Information:
Benefits, News and Product
Adapted from J. Scott Armstrong
Updated June 2014
Information: Benefits, News and Product
Information-Product-R19
Learning Diary
The lectures follow an experiential learning experience.
To make this work properly:
1. Obtain a learning diary (paper). A 10 x 13 bound
diary is suggested.
2. Keep it up to date.
3. Take the learning diary with you to all class sessions.
4. For self-learners, use the diary to track your
learning progress for all of your learning activities.
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Objectives of this session
To understand and apply these principles and
techniques (not to convince you). Ask for clarification as
needed.
Set a goal for yourself on how many principles and
techniques you plan to use by the end of this session.
Even a goal of one will help you. Put this in your learning
diary now.
Note: We will discuss only some of the slides. When you go
through the lecture on your own, view it in “Slide Show” and
follow the experiential procedures.
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Procedure
Focus on understanding.
Record questions in your learning diary that will help
you to apply the techniques or principles, then,
after you decide which ones you want to apply, try
to answer these from the readings. If not clear, ask
others for help.
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Outline for session
Advertising:
• Benefits
• News
• Product information
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Early ads for computers
“Take our operating systems. Our version of the UNIX*
operating system, DEC OSF/1,* unifies many UNIX versions,
like System V, Berkeley and others, so you can run more
applications… Take our leading-edge Alpha microprocessor
and PCI peripheral chips…”
How could you improve this ad?
• Provides features – not benefits.
• The company, Digital Equipment Corporation, no longer
exists.
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Selling benefits: Old adage
“Every year people buy millions of quarter-inch drill
bits – not because they want quarter-inch drill bits,
but because they want quarter-inch holes.”
“People don’t buy products, they buy an expectation
of benefits.”
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P&G’s Dawn Case
In 1972, Procter and Gamble was preparing to launch its Dawn
liquid dishwashing detergent. Their top management debated
whether to advertise its
a) “superior cleaning ability” or its
b) “grease-cutting action.”
Which would you recommend and why?
Both contain a benefit, but the latter is specific
P&G went with “b” and it was successful.
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Describe specific, meaningful benefits
(Principle 1.1.1)
When possible, advertise benefits rather than
features.
Exceptions:
• benefits are well-known by those in the target
market
• advertised feature clearly implies a benefit
• benefits hard to explain or to support
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Evidence supports advertising of benefits
Quasi-experimental evidence from WAPB print ads:
• Mention benefits: 1.21 times better recall
• Specific benefits: Another 1.22 times
• Thus, a gain from specific benefits of about 1.5 times
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Do ads include specific meaningful benefits?
Almost 70% of 1,059 tested TV commercials described
benefits (Stewart & Furse 1986)
Using Which Ad Pulled Best, we found that of 478 tested fullpage print ads by leading advertisers, 70% provided
benefits. . . but of those with benefits, only 44% advertised
specific benefits. . .
Thus, only 31% of all these print ads had specific meaningful
benefits.
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Communicate a Unique Selling Proposition
(USP) (1.1.2)
Definition: A relevant selling point that is not
claimed by any other seller.
Harry Hopkins, a famous advertiser, emphasized this
in his “live steam” ad for beer. (See Hopkins story in
PA, page 30.)
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Evidence on the USP
Quasi-experimental study of WAPB print ads
“Claimed USP” 18 pairs showed 1.43 times better
recall.
“Real USP” 27 pairs showed 1.43 times better recall
than for “common USPs.”
Thus, a real USP had twice the recall of an ad not
claiming a USP.
Non-experimental data: Studies with large samples of
TV commercials showed “brand differentiating
messages” to be effective.
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1.1.2 – Communicate a unique selling
proposition – Complies
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1.1.2 - Communicate a
Unique Selling
Principle (USP) –
Complies
This ad means “Whipping
Cream” as the lads would
quickly spot, even after
many pints. It works best
as a conversation piece in
a tavern.
Boddington’s was not the
only creamy beer, but it
was the first to advertise
it, and it seemed to be a
successful campaign.
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Usage of USP
In Which Ad Pulled Best, of 474 tested full-page
print ads by leading U.S. firms, 57% described a
USP.
Analysis of 691 thirty-second TV commercials found
that different – yet relevant – main ideas were used
in only 20% of the tested ads (Ipsos ASI).
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Form groups for projects (optional)
At least 2 people, preferably 4, but no more than 6.
• Creative people
– Writer
– Illustrator (computer skills)
• Analyst
• Account manager
• If you do not intend to apply group problem solving
techniques, then the larger your group, the poorer
the result will be, as described in the creativity
lecture.
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Unique Selling Propositioning (USP) Exercise
1. Develop a USP for your organization (or your “ad
agency”)
2. Present the USP as a tagline
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Read all about it!
Under what conditions should you announce that you
have news in an ad?
Provide news, but only if it is real (1.2.1) Trivial news
will not help much and might even annoy viewers.
Experimental studies show that news is probably the
most important element in gaining responses. See the
summary on pages 32-33 of Persuasive Advertising.
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How to present complex news: Still or motion?
If real news is complex, use still media (1.2.2)
Evidence: 14 lab experiments found print to be
superior to audio-visual or audio only. Furham,
Gunter & Green 1990).
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Provide product information that
customers need (1.3.1)
Ads with product information had 1.34 times
better recall (37 pairs of WAPB print ads)
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Provide Information needed
Does this Audi automobile ad comply with the
principle?
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Making choices
When presented with an ad for a single microwave oven, 53% said they
would purchase. How many would intend when given a choice of five
ovens of different sizes? Write your prediction in your learning diary
and explain.
Percentage of purchasers increased to 73%. So Provide choices (1.3.2)
How many purchased when the five choices were multidimensional?
Purchases decreased from 53% to 40%.
Moral: provide many uni-dimensional choices.
Source: Simonson & Tversky (1992)
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Do people have too many choices?
The jam study: 24 flavors vs. 6 flavors at sampling table.
Which sold more and why?
Failure to replicate in the famous jam study
Meta-analysis of 49 experiments found no “paradox of
choice” – more choice was not harmful on average –
but conditions matter
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How can you satisfy poorly informed customer
who face many multi-dimensional choices?
___ 1. Offer one choice
___ 2. Offer a few choices
___ 3. Offer many choices
___ 4. Offer many choices organized in uninformative
categories.
___ 5. Offer many choices in informative categories
#2 is better than #1. #3 clearly better for unidimensional choices,
#3 gets difficult beyond 10 choices; #4 resolves the stress for
customers and is almost as good as #5; but #5 educates customers
about the product and they can handle many choices.
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Conditions for choices
When there are many substantive multi-dimensional
options, organize them and provide guidance (1.3.3.)
(Mogilner, Rudnick & Iyengar 2008)
They should be organized into meaningful groups of
about 7 choices, and guidance should be given to
uninformed shoppers.
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An experiment on offering options
An ad for The Economist made the following offer:
A. Internet only subscription for $59
B. Print-and-internet subscription for $125
32% of the customers chose the combination.
Suggest a way to increase the use of the combination in your
learning diary.
The Economist then offered:
A. Internet only subscription for $59
B. Print only subscription for $125
C. Print-and-internet subscription for $125
How many chose the combination? Explain __68%
Source: Ariely (2008, p 2)
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Organ donation problem
In Germany, 12% of people participate in organ donations,
while in Austria, nearly 100% do so. Germany has asked you
to propose advertising to increase organ donations. What
would you do? Your target market surveys show that 85% of
people favor organ donations in Germany.
Which of the techniques for this course can you use to solve
this problem? Write at least one technique in your learning
diary. Then click here.
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Techniques for Organ Donation Problem
Problem storming:
Take a short time for individual thinking and writing to
generate creative solutions. If possible, discuss ideas with a
group.
Synectics:
Prepare a list of solutions, analogous to when a similar
problem had been solved.
Apply each and write the applications in your learning diary.
Then, click for potential applications of the techniques.
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Application of techniques
Problem storming:
How can we make it easy for them? So easy, they do
not have to do anything.
Synectics:
How do they get people to subscribe to magazines or
newspapers? Send it to them as a free trial and say “if
you do not want to continue, let us know by [date].”
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A solution for the organ donations problem
In the Netherlands, nearly all adults received a letter asking them
to sign up. Estimate the success of this approach.
It had negligible effects.
In six European countries where people must take action to opt
out of a donor program, 99% are donors. In four countries where
one must take action to be a donor, only 15% are organ donors.
Reference for above
“To do nothing is in everyone’s power.” - Samuel Johnson, mid-1700s
Make the recommended choice the default choice (1.3.4 )
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Pizza Case: Within store advertising
A pizza store is considering two ad campaigns. One starts
with a fully loaded pizza and allows customers to save
money by removing toppings. The other starts with the
basic cheese pizza and allows customers to add
toppings at an additional cost. Which campaign would
have higher sales?
_____ Scale down
_____ Build up
“Scale-down” version had twice as many ingredients as
build-up version (Levin et al. 2002 experiments in Italy and
U.S.)
Inform committed customers that they can delete
features, rather than add them (1.3.5)
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Conditions for “Inform committed customers that
they can delete features, rather than add them” (1.3.5)
Applies only to committed customers, such as people in
a store.
To attract customers to the store, you may need to
advertise a low price.
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Risky Business
What would you rather receive?
___ a) $500 for sure or
___ b) a 15% chance to receive $1,000,000 (and an 85%
chance to receive nothing)?
Frederick (2005) asked students at various U.S. universities:
Predict the percentage choosing “a”, then click for the answer.
About half of the students chose $500.
The expected value of the second offer is $150,000.
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So how can you reduce risk for customers?
Write your ideas on how to reduce risk in your learning
diary. When you have your list, share it with a learning
partner.
Then click for ours.
1. Design safe products.
2. Use good guarantees on repairs.
3. Free trials.
4. Money-back guarantee on purchase. (Wanamaker)
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Reducing risk for companies
Companies need guarantees to protect them and to
protect customers. However, U.S. courts do not
recognize contracts in cases involving injuries. They rely
on tort law and seek payment from deep pockets. This
adds to the prices of risky products.
So what can a company do?
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Quasi-contracts
Consider that you break a leg while skiing. You are told you are
entitled to the advertised guarantee of $10,000. Alternatively,
you have the right to sue, which implies:
– unknown amount to be decided at
– unknown future date with an
– uncertain likelihood of winning, and with the
– time, cost and aggravation of legal case.
To reduce customer risk, use a product satisfaction
guarantee (Principle 1.3.6.)
Quasi-contracts reduce risk.
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Quasi-contracts
The inclusion of insurance policies (“quasicontracts”) yields savings on lawyers’ fees and court
costs and leads to gains for sellers and claimants.
When quasi-contracts have been tried, nearly
everyone took the immediate and sure payoff.
See review of Huber’s book on quasi-contracts
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General Motors and its Safety Problem
• Over the years, General Motors has had several recalls
that have led to millions of dollars lost in law suits,
penalties, compensations, and repairs. Most recently,
GM has recalled 2.6 million vehicles due to a flaw in
ignition switches.
• Companies cannot develop a car that is completely safe.
With that in mind, describe how General Motors might
be able to protect itself against problems such as that
involving the defective ignition switch.
Write this in your learning diary then click for a possible
answer.
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How can GM protect itself from its safety problems
With a quasi-contract, owners of faulty vehicles will have
the choice between taking the pre-determined, guaranteed
amount of money or suing.
However, most people probably won’t want to hire and pay
for a lawyer to fight GM for an uncertain amount of time for
an unknown outcome.
Quasi-contracts would reduce risk for GM and,
consequentially, monetary loss.
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Techniques described in this lecture
Replication
Problem-storming
Synectics
Quasi-contracts
Checklists
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Applications
1. Analyze an ad for a utilitarian product by using the
the end-of-chapter information checklist for this
chapter (on next slide). Write this in your learning
diary.
2. Support your analysis by reference to the original
research studies.
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Ideas for Applications of Principles
To learn the principles, use the checklist for
creating ads to apply the information principles.
If you are not currently working for an organization,
pick something to advertise, perhaps a charity.
If you are in a class, design an ad for yourself as the
owner of small advertising agency (commonly
called a “house ad”).
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Techniques
In your diary, describe the techniques that you were
able to use for your information-focused advertisement
and rate your success (e.g., creativity, objective setting)
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Advice on learning techniques
One study found that fewer than 10% of students were
successful in applying new knowledge.
• This went to 20% if they actively applied what they
were taught during a class session.
• It went to 90% when they worked with a learning
partner and coached each other.
Select techniques to apply
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Follow-up: Complete prior to next session
1. ___ Go through this lecture on your own (It is on
the Educational Materials page)
2. ___Study Persuasive Advertising pages 27-62 and
record your reading time in your learning diary.
Highlight techniques and principles that you want
to apply in yellow.
3. ___ Complete the End of Chapter Questions for
“Information” and check your answers against PA.
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