Consumer Marketing E_MKT_CM
Table of Contents
Week 1...............................................................................................................................2
Articles Week 1.............................................................................................................................2
Lecture 1: Introduction to Consumer Marketing...........................................................................3
Lecture 2: Understanding Consumers...........................................................................................4
Week 2...............................................................................................................................7
Articles Week 2.............................................................................................................................7
Lecture 3: Consumer attention, perception and memory............................................................12
Lecture 4: Consumer Behaviour Refresher..................................................................................15
Week 3.............................................................................................................................19
Articles week 3...........................................................................................................................19
Lecture 5: The art of choosing.....................................................................................................20
Lecture 6: Midterm review.........................................................................................................23
Week 4.............................................................................................................................24
Articles week 4...........................................................................................................................24
Lecture 7: Price Promotions........................................................................................................29
Video on pricing strategies.........................................................................................................34
Lecture 8: Influence & persuasion...............................................................................................35
Week 5.............................................................................................................................36
Articles week 5...........................................................................................................................36
Lecture 9: Ethics of marketing.....................................................................................................43
Lecture 10: Customer loyalty......................................................................................................43
Week 6.............................................................................................................................46
Articles week 6...........................................................................................................................46
Lecture 11: Consumer happiness................................................................................................48
Lecture 12: Consumer Marketing Final Review...........................................................................50
1
,Week 1
Articles Week 1
Article 1: Dueling with desire (Bitterly et al., 2014)
In our daily lives we frequently face a tension between what we want to do and what we
believe we should do. Bazerman et al. (1998) refer to the common struggle between choosing
what we desire in the heat of the moment and what would be best for us in the long term as
‘’want/should’’ conflict. According to their conceptualization, we each face frequent conflicts
between ‘’multiple selves’’ – our want self, who desires immediate gratification, and our
should self, who argues for our long-term interests.
Milkman and coauthors (2008) define options as relative wants and should based on the
following criteria:
1. The instantaneous utility obtained from the want option is greater than the
instantaneous utility obtained from the should option.
2. The sum of the utility that will be derived from the want option in all future periods is
less than the sum of the utility that will be derived from the should options in all
future periods.
This definition does not account for the affect and or feelings evoked. Also, this definition
does not indicate which type of option is optimal and thus rational.
Over-indulging in want options typically has a greater cost than overindulging in should
options.
Psychologists have proposed a model wherein individuals’ decision making processes are
guided by two models of thought or ‘’systems’’, which are referred to as System 1 and
System 2. System 1 is an intuitive, automatic system, which relies on emotions and makes
quick judgments (wants). System 2 engages in slower and more logical, effortful reasoning
(should).
The construal level theory (CLT) explains that events and choices can be represented in two
fundamental and distinct ways – abstractly or concretely. The proximity of an event impacts
how it is mentally represented.
Another body of research suggests that the limited self-regulatory capacity shapes the
outcomes of our internal struggles between wants and shoulds. According to this stream of
research, self-control is conceptualized as resembling a muscle that can be weakened through
repeated use. The idea is that after resisting something we desire or more generally, after
engaging in activities that require the use of our executive function, we have less self-control
‘’strength’’ available for subsequent choices, causing us to give in to our short term desires
more readily.
What factors shift whether we choose wants or should?
Choosing for now or later – people prefer should options at a higher rate when
making decisions for the more distant future, but prefer want options more often the
sooner choices will take effect.
Cognitive load – the relative strengths of System 1 reactions (characterized by
emotions and instincts) and System 2 reactions (characterized by deliberative,
controlled thinking) influence the outcomes of want/should conflicts.
Construal level – suggests that we prefer should over wants more often when we are
thinking abstractly and thus focusing on the global and goal-relevant features of
2
, options rather than when we are thinking concretely and thus focusing on the
contextualized, surface-level and goal-irrelevant features of options.
Depletion – the process of reigning in our short-term desires and choosing should
over wants requires exercising willpower or self-regulation. As discussed previously,
a growing body of research suggests that exerting willpower comes at a cost, and that
cost is a reduction in available self-control resources for use in future choices.
Joint vs separate evaluations – although want options tend to be preferred at a
higher rate than should options in isolation, we are more likely to think about the cost
and benefit of each option and make farsighted should choices when multiple options
are evaluated at the same time.
Mood effects – emotions can shift the outcomes of want/should conflicts.
Licensing effects – past research has shown that people feel ‘’licensed’’ to make (or
justified in making) want choices if they believe they have previously engaged in
should behaviors or if they anticipate having opportunities to engage in should
behaviors in the future.
Closeness to your future self – when we do not feel psychologically connected to
our future self, we should be less interested in taking actions to benefit this self and
thus should shy away from should options.
Fresh starts – there are naturally-arising points in time when people are particularly
motivated to pursue their long-term interests or in other words, to prefer shoulds.
Past research highlights that our choices over wants and should are malleable and depend on
the context where we make a decision. Here we review a series of different ‘’nudges’’ that
have been shown to successfully increase the rate at which we choose should over wants:
Prompt plan-making – prompting people to stipulate when, where and how they will
enact their goals. Plan-making has been shown to improve our likelihood of achieving
goals in a diverse array of domains, including exercise, dieting, smoking cessation,
academic performance, test preparation, recycling and voting.
Commitment devices – providing individuals with access to commitment devices –
or a means of voluntarily (a) enforcing restrictions on themselves until they have done
what they know they should or (b) imposing penalties for failing to do what they
should.
Temptation bundling – seeks to increase should behaviors by bundling them with
tempting wants.
Lecture 1: Introduction to Consumer Marketing
Choice can be driven by:
Price
Design
Convenience
Quality
Others are using it (social proof)
Trustworthiness (seller, in secondary markets)
Jobs-to-be-done theory (JTBD)
o JTBD is a simple framework that puts emphasis on the ‘’why’’ behind what a
customer is doing. It focuses on identifying enduring consumer needs to develop
products that have a lasting impact.
3
, o It gives a unit of focus – the job the customer is looking to do – to build measurable
ways of looking at the success that do not change over time. The products need to
meet the metrics important to the customers.
o You are not trying to just solve a consumer problem. You are first trying to figure out
what the right problem is.
o Good products do not sell themselves.
o ‘’Job’’ is shorthand for what an individual really seeks to accomplish in a given
circumstance.
o The circumstances are more important than customer characteristics or product
attributes.
o Good innovations solve problems that formerly had only inadequate solutions – or no
solution.
o Jobs are never simply about function – they have powerful social and emotional
dimensions.
What questions can you ask to uncover jobs your customers need help with?
What progress is the consumer trying to achieve? What are the functional, social, and
emotional dimensions of the desired progress?
What are the circumstances of the struggle? Who, when, where, while doing what?
What obstacles are getting in
the way of the person
making that progress? What
tasks do people want to
avoid?
Are consumers making do
with imperfect solutions
through some kind of
compensating behavior? Are
they buying and using a product that imperfectly forms the job?
Lecture 2: Understanding Consumers
Segmentation and benefits
o Segmentation aims at dividing the market into
subsets of customers.
o Members are different between segments, but
similar within.
o What are the benefits of segmentation?
o To the firm:
Identification of valuable
customers (higher CLV)
More targeted promotions &
marketing communications.
o To the customers:
Customized products & services
Personalized experience
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