Class 4

Question 1

Single option aversion

Answer 1

• Single option aversion = Leads to a product being chosen more often when competing alternatives are included in the choice set (Mochon 2015)
• Good practice is to offer consumers at least two options. Must be consistent with the choice overload theory (occurs if people are exposed too many options)
• Number of options consumers can handle depends on the level of involvement and on the attractiveness of options. But in general consumers can handle well at least 3 options.

Question 2

Loyalty

Answer 2

• Men are more loyal than women to companies and women are more loyal than men to individuals in companies (salespeople, service providers…)
• That is a fact of how men and women are. Men are more loyal to groups. Women are more loyal to individuals (Stijn van Osselaer and Melnyk (2009))

Question 3

Familiar and unfamiliar items

Answer 3

• Very few consumers go all the way down the aisles but go around the supermarket perimeter and enter a few aisles where they need to pick an item
• This has consequences for where supermarkets should place familiar and unfamiliar items
• Familiar items are better remembered from memory (from recall). Should be placed in the middle of the aisles to motivate consumers to visit more areas inside the store
• Unfamiliar items are better remembered by walking inside the supermarket (from recognition). Should be placed at the end of the aisles where consumers are more likely to go and therefore remember that they need to buy these items

Question 4

Company associations

Answer 4

• Companies should focus on one key thing they do best. (Apple is about creativity, Porsche is about luxury cars, L’Oreal is about precision)
• This is because of the halo effect and of the associative network theory (part-list cuing and reinforcement of activations)
• One transfers the positive characteristics of others and of companies in another area to other areas. Whenever an association is reinforced it gets stronger and shuts down other associations
• The halo effect helps the introduction of new products because consumers will create positive associations with product if they have positive associations with the brand

Question 5

Category fit

Answer 5

• Brand extensions need to deal with category fit (perceived fit between product categories), and association fit (relevance of existing brand associations in new category)
• Transfers of perceived quality of a brand is enhanced when the two product classes fit
• Poor fit not only detract from the transfer of positive associations but can stimulate undesirable associations

Question 6

PWYW

Answer 6

• PWYW strategy: the PWYW strategy works because of self-signaling (people want to be fair to themselves) and social signaling (people want to be fair in the eyes of others)
• It is more likely to work when consumers are loyal to the firm