Consumer Psychology

Consumer Psychology • The study of the interactions between consumers and organizations. • Advertisers and advertisements are everywhere! • We are exposed to up to 3000 advertising messages a day • Examples include signs, billboards, flyers, scented advertisements, TV, film previews

Unique Research Methods • Surveys and Public Opinion Polls – often excellent at predicting public behavior. But have failed famously at times. • Sample selection is often the key • Participants often fudge answers (under-report alcohol and junk food) • Some companies have moved toward target samples (e.g., Toyota used VW Beetle owners)

Focus Groups • Paid participation of 8-12 members • Match the profile of traditional product owner • Describe their reactions to a product • Sometimes observed using the product • More qualitative than quantitative

Projective Techniques • Idea that people won’t directly express their opinions. Thus need to uncover their unconscious feelings • Use role playing, personifications, have them describe someone who uses the product

Observational Techniques • Idea that behaviors do not always correspond with attitudes • Variety of techniques • Purchasing Behavior: sales after an ad is aired. Problem is that there are often other variables to consider • Supermarket Observers: costly and time consuming, lack of experimental control (e.g., SES, ethnicity)

Observational Techniques Cont. • Scanner Cable Panels – shopping behavior is monitored electronically (UPC Codes). Shoppers are then targeted for specific advertising via cable television • Brand Identification and Preference Tests: Take the Pepsi Challenge!!

Testing for Advertising Effectiveness • Aided Recall Technique – most popular method. How much of the ad content can be remembered. Aided by specific interview questions • Recognition – where did they see it, what do they recall • Sales Tests – control and test areas • Coupon Returns – tracks actual buying behavior. Price reduction from coupon leads to more sales than an equivalent price markdown

Television Programming Research • What shows are watched by a lot of people. Advertising money is at stake • Poor pre-release research – over 90% of new programs are cancelled in their first year • New pilots are judged by audience reaction • Viewer samples, unfortunately, are rarely random

Nielsen Ratings • Most commonly used rating system • Use mechanical devices to assess audience size and composition • Audimeter tracks what program is on, but not who is watching or if it is being watched • People Meter used during Sweeps period. Asks for the above info., but only ½ the respondents actually use it

The Seller • Types of Advertising Used • Direct sell: Designed to elicit an immediate buying response • Consumer Awareness: create a brand name and maintain awareness of that name • Product Image: create an image. For similar products, need to make yours stand out • Institutional Advertising: persuade the public that the company is a good neighbor (e.g., Shell advertises highway safety advice)

Types of Advertising, Cont. • Comparative Advertising - compare one brand to others. Only successful when spokesperson has a high degree of credibility • Informational Advertising – Present facts. Increased in last decade from 20% to 65%. • Magazine ads tend to be more informative than TV

Types of Advertising Appeals • Primary and Secondary Needs • Celebrity Appeals – social learning theory, we often imitate those who we identify with, resemble, or who are popular • Not very effective. Credibility of celebrity declines with an increase in products advertised • Positive/Negative Appeals – negative appeals fail if consequences that are shown are overly unpleasant

Types of Advertising Appeals, Continued • Implied Superiority – No Pain Reliever Works More Quickly!! • Suggests that it is the fastest, but actually all pain relievers work equally fast • 70% of assertions in TV commercials utilize implied superiority

Trademarks • Shorthand symbol of the feelings and images associated with the product • In the 18-29 age group, the most recognized trademarks are: Coke, Campbells, McDonalds, Pepsi, Kodak, Disney, NBC • Foreign Interpretations • Updating Trademarks

Product Image • The ideas, thoughts, and feelings associated with the product’s personality • Examples include – • The Marlboro Man • The Izod Alligator in the 1980’s • Mr. Clean

Product Packaging • Plays an important role in the products that we buy • Packaging costs comprise 1/3 the cost of supermarket items • Environmental concerns surrounding packaging

Sex in Advertising • Not very effective • Target sex stares at pictures, ignores rest of ad • Overall, poor recall for ads with sexual content • Sexist portrayal of women in advertisements

Internet Advertising • The power of the world wide web • Number of people on the web grows everyday • Recently, women have begun to use the web more than men • Targeted advertising • Cookies count the number of times a site is accessed. Counts what site you came from

The Consumer • Buying habits and brand loyalty – habit is the key word • Move cans of soup from normal shelf, people unwittingly buy wrong soup • Underscores importance of getting people into your store and trying your product • Logic behind introductory offers • Product pricing • Price frequently not considered for staples • We use price as a meter for quality

Advertising to Different Groups • Ethnic Groups • Considering equal economic groups, blacks spend more on clothing, but less than whites on food, housing, and medicine • Black spokespeople are more effective in ads aimed at blacks • For whites it depends upon the listener’s initial state of prejudice. Low prejudice whites find black spokespeople more memorable

Advertising to Different Groups • Children • Huge amounts of disposable income: 4-12 year olds control $14 billion, Teenagers spend more than $30 billion a year. • Half of routine shopping is done by adolescents • Is it ethical for psychologists to help target advertising at children?

Advertising to Different Groups • Gays – tend to be better educated than the rest of the population. Thus they are wealthier. • Makes gays a large potential market with high discretionary income • Elderly – rapidly growing sector of the economy. Currently a sector of the population that struggles economically

Consumer Psychology