Chocolate, sometimes nothing else will do.

My Grandmother used to tell me that there’s no such thing as bad booze. I feel the same way about chocolate. There hardly seems a need to use advertising and conditioning for an obsession and so fetching a delight. Nevertheless, the major chocolate manufacturers and retailers use a combination of both classical conditioning and operant conditioning, but mostly classical.

Classical
Classical conditioning is the association of chocolate with an appealing stimulus. Hawkins, et al (2007, p 331) inform us that music, holidays and popular personalities are often paired in commercials with chocolate as part of classical conditioning. With chocolate, there is usually an undertone of romance.

Here is a Nestle’s :30 second spot on Youtube with many elements of classical conditioning. An ecstatic cellist. A woman, melting and open. How beautiful she is too. Enchanting music. Nestle's Alpine TV Spot

Latent romance in the popular commercial touched our need for objectification (see Hawkins, 2007, p 367) by having us view the behaviors of “others and [draw] inferences as to what one feels and thinks.” Showing affection in interpersonal relationships can also help satisfy our need for affiliation (p 371).

There is a dark side to chocolate too, an unstated sexual desire. Unstated motives are often driving forces in our culture but unlike manifest motives, are not directly presented (p 375). Instead, indirect appeals through artwork are made.

Hawkins, et al (2007, p 386) further report that “repeated exposure to positive-emotion-eliciting ads may increase brand preference through classical conditioning.” What is an example of such an emotion – they tell us: love. The 1989 commercial above was actually the apex of a multi-year campaign that started in 1986. Here is the Adam ad, notice the Maxfield Parrish theme (this one is a little louder): 1986 Nestle's TV Spot

Nestlé’s does not have a lock on chocolate advertising though. For their part Hershey’s follows suit with a more recent and similar Special Dark :15 spot (much louder): Hershey's :15 Spot

Here Hershey’s employs gold and copper colors to convey richness in the affective interpretation by the consumer, to supplement the same unconditioned stimuli we saw in Nestlé’s. Hawkins, et al (2007 , p 299) give a print ad example with a similar gold and copper color combination for a Godiva chocolate ad, but Hershey’s even gives us the words to associate with the product.

Hershey’s Kisses added a popular personality to the music, Thalia as she covered the Shirelle’s hit It’s in His Kiss: Thalia TV Spot

They also changed colors for the Christmas season and bell-rang a popular carol: Hershey's for the Holidays . Hawkins et al (p 332) use Christmas music as an example of eliciting the emotional responses characteristic of classical conditioning.

Hawkins and crew give other interesting examples of classical conditioning for chocolate candy (p 286): Reese’s Pieces product placement in the movie E.T. It was E.T.’s favorite food and its cinematic use in a natural way resulted in positive transfer to the product and sales jumped 6%.

In their Darwinian competition for attention, the chocolate makers are now exploring non-traditional venues. The response rate for advergames is between 16% and 45%. Additionally, customers spend an average of 25 minutes with our message. Blank (2001, ¶ 1) reports that Hershey’s Chocolate also experienced a phenomenal response rate with advergaming.

According to Ron (2002, ¶ 1), advergaming is a marketing device where the brand elements are an integral part of an online or computer game. Two academic studies have found that classical conditioning in advergaming produces most the most positive attitude (see Bailey, 2008, pp20-1 and Huang, 2005, p 1).

Operant Conditioning
Chocolate candy is a low involvement purchase. Duncan (2005, p 158) notes that conditioned learning is especially active in low involvement purchases. Gum and candy are the examples Duncan uses for low involvement products (p 140).

Operant conditioning works from the consequences of a purchase rather than through forming a positive stimulus for purchase. It rewards purchase “with positive outcomes,” according to Hawkins, et all (p 332) who also give an example of operant conditioning for chocolate candy. A free sample of chocolate in a candy shop resulted in a 25% higher purchase of chocolate. Tools of operant conditioning are free samples, discount coupons and sweepstakes (p 332). All are oriented to “secure an initial trial.”

Hershey’s used sweepstakes. Blank (2001, p 1) observes that the effective campaign used prizes ranging from Sony Play Stations, a one years supply of candy, a trip to Hershey’s Park, and daily prizes earned using the advergames – Reese’s Treasure Hunt and Reese’s Table Tennis. The sweepstakes was part of the advergame reported in classical conditioning.

Huang (2005, p 1) notes there is a secondary operant conditioning effect in advergaming, although the prime effect is from classical conditioning. Stokes, et al explain further (2008, p 9) “where reinforcement or punishment is used to promote specific behaviors,” advergames use operant conditioning to achieve desired behaviors.

Coupons and gift cards are standard fare also. See’s uses coupons as do the others, (See
See's Deals). Sweepstakes too (see See's Sweepstakes ).

References
Bailey, R (Summer 2008). TRAINED TO EAT: CHILDREN’S COGNITIVE AND
EMOTIONAL PROCESSING OF SNACK FOOD
ADVERGAMES. Univ. of Missouri. Retrieved on March 17, 2009 from http://edt.missouri.edu/Summer2008/Thesis/BaileyR-072308-T11745/research.pdf

Blank, C (August 6, 2001). Hershey's Online Push for Reese's Gets Sweet Response. Direct Marketing News. Retrieved on March 16, 2009
http://www.dmnews.com/Hershey39s-Online-Push-for-Reese39s-Gets-Sweet-Response/article/74093/

Hawkins, Del, David Mothersbaugh and Roger Best (2007). Consumer Behavior. McGraw-Hill/Irwin.

Huang, Y (August 7, 2005). The Application of Learning Theory to The Study of Advergaming. Retrieved on March 17, 2009 from http://etdncku.lib.ncku.edu.tw/ETD-db/ETD-search/view_etd?URN=etd-0807105-020544

Ron, S (June 27, 2002). Inject Some Fun and Games Into Advertising. Direct Marketing News. Retrieved on March 16, 2009at http://www.dmnews.com/Inject-Some-Fun-and-Games-Into-Advertising/article/77963/

Stokes, B, S Seggerman, and D Rejeski (9/28/2008). Digital Games and the Social Change Sector (For a Better World). Retrieved on March 18, 2009 from

The Kennedy Center Offer

I am a member of the Kennedy Center for the Performing Arts and I received direct mail and direct Internet e-mail offers to renew and upgrade my membership (see Kennedy_Center_Upgrade). The Kennedy Center presents plays, ballet, National Symphony Orchestra performances, and various workshops. Additionally, it has the Gift Shop and restaurant. I have made it a focal point for entertainment with friends and family when in DC. Ticket sales do not cover the Centers 3,100 stage performances a year and its ambitious educational activities; hence the need for members (donors), and its annual tin-cupping.

The offer has the price, my annual renewal at the current donation, a time limit (my current membership expires every August), no express guarantee or breakdown of use, but as Haigh and Gilbert (2005, p 108) note:

“Brands provide a guarantee of origin and quality;”

So the Kennedy Center brand is my guarantee that the money will be used to support the activities, and provide the benefits suggested. My first contact with the membership office was a phone call from them during which they sold me my membership initially. Here they did give a guarantee. The Kennedy Center representative gave me his personal, direct line to answer any questions or smooth out any difficulties I had with any benefits.

In the Internet e-mail, they give me the option of renewing with a phone call, or on-line. For the postal mail they also provided a return envelop. In neither case are mobile form factors considered. They do give me an option of upgrading my membership. The benefits are for higher levels add new perks to the benefits at lower levels. Here is the roster:



The additional benefits are an incentive but so too is identity congruence, the trait that “consumers’ behavior is often affected by what others [do]” (see Shang, et al, 2008, pp 351-2). Social influence is particularly effective in the case where the benefits of a transaction are ambiguous. The Kennedy Center appears to be using such incentive here.

Simonson (2005, p33) relates that including options in the offer can result in up-selling. This depends on the stability of consumer preferences and their insight into those preferences. I believe that donors fall into Simonson’s Category 3, those having stable preferences but lacking insight into those preferences. This is how the Kennedy Center is presenting the offer. No customized recommendation, although they have substantial demographic data. Customized offers can backfire with Category 3, as Simonson notes:

“Consequently, these customers may mistakenly accept customized offers or choice criteria that do not really fit their preferences, which leads to dissatisfaction.”

To explain why I place donors in Simonson’s Category 3, an understanding of the audience needs to be developed.

The Audience
Spiller and Baier (2005, p 97) admonish us to do market research to “determine consumer needs and wants.” Included here then is a study of charitable behaviors published in the Journal of Marketing. Reed, Aquino, and Levy (2007, p 189) found that individuals with high organizational status, low moral identity contribute money to high moral value organizations. Individuals with high moral identity want to contribute time but are chinchy with money. Here is a chart of their findings:




High moral identity is associated with idealism and low moral identity with pragmatism. A money donor’s high organizational status drives their time pressure.

A Syracuse University study furthers our understanding about the nature of donors. McNesby (2007, pp1-2) cites Who Really Cares by Arthur C. Brooks about charitable contributions. His findings are that contributors tend to be religious and conservative. Additionally, this religious and politically conservative cohort is 24 times more likely to contribute to charity than secular idealists.

Although it is an organization of artists, the Kennedy Center has an intuitive understanding of their donor audience that is reflected in the pragmatic appeal for donations (see Kennedy Center, 2008, p1) that lacks both do-goodism and change-the-world slogans. Here is their appeal instead:

"Generous support from Members like you enables the Kennedy Center to bring the finest performances to Washington D.C. and maintain its presence as the nation’s leader in arts education. "

Why Category 3? Kennedy Center donors have well defined preferences but with work and a busy schedule they do not have the idle time to actually think about these preferences.

Improving the Offer
The Kennedy Center does not customize the offer it presents to me. Based on the audience characteristics of donors who donate money as opposed to time, I have argued that their donor profile is what Simonson (p 34) categorizes as Group 3. He informs us that this group is prone to misunderstand customized offerings leading to dissatisfaction. Therefore, I would not try to improve the response with customized appeals to upgrade.

The nature of the offer’s creative appeal also seems to be an effective balance for the audience. As Spiller and Baier (2005, p 92) tell us, an emotional appeal targets the member’s wants, in this case an appeal to the noblise oblige of social status. However, a maudlin tone does not emanate from the offer, a reflection of the conservative nature of the audience. Neither does the creative appeal present opportunities for improvement.

Regarding the offer price, I think there is an opportunity to expand the revenue structure by extending the price segments to include a $60 donor level to either lapsed members or as a reach to potential donors. Spiller and Baier (p 95) instruct us that price elasticity is a critical aspect of offer pricing. Interested parties might be more inclined to become new members if it were easier to give and also a little easier on the wallet. Such a special offer can be made to them without undermining existing donations by using an emerging technology and exploiting our database.

Demographics of mobile phone SMS text users is younger and better educated. New technical venues may extend the reach of the Kennedy Center appeal for donations. Given the pragmatic and conservative nature of donors, my gut feeling is that a simple text message would have good effect. This hunch is supported by a web site mGive.com, and an article on the Everyday Giving Blog. As Carr (2008, p 1) concludes “Making a donation by sending a simple text message is convenient. This convenience is available to the 250 million mobile phone users in the United States alone.”

This is an avenue for the Kennedy Center to economically extend its reach for donations to candidates with mobile technology. The donation is added as a charge to the cell phone monthly bill. The campaign is then to select appropriate audience of conservative, religious pragmatists from organizations like AllMedia.Com, and send them a simple text message much like the Center Generous Support statement above through a service like mGive.com.

In addition, QR Codes can be used to integrate Kennedy Center print materials with its online assets. QR Codes are a special type of barcode that is optimized for use by mobile devices. Smith (2008, p 1) echoes the view of many. He observes that QR Codes and mobile form factors link print media with the Internet. By strategically locating QR Codes, mobile readers of Center print media can link to the Center Web site, getting pod-casts, steaming audio and video, Mobile Web pages, and other entertaining or informative communications.

Center print materials for the gift store will have QR Code to link to always up-to-date reference materials on the music, play, dance, or on the artists. By also forwarding users from the Center Web site to associated blogs, and community sites further information becomes available and communities of interest can be accessed from print materials.

By using a QR Reader, possibly a mobile phone, one can jump from the print world to the online world. This is unprecedented value for the customers of the store.

Say and Southwell (2006, p 262) notes that one key success factor with text messaging direct marketing is to guide actions with testing and evaluation. They take baby steps with an idea in a test, and through a comprehensive evaluation decide how to implement it. Permission is another critical success factor. They have devised a series of techniques for garnering permission (p 263). They caution against the temptation to treat mobile marketing as a “silo” or isolated channel. Integrated channel planning unleashes the full potential of mobile marketing.

Their article explains how First Direct was able to gain permission for extensive mobile marketing activity. Initial usage of text-messaging was to provide a convenience to customers, at the banks expense. This created a foundation of trust and a new point of view by the customer. They can use their mobile phone to increase their control over their money (p 263).

The same could be done at the Center. An initial benefit of notifications of new shows, ticket availability, specific seating availability for those on wait lists and so on. The advantage of subscribing to the text messaging is first notification and right to good seats when they come open, to get tickets to popular shows on popular nights, and other conveniences. Once we have a database of subscribers, we can start the mGive.com campaign for collecting donations.

References
Buchanan, Mark (2002). Nexus. Small Worlds and the Groundbreaking Theory of Network. W.W. Norton, New York.

Carr, Roger (May 17, 2008). Will You Text Message Your Next Charitable Donation? Retrieved on March 14, 2009 at http://www.everydaygivingblog.com/2008/05/mobile-giving.html

Duncan, Tom (2005). Principles of Advertising and IMC. New York: McGraw-Hill Irwin.

Haigh, D. and S. Gilbert (May 2005). Valuing not-for-profit and charity brands — real insight or just smoke and mirrors. Int J. Nonprofit Volunt. Sect. Mar. Retrieved on September 6, 2008) from EBSCOHOST.

McNesby, Mick (January 13, 2007).Charitable Giving In America: Is Advocacy Of Government Programs A True Form Of Charity? Ezines. Retrieved on March 14, 2009 from http://www.yoursdaily.com/culture_media/books/charitable_giving_in_america_is_advocacy_of_government_programs_a_true_form_of_charity

Reed II, Americus and Karl Aquino, & Eric Levy (January 2007). Moral Identity and Judgments of Charitable Behaviors. Journal of Marketing. Retrieved on March 14, 2009 at http://www.si.umich.edu/ICOS/Reed,Aquino,&Levy.pdf

Say, P. and J. Southwell (Jan-Mar 2006). Beep, beep, beep, beep, that’ll be the bank then – Driving sales through mobile marketing. Journal of Direct, Data and Digital Marketing Practice. Retrieved March 14, 2009 from EBSCOHOST.

Shang, Jen and Americus Reed, and Rachel Croson (June 2008). Identity Congruency Effects on Donations. Journal of Marketing Research. Retrieved on March 14, 2009 from EBSCOHOST.

Smith, Shawn (April 8, 2008). How QR codes could save newspapers from obsolescence. Mlive.com. Retrieved on March 14, 2009 at http://www.newmediabytes.com/2008/04/06/will-qr-codes-turn-newspapers-into-cash-cows/

Spiller, L and M Baier (2005). Contemporary Direct Marketing. Pearson/Prentice-Hall.

A Practical Guide to Market Segmentation

In his article A Practical Guide to Market Segmentation, Paul Hague reviews the value of segmentation, outlines a ten-step process for successfully achieving market segmentation, and analyzes three approaches for performing that segmentation. Segmentation is a key strategy to improve our customer database efficiency. He (p 2) says that “Segmentation enables us to group together customers with similar needs so that we can bring together limited resources to best serve them.” He applies the Pareto rule to the customer base and concludes that 20% of our customers may provide 80% of the sales revenue.

He asserts (pp 1-2) that it makes sense to personally customize offers to these devoted customers, but it would be financially irresponsible to do so for the other 80% of our customer base who are small buyers. For this 80%, Hague has several segmentation strategies. Although he is discussing business-to-business marketing, such segmentation also makes sense for business-to-customer as well.

Steps three through eight are a description of the three overall approaches he considers for classifying a customer base including the advantages and disadvantages of each approach. Once a segmentation approach has been selected, the customer base should be grouped together using cluster analysis (p 5). He recommends that such clustering be done every “six to twelve months with current customers to ensure any changing needs are recognized and addressed.”

Implementation of the segmentation is usually done from a spreadsheet (p 5), which can vary in sophistication depending on the extent of the customer base. A different offer must be prepared for each grouping of customers, and it must use the characteristics of each group to fashion a customer value proposition. Hague warns (p 6) that salespeople have an instinctual belief that all customers are “price fighters.”

Three Theoretical Perspectives on Segmentation
His first segmentation strategy is business firmographics that he compares to customer demographics. A major issue with segmentation based on firmographics or demographics is that it is an obvious approach to all our competitors as well and so may not provide competitive advantage.

Another possible segmentation strategy is needs based, although we must be careful about changes in needs over time. This strategy requires more resources to do the necessary market research but (p 2) “Gets to the heart of marketing; that is the identification and satisfaction of customer needs.” Hague asserts that the actual need drivers will end up being simple or at least simpler (p3) than generally believed because of the “action of cognitive misers.” To analyze a customer base for purposes of needs segmentation, he recommends no more than ten need factors be used to categorize customers.

The last segmentation strategy he discusses is the middle ground in terms of effort. Behavior based segmentation finds an external behavior measure that reflects a hidden need. He gives an example of a behavior that can be used to categorize customers (p 5). Customer behavior regarding procurement vehicles is the example he gives and he has a simple two-behavior classification: 1.) a Request for Proposal (RFP); or the alternative 2.) a Request for Information (RFI). His experience is that the RFP customers are price focused and the RFI customers are more open to suggestions and less price driven.

Hague’s Main Conclusions
Hague drives home the main conclusion throughout the paper, and that is customers are different, they should be grouped according to the relevant characteristics of our relationship with them, and our marketing activities should form around those segments. He concludes (p 2) that this approach optimizes our application of scarce resources, and that the true test (p 6) of a good segmentation is that it brings in “business that is profitable.” Orienting the sales staff (p 6) is critical so that they understand the nature of the segmentation guiding their efforts, and that they cannot return to the “cozy life in which they are given free rein and any offer will do.”

For a complete précis of the article see Redmond Review of A Practical Guide to Market Segmentation.

References
Hague, Paul (n.d.). A Practical Guide to Market Segmentation. B2B International.

Camouflage the ordinary with glamour, or at least history

My favorite magazine is the Smithsonian, published by the distinguished Smithsonian Institution. History, geography and anthropology are all article topics, all written with attractive eloquence. Interestingly, most of the advertisements are direct response, and from companies with superlative quality.

The magazine has seven million monthly readers (see Smithsonian Magazine ) so has quite a reach and began production in 1970 with Edward K Thompson, who left his post as editor at Life magazine. The creative strategy for the magazine is to “stir curiosity in already receptive minds.” The clientele are already interested in history, travel, geography, anthropology, archeology and the other fun sciences and subjects. The advertisements, not surprisingly are about these themes also.

The Stauer company places direct response advertisements in the Smithsonian magazine. They have been doing so for at least three years. My wife throws away old magazines so I only have issues back to 2006. But there is the Stauer ad, 2006, 2007, and 2008. The ad must be working to keep it for nearly three years.

Stauer is a watchmaker (see their Web site) that specializes in historic designs from the golden age of watchmaking. They are also jewelers and sell coins and other collectibles but the ad in question is for a watch. Not just any watch though, they are remaking long forgotten designs using modern materials.

Spiller and Baier say (2005, p 125) that the headline is “possibly the most important element of a direct response print advertisement.” The headline for Stauer’s ad is “World’s most valuable timepiece disappears.” There are other headlines in different issues but they capture this theme: We are losing part of our history when a culture’s plastic arts disappear, including metal work, leather work and watch design. Stauer includes lengthy copy in the full-page ad describing the history of the watch they are now remaking.

According to the Elaboration Likelihood Model this is central route processing. The greater our communication engagement with the other party the more likely that party will use what the model calls central route processing, which is to say a great deal of message related thinking. Media appropriate for in-depth thinking and evaluation of the message is used in such a case. Cacioppo and Petty (1986, p 673) state that when:

“the elaboration likelihood is said to be high. This means that people are likely to: (a) attend to the appeal; (b) attempt to access relevant associations, images, and experiences from memory; (c) scrutinize and elaborate upon the externally provided message arguments in light of the associations available from memory: (d) draw inferences about the merits of the arguments for a recommendation based upon their analyses of the data extracted from the appeal and accessed from memory; and (e) consequently derive an overall evaluation of, or attitude toward, the recommendation.”

This bodes well for the selling of these watches. The body copy can tell the story completely and Spiller and Baier (p 124) note that is an essential aspect of successful print advertising for direct response. Stauer has complete text copy describing the Graves watch, which recently auctioned for $11,000,000, including its interesting history. Finally, Spiller and Baier (p 126) note that the time eventually comes to “ask for action.” Stauer does this after the interesting body copy. Here are the offer details:

• 2 year warranty
• 30 day free trial period
• Not available in stores
• Three payments of $33
• 
• 800-859-1736
• Promotional code GRV378-04
• Address of company if you wish to order by postal mail

There is a rational deftness to the offer, the product and the medium. A receptive audience is given detail of a glamorous history about the original watch. So Stauer engages them in central route processing. “Free trial” is used as recommended by Spiller and Baier (2005, p 126). The offer should showcase the benefit. Here the headline and copy emphasize the historical interest and exacting craftsmanship to what is really an ordinary replication of the original work of art. This whole direct response ad is characterized by facility and skill.

References

Cacioppo, John and Richard Petty (1986.) THE ELABORATION LIKELIHOOD MODEL OF PERSUASION. Retrieved on September 19, 2008 from the EBSCOHost database.

Spiller, L and M Baier (2005). Contemporary Direct Marketing. Pearson/Prentice-Hall.