in class midterm

Question 1

Why is brand equity important for firms? 6

Answer 1

1. Price premium over unbranded alternatives
2. Ability to extend brand (same or diff category)
3. Barriers to competition
   (Consumers won’t try alternative brands due to habit/learning cost of switching from strong brand, Strong brand will have deep pockets to acquire rivals and keep competition low,
   Investors won’t back alternative brands due to high investment required & risk of loss)
4. Leverage in distribution channels (brick and mortar, online stores)
5. Value from licensing
6. High share price
   (Bc can charge price premium = more expected profits = greater share price)

Question 2

Brand equity, elements, personality, cobrand definitions

Answer 2

Brand equity; brand knowledge that influences consumer response to the brand (familiarity, price premium)

Elements: brand awareness, associations (SFIU), unique = pop and pod

Brand associations can also be expressed in the form of brand personality: excitement, sincerity, sophistication, ruggedness, competence

Brand personality can be expressed through brand elements (physical interface, logo, should be unique/differentiating elements, product design, store design, experience design)

Co-brand: each brand should a) reinforce existing brand associations b) add new brand associations
Won’t work if dilution of stronger brand by weaker brand

Question 3

Attention: 4 challenges for marketers

Answer 3

Crowded World (competition for attention)
Mind is a Funnel (attention is limited)
Confirmation Bias (attention is selective)
Multitasking (attention can be divided)

Question 4

attention: 4 methods to gain attention (first 3 is motivation, fourth is ability)

Answer 4

1. Self-Relevant => relevant to important needs, think maslow => greater attention
   Needs: achievement, social, safety
2. Pleasant
   Attractive visuals (car ads, vacation ads, clothing adss), music, humour, children, animals
3. Surprising
   Surprising + product benefit
4. easy to process
   a. Prominent: full page ad, loud radio ads
   b. Concrete: testimonials, pictures
   c. Contrast: color ads in B&W newspaper or vice versa

Question 5

exposure

Answer 5

Ad must be seen by the right person (target customers)
- Solution: appropriate media
- Target by age, gender, product interest

Ad must avoid selective exposure (popup blockers, advertising filters, do not call register)
- Solution: product placement
- Why^ difficult to avoid, entertainment value

Question 6

Effective Product Placements

Answer 6

If During Exposure…
Liked Movie
More Time on Screen
Displays Brand Benefits
Integrated with Plot

Then After Exposure …
Greater Brand Recall
Greater Brand Attitude
Greater Sales

Question 7

search, social media and tv advertising adv and disadv

Answer 7

Search advertising : good bc….relevant to needs, large audience, precise targeting, ROI of ad spend. Bad bc…….. tracking/lack of privacy

Social media advertising: good bc ……. Large audience, precise targeting, ROI of ad spend. Bad bc …… intrusive, tracking/lack of privacy

TV advertising: good bc ……. Large audience, low cost per exposure. Bad bc …… low effort viewers, reducing # of viewers

Question 7

ACAM IMC objectives

Answer 7

attention, categorization, associations/attitude, memory/familiarity

Question 7

IMC plan components

Answer 7

strategic, comms, media plans

Question 7

IMC Strategic plan

Answer 7

(what do i want to say, to whom, to achieve what, $?)

STP/3 Ps except promotion P which is being planned

Communication goals:
What do i want IMC to achieve? Needs to be quantified!
Advertising influences sales over time….. But depends on whether brand is familiar or unfamiliar
Sequence of goals: brand liking, brand purchase, brand post purchase (over time)

Question 8

IMC strategic plan budget (3 methods)

Answer 8

1. Percentage-of-sales method

Backward looking (i.e., based on firm data)
Considers your own past ad budget/sales as benchmarks
O.k in less competitive markets where you want to maintain brand
image/sales/market share (e.g., business to business markets with few brands)

2. Competitive-share-of-voice method

Backward looking (based on competition data)
Considers competitors’ ad budgets & market shares as benchmarks
O.k in competitive but mature markets where market shares are stable over time (e.g., consumer packaged goods with many brands with loyal customers)

3. Task-objective method

Forward looking (based on future plans for the brand)
Considers communication goals, and calculates cost of accomplishing them
Best for growing brand equity & sales (i.e., new brands/extensions

Question 9

IMC communication plan

Answer 9

(how should i say it)

Promotional Mix: advertising, direct marketing, digital internet marketing, sales promotion, publicity/PR, personal selling

Message Design: source & message, authority, liking, similarity, appeal (practical, environmental, family, humour)
- DEPENDS ON → High effort: high MAO (first strong emotions then detailed information), low effort: low MAO (first weaker emotions then limited information)

Message Creativity
- Creativity, visual, simple

Message Integration
- Integrated across touch points and time

Question 10

IMC media plan

Answer 10

(what do i have to do to say it?)
Budget breakdown
Timeline
Effectiveness
Before launching campaign
After launching campaign

Question 11

IMC media plan assessing effectiveness at various stages

Answer 11

Concept testing (focus groups)
Rough testing (focus groups)
Finished art or commercial testing (online advertising, tv)
Market testing (survey, sales, internet data)

Question 12

Attitudes

Answer 12

liking or disliking of something, express attitudes using scales
Attitude is important bc liking = more purchase of that brand

Question 13

How to improve attitudes?

Answer 13

Understand there’s 2 types of information that influence whether we like/dislike brand

1. Category information: product category, country of origin
   (ppl have categories in their mind, and ppl have associations with those categories that can get transferred to brand)
2. Attribute information: price of product, features

Question 14

Categories can influence attitude / choice via…
(3) MAC

Answer 14

1. Associations
   Negative associations get transferred to products
   Category associations (product category, country of origin) and attributes associations (brand name, packaging)
2. Competition
   Create new product category (reduce competition, increase sales)
   Reposition in a different category (reduce competition, increase sales)
3. Memory
   Categories have prototypical brands
   Benefits of easy recall: considered for purchase, positive feeling of familiarity

Question 15

Category can bias interpretation of attributes
…

Answer 15

Confirmation bias:
Prior expectations bias subsequent judgments
Expectations of quality VS actual quality gap = gap due to confirmation bias

Question 16

Taxonomic categories

Answer 16

• Most widely used by consumers/default way to categorize products based on common attributes
• These categories are organized hierarchically (general categories to specific sub-categories)
• Common product features/ingredients and benefits
• Marketers often organize product displays in a taxonomic manner (bc consumers use taxonomic categories, they find it easier to search displays)

Question 17

Goal-based categories

Answer 17

• Less common, useful to markets
  
  • Mental categories based on common goals/objective, ex. School supply section
• Ecommerce can be both taxonomic and goal based

Question 18

Looking across multiple product categories

Answer 18

1. compeition

Consider cross category competition at a higher level of categorization (movies compete with forms of audio visual entertainment)
Reposition in a different category (more consumer demand less competition = increased sales)
Create a new category or sub category (less comp = increased sales)

2. New products

Combine multiple categories … cross category new products = best of both worlds when categories are close to each other in the mind (benefits transferred easily)

Question 19

Category associations

Answer 19

Positive versus negative associations
- Can be goal based or taxonomic
- Ex. “healthy choice” positive goal based
- Ex. red meat = cholesterol = negative taxonomic

Country of origin associations
- Wine !, can be misleading like barilla

Question 20

Attribute associations

Answer 20

Price-quality association:

Price, packaging, ingredients, unhealthy=tasty

Unfamiliar attributes = low MAO = more use of heuristics such a price quality

Subjective / not objective quality = more use of price quality associations

Price very low or high = more use of price quality associations

Question 21

Using both category and attribute information

Answer 21

Debiasing techniques:
Low effort conditions = people rely more on category associations (easier)
Reliance on product category and social category associations

Question 22

How can we increase the use of both category & attribute information?
(3)

Answer 22

1. Increase knowledge
   - Abstract (consumer behavior course)
   - Concrete (examples)
2. Increase time available
   - Don’t make snap judgments
3. Use nudges
   - Set up context/task appropriately
   - Blind CV/performance evaluation
   - Multiple, diverse interviewers (bc diff interviewees have diff category associations, justification of decision means multi attribute judgment, objective criteria easier to use when trying to reach group consensus)
   - Use checklist / rubric

Question 23

high effort

Answer 23

High: MAO (high price, important, more knowledge about predict, more time to think, etc)

Question 24

for high effort attitudes -> cognitive -> TORA

Answer 24

Theory of Reasoned Action (TORA): People mentally list attributes, People judge performance on attributes for product, People judge importance of attributes for the product category as a whole, People calculate attitude towards the brand
Useful for managers, shows them brand attribute matrix, and shows them what to do based on matrix in notes

Question 25

for high effort attitudes -> cognitive -> message vs source

Answer 25

• Part of info comes from message, part from source (ex. Lays chips ad massage, source is Lays)
• TORA helps us design the message (whats important)
• Source: increase credibility (dont use company as source) use 2-sided ads (criticizes and praises brand), can alsi use expert source, or high status source

Question 26

for high effort attitudes -> cognitive -> Regulatory Focus (2 types)

Answer 26

1. Promotion-focus: want to increase positive outcomes
   - Emphasize pleasure in ad
2. Prevention-focus: want to reduce negative outcomes
   
   • Emphasize safety in ad

Question 27

for high effort attitudes -> affective -> imagery

Answer 27

(affective=info that is there to create emotions)

Images create strong emotions (fear, anxiety, sadness, joy, excitement)
Feelings are best created through imagery!!

Question 28

Full tora info

Answer 28

How people mentally combine attribute information into attitude

Individual and social influences on judgment and decision making

Take into account attitude behaviour gap (reasons = low budget, long purchase cycle, high competitions, low memory during choice) (reduce = reminder, implementation method, consistency)

Take into account cognitive responses: consumers think about and question brand information provided by firms (counter arguments, support arguments, source derogations)

Take into account feelings: affective, feelings have bigger influence on attitudes and behaviour where feelings are important aka hedonic products (sports cars, perfume, movies, fashion)

Question 29

Full tora diagram

Answer 29

diagram in notes

Product attributes (performance and importance) –> across attributes

social attributes (others opinions, others importance) –> across significant others

–> behavioural intention –> behaviour

Question 30

Blemishing & Attitudes (moderate effort)

Answer 30

Seeing minor negative information about an offering after seeing important positive information increases attitude
- Compared to only seeing important positive information

Ex. online reviews : seeing positive reviews and minor negative review inc liking
Ex. advertising: first saying good things about a brand followed by admitting a minor drawback

Reason: contrast effect = visual bias = should have higher effect under low effort conditions

Question 31

Self-perception & Attitudes (moderate effort)

Answer 31

People sometimes infer their attitudes by observing their own behavior (rather than via product or social information)
reason: availability of own behaviour

Ex. coffee shop, motivational speakers, joining facebook group for a brand (you wait to be admitted), sorority hazing, cult rituals, laugh tracks on sitcoms

Question 32

Self-perception & Attitudes (moderate effort)
implications

Answer 32

• Incentivize frequency of usage through loyalty program
• Have multiple retail locations so that it is very convenient to visit the store
• Remind people of patronage:“Thank you for being a customer since 2014”
  => especially effective for consumers without pre-existing strong brand attitude

Question 33

LOW EFFORT ! Cognitive route to attitude formation
(2)

Answer 33

1. Associations (“simple inferences”) : get transferred to brand → country of origin, brand name, packaging
   
   • simple inferences thoughtless associations
   • Colour: Color is automatically perceived => low effort influence on consumers, Color has associations in the consumer’s mind, Color be used in different brand elements
2. Heuristics : if X then Y
   - Availability: if it comes to mind quickly, it must be true
   - Frequency: if more then better
   - availability (minimally thoughtful inference), frequency (more is better, but theres an optimal level)

Question 34

Simple cognition: low effort

Answer 34

based on one attribute (categoory, colour, number of features)

Question 35

LOW EFFORT Affective route to attitude formation
2

Answer 35

1. Mere Exposure : tendency to like familiar objectis, repeated advertising, reduce boredom with diff executions
   - ex yard sign
2. Classical Conditioning: pairr brand with liked object / repeat
   Conditions for classical conditioning: CS-UCS paring is relatively novel (celeb effective at beginning, single endorser), CS precedes UCS, CS paired consistently with UCS (at least 5 exposures/week/person), CS logically linked with UCS (fit)
   - novel pairing, logical link

Question 36

Attitude towards the Ad, affective/low effort

Answer 36

Dual effect on attitude towards the brand

Positive attitude towards the ad Aad
- Often created by humoir in advertising
- Positive Aad transfers to the brand

Liked ad = less thinking = less counter arguments against claim → so Aad created acceptance of message claim along with positive feeling

Question 37

Mood, affective/low effort

Answer 37

1. Program context

Surrounding TV program can create positive mood
Positive mood can transfer to brands being advertised during the program
Bad news could create negative mood, can transfer to brand
Offensive content can crete negative mood

2. Store context

Product sampling creates positive mood, transfers to brand in the store
Discounts create positive moods
Friendly salespeople create positive mood
Broken carts create negative mood

Question 38

Summary of Attitudes: 2 ways to create positive attitudes

Answer 38

High effort: INCREASE MAO → pout ppl in high effort mode → then use full TORA to influence consumers

Low effort: heuristics, feelings

Question 39

Create positive attitudes early!!

Answer 39

More time to reinforce brand associations/positive attitude
Positive confirmation bias
Nostalgia
Habit
Learning cost => More revenue over time

Question 40

Brand names & memory

Answer 40

If we remember a brand name it will be considered for purchase

Brand benefits
- If we remember a brand’s benefits
- our attitude towards the brand will improve

Experience with brand
- If we remember good experiences with a brand
- our attitude towards the brand will improve
- we may recommend the brand to others

Question 41

Memory failure :
3

Answer 41

1. Interference : mastercard vs visa, interference of stronger link, solution: add a strong link
2. Confirmation : bush vs kerry, bad meal => recalled bad service (even if service was actually good)
3. Sleeper effect : Remember the message,but not the source, ex. rumours/negative advertising, solution: repetition = availability heuristic

Question 42

How Can We Improve Memory?
(5)

Answer 42

1. Chunking: Chunking reduces number of units to be encoded into memory, reduces problem of selective attention
2. Imagery: memory can process words (verbal processing), senses (imagery processing) - imagery processing capacity is greater → show picture with the brand benefits
3. Recirculation : passive repeated exposure (slogans, ad jingles)
4. Retrieval Cues : Help remember ad /brand information seen earlier (logos can work as retrieval cues at point of sale - can help exam prep (learn at home and in class)
5. Mood: positive mood = remember good experience with the brand, create in store with greeting, free candy, food samples, popular music

Question 43

types of memory

Answer 43

1. Sensory: Five senses
2. Short term: Capacity limitation
3. Long term
   a. Autobiographical memory (personal experiences) marketers should encourage customer participation → helped by pictures which can retrieve it later
   b. Semantic memory (abstract information)

Question 44

Picture Taking & Memory/Enjoyment of Experience

Answer 44

• Photo taking can undermine enjoyment
• Implications for consumers: put your phones away, if taking pics dont have picture posting goal when taking, take polaroid cams, appoint picture taker
• Implications for marketers: forbid phone cams, have photo booths/professional photographers

Question 45

Advertising & Memory/Enjoyment of Experience

Answer 45

• Advertising can influence choice (by conveying brand info before choice)
• Advertising can influence satisfaction (by setting performance expectations during consumption
• Advertising can influence memory of enjoyment later in time

Question 46

Memory During Product Reviews

Answer 46

• Confirmation bias in memory (when there is a time gap between experience and review)
  - Bad meal = recall bad service later even if service was ok (ppl post negatively)
• Loss aversion / framing
• Respond to negative reviews (source credibility and surprise)
  - Public response/acknowledge, tailored response/not standardized response
  Unexpected remedies, report to follow up action