4. Using the demographic information given in Table A and your own experience and knowledge, characterize the segment of "high-frequency" user that Domino's would want to target. (02 marks) III. Consumer Insight: Unilever Adapts to Sell Laundry Products Globally (04 marks) Unilever is highly successful in marketing its laundry products outside of the United States. The reason is it continually adapts to existing and emerging factors both within and across the countries where it does business. A stunning statistic is that "[every half hour 7 million people in the world wash their cloths with Unilever products, and 6 million of them do so by hand." Below we touch on each of the seven global considerations as they relate to Unilever's global strategy. Cultural Homogeneity. In the global laundry market, heterogeneity, even within a country, can occur. For example, Brazil's Northeast and Southeast regions are very different. One difference is that in the poorer Northeast region, most laundry is done by hand and more bar soap than powder is used. In the more affluent Southeast region, most laundry is done in a washing machine and more powder detergent is used than bar soap in the process. Needs. Hand washing versus machine washing leads to different laundry product needs. In addition, in developing countries that are an important focus for Unilever, products must be adapted to meet strength of cleaning needs related to removing sweat, odors, and tough stains due to physical labor. . Affordability. Clearly affordability is a component in pricing the laundry detergents themselves to be competitive. However, Unilever also faces the situation that a transition from hand washing to washing machines depends in large part on the economic prosperity of a country or region, as this determines the affordability of washing machines. Adoption of washing machines, in turn, changes the type and amounts of laundry products used, as we saw earlier. . Relevant Values. One source indicates that cleanliness, convenience, and sustainability are key value aspects in laundry products that vary across cultures. In many countries where Unilever operates, there are segments of kids dubbed "Nintendo Kids" who don't tend to go outside and play and thus don't get dirty. A core strategy for a number of their brands in these markets is the 'dirt is good" campaign that stresses that playing and getting dirty are part of a healthy child's development and "let Unilever worry about getting their clothes clean." . Infrastructure. A broad infrastructure issue in laundry is access to hot water. Many in developing countries don't have access to hot water or large quantities of water. Unilever responded in India with Surf Excel Quick Wash, an enzyme-based product that uses less water and works under lower water temperatures. Communication. Europeans have traditionally cleaned their clothes in much hotter water with the logic being that "boiling clothes" is the only real way to get them clean and kill germs. This trend is reversing as Unilever pushes more environmental-friendly products and as Europeans have begun to wash in cooler temperatures to save energy. An interesting consequence of the shift is that antibacterial additives are now demanded by European customers to kill the germs . Ethical Implications. While conversion of the world's consumers to fully automated washing machines would help standardize Unilever's approach, it has major implications for water usage. This is because compared to hand washing, machine washing can, depending critically on the Page 5 of 6 number of rinse cycles needed, use more water. Continued innovation in products toward lower water use will be a key ethical and performance issue for Unilever moving forward. As you can see, Unilever has and must continue to innovate and adjust as its target markets evolve along these critical dimensions. Critical Thinking Questions 1. How might generational influences affect the adoption of washing machines even after economic conditions make them affordable? (01 mark) 2. What other features beyond price and form (bar versus powder) do you think Unilever has had to adjust to meet different needs/wants/preferences across different markets? (01 mark) 3. Which core value is related to sustainability and green marketing? Does this value vary across countries and cultures? (02 marks) Page 6 of 6Assignment (15 marks) I. Consumer Insight: Scare You Smokeless (03 Marks) Prior to the 1970s, cigarette smoking was a "perceived and promoted" healthy habit recommended by doctors, Santa Claus, and infants. 71 Cigarettes were packed with the c-rations provided to soldiers during WWII.72 Celebrities, including lovable cartoon characters Fred Flintstone and Barney Rubble of the long-running TV series The Flintstones, promoted the enjoyment of smoking cigarettes. Today smoking cigarettes is understood to be an unhealthy habit. The three-pronged effort- affective, behavioral, cognitive to decimate cigarette consumption, along with antismoking advertisements and the increase in cigarette prices, has been credited with the decline of smoking in the United States. To decrease consumer top-of-the mind awareness (cognitive component), cigarette advertising was banned from TV and radio (1971). To make it harder to engage in smoking behavior, 38 states have some form of ban on smoking in enclosed public areas- restaurants, offices, theatres (behavioral component). To induce fear as a deterrent (affective component), cigarette packages were required to carry warning labels proclaiming its health hazard (1984). In recent years, the suggestion for the United States to follow in the footsteps of 40 other countries, including Thailand, England, and Canada, to include graphics- photos of diseased lungs and rotting teeth-to the health warning labels has been championed as a technique to aid efforts to prevent, decrease, and eliminate the consumption of tobacco. It is a more severe form of the fear appeal discussed previously and designed to operate directly via the affective component of attitudes (though it also likely indirectly operates via cascading effects on thoughts and behaviors). Research in other countries where the effort has been ongoing finds that consumers report that the graphic images help them to decrease cigarette consumption and prevent initial use. Whether or not the enactment of such a requirement in the United States would lead to similar results will remain moot. The courts have recently ruled that requiring cigarette manufacturers to include graphics is a violation of the First Amendment right of free speech. Cigarette manufacturers and governmental regulation bodies will now have to contend with the recent arrival of e-cigarettes. A battery-powered device that looks like a cigarette, e-cigarettes or electronic cigarettes vaporize a liquid solution that can deliver nicotine or non-nicotine flavorings smoke free. Too new to be a real commercial threat, but growing too fast to be ignored, cigarette manufacturers are hedging their bets by buying e-cigarette companies (in 2012, Lorillard bought e-cigarette company Blu for $135 million; in 2014 Altria announced it was buying e-cigarette company Green Smoke for $1 10 million) and developing their own e-cigarette brands, MarkTen (Altria) and Vuse (Reynolds). With insufficient information to know whether e-cigarettes will act as a deterrent or as a gateway to smoking conventional cigarettes and whether their long-term effect is less threatening to health than traditional cigarettes, governmental regulating bodies have waded tepidly into the regulation waters. E-cigarettes are an interesting case study in attitude formation for new products. Companies are marketing the products as safe (cognitive component) and the users as sophisticated and Page 1 of 6 individualistic (affective component), which will likely drive adoption in the future by consumers. Government regulating bodies are finding it hard to form "attitudes" towards this new nicotine delivery device due to the lack of information and research with which to form those attitudes. As we can see, attitudes are important for consumers, marketers, and government regulators. Critical Thinking Questions 1. Describe each attitude component used in deterring cigarette smoking in the United States. (01 mark 2. Using what you know about fear appeals, do you think the graphic approach will work better than verbal warnings? (02 marks) II. Case - Domino's Reformulation Domino's Pizza long held a reputation for quick delivery service and terrible pizza. Consumer focus groups described Domino's pizza crust as being similar to cardboard, the pizza as mass produced, the sauces as ketchup, and the cheese as bland. For years, executives at Domino's were aware of many people's feelings about its pizza but chose to focus on its core competency of delivery service instead of product quality. However, delivery speed was not enough and Domino's recognized that it needed better-quality pizza as well. Domino's recently introduced a reformulated version of its pizza with higher quality and more flavorful ingredients. It launched an extensive advertising and promotional campaign that poked fun at its own brand by announcing that the old pizza recipe was awful, but its new recipe was wonderful. Commercials featured focus groups giving negative evaluations of the old pizza recipe and Domino's employees talking about complaints received about the pizza, with the promise of the new pizza being much better. According to Domino's CEO: It wasn't a hard choice to change the pizza. But it was absolutely a calculated risk to advertise it this way. There was no Plan B. If it didn't work, there was no going back. You can't say your old pizza was bad and this new pizza is great and expect to go back to the old formula if people don't like it. This new pizza was dramatically different. It tasted better-there was no question. We knew all we had to do was get people to try it. We were doing it through the absolute teeth of the recession, and we knew it would result in a higher-cost pizza. Consumers' reactions to the new pizza recipe were mixed, but generally positive. Some critics claimed that adding spices does not constitute a reinvention of the recipe. However, two months into the campaign, Domino's new pizza recipe beat Pizza Hut and Papa John's by a wide margin in taste tests. One customer wrote on Domino's Facebook page: I seriously hated Domino's in the past. Only had it a couple times and it made my stomach upset and it was average at best. I recently moved and tried Domino's again since there's not much for delivery where I moved to. We are totally turned around by the taste! We have ordered again since 2 more times and plan to order a lot more in the future. Way to turn things around Domino's, keep up the fantastic work!Table A provides demographic data for low- and high-frequency Domino's customers. The reaction to the advertising campaign itself was very good. Late-night talk show hosts such as Conan O'BRIEN exaggerated comedy pieces that helped to put Domino's new pizza recipe in the national spotlight. Because of its campaign, Domino's was named runner-up for Advertising Age's Marketer of the Year Award. Domino's was also named the Pizza Chain of the Year by Pizza Today, the industry's leading trade publication. Part of the success of Domino's new campaign is that it actively engages customers in a number of ways. For example, Domino's actively seeks feedback from social media as well as providing various contests and activities for its customers. For example: In the "Taste Bud Bounty Hunter" program, customers nominate others who have not tried the new pizza. Those customers who "convert the most taste buds" win a year of free pizza. The potential customers who have not tried the new pizza have the potential to end up on a Domino's commercial. . In the "Show Us Your Pizza" program, customers send in photos of the pizza that they ordered from Domino's to be used in a national advertising campaign for cash prizes. In a commitment to transparency, Domino's solicits customers' positive and negative comments through social media. It also promised to never edit photographs of its pizza in advertisements. The combination of a higher-quality product and a successful marketing campaign resulted in a positive financial impact. Domino's posted a 14.3 percent increase in same-store sales in the first quarter of 2010, beating Mcdonald's highest-ever gain of 14.2 percent. The following quarter saw a 14.5 percent increase in sales. The true test will be whether Domino's increase in popularity has longevity. Domino's intends to continue the wave of revamping its menu by moving on to chicken. Again, it is soliciting customer ideas and opinions. TABLE A: Demographics for low and high-frequency Domino's Customers Page 3 of 6 + Visits per 1-5 Visits per Month Month Age 18-24 179 214 25-34 139 114 35-44 127 113 45-54 100 100 55-64 8 8 65 + Gender Male 93 97 Female 106 102 Ethnicity White 79 30 Hispanic 154 297 Black 179 353 Asian 73 Household Income $25K 115 180 $25K-$49K 92 92 $50K-$74K 90 60 $75K-$99K 103 119 $100K-$149K 106 34 $150K+ 87 51 Children at Home No 77 81 Yes 144 137 Note: Numbers are indexed to 100, where 100 is the average; for example, 115 would represent 15 percent above average. Source: Experian Simmons' Fall 2009 National Consumer Study. Discussion Questions 1. Domino's is repositioning its brand with new recipes and extensive advertising and promotional campaigns. (02 marks) a. Why can repositioning the brand be very difficult? b. What characteristics of Domino's rebranding effort may help it ultimately succeed in the long term? 2. What message structure characteristic discussed in Chapter 4 (Attitude) does Domino's use in its campaign? What consumer emotions are stimulated by this type of message structure? (02 marks) 3. In chapter 3 (Learning) we discussed several learning theories. What learning theory is Domino's using to teach consumers that its product is improved? (02 marks)