Packaging, Positioning, and Placement
1. Gift Wrapping
Howard suggests that (he’s from chapter 7.3) wrapping gifts allows the giver and receiver to know their roles.
Poruvleb says that a gift is presented 1 of 3 ways:
• Wrapped in a non-traditional manner.
• Wrapped in a traditional manner.
Howard conducted a study to see how a gift’s appearance influenced participants’ moods. He found that people were happier when given a traditionally wrapped gift than the other 2 types.
Naked gifts can be acceptable but there are cultural and situational differences. A box of unwrapped chocolates is allowed to be brought to someone’s house as a gift.
Poruvleb’s study had 3 data collection techniques:
- Observations were conducted at a Christmas gift-wrapping stall.
- 20 in-depth interviews where respondents gave their views on gift wrapping.
- 6 workshops where participants in pairs were asked to wrap 1 gift for a close person, and another for an acquaintance. Asked to converse about gift wrapping while doing so.
- Most participants preferred to receive a wrapped gift.
- Qualitative data supported that gifts should be wrapped.
- It was found that there’s a social expectation of what a gift should look like. It should have traditional wrappings, ribbons, bows, etc.
- Participants, while wrapping for an acquaintance ‘played it safe’ but for a close person, tailored the wrapping style to the receiver’s taste.
Gifts should be wrapped because they (the giver and receiver) make it easier for the exchange to occur as they understand their role without confusion.
Gift wrapping services by luxury brands can help make them stand out.
- Gift wrapping helps the social interaction of gift-giving easier.
- Useful application for retailers: when the customer is given a wrapped product, the customer feels as if they are being given a gift which makes them more likely to visit the store again.
- Research Methods included the use of focus groups (when in workshops). Focus groups bring people together to discuss and provide feedback on a product before release.
2. Product Colour & Associative Learning
Grossman and Wisenbelt use the classical conditioning theory to explain consumers’ colour preferences.
Classical Conditioning = associative learning where 2 stimuli have been associated to one another.
Grossman and Wisenbelt report Gorn’s study which paired different coloured pens to pleasant or unpleasant music. When participants were asked to choose a pen to take home, they chose the pen colour which had been associated with pleasant music.
- Associative learning explains the psychological reactions people have with colour.
Blue & Green ➜ Calming colours
Red & Orange ➜ Arousing colours
In real life:
1. Pink is used in prisons to calm inmates.
2. Dentists paint surgeries blue to calm patients.
- Different colour associations exist for different products.
Holmes and Buchanan’s study supports the findings that people’s colour preferences differ based on the product.
For example, cars are preferred in blue, red, grey, and black, but, for soft furnishing, beige is used.
Grossman and Wisenbelt gave the example of a vitamin supplement packed in a black container with white lettering. Interviews revealed that potential purchasers mistook it for poison.
Changing the packaging to beige and brown changed customer perception. However, black created a successful association to signify strength & masculinity when packing men’s cologne.
- Grossman and Wisenbelt suggest that colour can signify the attributes of a product.
Researchers tested the use of blue, yellow, and red flakes in laundry detergents and found that blue signifies cleanliness to the consumer.
There are cultural differences, however. For example, in the USA, grey is associated to expensive products, but in China, it’s associated to cheaper products.
- Lastly, product colour can be influential when the customer is less involved during the decision-making process.
3. Attention and Shelf Position
Atalay et al. used eye-tracking technology to identify customers' tendency to choose the centre product from an array.
Atalay conducted 3 studies, and other than this, another study (offline) conducted that centrally located items are chosen more often, even when its not in the centre of the visual field.
The 3 studies by Atalay:
67 undergraduates in France; the mean age was 20.4; 54% were females.
Participants reviewed 2 product categories, vitamin supplements and meal replacement bars.
2 planograms were displayed. On the planograms, there were 3 fictitious brands.
Participants were seated in front of an eye tracker which records their eye gaze and tracks the location of eye fixations on the screen.
Participants were asked to review each product as if it were on a real shelf and to hit ‘enter’ when they made a choice.
Participants were asked to rate on a scale of 1-9 whether they believed that popular products were placed in the middle. Once they hit enter, the stimulus disappeared from the screen.
- Brands in the centre had more frequent eye fixations and were looked at for longer.
- Analysis revealed that centre products were chosen more solely due to increased visual attention.
- For the ratings, the mean response was 5.8 (above the scale’s centre).
To find whether the effect of horizontal central location and central gaze effect on choice was due to either horizontal centrality or the centrality on the computer screen.
64 undergraduates from France.
Replication of study 1A but planograms were shifted to the left or right of the screen (not at the centre).
- Centrally located item in a horizontal array gets more visual attention.
- The central gaze effect is involved in the last few moments of the choice-making process.
To see whether results could be replicated in a realistic context since items are not always at the centre of the shelf.
84 students from Concordia University.
- Fictitious brands of energy drinks were used.
- Products were placed in the left, centre, or right position of the category.
- The category would be placed on the left or right side of the shelf.
- Participants were positioned at the middle of the shelf so that the category asked to choose from, was to the left or right side of their visual field. They were not allowed to reposition themselves. They then chose an energy drink.
The central energy drink within a category was chosen more often even when not in their central visual field. Therefore, this shows that the central gaze effect is not due to screen-based presentation.
- The study had high levels of control ➜ they used fictitious products so that no other product features were used to base a choice on, therefore, differences in choice were due to the location/position.
- Situational variables (positioning) influence consumer purchasing. This has obvious useful applications for retailers since expensive products can be positioned at the centre.
Selling The Product
4. Sales Techniques
- Customer-Focused Sales Techniques
The seller carefully identifies what is wanted by a potential customer. The seller then matches their needs with a long-term solution.
This method helps get loyal customers who will return and spread the word about your business.
- Competitor-Focused Sales Technique
Used when your product is similar in price and features to those offered by competitors. Retailer would have to ‘sell’ other advantages of buying from them in their sales pitch.
- Product-Focused Sales Technique
Ignores the needs of individual customers and focuses on selling a quality product. Seller assumes that if you have the best product, then customers come to you.
Creating a new, high-quality product might create a need that didn’t exist before.
5. Interpersonal Influence Techniques – Disrupt Then Reframe (DTR)
The ‘Disrupt-Then-Reframe’ (DTR) technique confuses customers with a disruptive message and reduces this confusion by reframing the message.
A) Davis and Knowles asked participants if they’d like to buy Christmas cards from a charity. Experimenters used the DTR technique by saying “The price is 300 pennies… I mean 3 dollars.” This technique doubled the sales.
B) Kardes conducted 2 fields and 1 lab experiment.
- DTR should increase compliance with a monetary request presented in a commercial context.
- DTR should be more effective when the customer’s need for cognitive closure (NFCC) is high.
The DTR effect is stronger when there are high levels of ambiguity.
A field experiment in a European supermarket, where a sales stand offered a special offer on candy. 5 confederates acted as sales staff and introduced themselves to customers who stopped near the stand.
DTR condition: ‘The Price is now 100 euro cents, (2-second pause) that’s 1 euro. It’s a bargain.’
Control condition (reframe only): ‘Price is 1 euro. It’s a bargain.’
When customers took the candy boxes, it was recorded as complying with the sales request.
- 65% of those in the DTR group bought candy.
- 44% of those in the control group bought candy.
Study 2 was a field experiment. A male confederate asked students of a Dutch university campus to join a fictitious group for a cost. Only half the students were exposed to a DTR message. Participants were asked to complete a questionnaire measuring their need for cognitive closure.
DTR condition: ‘You can now become a member for half a year for 300 euro cents, (2-second pause) that's 3 euros. That's a really small investment.
Control condition (reframe only): ‘You can now become a member for half a year for 3 euros. That's a really small investment.’
- 30% of the DTR group agreed to join.
- 13% of the control group agreed to join.
- Compliance increased as NFCC increased ➜ 43% of high NFCC individuals complied in the DTR condition, compared with only 17% in the control condition.
The DTR effect was stronger for high NFCC individuals.
Study 3 was a lab experiment conducted on computers. 137 American university undergraduate students participated for course credits. They were randomly assigned to either the DTR, reframe only, or disrupt only condition.
A male actor who had been blind to the aims of the study said the following in each condition:
DTR condition: ‘An increase in tuition of 7500 pennies, (2-second pause) that’s $75, it’s a really small investment.’
Reframe Only Condition: ‘An increase in tuition of $75; it’s a really small investment’.
Disrupt Only Condition: ‘An increase in tuition of 7500 pennies.’
Participants then completed the NFCC scale and scales which measured perceived ambiguity, attitudes, and behavioural compliance.
- For low NFCC individuals, DTR manipulation had no effect on perceived ambiguity.
- DTR technique was more effective as NFCC increased.
- For high NFCC individuals, disruption increased ambiguity and then accepted a reframed message which reduced ambiguity.
6. Ways to Close a Sale
Cialdini suggests there are 6 ways of getting people to make purchases:
- Reciprocity ➜ The idea that if someone gives us something, we have to give them something in return.
- Commitment & Consistency ➜ If you persuade someone to make a commitment, then you increase the likelihood of them making a larger commitment.
- Liking ➜ A customer is more likely to make purchases if they like the salesperson, if a celebrity endorsed a product, or if they like the brand image, etc.
- Authority ➜ Advertising which includes ‘scientific’ or ‘expert’ evidence will convince consumers to buy the product.
- Social Proof ➜ Reviews of products and services left by other people influence customers.
- Scarcity ➜ If we think we might miss out on something, we’re likely to buy it.
- The sales techniques and methods to make customers purchase are based on retail observations and research.
- Customer-focused strategies give importance to individual variables. However, competitor-focused strategies give importance to situational factors.
- Kardes et al.’s inclusion of the 3 experiments in their article strengthens their findings even further.
- Kardes ➜ As the DTR technique was stronger in participants with a high NFCC, this means that both situation and individual influences were there.
- Kardes ➜ Rating scales were used.
Advantage: Large amounts of quantitative data can be easily gathered and compared.
Disadvantage: Different individuals interpret values on the scale differently, and we can’t know whether responses would mirror real-life actions.
Buying The Product
7. Purchase Decision: Theory of Planned Behaviour
Ajzen’s theory of planned behaviour states that attitudes towards behaviour, subjective norms and perceived behaviour control, together shape an individual’s behavioural intentions and behaviours.
So, exploring people’s attitudes and intentions in relation to products/services help us predict their purchase behaviour.
Attitude towards an act or behaviour is an individual’s attitude on whether a certain behaviour would have a positive or negative contribution to their life.
Subjective Norms involve how a person’s social network influences the decision-making process.
Perceived Behavioural Control is the perception of the difficulty of enacting a behaviour.
Applications of the TOPB:
- Helps companies predict consumers’ likely purchase behaviours.
- A company can make sure that they target people most likely to be interested in the product.
- Helps understand how attempts to change attitudes ultimately change behaviours. This can be used by companies as they can produce products aimed to bring positive contributions to people's lives, hence changing their attitudes.
8. Black-box (Stimulus-Response) model
A behaviourist model which looks at the stimuli (what goes in), responses (what comes out), and lastly, the intervening factors (cognition, emotion, etc.) which are considered part of the black-box.
2 stimuli types:
i) Marketing Stimuli
- 4 P’s of Marketing.
- Controlled by the retailer.
ii) Environmental Stimuli
- Cultural, social, physical, and psychological.
- Understanding how environmental stimuli influence buyer behaviour is crucial and allows retailers/companies to design products for specific buyer groups.
The outcome of what takes place within the black box are the buyer responses:
i) Their buying choice
ii) Buying behaviour
9. Characteristics affecting Customer Behaviour
Engel, Blackwell, and Kollat developed the Consumer-Decision Process model:
- Recognising a need/problem
There are different types of needs:
• Internal stimuli – such as hunger/thirst.
• External stimuli – shoes seen on a catalogue.
- Finding information on how to meet the need.
- Alternatives are evaluated & the consumer selects the best one suited to their needs.
- Purchases their decided choice.
- Post-purchase behaviour stage. The stage where the consumer will evaluate the purchase they made.
- If the evaluation is positive, then customers become loyal, repeat purchases, and also, the next time they need this, they will use a mental shortcut (heuristic) and simply purchase the one they did before.
- If the evaluation is negative, then the stages are repeated the next time there’s a similar need.
- Applications to real life
The Theory of Planned Behaviour helps us understand why intentions don’t always lead to purchases. This helps retailers identify techniques to increase the chance of intentions leading to purchases.
Example: Targeted online advertising where your adverts are determined by your previous internet searches, are methods to understanding buyer intentions and buyer decision-making process, and providing a solution to the need.
- Individual vs. Situational Behaviour
- The models incorporate situational and individual characteristics.
- The models confirm that purchases are due to the complex interaction between the 2 variables, which can be manipulated by the retailer.