Summary Advertising and
Consumer Psychology
Course by Ronald Voorn MSc. Senior lecturer/researcher
Master Communication Science University of Twente 2021
Britt Heuvel
1
,Content of the Course
Ultimately Advertising or better yet marketing communications (marcom) is used as a part
of marketing activities to influence and interact with the buying behaviour of consumers
with regards to brands. Its main tasks are to inform, persuade and remind consumers
directly and indirectly (through others). Consumer psychology goes further and can be
applied in all aspects of marketing. In this course we will mostly focus on its application
towards marketing communication however, to be successful marcom has to influence
consumer behaviour. And nothing is so complex as behaviour. There are many moving
parts in a noisy world & brain. So, understanding the consumer behaviour ecosystem, what
brands are and how they are shaped in co-creation with users and non-users is where it all
starts.
For marcom to have an effect it, firstly, has to reach people’s senses (consciously and
unconsciously) and affect their memories by connecting to people’s goals, desires, and
needs, bypassing or overcoming barriers in the process. And if done successfully brands are
even able to create relationships with consumers. For this, marcom has to influence
attitudes and persuade, realizing that consumers are in general not so interested in the
marcom of brands. Several techniques can be used in this, ranging from influencing the
unconscious to making people switch to conscious thinking. The role of the self, also in
relation to others, plays a big part in this.
Consumers are not defenceless, however. They have a persuasion knowledge system that is
automatically activated when their radar senses they are caught in a persuasion attempt.
Several defence mechanisms can be activated in response to this. Not triggering those is an
important condition to become effective. Several techniques exist for this. The field of
marcom is a very active field (+/- 700 billion invested per year globally) where new
techniques are continuously investigated and introduced. Knowing which of these are
sounder (as well as more ethical) than others can make the difference in becoming a
successful brand or not. This course will cover some of the most important new
developments.
The set-up of this course
You will find content on canvas and we will have weekly live-online sessions via conference.
The structure of this course is organized in themes per week and will consist of a
combination of lectures and literature study presentations.
Overview Course:
1. Lecture 1: Marketing Communication in real life
2. Lecture 2: Consumer behaviour eco-system
3. Lecture 3: Attitudes, persuasion and consumer decision making
4. Lecture 4: Me myself and I, The role of self
5. Lecture 5: Does the target react automatically? Effects of MarCom
6. Lecture 6: Tactics and trends + Exam training
7. Exam
The Exam:
Corona virus permitting we will have an electronic exam with 10 open questions. If this will
not be possible, we will do an exam on the basis of an essay you have to write. I sincerely
hope it will be the former. Please watch the theory video per week BEFORE our live-online
session. The exam is covering all materials and lectures (so make notes)
2
,Lecture 1 Marketing Communication in Real Life
What is (the function of) advertising? Definitions of this lecture are Important!
American Marketing Association (widely accepted definitions): “The placement of
announcements and persuasive messages in time or space purchased in any of the mass
media (+ online media) by business firms, nonprofit organizations, government agencies,
and individuals who seek to inform and/ or persuade (+ remind) members of a particular
target market or audience about their products, services, organizations, or ideas.” (AMA).
*Reminding is very important because otherwise information in the brain decays
Definition of Consumer Psychology
Branch of social psychology concerned with the market behaviour of consumers. Consumer
psychologists examine the preferences, customs, and habits of various consumer groups;
their research on consumer attitudes is often used to help design advertising campaigns
and to formulate new products. (Encyclopedia Britannica)
Overview digital around the world
Interesting figure, we often think that everyone is on the
internet but that is not the case. It is growing but there is
still 41% of people around the world that have no access
to internet (more than 3 billion people). Facebook is the
largest platform, then YouTube and WhatsApp. WeChat
is a Chinese messaging platform, Instagram, TikTok and
then some other smaller social platforms follow.
Amount of spending
An estimate of the amount of money that's been spend on advertising around the world for
three different companies is a little less than 600 billion USD. The amount of money that
has been spend on digital advertising is around half of the total budget. These are very large
amounts of money, but it is not all on digital. There are many people that are still using
offline media as well. You have to be where the eyes/ears are of the people you want to
reach/ try to influence. And that is not always exclusively online. You have to take an
approach whereby you allow your programs to be led by where your people are (that's
where you want to be). That's the simplest rule of thumb that you can follow, by which you
can increase your effectiveness.
Some new stuff
There are some really interesting new techniques such as Artificial Human beings etc. (see
videos and article). Example is NEON: artificial human being developed by Samsung.
Technical possibilities are increasing, also in artificial intelligence. Example is ROSS: one of
the first law offices around the world that are able to give you recommendations totally
based on artificial reality. You type in a question and get an answer from a super intelligent
attorney that is completely a computer. This kind of developments are really going to
change how advertising will further develop and other forms of marketing communication.
Artificial fashion models are coming alive and will seas to exist in the future. Another
possibility is that advertising is becoming more two-way (also with the use of artificial
intelligence). Example: billboards may see you too. The shoe company Toms is using
technology to measure the effectiveness of outdoor ads like a billboard displayed in
Orlando. An even further step is the I-88 Chevy billboard that spots rival cars and makes a
targeted pitch. In South Korea they also have a company: Bidooh that makes posters in
malls etc. that recognize you and your personality type based on the proximity of your
smartphone and the information that they have stored about you. Another thing
happening is robots: Lilmiquela on Instagram for instance is artificial intelligence and build
up by a company that build models. Lilmiquela is an influencer and makes money by
advertising brands and singing songs. Her profile is very interesting. There are multiple
accounts like hers with 'fake' people that are concurring the world.
3
,Marketing principles
To be able to understand marketing communication, advertising and consumer
psychology we have to discuss the topic of what is marketing in fact. Definition of
marketing: Marketing is the activity, set of institutions, and processes for creating,
communicating, delivering, and exchanging offerings that have value for customers, clients,
partners, and society at large. AMA 2016. This is a very recent kind of definition.
Marketing Mix
What does that mean? Well basically companies, marketers in this case, take care of the
product, the price of the product, where they do sell it (place), how they promote it (with
marketing communications, PR, influencers, sponsoring all kinds of promotion tools). Those
first four are called the four P's, which is very famous in the marketing world. There's also
an addition with the P of people the P of physical context and the P of process.
Why? Because when you talk about services, the people that actually give you the service
are very important in that process. So, there should be more attention paid to the P of
people. Physical context: the kind of place where you sell it is also becoming more and
more important and marketers try to actually design that sometimes and even modify that.
Processes are also important in terms of how you're being serviced, with what kind of
processes. For example, how you can send stuff back online, one big problem with online
sales is that a lot of people send back their stuff (40% returns is a normal number in the
fashion industry). Which means you have to have good processes in place as well, also to
keep happy customers. Because if you don't end all the returns in the right way, you're
going to have these dissatisfied customers. There are even models with twelve P's but
nevertheless the first four (product, price, place, promotion) are the most well-known.
Multiplicative Marketing Steps
There's a very interesting presentation on YouTube by professor Ritson:
Ritson (2017). https://www.youtube.com/watch?v=pUB-jLlsGsk
At this moment he is probably the world's most famous
marketing communication professor around. In this
video he presents what marketing communications is
and that marketing exists of multiplicative steps. What
does multiplicative mean? For example: here the three
main activities of marketing (diagnosis, strategy and
tactics) are all equally important. So multiplicative
means: any of these areas is of importance, you can
have a great diagnose and great strategy but if you do
something wrong with the tactics it won't work and the
other way around as well.
In the diagnosis phase you do a lot of research: on what do people need. what competitors
are out there, in what kind of conditions do they sell, how much market share do they have,
what do people think about what, what is being sold by a certain product category, what is
the quality that they see of those products, so you have quantitative and qualitative
research there as well. The next step, when you have the answers of that research, is the
strategy: the who, the what and the how are of importance. You determine who do you
want to sell to, what do you want to sell them and how you want to sell to people. The third
step is tactics, there you actually see the four P's (Communications (promotion), Distribution
(place/process), Product, Pricing).
Multichannel Marketing
When people do marketing communication (part of promotion) they do it via multiple
channels (social media, physical locations, catalog, website, paid search, direct mail, email,
tv, radio, print advertising and more). Always the starting point is: Where are my customers?
Because that's where you want to be, as well with your communications.
4
,Branding
You're only going to be successful when you create brands. The importance of brands in a
very easy way according to Freddy Heineken: “Mr. Voorn, when my breweries burn down
tonight, I will get a loan tomorrow to rebuild them all on the basis of the value of my brand.
But, Mr. Voorn, when you burn down my brand tonight, I will be stuck with a lot of empty
breweries in the morning!” Mr. Alfred Heineken (1992). He was absolutely right, if the brand
goes under, your fixed assets have no use anymore. So that's how important brands can be.
The word “brand” derives from the Old Norse word “brandr”, which means “to burn”, as
brands were and still are the means by which owners of livestock mark their animals to
identify them. (Keller 2002). Kevin Keller is a famous marketing communications person.
The brand is always more than the product, different ways of describing a brand:
1. “The intangible sum of a product’s attributes: its name, packaging, and price, its
history, its reputation, and the way it’s advertised.”
2. “A name, sign, or symbol used to identify items or services of the seller(s) and to
differentiate them from goods of competitors.”
3. “Products are made in the factory, but brands are created in the mind.”
Another way to look at brand is that a brand is a bundle of benefits with sustainable
differentiation potential (definition by Burmann and Meffert 2005):
• Utilitarian benefit: taste, energizing
• Economic benefit: price
• Social benefit: acceptance (lifestyle)
• Aesthetic benefit: Bottle design
• Hedonistic benefit: Pleasurable use
The benefit itself has to be: Important or motivating to target consumers, deliverable by the
brand (how well do all brands in target category deliver various benefits?) and unique to the
brand: differentially superior delivery
The 20/80 rule: The Pareto principle
The 20/80 rule basically says that 20% of the people actually buy 80% of the product. So
that would mean that 20% of the people that consume Heineken actually consume 80% of
all the volume/beer of Heineken. But it is not true, an overview of different brands of
products from a study concluded that. They looked at the Pareto share: so, if you look at
20% of the people that by most of the volume, how much of the volume do they actually
buy? For example, Coca-Cola: 20% of the people that drink the most Cola, drink 58% if the
total volume. And you can see that it's never 80%, it is always lower. So that means that the
Pareto rule in this case, in marketing and market shares is not true.
Loyalty or Penetration?
So, the question is then always as a marketeer: do I go for loyalty or do I go for penetration?
Because if it's true that 20% of the people use 80% of your product, you better make sure
that you keep them satisfied. And spending money on the other 80% of the people is going
to be inefficient, because you will maximum only sell to 80% of the people 20% of the
product. Well, this is not the case. So, the answer to this question is: penetration (Byron
Sharp: How brands grow).
Example people that drink Coca Cola in the US: on the left side
on the vertical axis, you see the percentage of people that buy
Coke in a market and on the horizontal axis you see how many
times they do a purchase. So, on the right side you see some
people buy Coca Cola 50 times in a month. That's a huge part
but it's only a very small number of people. When you look on
the left side, the people that buy Coca Cola one time in a month
or two times in a month are actually a lot of people. That's at
least 32% of all people: now that's where you grow from.
5
,Because if you dare to aim your marketing communication and marketing efforts towards
the light users and get them to buy one more in that month you're actually going to grow
very rapidly. This story is important because the mistake is made that in the market people
always talk about loyalty and not enough about penetration. And growth by penetration is
actually one of the most efficient ways to grow your market share. When you calculate all
the results from all the studies then there's a really high correlation between penetration
and market share in terms of volume, and it's around 85% (that’s a really high correlation).
Who are you going to target for? And actually, especially in the brand building phase: don't
go for two small groups of people. Go for everybody that would be in the market for a soft
drink and not only people that will be in the market for dark soft drinks for example. So, go
for all category users and don't limit yourself by making your target groups too small.
Psychology and marketing communications
An essential lesson is that people group things they know together in their mind (penguin).
In that sense our brains are like a library where there are different departments in there and
that’s where you store the information. The categories that you store in your brain also
contain information about brands and all the kind of things you know and feel and have
memories of and also your attitude towards the brand is connected. The easiest to retrieve
information is always the most important to aim for. So, if there's anything you want to
achieve, it is as a brand to pop up in your mind as the first possible brand in that category.
People categorize information, and once you ask them to think of a category the most
likely candidate will pop up (the most well-known/the most salient). Salience of the brand
is a very important objective to achieve with your brand. A high salience means brand
awareness and the typical things that belong to the brand that you can remember.
You have to increase mental availability.
That's the salience You want to store your
brand in the right category in the mind and
you want to be more salient than any other
brand that that they know in the category.
So that once they have to make a purchase
in that category, your brand pops up.
You don't only want to achieve savings in
the mind, you also want to make it very
easy for people to really buy your product.
So, you have to take care of the physical
availability. Delivering an experience: so,
you want to create the experience with
mental availability, and you want to deliver
it with physical availability.
In physical availability there are three different components you have to take care of:
• Presence: Are you where you should be?
o 80% of success is turning up. Maximize your presence across as many buying
occasions as possible.
• Prominence: Are you easy to find?
o Be the star of the store. Prominence is relative presence, in terms of
noticeability, how easy your brand is to spot compared to competitors.
• Relevance: Are you buyable?
o Right product, right place, right time. Relevance is about being present and
prominent in the most relevant buying occasions for category shoppers.
These two, mental and physical availability, are the top two priorities to take care of once
you are working in marketing. Once you have increased mental availability and increased
physical availability you will see that you will actually increase penetration.
6
,Advertising application areas:
• Profit/ Business to Consumers (B2C): Where company sells to private consumers
• Business to Business (B2B): Where one company sells to another company
• Business to Employer (B2E): Where companies advertise to (future) employees
• Non-Profit: Advertising from organizations, political parties, causes
Product placement
Product placement is also a form of advertising or marketing communications that is used
a lot (see video on canvas that shows the number of brands used in just one music clip).
Example of product placement is Heineken in James Bond movies. There are also many
other modalities that advertising can take, like influencer marketing or native advertising
but we get to that throughout the course.
Paid, Owned and Earned Communication
There is a specific way to think in terms of what different kinds of contact you can have
with consumers. And there you see sometimes the distinction being made between paid
communication, owned communication and earned communication.
• Paid communications are basically all the advertising that you see in terms of print,
television, radio, magazines, cinema, outdoor, online banner ads, search ads, direct
mail, etc. which is paid for. And it's actually a company selling to strangers.
• Owned communication is all the media that you own yourself: like your website,
your brochure, your own retail stores, your Twitter account, your Instagram account,
etc. and it's basically having contact with your customers.
• Earned communication is really nice to have. Because when earned communication
is word of mouth, so people talking about you, (hopefully in a very good way) on
Facebook, on Twitter, in newspapers, on television shows etc. it is usually seen as
very valuable. And it's actually your fans that will talk about you.
Product Life Cycle and Objectives
When you have communication, it has to serve a certain purpose. And in that sense, you
can think of product life cycles. Where you have an introduction phase, the growth phase of
a brand, the maturity phase and then you get to decline phase. And in those phases, it is
actually described how you can recognize those phases, and you see that brands overtime
grow to a certain peak and then they start declining. This is not necessarily always the case;
really good marketing people are capable of keeping a brand alive by staying relevant
throughout time.
In the different phases you can use different
kinds of marketing communication
• In the introduction phase you would
be interested in creating a category
need, awareness, knowledge and
having a positive attitude towards
your brand.
• In the growth phase you want to
concentrate also on attitude and
creating a preference for your brand
• In the maturity phase you want to
stay top of mind, you want to keep on
the positive attitude, you want to
have loyalty and satisfaction but also
penetration.
• In the declining phase you have to
keep going at penetration and then
you find new target groups because
you don’t want to decline
7
, An ideal ad-campaign
There is another way of looking at what makes effective advertising or marketing
communication according to Kevin Keller:
• The right consumer is exposed to the message at the right time and place
• The ad causes consumer to pay attention
• The ad reflects consumer’s level of understanding and behaviors with product
• The ad correctly positions brand in terms of points-of-difference and points-of-parity
• The ad motivates consumer to consider purchase of the brand
• The ad creates strong brand associations
The previous list shows what good advertising should achieve in in the mind according to
Kevin Keller. The thinking about this started to exist in the 1950s in a famous paper by
Gardner and Levy: “The Product and the Brand” where they make a distinction between
what is a product and what is a brand. They started to recognize that there's something
more to products and that brands actually make products much more valuable. Because
customers form enduring associations with a company or product and those associations
guide consumer purchase decisions.
Spreading Activation Theory of Memory
Later in science it was discovered that brands are
association networks in the brain. Based on the
spreading activation theory of memory. Keller
describes that also in his paper in 1993 (see article).
In the example you see all kinds of associations
and that they are connected together of
Volkswagen Golf. What is the central thought in
the spreading activation theory of memory?
Information is encoded in an all-or-none manner into cognitive units and strength of these
units increases with practice and decays with delay. Triggering one activates the others,
John Anderson (1983). You can actually research any brand around the world and find what
the associations are and how strong those associations are. Because the stronger your
brand is, the quicker you will remember the brand once some associations are mentioned.
The lesser associations you have to tap for a brand to become alive in your mind, the
stronger the brand is. It's one of the fundamental building blocks of branding (theory +
paper Keller are important! there will be a question about it during the exam).
Distinctive Assets Grid
Another way to get people to know your
brand well is by creating distinctive
brand assets. What are they? They can be
anything: they can be something that
you own in terms of advertising, it can be
a specific tagline, it can be a celebrity you
always use, it can be music that you own,
different color that you really own,
certain typefaces, back shapes, logos,
even smell can be used.
The more you have distinctive assets, the
better it is for brands to become alive in
the brain. You can measure the strength
of those distinctive assets in two ways: on
the vertical axis you see fame (how well
known is your asset) and uniqueness
(how unique is your asset) on the
horizontal axis.
8
