BAMA 506 CONSUMER BEHAVIOR. TERM 2 (Period 3)

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1 BAMA 506 CONSUMER BEHAVIOR TERM 2 (Period 3) Instructor: Kate White Office Location: HA Katherine.White@sauder.ubc.ca Telephone: Office Hours: Tuesdays at 4pm, or by appointment Dates: Period 3: Jan 6 th to Feb 12 th Times: Tuesday and Thursday 2:00-4:00PM Location: HA 132 Prerequisite(s): MBA Core Required Reading Material: The course readings which include some book chapters, cases, and articles will be available free of charge on Connect. A course reader that includes the copyrighted cases can be purchased in the bookstore. The online readings will also contain several chapters from a textbook: Solomon, White, and Dahl (2013), Consumer Behaviour: Buying Having Being (6th Canadian Edition). You do not need to buy the textbook separately.. Additional Suggested Readings: Kahneman, D.: Thinking Fast and Slow. Thaler and Sunstein: Nudge: Improving Decisions about Health, Wealth, and Happiness. Heath and Heath: Made to Stick: Why Some Ideas Survive and Others Die. Belsky and Gilovich: Why Smart People make Big Money Mistakes. Cialdini, R. Influence: Science and Practice (4th Edition). Underhill, P. Why We Buy. Zaltman, G. How Customers Think. Alba, J. A: Consumer Insights: Findings from Behavioral Research.

2 Module Description: Uncovering real insight into how consumers attend to, perceive, think and feel about, choose, consume, and evaluate products is the foundation of the success of virtually all business organizations. All decisions involved in developing an effective marketing mix rely on in-depth understanding of the consumers who comprise the target market. Thus, a clear understanding of the principles and processes of consumer behavior is critical to evaluating and developing effective marketing strategies. Contemporary approaches to marketing management emphasize the importance of adopting a customer-focused orientation.the notion of a customer-focused organization implies that all employees of an organization not simply those in the marketing department should be focused on consumer satisfaction. This course examines the science and the art of understanding the consumer and is aimed at an academically-oriented general managerial audience with interest in consumer behavior. The focus of this course will be on uncovering consumer insights and interpreting these through the lens of consumer behavior principles. The term consumer insight refers to more than the simple observation and description of what consumers are doing, to moving towards uncovering the underlying drivers of their behaviors and preferences. Thus, a consumer insight is an inference that explains why an individual or group behaves the way that they do. A meaningful consumer insight will drill deeper than surface observations of behavioral patterns into the realm of the underlying psychological processes at play such as conscious goals, unconscious motivations, perceptions, and consumer values. The main goal of this course is to encourage participants to view the market with an eye towards uncovering these types of consumer insights. We will focus on ways in which we can become astute observers and discovers of consumer insights that can be interpreted and acted on in meaningful ways. To do so, we will first consider different tools and techniques for uncovering consumer insights. In addition, the course will provide comprehensive coverage of relevant consumer behaviour frameworks and concepts that will help us to interpret and apply these insights in business-relevant ways. GRADING o 30% o 5% o 35% o 30% Individual Participation (includes general participation, case preparation and other homework exercises, and in class exercises) Discussion Leadership (Group leads overview and discussion of an article) Individual Assignments - Assignment #1: Experiential Audit (15%) - Assignment #2: Viral Advertisement Analysis (10%) Group Project/Presentation Examining Ideal-Actual Brand Network Associations.

3 Participation Grades For effective class participation you need to have read the assigned materials before the class session. A significant portion of class time will be devoted to in-class discussions, applying concepts you have uncovered via the readings, and analyzing assigned cases. We all have unique business experience and knowledge, and drawing on this in class is actively encouraged. This discussion forum provides an opportunity to present your position and analysis as well as learn from others by listening and responding to their comments and criticisms. Constructive contribution to the class discussions and active listening are important elements of this course. Please note that I will be looking for quality, not mere quantity in terms of class participation. Grading Scale for Class Participation: 0 Absent or late to class. 5 Present but does not participate. 6 Participates with basic information such as case facts. 7 Offers an opinion or asks/answers a basic question. 8 Engages in a meaningful discussion with other members of the class. 9 Shares an analysis using data or evidence from the case or reading. 10 Provides insight or asks a question that is instrumental in advancing understanding. Please follow these other simple rules. Failure to do so will negatively impact your participation grade. #1: Be on time #2: Put up your name tag #3: Come prepared and be ready to participate in discussions #4: No laptops. Note: this rule is observed in case-based courses across leading MBA programs. Discussion Leadership Assignments Each group will be asked to briefly present an overview of an article and then generate class discussion around the article (approximately minutes). 1) Assignment 1: Experiential Audit (Individual Assignment) Deliverable: A 3-4 page write-up, plus a 2 page appendix. Hand-ins should be 12 point font, double spaced, with one inch margins. Note: you must run your two chosen branded examples by me first. The goal of this assignment is to practice one of the qualitative research tools for uncovering consumer insights. In particular, this assignment familiarizes students with the use of the experiential audit tool as a means of uncovering insight into the consumer s experience. The assignment involves a field visit to two retail or service environments and an assessment using the experiential audit.

4 First, pick a retail or service category (e.g., spa, pizza, consumer electronics, clothing, etc.). Then pick 2 particular branded examples that you feel involve relatively better vs. worse (or otherwise qualitatively distinct) consumer experiences. For example, you might compare the Apple store with the Sony store. Next, your team will visit both locations and complete the experiential audit. Use the experiential grid to analyze both retail/service settings separately. Make note of all the experiences falling into specific cells of the grid. You may focus on most, but not necessarily all, of the cells. Be careful to use both dimensions of the grid. It is fairly easy to describe the experience providers (e.g., environment vs. products vs. people). But also pay special attention to examine the distinct internal responses that are evoked (sensation, interpretations, affective response, etc.). One experience provider typically triggers a chain of responses. To capture this, fill out the grid vertically, start with the first column (messages) and then go down the list of 5 responses. Come up with a metric that you believe best allows you to compare consumer experiences. You will hand in your completed grids as appendices and then also provide a consumer insight brief that highlights a) what are the key experiential differences/similarities that were observed across the two different settings, b) why you think such similarities and differences emerged, c) what you think the best metric would be to describe the value of experiences, d) whether there are any insights to be gleaned from this analysis, e) whether one of the two providers is doing a better job at serving their target market, or whether they are serving different markets in different ways, and f) the quality of actionable recommendations to either of or both of the providers given your analysis You will be evaluated on: a) clarity, b) concrete details and thoroughness of the analysis, c) quality of conclusions/ recommendations, and d) the applicability of your metric. Assignment 2: Viral Marketing Analysis The goal of this assignment is to get us familiar with applying consumer behaviour principles to marketing communications. Note: You must run your chosen ad by me first. Deliverable: A 2-3 page write-up. Hand-ins should be 12 point font, double spaced, with one inch margins. What Makes an Ad Go Viral? This assignment familiarizes students with the 6 sticky principles from Made to Stick by Chip and Dan Heath and asks students to apply these principles in meaningful ways. These principles are useful for word-of-mouth marketing and give insight as to why some ads go viral. Find an advertisement that you believe has gone viral (use Youtube, adage.com, Adweek, or any resource of your choosing). Apply the principles outlined in the chapter to your particular ad. How does the ad capitalize on these principles? Is there any other element of the ad that you think has contributed to its success? A strong analysis will correctly identify and apply all of the principles and highlight how they are utilized by the ad. An excellent analysis will take this analysis

5 further to identify other drivers of what makes the ad a success. Were there other psychological factors that made this particular advertisement go viral? Are there other course concepts that can help to explain the viral success of your chosen ad? Is this an ad that will likely continue to stick in consumers minds over time? Why or why not? You will be evaluated on: a) clarity, b) concrete details and thoroughness of the analysis, c) ability to apply all of the 6 sticky principles to your chosen ad, and d) ability to go beyond the 6 principles. Group Project The goal of this project is to tie together the themes, frameworks, and skills we have focused on during the course. You will use research methodology to uncover insights into how consumers perceive the brand versus how the brand ideally wants to position itself. In addition, you will make recommendations based on principles of consumer behavior as to how the marketers might strategically close this gap. Deliverable A presentation during exam week and you will hand in your power-point slide deck (plus appendices) to the instructor. ASSIGNMENT Marketers strive to increase brand equity. From a customer-based perspective, brand equity relates to the value a brand has in consumers mind, and it depends on the positivity, strength, type, and uniqueness of associations that a brand elicits. Thus, understanding the network of brand associations in memory is important to improve the effectiveness of marketing efforts. Specifically, capturing the complexity of such networks by using brand maps may help marketers identify whether there is a strategic gap between the desired and the actual set of brand associations. The identification of such gaps is critical to improve strategic decision making about the target market and product positioning, as well as to improve tactical decision making about specific elements of the marketing mix (i.e., product, placement, price, and promotion). The objective of the group assignment is to measure the network of associations of a target brand, identify potential gaps between the desired and the actual brand associations, and provide a set of strategic and tactical recommendations that will address the identified gaps. More broadly, this assignment will provide you with practical knowledge on how to draw brand maps and use them as inputs in decision making. PROCEDURE The first step is to choose a target brand. You MUST run your target brand by me first. Use a brand that you believe is trying to create strong and distinct brand image, but that might elicit varied or incongruent responses from consumers (for example brands such as Ikea, Apple, McDonalds, etc.).

6 Once you select your target brand, use available sources of information to develop a better understanding of the desired set of brand associations (desired brand map). Next, you should draw an actual brand map, which is often referred to as consensus map. To draw the map, you should interview at least 15 respondents and use Brand Concept Maps. This technique typically involves three stages (see John et al. 2006): Elicitation stage in which brand associations are elicited from respondents Mapping stage in which respondents indicate connections among brand associations and their strength Aggregation stage in which researchers construct a consensus map, which includes the most important brand associations and their connections. For the elicitation and mapping stage you can use the same sample, although John and colleagues (2006) use different samples. Next, you should identify the most important gaps between the obtained consensus map and the desired brand map, and develop a set of strategic and tactical recommendations to resolve these gaps. You can be creative, but base your recommendations on the results of the analysis. Also, you can include sample materials for the proposed elements of the marketing mix. The deliverable will be in the form of a 20 minute presentation on your recommendations for the brand during exam week and you will hand in your slide deck and any appendixes. You will be graded on: Description of the sample(s) and research methodology used. Creation of the actual and ideal brand concept maps. Ability to identify clear gaps between the actual and ideal brand maps. o Here I will be looking for depth of analysis and ability to identify relevant consumer insights. Recommendations made o Here I will be looking for recommendations that are creative, actionable, and clearly relevant to the previous analysis. o Are your recommendations related to concepts we have discussed in class? o Do your recommendations relate strategically to the assumed goals of the brand? Do they relate strategically to the 4 Ps? o Be as specific as you can with respect to your recommendations give clear examples of specific executions if you can. Appendices Include summaries of the individual interviews here. You will also be evaluated on presentation style and the quality of the visual presentation of the project. RESOURCES D. R. John, B. Loken, K. Kim, & A. Monga (2006), Brand Concept Maps: A Methodology for Identifying Brand Association Networks, Journal of Marketing Research, 43,

7 GROUP PEER EVALUATION You will be asked to complete a peer evaluation form for your team project. Please note that if there is consensus among the team that an individual has contributed less than their peers to the project, your team project grade will be weighted to reflect this. Team members that work in good faith will not experience grade adjustments, while individuals that perform below expectations or fail to pull their weight will experience a negative grade adjustment. I reserve the right to adjust peer evaluations to ensure fairness. Be proactive with your team members and make your expectations of one another clear from the start or the team project. Poor communication is often the source of discrepancies. Any problems that arise with team members must be brought to my attention well before the projects are due. LEARNING OBJECTIVES: After taking this course, students are expected to: 1) Become familiar with concepts and frameworks related to consumer behavior. 2) Apply these psychological frameworks and concepts to understand and predict consumer behavior across a variety of contexts. 3) Use creative, thoughtfully designed research techniques to build deep understanding of the drivers of consumer behavior and to uncover consumer insights. 4) Leverage the combination of well-executed research and the application of consumer behavior frameworks to make strategic recommendations. PROGRAM GOALS (MBA) RELEVANT TO THIS COURSE Critical and Analytical Thinking Integration Communication Ethics and social responsibility Academic Honesty You are expected to follow the standards of the University of British Columbia with respect to academic honesty. Misconduct includes, but is not limited to, cheating on

8 COURSE OUTLINE AND ASSIGNMENT DATES (Subject to Change) Session Date Topic, Readings, and Assignments PART I: UNCOVERING CONSUMER INSIGHTS 1 January 6 Course Introduction/ From Consumer Behavior to Consumer Insights Article: An Anthropologist Walks into a Bar (2014) 2 January 8 Understanding The Consumer: Segmentation and Trends *Discussion Article: Are You Ignoring Trends That Could Shake Up Your Business? Harvard Business Review Case: BMW Films (Harvard Case: Course Reader) 3 January 13 Understanding the Consumer: Targeting and Positioning *Discussion Article: Break Free from the Product Life Cycle. Harvard Business Review Guest Speaker: From Insight to Innovation, Dr. Tom Waller, Director of White Space, Lululemon 4 January 15 Using Research to Uncover and Test Consumer Insights Article: A Step-By-Step Guide to Smart Business Experiments. Harvard Business Review Case: Boston Beer Company: Light Beer Decision (Harvard Case: Course Reader) Assignment #1 Due: Experiential Audit (Hardcopy Due in Class) PART II: INTERPRETING CONSUMER INSIGHTS 5 January 20 Motivation, Values, and Affect *Discussion Article: Laddering Theory Case: Unilever Ice Cream Case (LBS Case: Course Reader) Chapter: Consumer Behaviour Chapter 4 (pp ) January 22 Sensation, Perception, and Attention *Discussion Article: Want to Perfect Your Company s Service? Use Behavioural Science. Harvard Business Review. Chapter: Consumer Behaviour Chapter 2 (pp )

9 Case: Renova (INSEAD Case: Course Reader) MBA PROGRAM Assignment # 2 Due: Viral Marketing Analysis (Hardcopy Due in Class) Chapter: Made to Stick (Can be read earlier for assignment) 7 January 27 Learning and Memory Chapter: Consumer Behaviour Chapter 3 Guest Speaker: From Research to Insight, Lindsey Davis, Vice President of Vancouver Office, The Sound Research Article: Brand Concept Maps: A Methodology for Identifying Brand Association Networks (Can be read earlier/later for group project) Part III:ACTING ON CONSUMER INSIGHTS 8 January 29 Decision Making Mowen, J.C., & Minor, M.S. Consumer Behavior: A Framework. Ch. 9. Consumer Decision Processes (pp ) Get Close to your customers. Itamar Simonson. California Management Review Guest Speaker Prof. Dale Griffin 9 February 3 Diffusion of Innovation *Discussion Article: Eager Sellers and Stony Buyers: Understanding the Psychology of New-Product Adoption (2006). Harvard Business Review, Volume 84, Issue 6, Case: TiVo (Case to be distributed) 10 February 5 Attitudes, Persuasion, and Loyalty Chapter: Consumer Behaviour Chapter 8 A Case for Brand Loyalty (Harvard Case: Course Reader) 6 EXAM GROUP PROJECT PRESENTATIONS WILL BE GIVEN DURING EXAM WEEK