Mohit Sewak

Factors affecting Impulse Buying in a Retail Store

The article “The Interplay Among Category Characteristics, Customer Characteristics, and Customer Activities on In-Store Decision Making” by J. Jeffrey Inman, Russell S. Winer, & Rosellina Ferraro, gives some intuitive insights about the effect of various factors on the unplanned behavior of the consumer.

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It proves that where factors like effect of display, inter purchase cycle and category Hedonicity, gender of the consumer, household size, store familiarity, number of aisles being shopped at, amount of time spent in the store, paying by check or by credit card instead of cash increases the unplanned behavior of the consumer, factors like use of shopping coupon, use of list, and greater shopping frequency, reduces the unplanned shopping behavior of the consumer.

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The study has significant learning lessons for both the customers and for the managers. Where customers can avoid all such steps that increases his unplanned shopping tendency, the manager has to be more creative and innovative in terms of store/ aisle design, and planning his marketing and sales activities to further enhance the customers unplanned shopping behavior at his store.

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The study also gives a very interesting insight that the consumer’s unplanned buying behavior is not affected by his being accompanied by anyone.  Here we think that measuring the age of the companion would have been very handy. Because we think that although while accompanied by an companion should decrease the tendency of  unplanned purchase, owing to rational decision making with the discussion with the companion, or due to fear of social shame arising out of unplanned purchase. Also we think that while accompanied by children, the tendency of unplanned purchase must increase due to pester effect, especially for hedonic category products (positive interaction effect). But as the age of the companion has not been taken into consideration, any effect because of it might have been averaged out, and hence the significance of being accompanied by someone id low in the result.

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Also the negative interaction between display and category hedonicity is an interesting finding, but we think other explanations for the phenomenon are possible than the one given.

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Overall, despite the limitation of being constrained to the data given in the POPAI data set, the finding is very useful as it goes a long way in educating the consumer how to safeguard them against the tendency of impulse buying.

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Making Better Investments at the

Base of the Pyramid

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The article “Making Better Investments at the Base of the Pyramid“, by Ted London, illustrates with example, how better investments can be made at the Bottom/ Base of the Pyramid (BoP), and how to do the impact assessment of such an assessment. It explains the following: -

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Who is being affected?

Any BoP venture potentially affects three groups of local stakeholders:

1. the sellers,
2. the buyers, and
3. the communities in which it operates.

How are they being affected?

Consumers may get cheaper prices and greater access to needed products and services; producers may enjoy expanded markets and higher productivity. On the flip side, however, an entrepreneur who decides to invest his own hard-earned capital in a new business may open up himself and his family to unanticipated shocks, such as those generated by health- or crop- related crises. Even when local entrepreneurs do succeed, their actions can still negatively affect the community’s economic well-being – for instance, when indigenous businesses suffer because of increased competition.

The strategic analysis: Understanding the Impact.

It does require, however, that the venture’s assessment team rigorously and collaboratively fill in the cells of the framework. List all the expected effects of the venture – both positive and negative – on local stakeholders. To avoid double counting, teams should log only direct effects in the framework – noting an increase in, say, buyers’ incomes but not how the additional income will or could be spent to improve other aspects of well-being. Listen to and respect the opinions of a variety of stakeholders – field staff, development professionals, academics, and local community members. The team should use a variety of methods to collect data – such as semi-structured surveys, focus groups, in-depth discussions, and group forums. It probably makes sense for venture managers to pay close attention to potentially high-magnitude outcomes even when the likelihood that they will happen is relatively small.

For instance, using the framework, the management team was able to recognize the potential for strife and jealousy in families and communities that weren’t used to seeing women in non-traditional roles – such as that of an entrepreneur selling wares outside the home and village.

The performance analysis:  Tracking the Impact

The process isn’t as complicated or expensive as one might think. It involves identifying and collecting baseline as well as post-intervention data on the local buyers, sellers, and communities most affected by the venture’s  activities, and, whenever possible, on a comparable unaffected group to better account for what would have happened had the venture never launched.

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Sellers:

The team members agreed that changes in the sellers’ economic situations, capabilities, and relationships could be effectively captured by measuring their incomes (a positive effect), income instability (a negative effect), and opportunity costs of not pursuing other livelihoods (a negative effect); their skills development, self-efficacy, and contentment with life; their perceptions of respect and conflict within the family; and their interactions with individuals and organizations outside their local communities.

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Buyers:

Their savings due to product affordability and convenience, and the effect that eyeglasses and vision care had on work productivity.

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Community:

The team recognized the importance of changing communities’ attitudes toward women who worked as entrepreneurs and took on non-traditional roles outside the home and village.

Case of PEACE and Du Pont’s Pioneer Hi Breed International

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The partners knew it would take time for the seeds to be accepted and had figured the pilot would be more of a learning experience than a profit-making one. If the partners had undertaken a strategic analysis of the venture’s effects on poverty alleviation, specifically looking at economics, capabilities, and relationships, they might have gained the following insights about its initial business model.

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Doing business with the venture put them at greater economic risk, given the larger initial investment required. Pioneer’s seeds at first were an unknown in the eyes of the local community; the farmers weren’t sure how best to use them to maximize their yields. Getting their seeds from PEACE instead of the local traders, for instance – they could find themselves cut off , unable to procure the rest of their farming supplies from traders bearing grudges.

The primary purpose of the BoP Impact Assessment Framework is to give managers a standardized approach for understanding the whole story. For managers, development groups, and funders, it can also generate some important insights into the types of organizational designs that are most likely to succeed with the base of the pyramid.

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Understanding the Relationships Among

Brands, Consumers, and Resellers

The article “Understanding the Relationships Among Brands, Consumers, and Resellers“, by Frederick E. Webster, Jr., says that the retailers keep some of this surplus for themselves and pass some onto their end user customers. In sum, retailers and consumers gain, while national brand manufacturers lose as large retailers gain more power and control in the marketing channel. At the same time, it is clear that the consumer’s value equation has more variables in it than price. Lowest price is not the only definition of value for most consumer segments.

There is often an implicit assumption that the brand is strictly a relationship of the manufacturer with consumers that competes with the retailer’s relationship with the consumer for consumer loyalty. Lost in the argument is any consideration of the value of the manufacturer’s brand to retailers in building their relationships with customers. For the past 100 years, manufacturer “pull” (mass communication) replaced reseller “push” (personal selling) as the main influence on the consumer. National brand marketers focused on the consumer as their customer, not the retailer’s customer. It is common to refer to “trade leverage” as a major benefit of branding to the manufacturer, a source of power over resellers.

Today, there is growing evidence that many major packaged-goods manufacturers have changed their thinking to define their customer as the reseller, not the end user/consumer. They therefore adopt the point of view of a business-to-business marketer as well as a consumer marketer. They must focus on enhancing the profitability of their  customer–the retailer, as opposed to thinking of products more narrowly in terms of the value they offer to end users. It must be recognized that both the manufacturer (brand) and the reseller deliver value to the consumer, and consumer buying motivations involve both sources of value.

There is a fundamental problem of integrating the elements of push and pull into the brand marketing strategy; relationships with the consumer and with the trade must be managed in an integrated framework. Pricing issues are a central element of this problem, as consumers, retailers, and manufacturers compete for their share of the value being created by the brand. Traditional theoretical approaches to the study of marketing channels have tended to focus on conflict, rather than cooperation. The traditional definition of a brand as a guarantee of consistent features, quality, and performance to consumers largely ignores its function as a pledge of support to retailers.

Push strategies require higher margins for retailers to support their selling efforts, while pull strategies require higher margins for the manufacturer to support advertising and other mass communications. In point of fact, of course, virtually all marketing strategies are blends of push and pull elements, and the test of marketing management knowledge and skill is to get the balance right given the unique requirements of specific markets. Traditional ways of thinking about branding have largely left the reseller out of the equation. First and foremost, the manufacturer must realize that its customer is the reseller, not the consumer. Fundamentally, the value of the brand to the reseller must be related directly to the value of the brand to the consumer, not just price and promotion.

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On the Permanence of Stored Information

in the Human Brain

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Article details:

Many people believe that information that is stored in long-term memory is permanent. And forgetting is nothing but retrieval failure. This article evaluated the evidence and concluded that, contrary to apparent popular belief, the evidence in no way confirmed the view that all memories are permanent and thus potentially recoverable.

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So what are the implications ?

To justify the failure (of retrieving previously stored information and conjecture as to what circumstances might have caused information stored in memory to irrevocably destroyed), they came up with a conclusion that there “SUBSTITUTION” might have happened.

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The misleading information might have irrevocably replaced the original information in the subject’s brain. When the memory of an event is called to consciousness, there appears to be a potential for substitution to occur. Therefore it is reasonable to suppose that memory is not necessarily permanent.  However the article states that co-existence along with substitution is possible and they are not mutually exclusive.

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What does co-existence mean?

Events like A – B (A related to B) and A- C (A related to C), responses can be simultaneously stored in memory. But there may be situations when, or circumstances where memory processes one instance or event alone, and forgets or erases the memory of other instance.

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“Often, however, real-world coexistence is logically forbidden. The automobile that was involved in the accident that we recently experienced stopped either at a stop sign or at a yield sign, but it did not stop at both. The shirt worn by the thief was not simultaneously green and blue. In such instances, the most economical procedure may be to dismiss one memory in favor of the other, much as a computer programmer will irrevocably destroy an old program instruction when a new one is created.”

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The Mismanagement of Customer Loyalty

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Following Hypothesis were tested: –

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Claim 1: It costs less to serve loyal customers:

This is not true. In fact, the only strong correlation between customer longevity and costs that we found-in the high-tech corporate service provider-suggested those loyal and presumably experienced customers were actually more expensive to serve.

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Claim 2: Loyal customers pay higher prices for the same bundle of goods:

It was found that the customers regularly guarantee greater frequency of purchase in return for lower prices.

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Claim 3: Loyal customers market the company:

It has been proved that if managers are investing in a loyalty program for its supposed marketing benefits, then they are looking at a potentially misleading indicator.

Customers may well buy all their groceries at the same supermarket out of inertia and convenience.

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Knowing When to Lose a Customer

The most common way to sort customers is to score them according to how often they make purchases and how much they spend. Many tools do that; one of the most familiar is called RFM (Recency, Frequency, and Monetary Value Analysis).

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So just why is RFM such a poor way to measure loyalty?

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One problem is that patterns of buying behavior for frequently bought goods are quite different than those for infrequently bought goods.

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The second main drawback of scoring methods like RFM is that the monetary-value component is almost always based on revenue rather than profitability.

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From Measurement to Management

After analyzing your customers’ profitability and the projected duration of their relationships, you can place each of them into one of four categories, as shown in the matrix “Choosing a Loyalty Strategy.”

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Turning True Friends into True Believers:

In managing these true friends, the greatest trap is overkill. At the catalog company, for instance, we found that intensifying the level of contact through, for example, increased mailings were more likely to put off loyal and profitable customers than to increase sales. People flooded with mail may throw everything out without looking at it. Sent less mail, however, they are more likely to look at what they get.

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Enjoying Butterflies:

The classic mistake made in managing these accounts is continuing to invest in them after their activity drops off. Any such efforts are almost invariably wasted; our research shows that attempts to convert butterflies into loyal customers are seldom successful – the conversion rate was 10% or lower.

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Subcultures of Consumption

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Ethnography of the New Bikers

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1. the overall structure of the subculture
2. its ethos (i.e., its underlying values and their expression and maintenance),
3. its impact on the lives and identities of individual consumers, and
4. its articulation with marketing institutions.

1. structure,
2. ethos,
3. transformation of self, and
4. the role of marketing in the subculture of consumption.

Structure

The structure of the subculture, which governs social interactions within it, and which we now address, is a direct reflection of the commitment of individuals to the ethos. The concentric social structure consists of members of the inner circle (hard core) demonstrate a commitment to punk style and ideology that is full-time and enduring. The soft core is formed by those whose commitment to punk Styles and values is less complete and whose roles are subordinate to and dictated by the hard core. Research indicates a complex social structure of multiple, coexisting subgroups that claim the biker designation and don the biker uniform (i.e., some combination of jeans, black boots, and Tshirts. a black leather jacket, and a vest that may carry insignias of club affiliation).

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Each subgroup Has its own separate hierarchy. Moreover, although each subgroup is highly committed to the Harley-Davidson motorcycle and to a related set of consumption values, each subgroup also has its own unique interpretation of the biker ethos (cf. Fine [1979] on the idiocultures of Little League baseball teams), and each pursues its own charter or purpose. The subculture of Harley owners cuts across many social categories, yet within its various subgroups there is a propensity toward homogeneity.

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Hierarchy within structure:

Each subgroup within the HDSC maintains a formal hierarchy of officers that is subsumed by an informal hierarchy based on within-group status. Status is conferred on members according to their seniority, participation and leadership in group activities, riding expertise and experience, Harley-specific knowledge, and so forth—in short, and the results of an individual’s commitment to the group’s consumption values. Visible indicators of commitment include tattoos, motorcycle customization, club-specific clothing, and sew-on patches and pins proclaiming various honors, accomplishments, and participation in rallies and other rider events. The status hierarchy is also reflected in the group’s riding formation.

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Barrier to entry:

The structural integrity or exclusivity of the HDSC and its subgroups is protected by barriers to entry. New members rarely, if ever, are recruited aggressively. The club does not approach you; you must approach the club as a supplicant.

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Ethos

Part of the reason for the existence of the HDSC is that certain people have found embodied in the Harley- Davidson motorcycle cultural principles and categories that resonate with their own needs and values. Each subgroup within the HDSC is committed to the same set of core values, but each group interprets them in a manner that is contextually consistent with the prevailing life structures (i.e., ages, occupations, family structures) of its members. The values that make up the biker ethos touch on virtually all aspects of members’ lives, including the social, the political, and the spiritual. So strong is the Harley-Davidson motorcycle as an organizing symbol for the biker ethos that it has become, in effect, a religious icon around which an entire ideology of consumption is articulated.

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Core Values

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Personal Freedom:

The dominant value in the ethos of the HDSC is personal freedom. Two kinds of personal freedom are particularly important: liberation (i.e., freedom from) and license (i.e., freedom to). Virtually every biker identifies strongly with the motorcycle as a symbol of freedom that contrasts starkly with the automobile (“cage” or “coffin” in biker vernacular) as a symbol of confinement. Two systems of symbols embody the value of personal freedom; they are the spread winged Harley eagle and the Harley-as-horse metaphor.

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Machismo:

Members of the HDSC value manliness. Expressions of machismo abound. A popular T shirt in Harleydom proclaims that “Real Men Wear Black.” The concern for what real men do pervades virtually every aspect of the biker experience.

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Transformation of Self

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The stages traversed are: -

(1) experimentation with the biker identity,

(2) identification and conformity, and

(3) mastery and internalization.

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Becoming a member of a subculture of consumption generally means entering at the bottom of a status hierarchy and undergoing a process of socialization. Socialization brings about a transformation of the individual that entails an evolution of motives for involvement and a deepening of commitment to the subculture and its ethos.

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MARKETING AND SUBCULTURE OF CONSUMPTION

By understanding the process of self-transformation undergone by individuals within a subculture of consumption, a marketer can take an active role in socializing new members and cultivating the commitment of current ones. Harley-Davidson cultivates consumer commitment through means such as supplying a steady stream of information geared to the needs of newcomers and providing a full range of clothing, accessories. Subcultures of consumption provide opportunities for marketers to engage them in symbiotic relationships. Marketers who understand the structure and ethos of a subculture of consumption can profit from serving its needs. In addition to providing necessary objects for the functioning of the subculture, marketers may also assist in the socialization of new members, facilitate communications within the subculture, and sponsor events that provide havens for the activities of the subculture. In return marketers may accrue increased customer loyalty, publicity, and consumer feedback, among other benefits.

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Affective and Cognitive Factors in preferences

Food preferences changes from place to place. Humans by birth don’t like chilli pepper. But in the case of Mexicans, they like chilli pepper once they mature. If it is possible to change an innate aversion to something like chili pepper, then it should be possible to change almost any attitude and any preference.

Significant affective factors such as parental reinforcement and social conformity pressures, identification with the group, machismo and so on. This paper, “Affective and Cognitive Factors in preferences” by Robert Zajonc and Hazel Markus, stresses on affective factors. In doing this, the authors do not intend to negate cognitive influences on preferences nor minimize their importance. Cognitions that have generally been taken to be the very basis of this preference can actually occur afterward – perhaps as a justification.

Acquiring preference through Exposures

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When objects are presented to the individual on repeated occasions, the mere exposure is capable of making the individual’s attitude toward these objects more sensitive. This is called as Exposure effect. When confronted with a familiar object, the individual was said to experience a warmth, a sense of ownership, a feeling of intimacy.

Preferences acquired in infancy and childhood are formed primarily on affective basis. By the time the child develops an extensive knowledge structure about chili peppers – i.e. before he learns to discriminate among them, identify various subtle features and discover all their uses – his preferences for them may well be completely established.

It is possible to change preferences by cognitive means alone only in early stages of preference formation, because even when a preference has been built up from cognition, its affects may become partly and fully autonomous and independent of the cognitive elements that were originally its basis. Social psychologists have tried to see what information could be given to a person so that he would become fond of some item. They asked how should this info be imparted and for best results, who should do it. Needless to say, the method of attitude change by means of persuasion has not met with a great deal of success.

It is quite reasonable to say that when a person “stores” affect, what he stores is the motor tendencies and other somatic manifestations. The behavior patterns are hard to change and hard to overcome by persuasion. The headphone experiment (where people said that they heard better when nodding than when they where shaking their head) proved that attitudes can be changed by simple things and he approached properly could be improved to a great extent. Motor basis of preferences says that change in preference can be accomplished by attention to motor correlates.

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The Quest for Customer Focus

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Getting closer to customers is not just a matter of installing a better CRM system or of finding a more effective way to measure and increase customer satisfaction levels. Tools and technology are important. But they’re not enough.

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Example of Continental Airlines-

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One of the first things it uncovered was a service mess that was costing the airline millions of dollars every year. Continental took a systematic look at how passengers were treated when a plane was significantly delayed, when they were bumped from a flight, or during some other unfortunate event. What it found was that compensation was offered on an arbitrary basis by the gate agent, and, somehow, the lowest value customers were, on average, receiving the highest compensation. Worse, some passengers were finding ways to be doubly compensated; a customer who was bumped from a fiight might first approach a gate agent, pick up a voucher for a free flight, and then minutes later telephone the airline and ask for another. The representative answering the phone would have no way of knowing that the same request had just been filled. Now everyone who is delayed for, say, nine hours gets the same compensation, and when a gate agent hands a passenger a fight voucher, that transaction is reflected immediately in the customer  information database.

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Another example, Royal Bank of Canada (RBC)-

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To the company’s surprise, a survey of more than 2,000 current and potential customers revealed that people didn’t choose a bank on the basis of how convenient it was. Instead, what customers wanted was a bank that demonstrably cared about them, valued their business, and recognized them as the same individuals no matter what part of the bank they did business with.

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Customer focused companies consistently embrace three concepts. First, they know they can become customer focused only if they learn everything there is to learn about their customers’ at the most granular level, creating a comprehensive picture of each customer’s needs-past, present, and future. Second, they know that this picture is useless if employees can’t or won’t share what they learn about customers, either because it’s inconvenient or because it doesn’t serve their interests. Finally, they use this insight to guide not only their product and service decisions but their basic strategy and organizational structure as well.

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There are four distinct stages on-route to becoming Customer focused companies –

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1. Communal Coordination –

Creation of a centralized repository of customer information, which records each interaction a customer, has with the company. As volumes are high this stage can take even more than 4 years.

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2. Serial Coordination –

Coordinating gets a little trickier as the centralized coordination role expands to manage not only the continued collation of data but also a sequence of tasks performed by certain functional units so that information can be analyzed and the resulting insights shared throughout the company.

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3. Symbiotic Coordination –

Move away from the one-way information flow that characterized the previous stage toward a dynamic give-and-take.

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4. Integral Coordination –

Here employees are given the autonomy and latitude they need to focus on the customer in virtually every action. At this stage, companies are coordinating key activities across vertical and horizontal boundaries, which are in many cases irrelevant to customers.

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When Customers Get Clever…

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Companies have always been on their toes dealing with clever customers. There are different strategies how to best use these clever customers to enhance the value of the brand, but before understanding these strategies, we have to understand the different types of “Clever Customers”.

Clever customers can be of two types: -

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1. Creative Customers: -

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Creative customers, also called as underground innovators are identified as those who adapt, modify or transform a proprietary offering and represent an interesting paradox for businesses. What should a firm do when creative customers start to modify products, hack code and adjust services to suit themselves?  This article identifies that creative customers can represent a black hole for future revenue or be a gold mine of ideas.

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2. Lead users: -

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Lead users are those whose current strong needs will become general in the marketplace months or years in the future. Since lead users often try to fulfill the need they experience, they can provide new product concept and design data as well.

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Differences between creative customer and lead user

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• Creative customers work with all types of offerings while lead users work with just novel or enhanced products
• Creative customers generally do not face needs that will become general; they work on personal interests that remain personal or expand to a subset of users.
• Creative customers need not benefit directly from their innovations but indirectly through peer recognition etc.
• Firms use a formal and disciplined process to find, screen and select lead users. Creative customers rarely ask permission to experiment with a firm’s offering.
• Creative customers are usually independent of the organization while lead users are contacted by, communicated to and their process of interaction with the firm controlled by the organization.

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Reasons for treating creative customers strategically

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• They exist and are here to stay. They are bound to grow in number
• They are a rich source of innovation
• Recognizing and utilizing creative customers is a form of outsourcing the process of new product development

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Firms’ stances towards creative customers

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Discourage – Firm’s attitude towards customer innovation is negative but actions are de facto passive. They verbally berate customer innovation but take no overt action

Resist – Firms verbally berate customer innovation and back that up with punitive action

Encourage – Firm verbally lauds and applauds customer innovation but takes no overt action to facilitate it.

Enable – firms cheer customer innovation and back words with deeds to actively help customers innovate on their products.

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Awareness, analysis and response

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Once managers are aware that their offerings are being modified by customers, they should analyze the phenomenon and then respond. Response should be unambiguous and send appropriate messages to all stakeholders.

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Beyond Advertising and Publicity:  Hybrid Messages and Public Policy Issues

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The article “Beyond Advertising and Publicity” by Dr. Siva K. Balasubramanian (Assosciate Professor of Marketing, Southern Illinois University; Professor of Consumer Behavior, Great Lakes Institute of Management, Chennai), observes that Organizations generally rely on two forms of non-personal communications, namely advertising and publicity. Advertising refers to communications that are paid for and clearly identify the sponsor; publicity refers to messages that are unpaid for and do not identify the sponsor. The key advantage of advertising is that the sponsor has control over the content of the message but this is not so in case of publicity. Because publicity messages do not identify the sponsor, audiences tend to perceive media as credible sources. Advertising and publicity individually do not provide the desirable mix of credible source and content control. Hybrid messages are developments in this field and are communications that are paid for but do not identify the sponsor.

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“Hybrid messages include all paid attempts to influence audiences for commercial benefit using communications that project a non-commercial character. Audiences are likely to be unaware of the commercial influence attempt and/or process the content of such communication differently than that of commercial messages.”

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Types of hybrid messages are: -

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Established hybrids– They have a ling history and have attracted some regulatory attention in the past. Product placements, program tie-in, program length commercial are various forms.

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• Product placement – paid product message aimed at influencing movie or television audiences via the planned and unobtrusive entry of a branded product into a movie or television program.
• Program tie-in – paid product message where the arrangement requires product sponsor to buy advertising spots broadcast with the program in exchange for product exposure within the program.
• Program length commercial – paid product message broadcast to television audiences using a format that resembles a legitimate program in content and in length. Also called infomercial.

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Emergent Hybrids – are of a recent origin and not subject to much regulatory attention. Masked art, masked news, masked spokesperson are forms.

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• Masked art – any work of art such as painting, sculpture etc that features branded products with deliberate but usually not obvious commercial intent. Friedman calls this ‘sponsored word of author communication’.
• Masked news – messages are embedded in news sources
• Masked spokesperson – two types: namely masked expert and masked celebrity. Masked expert messages are delivered by persons who legitimately play an expert role that accentuates credibility and deliberately suppress other roles that may damage credibility. Masked celebrity messages involve celebrities who mask their role as paid spokespersons while promoting products in public appearances.

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History and current status: -

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Product placement – evolved from successful publicity efforts directed at film medium several decades ago. It was neither a high profile nor a well organized area until late 1970’s. Firms now pay moviemakers substantial amounts for product placements perceived as advantageous. History suggests two conditions necessary for product placements – sponsors should perceive that they offer value; media should be motivated by the economic incentives.

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Program tie-in – existed in rudimentary form prior to 1960’s as FCC (Federal Communication Commission) discouraged program tie-ins. New developments in 1980’s relaxed these self-imposed standards. Program tie-in compensates for opportunity losses in advertising revenue by extracting a sponsor’s commitment to advertise heavily in the program. They also make it easier to sell ads in less successful programs.

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Program length commercial – originated in 1950’s as a tool to promote products for children. However, limits were sanctioned on PLC’s following concern over broadcast materials directed toward children.  Limits were removed post 1984  and their popularity expanded beyond children’s products to financial products, real estate investment planning, political candidates etc.

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Current regulatory status: -

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Hybrid messages that emanate from broadcast/cablecast media are required to comply with the FCC on sponsorship identification. Hybrids embedded within all other media are not subject to such rules.

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Policy waivers, specific provisos and impact of new technology and new habits help accommodating hybrid messages within broadcast/cablecast media.

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Pros and Cons of hybrid messages: -

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Advantages

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Recall – Von Restorff effect states that almost any technique that serves to increase the novelty of particular items or leads them to be unexpected enhances the subsequent recall of those items. This stems from the ‘surprise’ factor. Actual recall of a product placement also depends on whether product is displayed in the background or in close-up,explicitly mentioned in the script etc.

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Persuasion – 3 rationales namely attribution theory, classical conditioning, modeling

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Attribution theory – persuasiveness of a message is adversely affected if recipient infers a bias in the message communicator, also called reporting bias. Masked spokesperson messages are beneficial as there are lesser chances of reporting bias.

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Classical conditioning – as ad messages are short, development of a positive paired association between unconditional stimulus and conditional stimulus is expensive. Product placements and PLC’s are more effective.

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Modeling – product demonstrations through modeling(actors) can facilitate learning when they experience positive consequences following product use.

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Disadvantages

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• Audience impact of hybrids is less direct and less immediate
• No established measure to assess persuasiveness of hybrids
• Effectiveness of hybrids hinges on sponsor exercising control over message but such control dissipates in practice
• Limited in availability and applicability, cannot accommodate planning.
• Substantial risk involved. Uncertain investments as product exposure and mpney spent can evaporate if movie flops.

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