Attitudes, Intentions, and Behavior II MKT 750 Dr. West

Agenda Discuss the Tivo Case More on Attitudes Hierarchy of Effects ELM FCB Grid

What is TiVo’s Problem? TiVo has amazing features, and those who own it love it. However, consumers are not aware of TiVo. TiVo is hard to describe and difficult to advertise It is a bundle of many functions, each of which may not be compelling enough to warrant adoption

Feature & Benefits EPG (electronic programming guide) Find programs that interest you easily Season PassSimple & smart recording Thumbs UpWatch more of what you like most FF / Thumbs downWatch less of what you like least PauseStop the flow of TV to accommodate your life

What is TiVo? A super VCR No tape, superior recording, simplified programming A TV enhancement Pause live TV, skip ads A personal TV channel Reduce program overload and complexity

Who wants TiVo? TV “Geek” -- innovator Busy People – early adopter Couch Potato Sport Enthusiast People who find TV “irrelevant”

Value Proposition Questionable value Why would TV watchers want control? Complex benefits Difficult to translate features into benefits Compatibility Concerns How will this work with my existing equipment? Standards Consumers maybe cautious about investing in the equipment without assurance that TiVo will be accepted

Value Proposition Questionable Performance How well will it know my preferences? Multiple viewers within a household? Privacy Issue How will the information be used within TiVo? How will the information be used outside the system?

BeforeAfter AdvertisersAdvertisers Networks Cable & Satellite Consumers Value Chain Impact

Proposed Campaign: Product: bundle with DirecTV Price: $399 for 30-hour recorder, monthly fee Place: same Promotion: “lifestyle” commercials and print ads Focused on creating awareness, interest, and curiosity Brand building with an emotional appeal through humor Time-shifting, personal TV channel to busy people

Recommendations Product: bundle with cable TV (e.g. Time Warner) Price: no charge for the box, monthly fee (Roadrunner) Place: direct sales for non-cable households Promotion: Incentive: Collaborate with cable companies and offer a free month trial Commercials: Use product demonstrate advertising (owners “outsmarting” their TV)... keep the humor

Back to exploring attitudes…

Components of Attitudes Affect the way a consumer feels about an attitude object (favorable/unfavorable) Behavior the consumer’s intention to do something with regard to the attitude object Cognition refers to the beliefs (know) a consumer has about an attitude object.

Social Norms Social Norms Theory of Reasoned Action: A Multi-Attribute Model Evaluation of Product Attributes Brand Beliefs Overall Product Evaluation Intention to Buy Behavior n A o =  b i e i + SN (Fishbein & Azjen) i =1 (e i )(b i )(A o )(BI)(B)

The rest of the story… What’s missing from Fishbein’s “Theory of Reasoned Action” Attitudes = F(Beliefs, Evaluations, Social Norms) Where do our attitudes come from? Friends and family Personal experience Observation Media & Advertising

High-Involvement Hierarchy: Cognition Affect Behavior Low-Involvement Hierarchy: Cognition Behavior Affect Experiential Hierarchy: Affect Behavior Cognition Know FeelDo Know DoFeel Feel DoKnow Hierarchy of Effects

Exercise Take a out a piece of paper Make a quick list of investment firms that come to mind Jot down your reactions to the following ads. Be sure to keep your comments separate so that you can go back to them.

Elaboration Likelihood Model Cognitive responses occur while reading, viewing, or listening to an ad. Message related thoughts Supporting arguments and Counterarguments Source-oriented thoughts Source Bolstering and Source Derogation Ad execution thoughts Reactions or feelings toward the ad

Elaboration Likelihood Model The frequency and nature of responses determine whether attitude change has occurred

Persuasive Communication Motivated to Process? Involvement Relevance, etc. Ability to Process? Issue familiarity Arousal, etc. Nature of Cognitive Processing Mostly Mostly Mostly FavorableUnfavorable Neutral Thoughts Thoughts Thoughts Cognitive Structure Change New cognitions adopted Different responses Persuasion: enduring positive attitude change Boomerang: enduring negative attitude change Temporary attitude shift Peripheral cue present? Source characteristics Visual imagery Executional elements Retain Initial attitude Yes No Elaboration Likelihood Model

Persuasive Communication Motivated to Process? Involvement Relevance, etc. Ability to Process? Issue familiarity Arousal, etc. Nature of Cognitive Processing Mostly Mostly Mostly FavorableUnfavorable Neutral Thoughts Thoughts Thoughts Cognitive Structure Change New cognitions adopted Different responses Persuasion: enduring positive attitude change Boomerang: enduring negative attitude change Yes Elaboration Likelihood Model: Central Route to Persuasion Opinions are sensitive to the strength/quality of information presented Ad providing relevant information or images will lead to more favorable opinions

Persuasive Communication Motivated to Process? Involvement Relevance, etc. Ability to Process? Issue familiarity Arousal, etc. Temporary attitude shift Peripheral cue present? Source characteristics Visual imagery Executional elements Retain Initial attitude Yes No Elaboration Likelihood Model: Peripheral Route to Persuasion A ad (attitude toward the ad) impacts consumers’ opinion/feelings about a product Cues devoid of product-relevant information (peripheral cues) shape consumer behavior

MOTIVES FOR PURCHASING ThinkFeel Insurance Sports Car High Economy Cars Perfume Tires Wine Credit Cards INVOLVEMENT Medications Sun-Tan Lotion Pizza Low Liquid Bleach Beer Razors Soft Drinks Paper Towels FCB: Implications for Advertising III IIIIV Foote Cone & Belding Grid

Quadrant I: Informational approach emphasizing performance Quadrant II: Emotional appeals linked to self-image Quadrant III: Repetitive appeals (maintain awareness and encourage repeat purchase) Quadrant IV: Apply classical conditioning (develop continuity between a symbol and the product) I I II III IV

Real Men of Genius Mr. Giant Taco Salad Inventor Mr. Silent Killer Gas Passer Mr. Fancy Coffee Shop Coffee Pourer

Assignment Readings: Chapters (pp , , , ) Begin working with your team on identifying an ad campaign you want to study!