Week 5 Discussion

Discussion Questions – Week 5

Initial Blog Post - Due time: Friday at 11:00 pm

Responses – Next Tuesday at 11:00 pm

Each piece of marketing theory or concept is first introduced and explained in the context of a specific application.  Please use relevant concepts and theories from the textbook and give examples to support your argument.

Please read Chapter 6 before approaching the following discussion questions.

Part 1 (Q1-7): (Note – I have the sixth edition of McGraw Hill’s “Marketing” by Levy and Grewal rather than the fourth edition, so I’m unsure if the same product comparison and information was used)

1. Food packages have claims about taste, value, and nutritional information as well as information on the organic or conventional status of the product.

2. The Snapple tea mentioned early in the chapter claims to be natural – claims such as this lead to the idea that the product doesn’t contain highly processed or synthetic ingredients, meaning that they are healthier for consumers, however the Snapple tea in question does contain high fructose corn syrup. Labels such as “organic” or “natural” can be deceiving to the non-critical consumer.

3. Individuals who are concerned about their health, but perhaps are not the most critical consumers. They are willing to shell out more money for products that promise to be all natural or low fat, but may not spend time researching exactly what the benefits of the product are, and therefore won’t be likely to find out that their all-natural product contains not-so-natural ingredients.

4. Consumers favor products with packaging that sticks out from the rest. The example used in the book was a tube of Pringles – chips in a tube are less common than a shapeless bag, so Pringles stick out from the competition because the packaging doesn’t look the same.

5. Kashi certainly has the most public image for a nutritious product, with low fat, lots of fiber, little sugar, and plenty of protein. Grape Nuts have less fat, but less protein and more carbohydrates than Kashi. Cheerios have the same amount of fat, but less protein and fiber than Kashi. Overall, I would say that Kashi is the most nutritious.

6. At Walmart, Kashi cereal costs about $6, while Cheerios and Grape Nuts are closer to the $3-5 range.

7. A 2-for-$5 is more effective than $2.49 each. If you have a 2-for, you will almost guarantee that every customer will buy the multiple. Why? If purchasing two items guarantees that a consumer will pay a lower price for each than they would pay for the two individually, most consumers will purchase multiple because the lower price-per-item offsets the idea that they will be spending more money overall.

Part 2 (Q8): Please read Chapter 6 (i.e., 6.1 Ethical and societal dilemma) before approaching the following discussion question.

8. Gun owners absolutely should have to buy liability insurance. I believe this is the case because guns can cause an inexplicable amount of damage, and certainly need to be controlled much more than they currently are. I believe that liability insurance is a great idea for a way to control guns. If insurance companies had to offer insurance for gun owners, in order to reduce the risk of insuring this population the insurance companies would certainly lobby for more stringent requirements on gun ownership.

Part 3 (Q9-12): Please read Chapter 6 and the reading Prospect Theory before approaching the following discussion questions. You might also want to check out the following video if you prefer video-based learning:

9. When viewing advertisements in my daily life, I am careful to be aware that companies are only telling consumers what they want consumers to know. I never make decisions based on an advertisement alone, because obviously a company is not going to tell me about the flaws in their product or service.

10. With no context on what the numbers represent, I would choose option B because 3 is my favorite number.

11. The example of insurance is similar to the example of the warranty on the TV in the reading. Consumers will fail to take into account their future income, or their likelihood of actually needing to pay the deductible, choosing to pay a higher premium. I agree with the reasoning of paying a higher premium, but on a different basis. For me, it comes down to costs I expect and costs I do not expect. I would rather diminish unexpected costs that have the potential to derail my financial plans, even if it means expecting to pay a little more up front. I have had to pay the deductible on my car insurance twice, and both times I was very happy to have paid more up front to save money when I wasn’t expecting it.

12. In today’s technological age, new models of phones are always coming out. In advertisements, only the new features and improvements are mentioned, while many things remain the same from model to model. New features are seen as a gain, so whichever company advertises the most gains will likely see greater profits. Old features that are kept are not gains, they are just sticking to the status quo. These features won’t be mentioned in advertisements nearly as often because they just don’t bring in new consumers.