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Unformatted text preview: HA347: CONSUMER BEHAVIOR TTh 2:55 4:10PM Fall 2007
PROFESSOR: Dr. Michael Lynn PHONE: 255-8271 (O) OFFICE: E-MAIL: 552 Statler Hall <WML3@CORNELL.EDU> WEBPAGE: http://www.people.cornell.edu/pages/wml3 REQUIRED READER: HADM347 Course Packet CONSUMER BEHAVIOR Michael Lynn OFFICE HOURS: By appointment just see me after class, call me on the phone, or leave me an e-mail message to set up the appointment. COURSE OBJECTIVES: The goal in this course is to help you become better at understanding, predicting and influencing consumer behavior. We will cover such topics as: motivation , perception , learning, decision non-verbal communication, persuasion, compliance, geo-demographics, and psychographics. making, attitudes, The practical implications of psychological principles will be emphasized. Class time will be used for discussions and application exercises as well as for the presentation of relevant information. Specific applications will involve such areas as Guest Frequency Programs Menu Design Promotional Strategy Personal Selling Sales and Marketing Planning By the end of the course, your understanding of these topics should help you to: (1) define marketing and other consumer-related problems more clearly, (2) generate more and better alternatives for solving such problems, and (3) evaluate alternative solutions to such problems more thoroughly and rigorously. Together, these skills will enable you to make more effective marketing decisions and help you to get the customers that every business needs to survive. COURSE DESIGN: I want you to be able to apply the material from this course in your careers. To do that, you must first learn (i.e., store in long-term memory) the material. Therefore, I have designed the course to encourage both the acquisition and application of the material. Homework assignments will get you actively engaged with the material. Exams will consist of recall and applied questions. Class time will be devoted to discussing and applying the course material in addition to presenting it. However, the ratio of time spent on discussion and exercises as opposed to lectures depends on how well the class keeps up with the reading and how actively the class participates in the discussions and exercises attempted. You will need to complete the assigned readings before you come to class, so that you are prepared for discussions and exercises. Otherwise, I will simply lecture on the material. READINGS: In order to provide you with a basic background in consumer psychology, I have assembled a set of readings from popular books, magazines and academic journals or working papers. This reading material was selected for its content and form. It represents the clearest, most interesting presentation of the material that I have found. CLASSROOM ATTENDANCE & BEHAVIOR: In order to encourage classroom attendance, I will frequently present some new information (not in the readings). Depending on how well you and your classmates keep up with the reading and participate in class, I will either devote class time to lectures or to discussions, demonstrations and exercises as well as lectures. You should come to class every day, but I will not keep attendance records. Behave in a professional manner when you come to class. That means being on time, remaining attentive, and refraining from behaviors (such as eating or talking) that might distract others. Practicing professional conduct now will make professionalism easier later, when your career may depend on it. GRADED WORK: Your course grade will be based on nine home/classwork assignments and three open-book (but NOT open-notes) exams. The combined homework grades and each exam will be worth 25% of your final grade. In most cases, final course grades will be based only on the average of the homework and exam grades. However, I reserve the right to increase or decrease a student's final grade by as much as 10% (a letter grade) based on the student's classroom conduct and/or course effort. Home/classwork assignments will be given out at various announced times. The purpose of these assignments is to get you to think about applications of the course material and to give you practice for the applied questions on the exams. Most of these will be individual assignments, but some may be group exercises. Most will be homework, but some may be completed in class. These exercises will be graded using a check (reflecting acceptable work), check plus (reflecting exceptional work), or check minus (reflecting unacceptable work). You will get no points for check-minus work. You will earn 10 points for each assignment receiving at least a check, up to a maximum of 90 points. For every check plus, you will get an additional 2 points, up to a maximum of 10 points. Thus, your home/classwork grade can range from 0 to 100 depending on many assignments you complete and how well you do on them. Since there will be 11 assignments, you can miss up to 2 with no penalty to your grade. Assignments are due at the beginning of class on the due dates; you may send them to me as e-mail attachments. Late assignments will NOT be accepted. Graded homework assignments will be returned with no written comments directly on them. However, they will be returned with general oral comments about the class performance on each assignment and with a sample of one of the better examples turned in for each assignment. You are responsible for using these two tools to figure out how you could have done the assignment better. (Of course, I am available for consultation if you need help with this.) You will want to do your best on, and learn from, these assignments, because they or something just like them will appear on the exams. The exams will be given on T 9/25, T 10/30, and T 11/20. Each of these exams will consist of applied and/or recall questions and will be completed in class. Make-ups for these exams will be given during the time scheduled for the final exam and only then. Anyone may take one or more of these make-up exams to replace previous exam scores (including scores of zero due to failure to take the original exam). Make-up exam scores will only replace original exam scores if they are higher than the original exam scores. GRADING STANDARDS: I want everyone in this course to receive good grades. However, you have to earn good grades before I can give them to you. The standards I will use in grading your work are described below. I will base course letter grades on the total point percentages you earn from the properly weighted graded assignments previously described. Your total point percentages will be assigned letter grades using the scale below. Thus, it is possible for the entire class to earn an A. Everyone simply has to get 93+% of the possible points for this to happen. 97 100% 93 96% 90 92% 87 89% 83 -86% 80 -82% = A+ =A = A= B+ =B = B77 79% 73 76% 70 72% 67 - 69% 63 66% 60 62% 0 59% =C+ =C = C= D+ =D = D=F SEEKING ASSISTANCE: Performance is a function of effort, strategy and ability. In general, the harder you work in this course the better your performance and grades will be. However, sometimes a student will find that extra time and effort does not appreciably improve his or her grades on assignments. In that case, the student is probably using a poor work strategy. It is important to work smart as well as to work hard. If you find that your efforts are not paying off as much as you'd like, please see me so we can discuss alternative work strategies that may produce better results. ACADEMIC INTEGRITY: I expect all of your work to be independent and original. The school's code of academic integrity will be vigorously enforced. [Note: You are allowed to bring and use your reader, but not your class notes, during exams. Writing or copying any portion of class notes in your reader makes that reader unusable during the exam. ] COURSE SCHEDULE
I. Consumers are limited-capacity information processors.
TH 8/23 T 8/28 TH 8/30 T 9/4 TH 9/6 T 9/11 TH 9/13 T 9/18 TH 9/20 T 9/25 Introduction (Optional Reading) Rational & Experiential Systems (Reading # 1, #2, #3, #4); Exercise #1 due (cont') Attention & Memory (Reading # 5 pp. 78-91, #6, #7); Exercise #2 due (cont') Perception (Reading # 5 pp. 92-101, #8, #9); Exercise #3 due (cont') Decision Making (Reading #10, #11, #12, #13, #14); Exercise #4 due (cont') Exam #1 II. Consumers are easy to influence but difficult to know or change.
TH 9/27 T 10/2 TH 10/4 T 10/9 TH 10/11 T 10/16 TH 10/18 T 10/23 TH 10/25 T 10/30 Advertising/Persuasion (Reading #15, # 16, #17, #18); Exercise #5 due (cont') Sales/Compliance (Reading #19, #20, #21); Exercise #6 due Fall break (cont') Segmentation & Targeting (Reading, #22, #23, #24 )Exercise #7 due (con't) Marketing Research/Prediction (Reading, #25, #26, #27) (cont') Exam #2 III. Consumers are goal-oriented animals.
TH 11/1 T 11/6 TH 11/8 T 11/13 TH 11/15 T 11/20 TH 11/22 T 11/27 TH 11/29 Learning (Reading #28, #29, #30) Over-Justification (Reading #31); Exercise # 8 due Uniqueness/Status (Reading #32, #33); Exercise #9 due Sex (Reading #34, # 35, #36); Exercise #10 due Fairness (Reading #37, #38, #39, #40); Exercise #11 due Exam #3 Thanksgiving Break Tipping (Optional Reading) Wrap-up (All make-up exams will be whenever the university schedules our final.) READING LIST HA347: CONSUMER BEHAVIOR Fall 2007
Optional Reading Michael Lynn (2006) "Tipping in restaurants and around the globe: An interdisciplinary review. Chapter 31, pp. 626-643. In Morris Altman (Ed.) Handbook of Contemporary Behavioral Economics: Foundations and Developments, M.E. Sharpe publishers. Consumers are limited capacity information processors
1. Seymour Epstein, (1994), "Integration of the cognitive and psychodynamic unconscious," American Psychologist, 49 (8), 709-724. 2. Irvine, William (2006). Chapter 5: The Psychology of Desire. On Desire. Oxford: Oxford University Press, pgs. 91-119.
3. Ap Dijksterhuis, et al (2005), "The unconscious consumer: Effects of environment on consumer behavior," Journal of Consumer Psychology, 15, 193-202. Itamar Simonson (2005), "In defense of consciousness: The role of conscious and unconscious inputs in consumer choice," Journal of Consumer Psychology, 15, 211217. Wayne Hoyer and Deborah MacInnis (2001). Consumer behavior, 2 ed., New York: Houghton Mifflin, pp. 78-101. Philip Sawyer (1995). Ads that win vs ads that work. Martketing Tools, March/April, pgs. 4-10. Kardes, Frank (2002). Consumer memory. Consumer Behavior and Managerial Decision Making. New Jersey: Prentice Hall, pgs. 50-78. Thomas Robertson, Joan Zielinski and Scott Ward (1984). Consumer behavior, Glenview, IL: Scott, Foresman, pp. 166-179. Joel Cooper and Grant Cooper (2002), "Sublimial motivation: A story revisited," Journal of Applied Social Psychology, 32 (11), 2213-2227. fiction?," Journal of Consumer Research, 6 (Sept), 93-100. 4. 5. 6. 7. 8. 9. 10. Richard Olshavsky and Donald Granbois (1979), "Consumer decision making- fact or 11. Tori DeAngelis (2004), "Too many choices?," Monitor on Psychology, June, pp. 56- 57. 12. Richard Thaler (1985), "Mental accounting and consumer choice," Marketing Science, 4 (3), 199-214.
13. Gary Belsky (1999). To understand your customers, you have to know how they think. America's Community Banker, October, 23-26.
14. Monkey business-sense, The Economist, June 25, 2005, pp.80-81. Consumers are easy to influence but difficult to predict or change
15. Jack Trout and S. Rivkin (1996). Minds don't change. The New Positioning, McGraw Hill, pgs. 33-39.
16. Gerard Tellis (2004). Advertising as Persuasion. Effective Advertising, Thousand Oaks, CA: Sage, pgs. 111-134.
17. Matt Bai (2005), "The Framing Wars," NY Times Magazine, July 17, pp.38-45, 68-71. 18. Gerald Zaltman (2003). Chapter 10: Stories and brands. How Customers Think. Boston, MA: Harvard Business School Press, pgs. 165-187.
19. Neil Rackham (1988). The SPIN Strategy. SPIN Selling, NY: McGraw-Hill, pgs. 67- 98.
20. Cialdini, R. and Goldstein, N. (2002). "The science and practice of persuasion," Cornell HRA Quarterly, April, 40-50.
21. David Myers (1994), Exploring Social Psychology, New York: McGraw-Hill, pp. 82- 92.
22. Tony Allesandra, Phil Wexler and Rick Barrerra (1987). Relationship Strategies. Non- Manipulative Selling, 2nd Ed. NY: Prentice Hall, pgs. 13-33.
23. Rachel Kennedy and Andrew Ehrenberg (2001). There is no brand segmentation. Marketing Research, Spring, 4-7.
24. Garth Hallberg (1995). Why all consumers are not created equal. All Consumers Are Not Created Equal, John Wiley & Sons, pgs 27-48.
25. William Sherden (1998), The Fortune Sellers, New York: john Wiley & Sons, pp. 85-124. 26. Ann Lynn and Michael Lynn (2003), "Experiments and quasi-experiments: Methods for evaluating marketing options," Cornell Hotel and Restaurant Administration Quarterly, April, pp. 75-84. 27. Stephen Brown (2005), "Fortune favors the brand," Marketing Research, Summer, pp. 22-27. Consumers are goal oriented animals
28. Robert Settle and Pamela Alreck (1986). Learning. Why They Buy, John Wiley & Sons, pgs. 89-109. 29. Walter Nord and Paul Peter (1980). A Behavior Modification Perspective on Marketing. Journal of marketing, 44 (Spring), pgs. 36-47.
30. Stijn M.J. van Osselaer (2004). Of Rats and Brands: A Learning and Memory Perspective on Consumer Decisions. Inaugural Address at Erasmus Research Institute of Management on Oct. 29.
31. Alfie Kohn (1993). Cutting the interest rate. Punished by Rewards, Houghton Mifflin Co., pgs. 68-95.
32. Jeffrey Catrett and Michael Lynn (1999). Managing status in the hotel industry. Cornell H.R.A. Quarterly, (February), 26-39.
33. Michael Lynn (2002). Uniqueness Seeking. in C.R. Snyder and S.J. Lopez (Eds.) Handbook of Positive Psychology, New York: Oxford Press, pp. 395-410.
34. Tim Reichert (2003). What is sex in advertising? Perspectives from consumer behavior and social science research," In T. Reichert and Jacqueline Lambiase (eds), Sex in Advertising: Perspectives on the Erotic Appeal, Mahwah, NJ: Lawrence Erlbaum, pp. 11-38.
35. Michael Lynn, et al. (1999). "Evolutionary perspectives on consumer behavior: An introduction," Advances in Consumer Research, 26, 226-230.
36. William Allman (1993). The mating. US News & World Report, July 19, 57-63. 37. Daniel Kahneman, Jack Knetsch and Richard Thaler (1986), Fairness as a constraint on profit seeking: Entitlements in the market. American Economic Review, 76, 728-741.
38. Sheryl Kimes (2002). Perceived fairness of yield management, Cornell HRA Quarterly, 21-30
39. Sheryl Kimes and Jochen Wirtz (2002). Perceived fairness of demand-based pricing for restaurants. Cornell HRA Quarterly, 31-37.
40. Alex Dominguez (2003), "Monkeys of the world unite! Capuchins won't work for less. Ithaca Journal, Sept. 22. CONSUMER BEHAVIOR Exercise 1: The Implicit Association Test Due: Tues. 8/28 PART 1: Take IAT 1. Go to https://implicit.harvard.edu/implicit/demo/ 2. Click on "Go to the Demonstration Tests" 3. Read the info provided and click on "I wish to proceed" 4. Click on the "Race IAT" and follow the directions to take that test read your results 5. At the top of your results page, click on "Measure Your Attitudes" to take another test 6. Click on "I wish to proceed" 7. Select any other test you want and take that test read your results 8. Finally, click on "Background Info" at the top of the website page and follow the links (also at the top of the page) to "FAQs" and "In the Media" read about the IAT PART 2: Answer the following questions. 1. What IATs did you take? What did they reveal about you? Do you believe the results of your IATs? Why or why not? 2. What are implicit attitudes? What are implicit beliefs or stereotypes? 3. How does the IAT measure implicit attitudes? 4. What kinds of behaviors (if any) are affected by implicit attitudes? CONSUMER BEHAVIOR Exercise 2: Attention & Memory Due: Tues. 9/4 Which of the two attached ads had the highest recall score? Why? Use course material on attention and memory to justify your answer. CONSUMER BEHAVIOR Exercise 3: Perception, Attention & Memory Due Tues. 9/11 Look at the two menus provided one from Outback Steakhouse and one from Vietnam Restaurant. The focus of this assignment is the Outback menu; the Vietnam menu is provided only as a comparison that may make features of the Outback menu more apparent. What principles of perception, attention and memory are illustrated by the Outback menu? Make a numbered and annotated list of principles -- starting with principles of perception, then attention, and finally memory. For each principle, do the following: (a) describe the principle in general, abstract terms, (b) describe the features of the Outback menu that illustrate or embody that principle, (c) describe how the menu features will affect consumers, and (d) describe the benefit to the restaurant of having that effect. CONSUMER BEHAVIOR Exercise 4: Biases in Judgment DUE: Tues. 9/18 Below are various marketing actions/decisions that capitalize on biases in consumer judgment. For each, identify/name the bias that it capitalizes on the most and describe how the action affects consumers. A bias may be used more than once. (a) Rather than reduce prices by $500 a car manufacturer offers a $500 rebate on all cars sold during a promotion period. Name of bias: How action affects consumers: (b) A restaurateur with a casual dining restaurant decides to offer only 6 different bottles of red wine and 6 different bottles of white wine on his menu rather than offer a wider selection like his nearest competitor whose wine list contains over 50 different bottles of wine. Name of bias: How action affects consumers: (c) Instead of adding a separate charge for those who use the internet, a NYC hotel offers room rates with internet access already included and gives discounts to people who do not use the service Name of bias: How action affects consumers: (d) An amusement park presents a 10 visit pass as costing "$20 per visit for a total of $200" instead of simply saying it cost $200. Name of bias: How action affects consumers: (e) An art dealer convinces customers who can't decide between two paintings to take both home on a trial basis and that the store will pick up one or both if the customer is not satisfied Name of bias: How action affects consumers: (f) A bank advertises a payroll deduction plan as a pain-free way to save. Name of bias: How action affects consumers: CONSUMER BEHAVIOR Exercise 5: Attitude Change Due: Thurs. 9/27 Use course readings material to analyze and describe some case where you changed your opinion of (or attitude toward) some product, service or retail establishment. Answer the following questions. 1. What was the product, service or retail establishment you changed your attitude toward? What was you initial attitude and what was your final attitude? Briefly outline the events that lead to the attitude change. [Note: You can describe a change from neutral to either positive or negative, but I would prefer that you describe a change from positive to negative or vice versa.] 2. Was your attitude change based on central route, peripheral route persuasion, or passive learning? Explain -- If central route, what arguments persuaded you? If peripheral route, what cues, imagery, metaphors, and/or archetypal stories persuaded you? If passive learning, how did that happen? 3. Did you resist this attitude change? If so, why and how did you resist it? CONSUMER BEHAVIOR Exercise 6: Sales Techniques Due: Thurs. 10/4 Write a script (like for a play) in which you: (a) try to persuade a friend to go somewhere with you for spring break. The destination of the trip can be anywhere you want, but the trip should be at least moderately expensive. Write the parts for you and your friend. Use SPIN selling techniques discussed in the reading by Rackham. In the left hand margin, label all your questions as situation, problem, implication or need-payoff questions. --- OR --(b) ask a professor to let you take a make-up exam. Assume that your reason for making this request is that you have another exam and paper due on the original exam date. Write the parts for you and the professor. Use as many of the compliance techniques discussed in class and in the reading by Cialdini as possible. In the left hand margin, label all the techniques you use when/where you use them. CONSUMER BEHAVIOR Exercise 7: Relationship Styles Due: Tues. 10/16 1. The attached table contains 17 dimensions on which people differ along with 4 descriptions for each dimension. For each dimension, circle the description that best characterizes you. 2. Rate yourself honestly on the attached scales. Add your scores for each scale and divide each total by 15 to calculate your average score. Plot your average scores below. Responsiveness Relator 4 Socializer 3.5 3.0 Assertiveness 1.0 1.5 2.0 2.5 2.0 Thinker 1.5 Director 1.0 3.0 3.5 4.0 ___________ 3. Go back to the table used in #1. Write "Relator", "Thinker", "Director" and "Socializer" at the tops of columns 1, 2, 3 and 4 respectively. Next find the column that corresponds to your type and count how many times you circled a description in that column. Number of circles in column for your type ______ 4. Based on the information in the table and the scales, what do you think my type is? I think Prof. Lynn is a __________________________ From: Alessandra, A., Cathcart, J. & Wexler, P. (1988). Selling By Objectives. Englewood Cliffs, NJ: Prentice Hall, pp. 54-55. Source: Dr. Judy Siguaw, Cornell University CONSUMER BEHAVIOR Exercise 8: The Over-Justification Effect Due: T 11/6 Identify features of the John Thomas Steakhouse poker game (see description below) that increased or reduced the negative effects of extrinsic rewards on intrinsic value. Explain why each program feature had the effect that it did. In other words, relate the specific features of the program to general factors that increase/decrease the size of the over-justification effect and explain why those general factors have the effects they do. Program description: John Thomas Steakhouse in Ithaca had an unusual frequency program. Each customer received a game card each time he or she ate there. These cards could be combined with those of other people at the same table or with cards from previous visits to form poker hands. Customers won free items from the wine list or menu when they turn in poker hands using these cards e.g., a pair wins a relatively inexpensive item (such as a free side dish), four of a kind wins a slightly more expensive item (such as a free dessert), etc... Wait staff explained the program to customers when they hand out the game cards at the beginning of each dining party's visit. Otherwise, the program is not advertised. CONSUMER BEHAVIOR Exercise 9: Status Theory Due: Thurs 11/8 Read the attached articles about the 1941 Inglenook Cabernet Sauvignon Napa Valley and the 1945 Chateau Mouton-Rothschild. Each of these wines was identified by Wine Spectator as one of the top 100 wines of the 20th Century. Your assignment is to use your knowledge of status theory (described in the reading on status hotels) to identify which of the two wines has the highest status appeal. Explain/justify your answer. CONSUMER BEHAVIOR Exercise 10: Sex in Advertising Due: Tues. 11/13 Find two ads that use sex to sell a hospitality product one ad whose sexual elements will appeal to men more than women and one ad whose sexual elements will appeal to women more than men. try to find complex ads that provide a rich stimulus for discussion of the course material. Turn in copies of each ad along with answers to the following questions for each ad. (1) Why will the sexual content in this ad appeal more to men than women (or vice versa)? Explain/justify by relating features of the sexual stimuli to sex differences in sexuality. (2) How do you think this ad will affect viewers' attitudes toward the brand and intentions to buy the brand? Explain/justify by applying research on sex in advertising. CONSUMER BEHAVIOR Exercise 11: Fairness Due: Thurs. 11/15 Apply the reading material on fairness to the scenarios below to determine whether or not consumers would find the scenario fair. Explain/justify your answers. Q1: A shortage has developed for a popular variety of wine and customers must now wait two months for delivery. A wine shop has been selling this wine at the suggested retail price of $15. Now the shop prices this wine at $20. Fair or Unfair? (circle one) Principle of fairness & explanation: Q2: Due to poor harvests, a restaurant must pay 25% more for the coffee it serves. The restaurant raises the price it charges customers for coffee by 25%. Fair or Unfair? (circle one) Principle of fairness & explanation: Q3: A pizza chain has restaurants in many communities. Most of the restaurants face competition from other pizzerias. In one community, the pizza chain has no competition. Although its costs and volume of sales are the same as elsewhere, the chain sets prices that average 10% higher than in other communities. Fair or Unfair? (circle one) Principle of fairness & explanation: Q4: A hotel allows its reservation agents to discount prices up to 20% of the rack rate. Customers who do not insist on a lower rate receive no discount. If customers push for a lower rate, they receive a 10% discount. If they threaten to use a competitor, they receive a 20% discount. Fair or Unfair? (circle one) Principle of fairness & explanation: Q5: Two airline passengers who are sitting next to one another have a conversation on board their flight. It seems that Glenn's ticket cost $500, but Pat paid only $250. Glenn made a reservation the day before the flight and Pat made a reservation 30 days before the flight. Fair or Unfair? (circle one) Principle of fairness & explanation: Q6: A shortage has developed for a popular variety of beer. A bar has been selling this beer at $4 a bottle, which is $1 below the suggested retail price of $5 a bottle. Now the bar prices this beer at $5 a bottle. Fair or Unfair? (circle one) Principle of fairness & explanation: ...
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This note was uploaded on 12/03/2007 for the course H ADM 347 taught by Professor Mlynn during the Fall '07 term at Cornell University (Engineering School).
- Fall '07