Session 4 Flashcards
How does Loyality differ between men and women?
Men are more loyal than women to companies and women are more loyal than men to individuals in companies (sales people, service providers…). That is a fact of how men and women are. Men are more loyal to groups. Women are more loyal to individuals.
Why should companies focus on what they can do best?
Because of the halo effect and other associative networks.
People extrapolate to other domains the positive characteristics of others and of companies in another domain. And whenever an association is reinforced it gets stronger and shuts down other associations.
How does the halo effect helpt companies to introduce new products?
The halo effect also helps the introduction of new products as consumers will create positive associations with the new product if they have positive associations with the brand
How should companies identify their closest competitors?
- customer judgement
- similarity & benefit ratings
- consideration sets
- substitutions by use (e.g., during specific situations) - purchase records
- switching
- cross-elasticity of demand (when price changes)
What are the four types of brand extensions?
What should companies deal with when they want to extend their brand (two types of fits) and why?
Category fit and association fit.
If both are given the transfer of perceived quality for products is enhanced. Poor fit not only detracts from the transfer of positive associations but can actually stimulate undesirable associations.
What is the category fit?
Perceived fit between product categories (Michelin creating hiking shoes with rubber soles)
-> about product similarity
What is the association fit?
Relevance of existing brand associations in new category
-> is about brand’s image and identity
example: disney having his own theme parks, eventhough they are a film production company
what is the PWYW (pay what you want) strategy? why does it work?
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).
