. e. , consumers who prefer visual information, products that stress the visual) * Morning Dew Ad where there is a race with a Cheetah is a visual treat * detailed descriptions and explanations in targeting verbalizers (i. e. , consumers who prefer written and verbal product information). ‘Do the Dew”Verbalizers prefer verbal dimensions to the promotional message. * The Oye Bubbly Jingle of Pepsi is a Verbal treat to the ear, though it conveys nothing much about the product. 2. A marketer of health foods is attempting to segment a certain market on the basis of consumer self-image. Describe the four types of consumer self-image and discuss which segment would be most effective to target for health foods. In Self-concept theory personality is exemplified by the kinds of things with which people surround themselves.
The self-concept has shown to be multi-dimensional and encompasses the way a person actually is, the way individuals see themselves, the way a person would like to be, and the way in which individuals think others perceive them. Theories of self-concept have generally focused on two areas in marketing research. In the one, self concept has been applied to the discrepancy between the self and the ideal self as a measure of personal dissatisfaction. In this instance, product use has been related to items that deal specifically with self enhancement.
Consumers have four types of image. 1. Actual self image-how consumers in fact see themselves. In Everyday house hold products, they see themselves in Reality. For example,Washing powders Ads would be realistic. Nirma Powder focuses on Housewives ability to get more for less money. 2. Ideal self Image-how consumers would like to see themselves. In case of Fantasy Products, consumers desire to see themselves perfect, as in case of Women, Fairness or looking Pretty is high on desire list. The fair and Lovely campaign for fairness cream sells this dream. . Social Self Image-how consumers feel others see them. Here there is an inherent fear factor also involved as to how they are being perceived by others. For example Products which position themselves on social front, showing appropriate behaviour at parties etc appeal here. 4. Ideal Social Self image-how consumers would like others to see them. For Example, Aashirwad ready to cook products and Sambhar Masala Product campaign show the desire of Wives to be seen as a great cook by others.
However, since they are working or busy, they do not have time to cook themselves. That is when the Brandcomes to rescue. And finally they are seen as Ideal Wives. There are two more categories of Self-image: Expected Self image-how consumers expect to see themselves at some specified futuretime. The ABKING PRO Ad for machine to slim down people hypes this expectation of individuals that they will slim down and look good in Future. 5. expected self-image (e. g. , how consumers expect to see themselves at some specified future time) . ought-to self (e. g. , consists of traits or characteristics that an individual believes it is his or her duty or obligation to possess). Ought to self image-traits consumer thinks he ought to have. The Ashrwad readymeal Adis a hit for the wives feel that good cooking is a trait they ought to have. The expected self-image is somewhere between the actual and ideal self-images. It is somewhat like a future-oriented combination of “what is” (the actual self-image) and what consumers would like “to be” (the ideal self-image).
Moreover, because the expected self-image provides consumers with a realistic “opportunity” to change the “self,” it is likely to be more valuable to marketers than the actual or ideal self-image as a guide for designing and promoting products. In targeting consumers of health foods, the marketer can use the expected self-image to attract consumers who would like to enhance the quality of their lifestyles through better nutrition, and ideal social self-image to appeal to consumers who are likely to adopt health foods due to peer influence and pressure. Advertisers focus on components that make people feel better about themselves.
Many decisions based on looking glass and ideal self–ie. Aspiring to group not yet reached–image appeal Psychographic info enhances demographic info– people individuals 3. How can Toshiba use the diffusion of innovations framework to develop promotional, pricing, and distribution strategies for its computer notebooks targeted to the following adopter categories? a. Innovators b. Early adopters c. Early majority d. Late majority e. Laggards * In term of the nature, there are five major types of innovations: novelty, competence shifting, complexity, robust design and continuous improvement.
While in term of the extent of change, innovations can be divided into incremental, radical and transformational models. Innovation deals with the change related to product, service and process, and the innovation management involve people, product, process and technology” * diffusion is defined as a process by which an innovation is communicated through certain channels over time among the members of a social system * innovation as “an idea, practice, or object that is perceived as “new” by an individual or other unit of adoption. * company will usually sell the hardware at a relatively lower price to capture a share of the market, and then charge relatively higher prices for the software to maximize profitability * Based upon the time variable, individuals seeking new innovations are placed into adopter categories, according to the rate of adoption. Rate of adoption is the “relative speed with which an innovation is adopted by members of a social system. ” * the rate of adoption is the relative speed in which members of society adopt an innovation. It is usually measured as the number of people who adopt an innovation within a specified time-line. Some companies have a defensive strategy and aim to follow the leader. Such companies hope to profit from the mistakes of the first-to-market company by devising incremental design and performance improvements and cost reductions compared with the original product. In addition they hope to exploit the new market that has started to grow, so timing is important. * But it was the major Japanese companies (such as Sony, JVC, Toshiba) that captured a large share of the mass market through reducing the cost of these devices and improving their performance. (a) Innovators: Venturesome [1st group to adopt]
Rogers describes innovators as obsessed with being venturesome. They have an interest in new ideas and innovation and have generally very cosmopolitan type social relationships. Innovators generally have communication patterns and friendships among a certain clique of innovators even though their geographic distance between each other may be very significant. Innovators must be very financially secure in order to absorb a possible loss from an innovation that doesn’t turn into fruition. Likewise, an innovator must have a sound educational background, in order to comprehend a complex technical terminology.
Furthermore, an innovator must be able to cope with a degree of uncertainty whether the innovation will be adopted by society. Ultimately, Rogers believes the innovator takes risks in being the gatekeeper of innovations, but if the innovation is adopted the rewards are high. Early Adopters: Respect [2nd group to adopt] more integrated in the local society than the innovator. Where an innovator is considered a cosmopolite, an early adopter is a localite. Early adopters have the greatest degree of leadership in most localities. Most potential adopters look to the early adopter for advice and information regarding an innovation.
Generally, early adopters are respected and considered successful by their peers. The early adopter is the main group that decreases uncertainty of an innovation by adopting it, and then communicating with potential adopters about the idea. Early Majority: Deliberate [3rd group to adopt] Rogers suggest that the early majority group adopts new innovations just before the average member of society. Members of the early majority frequently interact with people in their society, but usually do not hold key positions of leadership. The early majority is the largest group and make up approximately one-third of members in a society.
The early majority follows with deliberate willingness to adopt an idea, but are rarely leaders. Late Majority: Skeptical [4th group to adopt] Rogers states that the members of the late majority adopt innovations just after the average member of society. The late majority also makes up approximately one-third of members in a social system. Members of the late majority are cautious and skeptical about new innovations. Most of the uncertainty surrounding an innovation must be removed before the late majority will adopt the new idea. Laggards: Traditional [last group to adopt]
Laggards are the last group in society to adopt a new idea. Generally, they possess almost no positions of leadership within their community. Laggards’ point of reference is the past, they are very cautious and only make decisions based on what has already been done. Usually, laggards’ educational and financial resources are limited, forcing them to be completely certain the innovation will not fail before they adopt. These are the traditional categories of society members with respect to the adoption of new ideas and innovations. The diffusion of innovations follows a common life cycle. 82 However, the period over which this trend occurs varies greatly due to a number of factors. 183 By the end of the 20th century many of the following innovations were adopted by society at a much greater rate. 184 For example, the PC, Internet, and cell phone, which are all relatively new products, have steeper gradients when compared to automobiles, electricity and traditional telephones. Price is one of the most important factors involved in adoption of consumer products. This pricing policy pattern can be used to predict the rate of adoption of new innovations.
When it comes to consumers’ rate of adoption to innovations, new technologies succeed at a faster rate than replacement technologies. An early adopting individual may decide to adopt in anticipation that the innovation’s rate of adoption will take off in the near future when others adopt, although past diffusion research suggest that most individuals do not adopt an innovation until after learning of their peers’ successful experiences. ” The diffusion of an innovation among the consumers can usually be presented by an s-shaped curve.
On a frequency basis the adoption over time will normally follow a bell-shaped curve, but when plotted on a cumulative basis the adoption will form an scurve. 9 The s-curve reflects the acceleration of the adoption. At the early stage the curve is rising slowly meaning relatively few adopters pr. time-period (x-axis). At about the middle of the adoption period the acceleration peaks and then fades as the percentage of adopters goes up. This course of events is typical for the adoption of new technologies. The logic behind this diffusion lies in the actual number of adopters.
The early adopters will be a majority compared to the people who have not yet adopted the technology and therefore there are less people to preach the virtues of the new technology to potential adopters. At the point where the adoption process reaches 50 % the number of adopters equals the number of potential adopters, by definition, thus providing maximal acceleration of the adoption. In the last period, adopters outnumber the people who has not yet adopted, and there will be less people to convince to adopt the technology – slowing down the acceleration of the adoption process.
The adopters are often divided into adoption groups. These groups are usually formed on the basis of innovativeness, meaning to which degree each individual is willing adopt new technologies, relative to other members of the social system. From this measure individuals can be placed into groups containing a certain range of innovativeness. The distribution is based on a mean and to which degree individuals’ deviate from the mean (standard deviation). Innovators are the first group of adopters and can be associated with the word venturesome.
The individuals representing this group are adventurous and often related to entrepreneurial environments. The innovators run the risk that the innovation does not catch on, and thus subject themselves to a potential loss they must be prepared to absorb. Therefore innovators have to live with the uncertainty about the potentials of the technology, which can be viewed upon as the price to pay for being pioneers in a new field – catalyzing the diffusion of new technologies.
The early adopters are ready to adopt a new technology when they observe that other individuals has started adopting, and sees the potential for being some of the first adopters of a new and promising technology. These individuals are often a more integrated part of the local society than the innovators, and their adoptions are crucial for the technology to take off and get hold of the broad public. For the early adopters the uncertainties about the merits of the new technology are strongly diminished, and can therefore adopt the new technology without running the risk of buying a young and untested technology.
This group accounts for about one third of the total number of adopters, and provide the link between the progressive early adopters and the more skeptical later adopters. In the latter half of the spectrum the late majority also represent about a third of the adopters. This group is skeptical to new innovations, and is not willing to adopt, until a lot of other people have adopted before them ensuring the success of the technology and possibly massive network effects. The last 16 % of the adopters, the laggards, often focus on traditional values and base their decisions on past events.
They are suspicious of any new inventions to change the way life are traditionally lived, and must be 100 % certain that the technology will prevail before they are willing to adopt. From a consumers’ point of view it is essential to think about the decisions of future adopters when choosing what technology to go with. The decisions of previous adopters are on the other hand a know factor and plays a role for the decision also. So does the structure of the market, i. e. which technologies are available at the time of adoption, compared to potential superior technologies that could be available in the future.
Recent findings indicate that there is a lack of willingness to wait by the early adopters. 11 This high priority of being among the very first users of a new technology is said to inflict negative externalities on the later adopters. These later adopters can be forced to adopt an inferior technology to make sure that they are compatible with the technologies of the early adopters, or they might be forced to give up compatibility to get a superior technology. That said the diffusion of new technologies is often strongly dependent on the choices of the early adopters.