Illegally Renting Room in Home by eua17832


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         Consider a company's successful attempt to influence your behavior as a customer as you answer Questions 1-3.                         Consider a company's unsuccessful attempt to influence your behavior as a customer as you answer Questions 4-6.

What was the name of the        Which behavior was the company trying                                                                    What was the name of the       Which behavior was the company trying
company? What product or        to influence? What mechanism(s) did it                                                                   company? What product          to influence? What mechanism(s) did it
service were you using?         use? ______                                In your opinion, why was the attempt successful?              or service were you using?     use?                                          In your opinion, why was the attempt unsuccessful?
                                                                           The company succeeded because I knew I needed
                                                                           the mobile phone service for 2 years anyway so the                                          Company was trying to get me to                The company was unsuccessful because the price
                                                                           thought of not having to spend extra to get a phone                                         "upgrade" from a bag of nuts to                was too high for what I was getting and the
                                                                           just made the commitment easier to make. Plus, they                                         sandwiches. Availability, price, and           stewardess didn't seem that enthusiastic about the
                                Company was trying to get me signed        offered a 15-day trial period which allowed me to                                           personal selling efforts on the part of the    sandwiches anyway. Add to that my expectations for
T-Mobile offering mobile        up for a full 2 years using free phones as cancel my subscription should my first 15-day                 United Airlines offering in-  stewardess were the main mechanisms            the sandwiches to be free in the first place given the
phone subscription service      primary mechanism                          experience prove horrible                                     flight sandwiches for a price used                                           length/duration of my flight
                                Trying to get me to use their products
                                instead of other salon brands or drug
                                store brands. Used promotion through                                                                     Best Buy - I was               The nature of my electronics-purchasing
                                salons that used their products            Because I was able to try the products without                purchasing a product and       behavior - trying to make me more risk-       Because I was willing to assume the risk that they
Bumble and Bumble - hair        exclusively and presented those            purchasing them, and because the sales tactic used            they were asking me to         averse by protecting myself in the event      were offering to take on for me, their service had little
care products                   products to me after my hair service.      was not pushy.                                                also buy a store warranty.     that my purchase broke.                       value to me - their value proposition was weak.
                                It was trying to influence my buying
                                behavior by selling an entire lifestyle
                                rather than just a particular product. In
                                this way, you no longer walk into a store                                                                                                                                             Because it was patronizing and felt almost
                                wanting to buy "something" but rather                                                                                                   The company was trying to move me             humiliating. One should be able to get a cheap air
                                wanting all of it. Stores that look like                                                                                                away from conventional to budget air          fare without having to be enveloped in an ugly
                                plush homes and advertising that is                                                                                                     travel using catchy slogans, convenient       orange color, the company's trademark, and without
Ralph Lauren - clothing and     experiential rather than informative help  Because it speaks to people's aspirations and makes                                          internet booking, colorful planes and of      having to suffer their aggressive demeaning of their
homewares.                      in this process.                           them feel like needs.                                         Easyjet. Air travel.           course cheap fares.                           competition.

                                The company was trying to influence me
                                to purchase my plane tickets at least 14                                                                                                The company was trying to influence me        This attempt was unsuccessful because the
                                days before travel. The mechanism that        This attempt was successful because I am frugal and                                       to purchase their insurance coverage for      probability of me getting into an accident during a
                                AirTran uses is that the price will           I hate to pay extra money for a service unnecessarily,                                    the car rental. They used the scare tactic    two day car rental, in my mind, was not very high
                                increase considerably if a flight is not      so I am motivated to purchase my tickets in advance                                       telling me all of the things that could go    and therefore was not worth the additional $32. I
AirTran Airways; Air Travel     booked at least 14 days in advance.           if the planning allows.                                    Avis; Car Rental               wrong on the road.                            was comfortable with taking my chances.

                                                                         A mix of all of the above. The convenience of the
                                trying to get me to pay online through a service gave it a leg up to begin with, lack of strong                                         Trying to get me to get me to give up         Unsuccessful because I have a strong preference to
                                simple interface. Used Ubiquitousness    competition to make me question the strength of                                                "owning" my music for renting it month        owning my music and a dislike for monthly fees.
                                of channels to make me feel like         paypal over others, and the fact that so many                                                  by month. Used the allure of "unlimited"      The plan felt like music was turning into cable
                                everyone was doing it, was supported by respectable sites and companies were adopting use                                               and a low monthly fee to try and create       television, and the idea of stopping the service and
                                media and others in the soundness of     of the service made it seem safe and useful. I was                                             the hook. Also had to ensure that they        having paid in money each month only to not have
                                security features. Easy to set up and    also forced to try it because of its success in finding         Yahoo Music -- Unlimited       had a robust database to be as attractive     any music personally to keep for it just did not sit
ebay--paypal                    trial.                                   merchant partners. Once I was in, I was hooked.                 Monthly Music Downloads        as others such as iTunes.                     with me.
                                Comcast was trying to get me to
                                upgrade my T.V. subscription to high     The attempt was successful because I was already
                                definition. Comcast partnered with Best spending so much on a T.V. unit, that another $50-                                              Tries to get customers to upgrade order
                                Buy, such that when I bought a T.V. with $100 did not seem like a big deal at the time. Also,                                           size. When customer places ice cream          This attempt would not work on me because I am
Comcast - Upgrade to high       h-d capabilities, the Best Buy salesman  the Best Buy salesman made me feel that my T.V.                                                order for a given size, server points out     making my size decision based on dietary concerns,
definition television           tried to sell me an upgraded Comcast     purchase would be a waste if I did not upgrade to the           Cold Stone Creamery - ice      that customer can upgrade to larger size      not a price point. If the opposite were true, the
subscription.                   plan.                                    h-d plan.                                                       cream shop                     for only 50 cents.                            strategy might work.

                                                                                                                                                                        Wireless companies attempted to get
                                                                                                                                                                        consumers to use this service in a
                                                                                                                                                                        manner similar to text messaging. They
                                Starbucks successfully attempted to                                                                                                     used mechanisms such as marketing
                                influence the way consumers drink and                                                                                                   (most commonly TV commercials),
                                think about coffee. It turned the habit                                                                                                 bundling the pricing of the service with
                                into a lifestyle statement using                                                                            Cingular (or any wireless   other services (i.e., text messaging), and No. I still rarely send or receive photos by phone,
                                mechanisms such as premium pricing,                                                                         company) -- photo           providing the hardware (camera included and the service is nowhere nearly as widespread as
Starbucks -- coffee             identifiable branding, and fast service.      Paying $5 for a coffee regularly? --Absolutely!               messaging                   with phone).                               text messaging.
                                                                              As soon as I became a member of their higher
                                                                              program tier, United provided me with several
                                                                              incentives to utilize their product (seat upgrades, wait-
                                                                              list priority) that cost them little or nothing, that provide
                                Customer loyalty. The company uses a          me with significant value. This means I am                                                                                              I had no incentive to return ontime, and strong
                                customer loyalty program that allows me       significantly less price sensitive when booking flights                                   It attempted to try to get me to return the   incentive to keep the van longer (the rental included
                                to earn 'status' as a frequent flyer, using   1) because I'm getting better service and 2) because I                                    van on time. The only mechanism it            fixed costs which were being amortized over a
United Airlines. Air travel     rewards including free travel and various     want to continue being an elite member of the                 U-Haul. I rented a moving   used was strong encouragement (but no         longer period, and low variable costs which would be
(domestic and intl.).           travel-related perks.                         program.                                                      van.                        penalties for not doing so).                  incurred with extra use).

                                Blockbuster was attempting to
                                encourage the early return of a high
                                demand video (within 2 weeks of
                                release). The organization used an            I believe that this was successful because it created                                     GAP was attempting to influence me to
                                incentive approach to encourage me to         the perception of a "cheaper" rental because I                                            spend at least $800 per year on my
                                return the movie by the next day instead      automatically applied the future credit to my current                                     Banana Republic credit card. The
                                of the waiting until the end of the 2 day     rental and felt I was renting the movie for $2.99                                         mechanism utilized was an upgraded            I believe this was inappropriately targeted. I rarely
                                rental period. I was offered a credit of $1   instead of $3.99. Also, the requested behavior was                                        status on my credit card, providing           spend more than $300 year on my Banana Republic
                                towards my next rental. Blockbuster also      very reasonable, and its highly likely that I would have                                  additional benefits. I was invited to a       card, so the likelihood of reaching $800 is slim, and
Blockbuster Video- movie        derived an added benefit by locking in a      returned the movie by the next day anyway- this          GAP Inc.- Banana                 members only event as a preview of one        especially in 4 months (since it is based on the
rental                          second visit from me.                         simply encouraged me to not be lazy.                     Republic credit card.            of the benefits.                              calendar year.
                                                                              Used technology, celebrity placements, beautiful
                                                                              design to motivate usage and running Combined two                                         Upsell from basic to extended cable and
                                                                              successful brands, leveraging best of each Offered                                        HD, watch more/different TV Offered           Even with promotions, still priced too high - in part
                                Get me to run more Integrated                 easy to use product Priced product at <$30 with 3+-                                       convenience, additional features, limited     b/c of Comcast's monopoly position in my
Apple Nike+iTunes               technology and running apparel                year lifecycle                                           Comcast Cable TV                 price promotions                              neighborhood
                                purchasing over the internet and flying
                                more frequently on their airline; it
                                provided lower fares on the internet and
                                usually took a long time to get through if
                                you decided to try to call; they also                                                                                                   trying to get me to not use banking
                                provided free flights and other privileges                                                                                              centers as much by imposing an                no because when it comes to matters as personal as
                                based on the amount of miles you travel                                                                  Bank of America; financial     account service fee if you exceed a           my money I want to transact with an individual not a
delta airlines                  with them                                     Yes.                                                       services                       certain number of visits/calls.               machine
                                They wanted me to pay my bills online.
                                This would be much quicker than writing                                                                                                 They tried to get me to use one of their
                                out a check and mailing it through the        It was successful because the phone attendant could                                       Visa cards, even though they knew I
                                post system. They asked me about it           set the service up for me on the spot. This happened                                      already had one with through another          They could not sign me up on the spot. It seemed
                                when I was calling them about                 this summer. If it had been a hassle, I would not have                                    bank. When I was calling about                like a procedure, especially since I already have a
                                something else. They used logic to            bothered. Also, I probably would not have asked for it     Bank of Nova Scotia. I         something else they tried to get me to        visa card. In order to get me using their Visa card
Bank of Nova Scotia. I have a   convince me as I saw it would save me         myself, so it was successful because they proactively      have a bank account with       sign up for their Visa card. They said I      they would have needed to up the cash back
bank account with them.         time to pay my bills online.                  asked me about it.                                         them.                          would get cash back if I signed up.           amount or make it easier to sign up for their card.

                                                                                                                                                                                                                   I signed up when I was offered it at the time of my
                                                                                                                                                                                                                   purchase, received free shipping, made subsequent
                                                                                                                                                                                                                   purchases and then cancelled the subscription
                                                                                                                                                                        Amazon Prime ($75? fee for the year for before being charged. The $75 / year was too
                                                                                                                                                                        unlimited 2 day shipping). They used a much for a service I didn't value and wouldn't use.
                                                                              They had the exclusive ability to provide a product                                       free subscription (with free cancellation) By making it so easy to sign up / opt-out and offering
Sirius Satellite Radio          Subscribe. Signed up Howard Stern.            that I wanted and was willing to pay for.                             for 3 months to induce me to sign up.      so much free, I fear they made it too easy.
                                                                              Because the company understood my needs and
                                my rational choice behavior. Used             their product best addressed my needs. The sales
Carphone warehouse. Mobile      analytical reasoning and facts and            person was knowledgeable and used the product                                                                                           No interaction and flexibility on price. No attempt to
pre paid service in London      superior rates                                herself.                                                   Avis car rental in London      Price consciousness                           customize for my needs.

                                                                                                                                Page 1 of 16

        Consider a company's successful attempt to influence your behavior as a customer as you answer Questions 1-3.                            Consider a company's unsuccessful attempt to influence your behavior as a customer as you answer Questions 4-6.

What was the name of the          Which behavior was the company trying                                                                     What was the name of the       Which behavior was the company trying
company? What product or          to influence? What mechanism(s) did it                                                                    company? What product          to influence? What mechanism(s) did it
service were you using?           use? ______                                   In your opinion, why was the attempt successful?            or service were you using?     use?                                         In your opinion, why was the attempt unsuccessful?
                                  Temporarily buy a local phone number in                                                                                          Avoid all types of customer service. They
                                  the country you primarily call to. They                                                                                          gave special offers (credit and prices) if
                                  use both emotional and rational (pricing                                                                                         you made the list of 'good customers'.               That the rules are not clear and you have no idea
                                  comparison) advertising and a lot of                                                                                             They would also take a lot of time to                the service you will get when opening an account
Lingo. I use their internet       promotion through word of mouth (you     It is easy to get this number once you are a customer,                                  resolve any issue and you are always                 with them. Besides credits and prices are not the
phone service, specially          get discounts for every new customer     and adding this feature makes the pricing of the       Bankinter (online banking        directed constantly to the FAQ on the                best mechanism to avoid having customers asking
international calls.              you recommend).                          overall service much better.                           in Spain).                       webpage.                                             questions and requiring services.
                                                                                                                                                                   It attempted to alter my buying behavior
                                  Attempted to encourage me to leave                                                                                               by trying to convince me to buy four                 No. I only bought one tire because I desperately
                                  promptly after eating buy dropping off        Yes. After I caught on I promptly left. The waitresses                             tires. Mechanism: misleading pricing                 needed it. I returned to my trusted tire provider for
Name: La Perilla Restaurant.      my check and stopping by frequently to        was courteous and justified, as the restaurant was          Company Name: American tactics, aggressive selling and suspicious           the other tires (Actually it turns out that I really only
Product: Food.                    make sure everything was OK.                  very busy. I have been back since.                          Tires; Product: Tires  bundling.                                            needed one additional tire not three).
                                                                                The attempt was successful because as I continued
                                                                                to fly AA and gain more status, the shorter the lines I
                                  The company was trying to influence my        had to wait in and better service I received from the                                      The company was offering balance
                                  behavior in selecting an airline to use for   company. With the increased amount of time needed                                          transfer to increase the amount of credit
                                  my travel. They used both a loyalty           for travel through airports, this has become                                               they extend. They use internet               The rates were not good and they send too many
American Airlines, air travel.    program and tiered service.                   increasingly important.                                     MBNA credit cards.             advertising and mailings.                    unsolicited offers (particularly through the mail).
                                  Increasing travel productivity; strategic     mapping of key customer requirements with intuitive                                        Domestic and international calling           customer service; IPO PR campaign and media
Blackberry                        selling through corporate partnership         usage                                                       Vonage                         through VOIP telephony;                      reports

                                                                                                                                                                                                                        The program is not well explained and the receipts
                                                                                When I was late with my payment once I had to pay                                                                                       they hand out which detail the system are too long
                                                                                this fee for two months and it really made me make                                         Duane Reade gives me points when I           and boring to read. I feel the program is not
                                                                                an effort to always pay my balance on time. I have                                         buy items in its stores which can be used    successful not only because it has failed to build any
                                  They try to make me pay my credit card        never been late since then so I would consider it                                          for discounts on future items I believe.     loyalty in me for DR, but also because I expect
                                  balance by the end of each month. The         successful. At the same time, I assume that these late                                     They are trying to influence me to           something from the program and yet I haven't ever
                                  mechanism they use is to charge a             fees must be a good source of income for AMEX, so                                          continue to shop at their stores by giving   seemed to receive a discount, so I feel it is a waste
                                  financing fee if I am even one day late in    it could be that they would rather I am late every once                                    me a building balance of points which        for me to swipe my card during every purchase.
American Express. Starwood        my payment, and then charge the fee           in a while. But the large fee is a disincentive for me to Duane Reade. Duane               probably expire or would be lost if I were   They ought to explain the program better, perhaps
Preferred Guest American          again the subsequent month even if I          hold a balance so it is structured to discourage late     Reade Dollar Rewards             to begin shopping at CVS or one of their     with a poster board in each store, and then give
Express credit card.              pay on time.                                  payments.                                                 Club Card.                       other competitors.                           more tangible benefits from using the card.

                                                                                                                                                                                                                        I built up a large reserve of miles with Delta during
                                                                                                                                                                                                                        my consulting days, and continued to use them
                                                                                                                                                                                                                        frequently for personal travel. However, once I
                                                                                                                                                                                                                        stopped traveling regularly and had exhausted my
                                  The time of day when I use my phone,                                                                                                                                                  miles, I had no remaining incentive to choose Delta
                                  using a peak/off-peak minute plan where Verizon took advantage of my price sensitivity,                                                                                               over other airlines. After several of my Delta flights
                                  “nighttime” minutes are unlimited, but  leading me to shift the majority of my usage to the                                              My airline ticket purchases, using           were cancelled or delayed, my preference actually
Verizon Wireless – cell phone     “daytime” minutes are restricted.       evenings where I wouldn’t be charged.                             Delta Air Lines – air travel   frequent flyer miles.                        shifted to other airlines over Delta.

                                                                                                                                                                                                                        Unlike Lufthansa you get no benefits from the
                                                                                                                                                                                                                        reward scheme that are significant to me. The
                                  Like other airlines they have a frequent                                                                                                                                              purchases collect you points that can be rewarded
                                  flyer program. If the tickets are the same                                                                                               They were also trying to influence my        for certain gifts. It takes years to get enough points,
                                  price, I would chose to fly Lufthansa as      They are basically offering extra services at no extra      Reward scheme for a            buying behavior. By giving me award          the gifts are not nice and it takes month to redeem
                                  this gives you benefits at check-in,          cost to me (obviously only if the tickets are the same      grocery chain in Germany       points, they were hoping to get me to do     them. Unlike US stores (Shwas) you get no instant
Lufthansa airline                 waitlist priority etc.                        price as competing airlines).                               (Karstadt)                     all my shopping at their stores.             monetary benefit at the time of purchase.
                                                                                                                                                                           Continue use of the service. It used a
                                                                                                                                                                           combination of making it very difficult to
                                  Increase use of card. It gave points          It gave me back something that, even though it was          AOL / dial-up internet         cancel and annoying operators trying to
Capital One / credit card         worth up to 2% of purchases                   small, didn't cost me anything and provided a benefit.      connection                     convince you not too.                        Poor product. Expensive.

                               The company was trying to take my
                               normal behavior of going to the grocery
                               store myself and let them take over for a
A company that successfully    fee. They explained how easy it was,
influenced me as a customer how anything that went wrong (i.e. -                The attempt was very successful because they
was Peapod. Peapod is a        melted ice cream or damaged cans) they           basically let you try it the first time for free and then
company that provides home could fix through replacement or refunds             give you additional coupons for free service at your
delivery for groceries. You    easily. The company also showed how              first order (I think it was 5 orders of coupons). You                                                                                   The attempt was unsuccessful because when I tried
select what groceries you      much time I could save by using their            get the opportunity to see for yourself how easy it         Procter & Gamble               P&G is trying to get consumers to switch     to product, I ended up re-dusting the traditional way
would like online and then     services and how easy and fast it was for        really is and how great the service is for free and then    unsuccessfully tried to        from a traditional spray and wipe method     because the swiffer duster did not do a good
they shop for them and deliver me to order and set up a delivery time           you never want to go back to traditional grocery            influence my behavior with     of dusting to using a one step duster that   enough job! The product didn't do what it said it
them right to your kitchen.    online.                                          shopping ever again.                                        the Swiffer Duster.            is supposed to do both for you.              would do and actually cost more time.
                               It was influencing the very basic need of
Coca cola - started to drink   water need. it used very                         it was successful as at some point you lose control                                        to eliminate the use of paper and pen        My low adoption rate of technology. Don’t think it
coke instead of water          heavy/cool/tempting advertising                  and become addicted                                         palm pilot - electric calendar using technology                             was "their" fault
                               They were trying to get me to move all
                               my accounts to HSBC - in the US, UK
                               and Pakistan - as well as my credit card.
                               They gave me lots of personal attention,
                               assigned a specific senior sales member
                               to my account and arranged a                                                                                                                They were trying to sell me a 1 year         The person was clearly reading from a note that had
                               convenient meeting to explain to me their        Two things - personal attention and willingness to be       AOL. I was using their free    subscription. They tried to convince me      been prepared for him. Was not at all listening to
HSBC. None at the time         different products.                              flexible (directly catering to my needs as a customer).     online 30 day internet trial   when I called them to cancel my service.     what I was saying.

                                  The company wants you to renew
                                  membership and make frequent
                                  purchases. The mechanisms used: 1)            The benefits and service level are better than other
                                  you accumulate points with every dollar       credit card companies. Furthermore, the company
                                  purchase so this gives you the incentive      makes the card personal. For example, based on my
                                  to spend more 2) the card has many            history of purchases, the company sends discounts                                          They want you to fly with their company      The service is poor. The planes are old, the flight
American Express. Credit          benefits and features that gives you the      and promotions for events I may want to attend and   American Airlines. Flight             and fly often. They offer promotions and     attendants are generally rude and prices are high.
Card.                             incentive to renew membership.                stores I want to shop at.                            service.                              deals.                                       They treat customers like a number.
                                                                                                                                                                           Behavior: Calling Sprint's customer
                                                                                I no longer wait in line to check in at the airlines'                                      service number for questions on my
                                  Behavior: customers waiting in line to        airport counters, which no doubt saves money for the                                       account. Mechanism: Sprint
                                  check in at the airport check-in counters.    airlines (reduced airport counter staff). This attempt                                     implemented a complex Interactive Voice      Unsuccessful because the phone prompt was very
                                   Mechanisms: almost all airlines now          was successful because the airlines offered me                                             Response phone prompt (voice of a            hard to use, so I just figured out what buttons to
                                  provide online check-in from home,            convenience and benefits - such as the ability to grab                                     fictional agent named "Claire"), and         press to skip ahead to a live person anyway. But the
Airlines - checking in for a      where customers can check in for their        my preferred seats before I get to the airport the day Sprint, as a cellular phone         made it very hard to actually get to speak   frustration led me to eventually change over to
flight.                           flights up to 48 hours in advance.            of the flight.                                         customer.                           to a live person.                            Verizon.

                                  The store is trying to influence my (and
                                  others) waiting behavior as well as                                                                       I flew United Airlines last
                                  create an orderly process through which                                                                   week and participated in
                                  their clerks can deliver a customized                                                                     the plane boarding process
                                  service. The mechanism is an easily                                                                       by group number, which
                                  understood system in which each                                                                           was printed on my                                                           The attempt was unsuccessful because the system
                                  person who walks up to the counter                                                                        boarding pass. Seeing                                                       was not strictly enforced. Since they announced
                                  pulls a number and waits for their                                                                        that other people were                                                      that the flight was full, a sense of scarcity around
While not unique, my local        number to be called before placing their      The pull-a-number system ensures that both the              boarding in advance of         By asking customers to board by group        overhead compartment space was created. Thus,
grocery store uses the "pull-a-   order. The display screen clearly             customers and the clerks know in which order to             their boarding group, I did    number, which was prominently                each individual customer had an incentive to board
number" system to determine       indicates the number currently being          service people. This creates a sense of fairness as         the same in order to           displayed on my boarding pass, the           early and secure a space. With boarding group
when it is my turn to order at    serviced, such that approximate wait          well as a way to estimate how long the wait will be,        ensure that I could put my     airline was hoping to get me to wait to      numbers visible on boarding passes, I could see that
the deli/prepared foods           time can be estimated and the clerk           which are both important to the customer, such that         bag in an overhead             board the plane in a presumably more         they were letting others board in advance of their
counter.                          knows who to help next.                       they are willing to participate in the system.              compartment.                   efficient manner.                            group and realized that I should do the same.
                                  purchase behavior using quality to build                                                                                                 purchase decision using brand and high
Aveda shampoo                     up its brand and royal customers              yes                                                         prada bags                     price to encourage purchase             yes

                                                                                                                                  Page 2 of 16

        Consider a company's successful attempt to influence your behavior as a customer as you answer Questions 1-3.                                Consider a company's unsuccessful attempt to influence your behavior as a customer as you answer Questions 4-6.

What was the name of the           Which behavior was the company trying                                                                       What was the name of the       Which behavior was the company trying
company? What product or           to influence? What mechanism(s) did it                                                                      company? What product          to influence? What mechanism(s) did it
service were you using?            use? ______                                      In your opinion, why was the attempt successful?           or service were you using?     use?                                          In your opinion, why was the attempt unsuccessful?
                                                                                    By offering free flights and check-in/boarding
                                                                                    advantages as well as convenient ways to                                                                                                Not only did the price exceed my estimated expected
                                                                                    accumulate miles (flights, credit cards, bonuses for                                      Dell tried to sell an extended service        value of the service contract, it made me question
                                                                                    status), I have paid premiums to consolidate my travel                                    contract with the computer by scaring         Dell's commitment to its products and customers
                                   United tried to influence loyalty using a        with United when competitors have had equal or                                            me with details of how limited the basic      and consider other manufacturers for my next
United Airlines, Air travel        frequent flyer mileage program.                  lower fares.                                           Dell, Laptop computer              warranty was.                                 computer purchase.

                                                                                                                                                                                                                            The incentive I have to use these lanes is the
                                                                                                                                                                        Stop & Shop introduced self-checkout                promise of saved time. However, due to the design
                                                                                                                                                                        lanes, where customers can scan their               of the new service this promise is not delivered on
                                   Starwood tries to increase its share of                                                                                              own products and pay without a cashier.             and in reality I have no incentive to use the new
                                   my total number of hotel stays. Two              The primary reason this has been successful at                                       If some customers use these lanes                  service at all. Although these lanes do have shorter
                                   ways that they do this are by offering           increasing my likelihood to stay at a Starwood                                      instead of conventional cashier lanes,              lines, most other customers are confused with the
                                   great incentives through a frequent              property is that they make their incentives have true                               Stop & Shop could reduce labor costs.               new service and take a long time using it, making
                                   stayer program that rewards you for              value. Points are easily redeemed for free nights                                   The only mechanisms used to                         the line move very slow. Additionally, Stop & Shop
                                   staying, and a credit card through Amex          even on short notice, and they are easily transferred                               encourage customers to try these lanes              does not provide bagging in these lanes, so if I am
Starwood Hotels, hotel             that ties all purchases back to the              to any other frequent flier program or other partner       Stop & Shop Supermarket, are signage and talking computer                    buying more than a bag or two of groceries it may
accommodations                     frequent stayer program.                         programs.                                                  buying groceries         screens providing instructions.                     take even longer than a conventional lane.

                                                                                    To begin with, the recognition achieved early on (their                                                                              The first time, I responded to the phone rep that as a
                                                                                    Gold level) provided both bonus points and a higher                                                                                  student I did not have a home phone (only a mobile)
                                                                                    level of service at check in and security - measures                                                                                 and my internet was already free as part of my
                                                                                    that saved me time immediately. It was a good                                                                                        university contract --- yet no kind of information went
                                                                                    enough incentive to make me 'sometimes' prefer the                                        Comcast sent several mailings and had      into any data base, and I received the same phone
                                   They were trying to influence me to              airline, as my time is pretty important to me. At their                                   someone call me to try to get me to        call and at least two pieces of mail in the coming
                                   prefer to purchase their tickets over any        higher levels, the added service and double miles                                         upgrade to a higher level of cable service weeks pushing the same product. Had Comcast
                                   other airlines'. They used their frequent        made me a very sticky customer, as I saw added                                            and bundle it with a phone and internet    been able to demonstrate a value to me in spending
                                   flyer program, which incorporated miles,         value beyond getting from point to point. When                                            service. They used milings and a phone more money, I might have been convincible; but
                                   upgrades, bonus miles, service levels,           factors did affect the basic service (point to point), my Comcast Cable. Current          representative, and attempted to show      sending me the same thing multiple times showed
American Airlines. I was           and sometimes special prices to help             'level' aided me in getting to my place as quickly as     basic user of digital cable     me how much I would save by bundling me that they really didn't care about my desires or
purchasing their flight tickets.   influence me.                                    possible and ahead of other travelers.                    with a DVR Box.                 my services.                               interests.
                                   Renting a DVD to watch a movie.
                                   Offered an alternative where I can watch
BWCinema. Rent and watch           the same movie online - eliminating the          Because it offered similar quality product with                                           Offered promotions and discounts to           Because it was always important for me to try the
regional movies online.            need to rent DVD.                                convenient procurement.                                    Banana Republic. Clothes.      encourage me to buy clothes online.           clothes before buying.

                                   The company provided a significant                                                                                                     They used punch cards where you
                                   number of frequent flyer points to       Wanting to go on a vacation, I was flexible on my                  Better Burger, a local     would get a free meal with every 10
I was flying on Delta's Song       encourage me to try their new route from travel dates and destination, and was interested in                burger chain in NYC. I was purchases. They were trying to increase The product was not good enough to warrant me
airline.                           NY to Seattle.                           saving for a free ticket in the future.                            purchasing their food.     my consumption and generate loyalty.    changing my behavior to earn a free meal.

                                                                                                                                                                                                                            Although the mechanism is exactly the same as
                                                                                                                                                                                                                            ANA, collecting mileage points was not attractive as
                                                                                                                                                                                                                            their core service (flight related) was not good (bad
                                                                                                                                                                                                                            in-flight service/ frequent lost baggage and awful
                                                                                                                                                                                                                            service in processing lost baggage claims etc.). I
                                                                                                                                                                                                                            have heard that their mileage program is most easy
                                                                                    It was successful as it used the mileage system to                                                                                      to accumulate mileage and that their mileage can be
                                                                                    make the consumers feel that they are getting a                                                                                         bought/sold at certain price even when expired
                                                                                    better bargain than buying the cheapest airflight                                                                                       (which is a service ANA doesn't offer), all leading to
                                                                                    ticket. It definitely stopped a lot of travelers to shop                                                                                better bargain but since their service was of poor
                                                                                    around for cheap airflight tickets as they knew that                                                                                    level, and not aligned w/ their mileage program, it
                                                                                    they would be accumulating mileage that will                                                                                            refrained me (and probably many other customers)
                                                                                    contribute to free flights/ great services such as                                                                                      from choosing UA whenever there was another
ANA (Japanese airline              It was trying to influence the decision          express check-in, lounge usage (although                   United Airlines. I was using   It was trying to influence the decision       choice of airlines despite the mileage program and
company). I was using their        making of consumers which airline to             economically it might not make sense unlike Zipcars        their flight service and       making of consumers which airline to          cheap ticket price. Whatever mechanism a company
flight service and enrolled in     use for traveling and business trips. It         model where they show in exact dollar amounts how          enrolled in their mileage      use for traveling and business trips. It      has for giving customers a discount/a good bargain,
their mileage program.             used the mileage award mechanism.                much you will be saving by using Zipcar).                  program.                       used the mileage award mechanism.             it has to be aligned with their core service.
                                   Behavior: responsible use of firm's
                                   resources (i.e. not using the free
                                   headphones if I have my own; cleaning
                                   my seat area after myself instead of
                                   relying on the flight attendants to do so).                                                                                                                                              The attempt was unsuccessful because the value
                                   The mechanism: they honestly say                 This was successful because they drew the honest                                          Making free (or almost free) long-            proposition is incomplete. The phone calls are free
                                   something to the effect, "conserve our           and open parallel between the conservation of                                             distance phone calls over IP using the        only if the other party is also using Skype and is
                                   resources and we'll give you cheap ticket        jetBlue's resources on my part, and the cheap flights Online phone        Skype software client. Mechanism:             actually logged into the Skype network when you
Firm: jetBlue; service: air travel prices".                                         on theirs.                                                 calling.                       word-of-mouth marketing.                      attempt to call them.

                                   How much I book through them (flights
                                   only, or also hotels, car, etc). It made
                                   offers to book a hotel and a car as I was                                                                                                  Writing checks connected to my credit         I have no need for getting cash out of a credit card
                                   planning flights and offered savings if the The service expected my needs and highlighted how I                                            card. MBNA sends me checks in the             and the fact that I do not max out my credit card limit
Travelocity. Planning a trip.      whole trip was booked as a bundle.          could save some money.                              MBNA. Credit card.                         mail every month.                             should have suggested this to the company.
                                                                                                                                                                              Flatter my ego to entice me to buy the
                                                                                                                                                                              clothes. Overly attentive and almost on       I don't like to be bothered like that once I am trying
                                                                                                                                                                              top of you every time you try on clothes      on the clothes. I like the attentiveness of getting me
                                   Influence my purchase behavior, by                                                                                                         at the store. Also, the mirror is outside     a dressing room and retrieving the appropriate size,
                                   suggesting other books based on my                                                                                                         the dressing room, forcing you to walk        but not to the point of fake flattery. Its to the point
                                   tastes or what other customers have                                                                                                        outside so the saleswomen can try to          that I don't like going into the store. Instead of
                                   bought in addition to my purchase, with                                                                                                    attempt to flatter you with the clothes on.   influencing me to purchase something, it actually
                                   editorials. In addition, the easibility of the   It catered to my tastes and gave me access to                                             Than it becomes uncomfortable when            turns me away from the store in fear of not being
                                   search engine and the free shipping with         information and many more choices versus simply                                           you have to walkaway without a                able to be able to try things on with out the, buying books           purchase over $25.                               walking into Barnes and Nobles.                            Searle, clothing store.        purchase.                                     saleswomen hassle.
                                   Amazon was trying to get me to buy
                                   more often from them. They offered me
                                   a 3 month free trial of a service called         I now check to see if Amazon stocks something                                             They wanted me to purchase more at
                                   "Prime" that gives you free 2nd-day air          before I order it elsewhere because I know I can get                                      Brooks Brothers and to give them              Because even though I would have saved enough
                                   shipping on Amazon's products. At the            faster and cheaper delivery with them. I have ordered                                     information about me. They offered me         money to make it worth my time to fill out the form, I
                                   end of the trial I paid $70 to retain the        a couple more things through them that I otherwise                                        20% off of the price of my purchase if I      assumed that their benefit was somehow coming at                        service.                                         would have ordered elsewhere.                              Brooks Brothers.               would open a charge account.                  my expense and chose not to participate.
                                                                                                                                               The Coca-Cola company
                               The company was trying to enhance the                                                                           tried to influence my
                               quality of my television viewing and to                                                                         behavior by offering           The company was trying to influence my
The cable company,             make it more worthwhile for me to pay                                                                           variations of its Diet Coke    beverage purchasing habits by
Comcast, has influenced my     for additional cable channels. The                   The attempt was highly successful because the new          product offering. It           expanding the range of diet coke              The attempt was unsuccessful for me because the
behavior as a customer         mechanism it used was the digital video              product offering enhances the underlying service           introduced various new         offerings. I think the aim of the company     new product offerings did not in any way enhance
through the digital video      recording service, which enables me to               offering. I am more willing to pay for additional cable    "diet coke" products such      was to capture a greater share of current     the current offering and, because I continued to
recording service offering     record and then watch television shows               channels now because I know that I can better take         as diet coke with lime, diet   diet coke customers' beverage spending        prefer the regular diet coke, I had no incentive to
(DVR).                         based on my individual preferences.                  advantage of the programming on those channels.            coke with lemon, etc.          by offering them more variety.                purchase the new varieties.
                               Early/prior purchasing of airline tickets.
                               JetBlue had a sale in the middle of the
                               summer, which they notified me of by                 They made it very easy/convenient and the prices are                                      Trying to get me to purchase additional
                               email, and thus I booked quite a few                 were very cheap. In addition, I like flying with JetBlue                                  services for a fee, by offering me these      I don't believe the service is worthwhile and if
                               tickets for this semester since my                   and I get nervous about waiting too long to book           Capital One credit cards -     services when I called in to change my        something goes wrong, I feel there will be some kind
JetBlue - booking airline      husband lives in Virginia and I travel               tickets that the prices will increase, so this was good    consumer/identity theft        name on my card after I got married last      of "fine print" that includes me from coverage for
tickets online                 quite a bit.                                         impetus to make the purchases.                             protection services            summer.                                       some reason.
                               Buying insurance was influenced.
                               Employees discussed a doomsday                       Forcing insurance on customers is very successful
                               scenario of potential liabilities for                since most customer don't understand the specific
                               customers without proper insurance and               uses of insurance package while the employee puts                                                                                 (1) No direct (monetary) penalty was associated with
                               increased pressure by requiring the                  fear in the customers about the potential liabilities.                                    Racking the weights. Signs              returning the weights to their storage areas. (2) Due
                               customer to sign a waiver stating he/she             Although I reduced my insurance purchase through       Bally's Fitness - health           encouraging the racking of weights were to the low cost image, most people didn't feel
Alamo Car Rental - car rentals refused insurance.                                   the use of my AMEX card, I still purchased insurance. clubs services                      posted everywhere.                      compelled to rack the weights.

                                                                                                                                      Page 3 of 16

        Consider a company's successful attempt to influence your behavior as a customer as you answer Questions 1-3.                         Consider a company's unsuccessful attempt to influence your behavior as a customer as you answer Questions 4-6.

What was the name of the        Which behavior was the company trying                                                                   What was the name of the       Which behavior was the company trying
company? What product or        to influence? What mechanism(s) did it                                                                  company? What product          to influence? What mechanism(s) did it
service were you using?         use? ______                                   In your opinion, why was the attempt successful?          or service were you using?     use?                                           In your opinion, why was the attempt unsuccessful?

                                                                              I originally had a plan with 1000 minutes for $49.99.
                                                                              But I would go over this plan, and each time I did they
                                T-Mobile was influencing me to optimize       charged me something like $0.99 a minute, which           Not a company, but a
                                my service plan (ie upgrade my plan to        quickly adds up. They offer a 1500 minute plan for        Democratic Political Action    The organization used telemarketing
                                more minutes) and extend my contract          only $10 more. It made sense for me to upgrade, but       Committee. I am a              (since I had volunteered for them before) The person who called me was completely
T-Mobile - cell phone service   with the company. It used pricing to          it required me to extend my contract for one year,        Democrat and I contribute      to contact me to try to get me to donate uninformed about the organization and unable to
calling plan                    affect my behavior.                           which I wouldn't have otherwise done.                     financially.                   $100.                                     answer my questions.

                                behavior - make customer show up on
                                time for the appointment mechanism -
                                they set up segregated price for people
                                who show up late more than 1 time or
                                cancel appointment on the day of the
                                treatment. (33% higher price from next        Yes. At first, since the service level of this salon is
                                treatment) For customers who show up          great, most of the customers become repeat visitor of
                                on time every time, they make gradual         this salon. These loyal customers try seriously not to
                                discount based on how many times they         show up late to make the price of the treatment
company -One of a local         come. For customers who show up late,         cheaper and to get treatment for whole time.              I'm sorry I have no idea
Japanese esthetic salon         they reduce the treatment time not to         Through this mechanism, this system succeed to            about unsuccessful
service - esthetic treatment    make next customer waiting.                   encourage customer show up on time.                       attempt...                     n/r                                            n/r
                                                                              For me it was easy to use, transferred liability of
                                                                              payment timing to bank (e.g., if payment did not arrive
                                                                              to recipient by certain date, bank assumed
                                                                              responsibility of delay), free (saved on stamps and
                                                                              time), instantaneous deduction from account, kept a
                                Behavior: Method of paying bills and          record of transactions, replaced the hassle and time                                                                                    In comparison to eBay, Yahoo Auctions did not have
                                managing accounts. Mechanisms                 spent of writing checks, stamping envelopes and                                          Through online advertising and targeted        enough customers and listings, and the auction had
                                used: Online and print (brochures at the      mailing payments. I have been using this system for 9                                    emails tried to offer incentives (e.g.,        a soft ending. High switching costs (hassle to learn
Bank of America's Bill Payer    branch) advertising, word-of-mouth,           years now and I hope to never go back to the old                                         discounts, reduced fees) to list my            new auction system and also lose my positive
system (Phone and Online)       employee recommendation                       method of paying my bills!                                Yahoo Auctions                 auctions on their site.                        feedback I had accumulated on eBay).

                                The company tries to influence couples'                                                                                                                                               Their attempt was unsuccessful because of their
                                vacation destination decision making by                                                                                                                                               customer service. We were ignored upon entering
                                making the vacation package extremely                                                                                                                                                 the store, although there were two salesmen
                                appealing and hassle free. There is                                                                                                                                                   standing in the front of the store that appeared to be
                                minimal planning that is required--all you    The attempt was successful because the resorts live                                                                                     greeters and were not assisting other customers.
                                need to do is book the length of stay and     up to their advertising-they are truly "all-inclusive".                                                                                 Furthermore, we stood by a case for about 5
                                airfare and all other activities and meals    There are no additional fees or spending that                                          Although the store's objective is to sell        minutes waiting to be assisted, before realizing that
                                are planned for you. Furthermore, they        consumers must worry about after getting off the                                       jewelry, the customer service we                 the sales person ignored us to help someone else
                                limit guests to adult couples, so you do      plane. They live up to all of the expectations one has                                 experienced was extremely poor. It               who entered the store and approached the case
Sandals Resorts, which is an    not have to worry about kids running          when looking for a package vacation. Furthermore,         Bailey Banks & Biddle. My seemed that they were not using ANY                 after we did. Rather than ask for help, we decided
all-inclusive, couples resort   around the resort. They also include in       once you arrive, they cater to your every need. It is     boyfriend and I went into    mechanisms to get us to buy something            to leave. The store was not busy at the time and we
located throughout the          the cost of the trip transfers, taxes and     obvious that all of the employees place a high value      the store one day to look at and we will never return to the store to         felt that the behavior of the sales people was
Caribbean.                      tips.                                         on customer service.                                      jewelry.                     make a purchase in the future.                   inexcusable.
                                Implementing self service. When
                                McDonalds entered Mexico about 20
                                years ago, self service was a very very
                                uncommon practice, especially the part                                                                                                                                                Because they are not consistent, so after 5 years of
                                that consists in picking up after yourself.                                                                                                                                           not paying and seeing how your debt to the
                                 They "educated" people through                                                                                                                                                       company rises and they never cut your water supply,
                                making it seem "cool" to pick up your         Because they established it as a norm from the very                                      Trying to make on time payment a               they publish "Extraordinary discounts" eliminating all
                                own mess and by acting as if it was           beginning so nobody dared to defy it because you                                         common habit. It uses the "terror"             the late payment fees and even cutting a discount,
                                super obvious that that is what you           would be looked over by everyone else in the rest. as     The Water service              mechanism, adding late payment fees if         because they are desperate for people to pay
McDonalds. Fast food            should do.                                    a person who just "didn't get the concept"                company in Mexico.             you don't pay on time                          "anything"

                                                                                                                                                                       Northwest intends to influence
                                                                                                                                                                       customers to choose NWA (over their
                                                                                                                                                                       competitors) for their air travel needs,
                                                                                                                                                                       through a customer service plan that
                                                                                                                                                                       includes: Offer the Lowest Fare
                                                                                                                                                                       Notification of Known Delays,
                                                                                                                                                                       Cancellations and Diversions On-Time
                                                                                                                                                                       Baggage Delivery Increase Baggage
                                                                                                                                                                       Liability Limits Cancel Reservations
                                                                                                                                                                       Ticket Refunds Accommodate
                                                                                                                                                                       Passengers with Disabilities and Special
                                                                                                                                                                       Needs Meet Customers' Essential
                                                                                                                                                                       Needs during long delays Handle
                                                                                                                                                                       "Bumped" Passengers with Fairness
                                                                                                                                                                       and Consistency Disclose Travel                If NWA's primary concern is customer satisfaction,
                                                                                                                                                                       Itinerary, Cancellation Policies, Frequent     then they are currently concentrating on the wrong
                                Habitual purchasing of Nordstrom's            Yes - I'm a habitual Nordstrom's customer, because I                                     Flyer Rules, and Aircraft Configuration        mechanisms. They should be fixated more on
                                merchandise, through a consistent             can rely on the quality of merchandises and the in-                                      Ensure Customers First Standards from          mechanisms such as on-time departures/arrivals,
Company: Nordstrom's            offering of high quality merchandise and      store and post-sale service levels to be superior to      Company: Northwest             Code Share Partners Respond to                 consistent in-flight service, and enhancing or
Product: Men's Clothing         service.                                      other clothing stores.                                    Airlines Service: Air travel   customer complaints                            maintaining a consistent awards program.

                                                                                                                                                                                                               I may be a major outlier here, but I am a bit of a
                                                                                                                                                                                                               music purist and don't believe Apple's files are of the
                                                                              I believe Insight was successful, because they                                                                                   same quality as CD recordings (which are similarly
                                The company was attempting to                 appealed to my desire to efficiently utilize time and                                                                            not of the same quality as vinyl, of course...).
                                influence my choice of                        money, two highly valued resources. By offering                                                                                  Although I appreciate the ability to purchase
                                entertainment/leisure experiences--           unlimited OnDemand HBO programming along with                                                                                    individual songs (rather than whole albums), I would
                                hoping I would choose their proprietary       monthly HBS subscription, for example, I was able to                                                                             rather have the song in its complete, unadulterated
Insight Communications--        OnDemand television services over             watch the occasional movie and keep up (or catch                                         The company was trying to influence the form. Not only is the quality better, but it is also in a
cable television services,      renting, TiVo, or out-of-home options.        up) with the Sopranos and Six Feet Under at my                                           way I purchase and use music            standard audio format, while iTunes music is in
specifically OnDemand           They primarily utilized convenience and       convenience and with very little cost compared to         Apple--iTunes music            recordings. Like Apple, iTunes appeals Apple's proprietary format, which limits the ways in
programming                     cost mechanisms.                              other options.                                            service.                       to convenience and cost, primarily.     which I can use the music I own.

                                Method of accessing company for iPod
                                service -- instead of traditional phone       Ease of use and accessibility of going to store for help                                                                                Still needed to call because info not available on
                                support getting me to bring it into the       -- real person, no cost, easy to reserve online ahead                                                                                   web. Difficulty of finding phone number just made
                                store. They made it very difficult (maybe     of time so don't waste time, easier to fix problem in                                                                                   me more frustrated and more determined then ever
Apple Computer, Inc. iPod --    impossible) to find a phone number (and       person, etc. (Plus, creates a purchase opportunity --                                    Use web for order info -- don't call in        to find it. Had to make multiple calls into service to
needed technical                very restrictive terms) -- but easy to find   almost bought new accessory -- and generates    Purchase             order. Make the phone number hard to           get answer to question (Saturday delivery possible?)
service/troubleshooting on      store locations and make a service            consumer goodwill --fixed my problem easily and very digital camera online --            find; little additional info in service reps   -- and ended up canceling order because of
setup                           reservation online.                           helpful.)                                                shipping questions              hands.                                         inflexibility (not available). Bad service experience.

                                                                                                                               Page 4 of 16

        Consider a company's successful attempt to influence your behavior as a customer as you answer Questions 1-3.                            Consider a company's unsuccessful attempt to influence your behavior as a customer as you answer Questions 4-6.

What was the name of the         Which behavior was the company trying                                                                     What was the name of the      Which behavior was the company trying
company? What product or         to influence? What mechanism(s) did it                                                                    company? What product         to influence? What mechanism(s) did it
service were you using?          use? ______                                     In your opinion, why was the attempt successful?          or service were you using?    use?                                          In your opinion, why was the attempt unsuccessful?

                                 The company wanted me to choose
                                 American for my business and personal
                                 travel needs. I actually did not have any
                                 control over my business travel plans,          This attempt was successful in that it generated
                                 but as a result of American's free              additional significant business for the airline. Over the
                                 upgrades plan, I ended up not only using        last year, I have traveled for vacation on American to
                                 American for all my personal travel             India, China, and Chile. I paid the full economy fares                                                                                The company did not have enough salespeople and
                                 needs but actually INCREASING THE               for these tickets but used my free upgrades to travel                                                                                 the salespeople gave equal attention to all
                                 AMOUNT OF PERSONAL TRAVEL                       in business. I would not have made these trips (on                                                                                    customers with regard to neither the probability of
                                 that I decided to take by air (all of it with   American or any other airline) but for these upgrades.                                  The company wanted to ensure that             their buying something nor the size of their potential
                                 American). As a top tier business                While this did increase my personal spend with the                                     each customer had the opportunity to          purchase. Thus, I received no attention for nearly an
                                 customer with American, the airline gave        airline, it may not have been successful in terms of                                    engage in an in-depth discussion with a       hour when I was committed to making a major
                                 me unlimited national and eight                 generating high margin business travel to American        Ski Market...I planned to     knowledge salesperson in the hope that        purchase while the salespeople worked with other
American Airlines. Flights for   international upgrades (which expired in        as I, who benefited from the upgrades, did not decide buy new skis and                  this would build long-term relationships      customers who made no/lower margin purchases. I
business and personal travel.    one year).                                      on when and on which airline I would fly for business. accessories.                     between consumers and the business.           left the store frustrated and without buying anything.
                                 They were trying to reach customers'
                                 appealing for tech-savvy solutions, love
                                 of nice design and easy of use. They                                                                                                    Young customers appealing for music
                                 leveraged their brand name and                                                                                                          and sport, who want to have something         Their product is not differentiated enough. Coke is
                                 reputation for high-end product and their                                                                                               different or take risks. Created young        still the absolute reference in my mind who is
                                 music download website (I-tune) to              They were able to create a consensus of "this is the                                    image and use young celebrities (britney      dedicated to everybody not only to young kids who
Apple, I-Pod                     create a new reference                          reference product to have".                               Pepsi, Pepsi cola             spears,...) to build their brand name.        like britney spears.

                                                                             Encourage neighborhood women to use Jay                                                                                                   After I realized that choosing the option they wanted
                                                                             exclusively instead of rotating between Jay and the                                                                                       me to choose put me on the phone with a voice
                                                                             other nail salons nearby. Frequent visitor card makes                                       US Airways wanted me to check                 recognition machine, I called back and chose the
                                 BEHAVIORS: 1) Frequency of Visits 2) me feel like I am a "regular" somewhere. The                                                       whether my flight was on time either          option for purchasing a ticket right now, with a credit
                                 Purchase of Additional Services             manicurists write their names in the little check boxes,                                    online or through the automated call line.    card at the ready. Therefore, USAirways did not cut
                                 MECHANISMS: 1) Frequent visitor card so if you have a particularly good manicure, you can                                                The automated message at the 800             the costs it had hoped to save by servicing me
                                 (buy 10 manicures, get 1 free) 2) Free      ask for that technician the next time you visit. The                                        number suggested that I could check           through the automated phone line. By pretending I
                                 sample of chair massage while nails are free sample of the massage is a great sales tool. The                                           online "for faster service", then gave        was about to buy a new ticket, I got a live agent on
                                 filed. Then a 10-minute chair massage       1-minute taste at the beginning of the manicure                                             "check flight arrival/departure times" as a   the phone who could help me figure out that my
                                 (for $13)is offered at the end of           certainly makes customers more likely to buy the                                            menu choice on the phone line.                flight was, indeed, delayed two hours. I also asked
                                 manicure, while you have to stick around chair massage later than if they had not been                                                  (choosing this option kicks you over to       her to help me select my seats, which I did not have
Jay Nails Manicure               to dry anyway...                            exposed to the delightful service earlier.               US Airways Phone center            another automated system)                     the option to do online.
                                 They are attempting to make me show
                                 loyalty to the airline when purchasing
                                 tickets and be willing to possibly pay a
                                 little more to fly American in some cases.
                                  It uses a loyalty program - frequent flyer It makes using their product more enjoyable and
                                 miles that provide free tickets and first   gives me flexibility I value as a frequent traveler.
                                 class upgrades. Becoming a Platinum         Inherent in the program is that if I find using their                                                                                     The attempt is unsuccessful because they send out
                                 or Executive Platinum member of the         product more enjoyable, I will get in the cycle of using                                    The company sends out catalogs at a           so many catalogs that you just ignore them and they
                                 program also gives me priority on           it more and getting more rewards. As long as the                                            rate of approximately one per week in an      do not use the information they have regarding their
American Airlines - airplane     standby lists, allows me to board early,    profit from my additional use outweighs the cost of                                         attempt to get you to purchase sale           customer previous purchases to target their catalogs
tickets                          etc.                                        providing the rewards, American is more profitable.      Victoria's Secret – cloths         items.                                        to drive specific purchases.
                                                                                                                                                                                                                       their methods (suing the pants off selected
                                 I was downloading the show illegally,                                                                                                                                                 scapegoats) were not perceived by me as a
                                 stripped of commercials. It presented a                                                                   Well, the RIAA. I was                                                       significant threat, and made me less guilty about
                                 new, slick, online website that streams         the website ended up being an easier way to access        listening to music                                                          stealing. Also the process of downloading was a
Comedy central. (Viacom). I      the videos, with some associated visual         the show than the illegal downloading, and the ads        produced by its member        once again, I was illegally downloading       much more satisfying way of getting my music vs. all
was watching the Daily Show.     and video commercials.                          were presented in a way that were not obstructive.        companies.                    stuff, this time music.                       options (including iTunes)

                                 Trying to get me to buy an IBM/Lenovo
                                 laptop. Used ease of purchase,
                                 increased tech support, linked through          Yes, very successful. I was swayed by the ease of                                       Trying to influence purchasing decision.
IBM/Lenovo. Laptop               Harvard, overdelivered on the order in          purchase, the cost, delivery and service, where I         Verizon. Cell phone           Used deals and discounts to increase          Too confusing and too much fine-print. I felt a lack
computers.                       terms of cost and delivery times.               wouldn't have bought an IBM otherwise.                    plan/phone.                   the size/type of purchase.                    of trust and a distain for Verizon on the whole.
                                 Macy's was trying to influence me to
                                 purchase the more expensive designer
                                 selections instead of the discounted
                                 clothing. The designer selection was            The clothes not only looked more appealing, but by                                      The restaurant was trying to get me to        I had read an article about the high margins
                                 better lit and clothes were pleasingly          putting the discount clothing in a separate section, it                                 purchase the high margin bottled water        restaurants make on bottled water. It was then
Macy's. Shopping in the          arranged instead of thrown around in the        was easy to identify the "discount shoppers". They        Lucca (Italian restaurant).   over tap. The waiter server made the tap      obvious what the server was trying to do. Besides, I
women's department.              discount section.                               made it a bad thing to look for bargains.                 Water for the table.          option seem unsanitary or cheap.              drink tap water at home so I know that it is quite safe.
                                                                                 The attempt was successful because in addition to
                                                                                 winning contracts to be installed in computers at
                                                                                 teaching hospitals, they sold their service, a web
                                                                                 based account in addition to CDs to download the
                             Up to Date was trying to be the one                 information, to medical students for a low price. Their
                             source med students and residents use               emphasis on continuously updating the information is                                    By making it extremely difficult to
Up to Date On-line,          to quickly access comprehensive                     consistent with the theme of practicing evidence                                        process the insurance claim, UPS was          The attempt was not successful because I was
comprehensive and current,   information, incorporating recent results           based medicine and it results in subscription                                           deterring me from following through with      diligent and was able to dedicate some time to follow
clinical medical information from clinical trials                                revenues for the company.                                 UPS insurance claim           the claim                                     through the claim
                             Key was trying to keep me as a
                             customer although I no longer lived in an                                                                                                                                                 The product (meal) was clearly more than enough to
                             area serviced by Key Bank (Boston and,                                                                                                                                                    satisfy my hunger-- typically leftover soda and fries
                             prior to that, Minneapolis), and to make                                                                                                                                                  made this clear [as a disclaimer, I only eat at
                             sure an adequate balance was                                                                                                                                                              McDonald's once a month maximum, although I do
                             maintained. The bank accomplished this              The fact that the bank would not only waive 'non-Key                                                                                  admit to enjoying it]. In addition to this, the size of
                             goal via a policy to charge no ATM fees             Bank ATM' surcharges but also re-imburse other                                                                                        the "Super" soda and fries bordered on obscene
                             AND to re-imburse other banks' fees up              banks' surcharges seemed an 'above the crowd'                                                                                         and I would feel the guilt of low will-power and clear
                             to $4.00/month as long as a balance of              attempt at customer service and that they were                                          The company was attempting to gain            excess. Also, aware of the sky high margins on
                             $2,000 was kept in the checking                     committed to maintaining a relationship. The inherent                                   incremental margin dollars by offering        McDonald's food products, the fact that the extra
Key Bank. Preferred Checking account and $5,000 kept in a 'linked'               hassle of closing an account and switching to a new                                     more product (Super Size) via a 'small'       $.50-$.75 was going 50%+ directly to their bottom
Account.                     savings account.                                    one factored in to my decision as well.                   McDonald's. Value Meal.       upcharge on their Value Meal.                 line would make me feel like I was being 'had.'

                                                                                                                                                                                                                       The automatic monthly shipment theoretically forces
                                                                                                                                           BMG / Columbia House                                                        you to buy because you're too lazy to return the CD.
                                                                                                                                           Music Clubs Back when                                                       I was NOT too lazy, and I would always return CDs
                                                                                                                                           CDs still mattered, buying                                                  at the company's expense. Required purchases
                                                                                                                                           music as a "club member."                                                   was not bad (usually 1-2 CDs only), after which I
                                                                                                                                           Basically, get 10 or 12 CDs                                                 was free to quit. The fine print says that you are not
                                 McDonalds wants me to (1) decide                                                                          for "free" and then commit    Music clubs tried to get you signed up        supposed to quit and rejoin or have multiple
                                 quickly; (2) order more; (3) order              Successful because I'm a sucker for a "complete           to buying a certain number    and buying overpriced CDs regularly           memberships at one address, but that didn't seem
McDonald's. Terrible, terrible   something standardized; (4) choose              meal" - not just the burger, but I need the fries AND     as a member. Usually          through (1) required purchases as a           enforced. So I have hundreds of CDs from quitting
fast food that somehow I am      high-margin items (i.e. drinks). They do        drink. "Value" meal makes it such a simple thing.         ended up coming to about      member; (2) automatic monthly                 and rejoining. It's possible - but doubtful - they
compelled to eat on occasion.    it through easy-to-choose "value meals"         Also, I'm greedy, especially when I'm hungry... why       $30 for 10-12 CDs... pretty   shipment of a selected CD if you did not      broke even or made money off me through shipping
 They do have the best fries,    and the much missed "super size"                have the medium size fries when you can get the           good for a poor high          respond in time; (3) "tailored" catalog to    & handling charges (which seemed a bit high), but
after all.                       option, may it rest in peace.                   JUMBO size?                                               school kid.                   suit my music tastes.                         that doesn't seem like a particularly good model.

                                                                                                                                  Page 5 of 16

        Consider a company's successful attempt to influence your behavior as a customer as you answer Questions 1-3.                            Consider a company's unsuccessful attempt to influence your behavior as a customer as you answer Questions 4-6.

What was the name of the           Which behavior was the company trying                                                                    What was the name of the      Which behavior was the company trying
company? What product or           to influence? What mechanism(s) did it                                                                   company? What product         to influence? What mechanism(s) did it
service were you using?            use? ______                                   In your opinion, why was the attempt successful?           or service were you using?    use?                                            In your opinion, why was the attempt unsuccessful?

                                                                                                                                                                                                                     It was unsuccessful for three reasons: 1. Clarity of
                                                                                 There are several reasons why they are continuously                                                                                 the offer. By using vague and often unclear
                                                                                 successful: 1. Significance. The dollar value of the                                                                                terminology, it was unclear whether the rate per
                                   In all cases, the airline has implemented     penalty or fee is significant enough to influence                                                                                   minute would be truly local (e.g., UK to UK) or equal
                                   various tactics and policies designed to      behavior. 2. Demand. with so few options to fly to                                                                                  to the long distance rate from the local market (e.g.,
                                   discourage me from making changes to          Canadian cities, AC has the "monopolistic" luxury of                                                                                UK to Sweden). This created confusion. 2.
                                   my flight plans. With cash tickets, there     getting away with more than in a more competitive                                                                                   Transparency. After trying the service once and
                                   are significant fees for changing dates       scenario 3. Industry. Customers (myself included)                                                                                   watching 50 pounds disappear within days, I was
                                   and times for the flight, along with strict   have come to accept these types of restrictions as a                                     By creating an international calling plan  certain that the plan was either not in effect or not a
                                   non-refund policies or large penalties for    normal part of an economy fare ticket, and have                                          available only to registering "members" it good deal. When I was back in the UK, I tried to get
                                   cancellation. While "points" tickets have     modified behavior accordingly. 4. Up-selling. From         Vodophone UK, pre-paid        was trying to influence me to make more a detailed summary of my cost per call, but was told
                                   smaller fees to give the impression of        AC's point of view, this also creates the opportunity to   mobile phone service for      long distance calls in the Uk when         that it cannot be furnished for a prepaid phone. This
Air Canada; personal flights       flexibility, there are often much fewer       sell the benefit of flexibility as an added feature (or    the summer. Specifically,     outside of my home market and pay          lack of transparency made me certain that the deal
over many years, purchased         flights/seats available to "points"           next tier) for customers who value the ability to          long distance calls when      "local rates." It used a pricing plan of   could not be a good one - otherwise the details of
either at discounted fares or      customers, reducing the number of             change at the last minute, and are willing to pay more     outside of the home           one initial "connection fee" plus minutely my own calls and money spent would have been
by using frequent flyer miles.     passengers who make changes.                  for it.                                                    market (UK).                  rates based on the local calling plan.     made available to me.

                                                                                                                                                                          The company was trying to sell its 'credit
                                                                                                                                                                          protection' program to its credit card
                                                                                                                                                                          holders, with a 30-day free trial period.
                                                                                                                                                                          Credit card frauds and payment disputes
                                   The company was trying to influence           The attempt was successful because of my heavy                                           might have cost Citibank dearly each
                                   customers' ordering behavior to               water consumption and the lack of storage space in                                       year. Through selling the credit
                                   minimize the cost of delivery for the         my dorm room. With Poland Spring's delivery policy                                       protection program to customers, the
                                   company. Its mechanisms include a             in mind, I would adjust my water consumption                                             bank earns additional income from the      The attempt was unsuccessful because I have not
Poland Spring -- Water             fixed delivery schedule and the               according to the 'stock' of water in my room and the                                     insurance policy and lowers the risk of    encountered enough credit card frauds to justify the
delivery.                          unavailability of same-day service.           delivery date set by Poland Spring.                        Citibank -- Credit Card.      bad credit card debts.                     cost of the program.
                                   Upgrading my willingness to pay for an
                                   average cup of coffee. Mechanisms for                                                                                                  Similar to Starbucks, a premium for
                                   the higher price include premium              I pay on average $1-2 more per Starbucks drink                                           standard product by ways of upgraded
Starbucks, hot coffee-related      branding, atmosphere, Starbucks               because of the emotional experience I affiliate with       Panera Breads,                atmosphere, premium branding and         In addition to being more expensive, food quality
drinks.                            experience and affiliation.                   Starbucks as opposed to buying for taste.                  breads/soups                  more "knowledgeable" varieties of bread. was below par and wait time much longer.

                                                                                                                                                                                                                          There were many reasons: - I want to
I would like to give two                                                                                                                                                                                                  see/smell/touch a product before I buy it. I order
examples. 1. Skype: They                                                                                                                                                                                                  from Internet only from trustworthy sources and only
changed the way I make long-                                                                                                                                                                                              products I used before. Buying things I just see in a
distance calls. Before I was                                                                                                                                                                                              catalogue does not work for me -The household
introduced to their services I                                                                                                                                                                                            products were actually good (I tried) but it was much
used prepaid cards or the                                                                                                                                                                                                 easier to go to supermarket around the corner than
normal phone service. Now I                                                                                                                                                                                               to order and wait. In addition, the fact that they were
use mostly Skype. 2. Veet: In                                                                                                                                                                                             very economical was not a strong point for me as I
Romania I used to go to                                                                                                                     Amway. I was approached                                                       did not need that much anyway. - The cosmetics: I
cosmetics saloon for hair          Skype tried to influence how I make                                                                      several time by Amway         The company was trying to make me               just did not trust them. I do not think I was their
removal. After I moved to          phone calls. They offered me a free                                                                      representatives both in       change the way I buy cosmetics,                 target audience. For example, the sales
Greece these services were         samples and I was hooked! Veet tried to       Both attempts were successful because the                  Greece and Romania, I         household products, etc: instead of             representative told me that one of their cleaning
more expensive and once I          change the way I remove the unwanted          products/services satisfied my needs, my budget and        was given samples and         going to the normal shops I could order         products was good for everything from kitchen and
discovered Veet I switched to      hair and they had a good advertising          they were of good quality. They pure and simple            catalogues. But I did not     from home from one of their                     bathroom to washing my hair (!). This really made
Veet's products.                   campaign.                                     worked!                                                    become their customer.        representatives.                                my mind. Not to become a customer.

                                   a) my quantity of use of the product and      a) the proposed alternative uses genuinely addressed
                                   my re-purchase rate as a result; used         an under-served need of mine(coating baking                                              Impulse purchases. The companies
                                   television adverts to highlight alternative   pans/dishes with the foil to facilitate clean up after                                   place their small, low price products at
                                   uses of their product b) my travel            baking--I have no dishwasher) b) offer of lower prices                                   the cash register to try to get me to add       I hadn't sought those products out in the store in the
a) Reynold's Wrap (aluminum        plans/flying habits; yield management         in instances when I would experience no or little      Candy, magazine and               them to my shopping cart on a whim at           first place so seeing them at the checkout counter
foil) b) Any U.S. airline (plane   pricing of tickets and ability to compare     cost/inconvenience from flying during non-peak         purveyors of various small        the very last minute, circumventing my          makes no difference for me. (I'm a "Seek and
tickets)                           prices relatively easily across itineraries   times/dates                                            knick-knacks                      usual buying thought processes.                 Destroy"-type shopper.)

                                                                                                                                                                          Amex was trying to get me to use my             It failed because I got an Amex card for the charge
                                   The company was trying to influence my                                                                                                 card as a credit card rather than a             feature, not a credit card (roll the balance from
                                   payment behavior. If I switched to auto-      It was successful because when students are both in                                      charge card, by offering me a 'flex-pay'        month-to-month) feature. I have credit cards with
Granite State Student Loan         payment (linked to my checking                debt and lazy, an auto-payment system that provides                                      option for larger purchases (hotels,            lower APRs for that. By trying to be both types of
Management. The service            account) then I could get a reduced           lower pricing is a win-win. They are more likely to get                                  airline flights, etc.). They positioned it as   card, they failed to convince me why I should use
was managing my undergrad          interest rate (0.25% lower) after 2-years     their funds on-time and the student is getting a better                                  a more flexible, consumer-tailored option       them for credit and not just charge. In other words, I
student loan                       of on-time auto-payments. They were           rate. I liked the convenience and ease and lower           American Express; charge      vs. the pay-off-your-balance-every-             didn't see the benefit for me, only the increased fees
servicing/payment.                 using a pricing mechanism.                    price.                                                     card                          month charge card.                              and interest paid to Amex.
                                                                                                                                                                          Trying to cross-sell hotels, flights,
                                   Wanted to limit usage of labor intensive                                                                                               insurance etc (ie, trying to get me to buy      Because I don't like being hassled by vendors, even
                                   services (in person visits or phone calls).   Hefty charges on overusage of teller services coupled Expedia (online travel             more). Used website layout and cross            on the internet, and I thought pricing was
TD Bank (banking services)         Used pricing to deter me.                     with a usable alternative (online banking)            services)                          promotions.                                     uncompetitive.

                                   short-term goal: choose their bank over                                                                                                They tried to convince me that the bank
                                   competitors' for this loan service. Long-                                                                                              makes no expectations to its standard
                                   term goal: transfer all of my transactions                                                                                             operating procedures (no way for them
                                   into their bank. mechanism - They             I did not have to do a lot of product research on my                                     to speed up the loan process, hence I           They were not responsive to my requests as a client
                                   offered a whole array of different loan       own. Instead, they dedicated a lot of personal                                           should not complain about the service).         – speed of service, variety of product options. Also,
                                   options + more favorable financial terms      attention to my problem + were knowledgeable about                                       Mechanisms – citing personal anecdotes          they did not provide me with high enough priority
PBZ - Privredna Banka              + excellent service (24-7 accessibility,      product portfolio + willing to compromise on deal                                        when they could not make exceptions             which I believed I deserved considering the amount
Zagreb. Loan.                      knowledge of product portfolio, etc).         terms.                                                     Zagreb Bank. Loan.            even for VIPs.                                  of money I had with them.

Safeway. Developed a                                                      Because I was indifferent between this grocery store                                            The company wanted customers to buy
partnership with Alaska        Increase customer base and increase        and the one across the street as both were                                                      more than one bottle and hopefully
Airlines to provide frequent   purchases once in the store.               equidistant from my house and had comparable                      Bath and Body Works.          increase revenue per customer.
                               Mechanisms: in-store advertisements,
flier miles for all purchases at                                          prices, selection, quality, and service. Also, it helped          Purchasing lotion. The        Mechanisms: large brightly colored signs
Safeway grocery stores.        flyers in the mail, and checkout clerks    that they made it easy for the customer (I just had to            company priced each           throughout the store, sales associates          I didn't want that much lotion and didn't really want
Further, if you used your Visa asking if you wanted to add your           link the frequent flyer number to my rewards card                 bottle at $12.50 each but     coming up to you and telling you about          to be spending that much on it. On that particular
card to make the purchase,     frequent flyer number to your rewards      number once, and then everything else was done for                would sell you 2 for $20 or   the offer, flyers in the mail, and email        trip, I was shopping for something specific and
you received double miles.     account.                                   me).                                                              4 for $30.                    advertisements.                                 nothing additional.
                                                                          It was successful because they created value for me,
                               Ease of use and convenience. Made the the customer, by being first to market with a product                                                Convenience, ease of use and a must             I saw a better product on the market that was more
                               phone multi-function, light weight and     that met my three needs to have a portable music                                                have item. Made the player ultra thin for       than a music player plus for only an additional $150 I
Sony Ericsson. Walkman cell small. Advertised the phone online as a       player, reasonable camera and a up to date cell                                                 portability coupled with a user friendly        was getting a decent camera and phone all in one
phone.                         3 in 1 option.                             phone.                                                            Apple-IPod.                   software.                                       instrument maximizing convenience.
                               Essentially they were trying to change
                               my behavior to be more of a self-serve
                               customer through online applications
                               such as bill-pay, customer service, faq's,
                               and statement information. I switched to                                                                                                   Arthur Murray was trying to influence our
                               online banking because they offered a                                                                                                      continued relationship as a paying              By going for the hard sell and trying to hit a home
                               monetary incentive of about $25 for                                                                                                        customer during our move from Los               run with a huge financial commitment through a
                               switching to online banking, but they      Incentives were provided which heavily influenced my                                            Angeles to Cambridge just this summer.          down payment, Arthur Murray lost a potential long-
                               also provided a simpler and superior       decision to make the switch and try the online                    Arthur Murray dance           Rather than emphasizing the service             term satisfied customer. They basically stopped
Bank of America - switching to customer service interaction online. I     banking, but at the end of the day the attempt was                instruction - my fiance       they provide - outstanding dance                listening to what we were saying and lost any sense
use online banking from a      find online transactions easier and        successful because the new format provided a more                 (now wife) and I were         lessons - they emphasized the sale and          of customer focus, while making us feel like walking
traditional atm and branch     therefore call the 800 numbers much        valuable experience for me than the phone and                     taking dance lessons for      down-payment commitment necessary               dollar bills rather than moderately lousy but rapidly
banking relationship           less frequently.                           branch alternatives.                                              our wedding                   to continue.                                    improving dancers.

                                                                                                                                  Page 6 of 16

        Consider a company's successful attempt to influence your behavior as a customer as you answer Questions 1-3.                            Consider a company's unsuccessful attempt to influence your behavior as a customer as you answer Questions 4-6.

What was the name of the         Which behavior was the company trying                                                                      What was the name of the        Which behavior was the company trying
company? What product or         to influence? What mechanism(s) did it                                                                     company? What product           to influence? What mechanism(s) did it
service were you using?          use? ______                                    In your opinion, why was the attempt successful?            or service were you using?      use?                                         In your opinion, why was the attempt unsuccessful?
                                                                                Since I want to save my daytime minutes that Verizon
                                                                                gives me to make phone calls between 7-9pm for
                                                                                important-type calls, I'm willing to save my longer,                                        Getting me to come back to the store at      Since I normally make purchases under $15, I didn't
                                                                                catch-up with friends & family phone calls for after                                        a later date by giving me "cash back."       think it would be worth my time to go back at the
                                 When to make my phone calls. They              9pm or on the weekend. By giving me something I                                             They gave me a "gift certificate" when I     designated time to save the $5 and buy things I
Verizon Wireless, Cell phone     gave me unlimited calling minutes after        found valuable (free air minutes) I was willing to alter    CVS, purchasing                 used my Extra Care card to save $5 on        didn't really need. Overall, I didn't find their offer
calls                            9pm and on weekends.                           my behavior.                                                merchandise                     my next purchase of $20                      valuable enough to alter my behavior.

                                                                                The product actually worked Also because I was                                           buying because you don't want to
                                 The desire to have your hair looking           already in the salon I was already in a frame of mind                                    damage an already expensive shoe the            no demonstration with old shoes so no guarantee
                                 great. There was women in the salon            where I was thinking about the look of my hair and          nine west. leather protector sales women asked me if I wanted the            that it would work also the women was not forceful
Bed Head. Anti-frizze cream      who tried the cream on my hair.                was therefore more likely to buy a product like this.       liquid                       product                                         enough
                                 The company was trying to upsell me on
                                 my digital cable package to add a                                                                                                          Cingular was trying to get me to renew       Cingular did not offer enough discounts or rebates
                                 premium movie channel package. They                                                                                                        service after my 1-year contract term        for the new phone that I wanted. Since my contract
                                 used a mechanism of a promotional              The discounted price was low enough ($5 per month                                           was over. It tried to use a customer         term was over I was free to switch to a new provider
Comcast and their digital        discounted price for a 6 month time            out of a $70 bill) to induce me to trial the additional     Cingular Wireless cell          retention discount to help offset the cost   and be treated as a new customer with all of the
cable service.                   frame.                                         channels.                                                   phone service.                  of a new phone to stay as a customer.        perks and discounts.

                                                                                This challenge encourages me to fly AA more so AA
                                                                                wins and in return for Platinum status I get the
                                 Increase use of AA by building loyalty         benefits of a Platinum member sooner (more miles,           United Airlines. Ameniti
                                 and offering incentives. Loyalty program       preboarding, upgrades, etc.). AA wins in the long run       Membership/Service.             Increase my usage of UA and build            If a person is a frequent traveler, they can earn the
                                 offers a "Platinum Challenge" which            too because they are building more loyalty because          Basically UA allows you to      loyalty. Also seeking to increase revenue    elite status without paying. If a person is an
                                 rewards a user who flies 15K miles in 3        once I get status, I'm even MORE likely to continue         buy elite status plus various   by charging a fee. Mechanism:Pay for         infrequent traveler, they really won't benefit from
American Airlines - air travel   months with Platinum status.                   using AA instead of other airlines.                         other benefits.                 the loyalty program with added benefits.     paying for the product/service.

                                 Trying to increase repeated use by
                                 customer. Had a clear value proposition                                                                                                    Tried to change customer behavior in
                                 as a "hip" airline, and designed every                                                                                                     buying life insurance from agent based       Though most people would imagine that by buying
                                 part of the experience in line with it: the                                                                                                sales to online sales. Provided online       online, they would be able to get discount prices, the
                                 cabin attendants, in-flight entertainment,     Turned flying, which is more or less a commodity, into DIY Insurance / life                 sales site, and advertised over related      pricing for DIY was not much cheaper than agent-
JetBlue / airline service        food sold at terminal, etc.                    an experience.                                         insurance                            internet sites.                              based insurance companies

                                                                                                                                                                                                                         -because the message didn't appeal to me either
                                                                                                                                                                                                                         emotionally or rationally. I didn't see why the product
                                                                                                                                                                                                                         was necessary and didn't see value in being able to
           #NAME?                                 #NAME?                                                #NAME?                                       #NAME?                                 #NAME?                       have my pictures with my music player.

                                                                                First - friendliness of sales person. Second -
                                                                                extensive knowledge of the product along with                                                                                            First - although nice, our waitress was disorganized
                                 Behavior: Purchase decision process.           personal experience with the product/similar products                                       Behavior: Choice and amount of               and rushed, which gave a feeling of incompetence.
                                 Mechanisms: information offering,              Third - Relating to the customer and asking                                                 food/drink ordered, amount of tip, desire    Second - the room was large with high ceilings and
EMS (Eastern Mountain            personal experience/personal                   questions to learn what I wanted/how he could most    Many Glacier Lodge                    to come back/recommend place to              not much intimacy at the table; although the view
Sports). Shopping for hiking     connection (sales people), displays of         help me. Fourth - Not putting pressure to buy, make Restaurant. Restaurant                  others. Ambiance (piano playing, view),      was great and the piano playing nice, it sort of felt
boots.                           items for purchase.                            a decision quickly, but focuses in points 1-3.        services for dinner.                  waiter/waitress service, quality of food.    like a big dining hall.

                                                                                                                                                                                                                         Was unsuccessful because I was offered the
                                                                                                                                                                                                                         promotion when I was purchasing $120 of stuff, and
                                                                                                                                                                            Company was trying to encourage              I asked the cashier to ring in each group of $20
                                 Company was trying to influence interest       It has been successful because both HD tv and PVR                                           shoppers to return to the store so           separately so that I could get the 5 stamps in 1 visit.
                                 in high definition channels and PVR            are addictive! They know they have a great product                                          offered promotion where you collected a      I then invited my husband and 4 friends to come
                                 (personal video recorder - like TiVo).         and that if you just try it you won't be able to live                                       stamp every time you had a purchase          shopping with me when I used the 50% off (there
                                 The offered 6 months free of high              without it and will then pay $40 to get what you had                                        occasion of >$20 and when you                was no cap of the amount spent) and we saved
                                 definition channels and PVR when I             been getting for free. Rogers is also great at offering                                     collected 5 stamps you received 50% off      hundreds of dollars. It did not encourage any
                                 purchased an HDTV - they got you               telecom bundles (they do cable TV, internet, cell                                           your next purchase. This is a version of     additional shopping at full price (although did
Rogers Cable -- digital cable    hooked on the service when it was free         phones and home phones and offer discounts for the                                          a loyalty program, where repeat usage        potentially win additional business from my friends
package                          and then made you pay for it.                  more products/service of theirs that you use).          H&M - clothes store.                gets you discounts or free stuff.            but probably at a cost to H&M given 50% discount).
                                 American Express wanted me to 1)
                                 spend a greater share of my credit card
                                 spending on my AMEX card and 2) to             This program was very successful for me - I have                                       JetBlue wanted me to check my bags in
                                 continually renew my annual                    renewed my membership for the past 3 years. In my                                      online (i.e. receive a bag claim number           Jetblue failed because it was unable to execute its
                                 membership fee. The mechanisms it              opinion, the key success factors are: 1) linking the                                   and answer security questions about my            plan and exacerbated this failure by raising customer
                                 employed to achieve these goals were 1)        card to the existing Starwood Preferred Guests loyalty                                 bags) instead of starting and finishing           expectations with a promise the company could not
                                 offering the first year of card                program with an already loyal customer base, and 2)                                    the process with a live representative at         deliver. More specifically, the two check-in line plan
                                 membership free, 2) creating the 1:1           great execution – The Starwood and AMEX websites                                       the airport. The mechanisms it used               actually increased wait time since so many
                                 dollar to hotel point credit card such that    work together seamlessly in transferring points, and                                   were 1) separating airport check-in lines         customers tried to adopt the option and inflated the
                                 I was rewarded in “points” for spending        reporting point totals and rewards to customers.                                       into “full check-in” and “bag drop only”          “bag drop only” queue to many times the length of
                                 AMEX dollars 3) providing extra                Further, Starwood continually upgraded the variety                                     check in, and 2) highlighting the option          the “full check-in” queue. JetBlue struggled to
American Express. Starwood       incentives (e.g., gifts at hotel, extra        and quality of its hotel offerings, increasing the                                     in ads and on its website, claiming it            rebalance either its staff or the customers in line to
Platinum American Express        points for free hotel stays) for all dollars   perceived value of the “hotel points” AMEX customers JetBlue. Online bag check-        would simplify the check-in process for           better match customers with available
Card.                            spent at a Starwood hotels                     were able to accrue.                                   in.                             customers and reduce check in times.              representatives to minimize wait time.
                                                                                                                                                                       The company was trying to persuade me
                                                                                                                                                                       to use an ATM machine for all deposits
                                                                                                                                                                       instead of a bank teller, given the lower
                                                                                                                                                                       transaction costs per ATM transaction.
                                                                             The attempt was successful because I could observe                                        The company used a customer service
                                                                             the economic benefit of the price discount on the                                         representative who approached
                                                                             larger sized bottle, however, it is more difficult to                                     customers waiting on line and
                                                                             observe the extra amount of the product I use during                                      encouraged them to use the ATM
                                 The company was trying to encourage         each shampoo. However, upon reflection I realized                                         machines for deposits. I also suspect
                                 me to purchase shampoo in larger            that I use a greater amount of the product per                                            that the company employs less tellers             Although I use ATM machines for small deposits, I
The company is Proctor &         volumes and consume larger amounts of shampoo when I use a larger bottle and make more                     The company is Bank of     than it previously did to use longer lines        prefer to conduct transactions with large deposits
Gamble and the product is        the product. It used price promotions on of an effort to use less per shampoo when using a                 America and the product is as an additional incentive to use ATM             with a teller because I feel greater comfort that an
Pantene shampoo.                 its larger-sized bottle to accomplish this. smaller bottle.                                                a checking account.        machines.                                         error will not occur with the transaction.

                                 The company is trying to balance/level                                                                                                                                              Because I was an internet junkie, I was always on,
                                 the utilization on its network by providing                                                                                                                                         regardless of time of day. I guess the attempt was
                                 a bundled peak/off-peak monthly                                                                                                                                                     unsuccessful largely because my demand for the
                                 package, with the off-peak minutes free,                                                                                                                                            service was higher than the number of hours in a
                                 while the peak minutes charged. In                                                                                                                                                  day, coupled with my relative price insensitivity for
                                 essence, it is a price differentiation                                                                                                                                              the service. I think at that time I was willing to pay
                                 mechanism that serves to both isolate          Pricing is a powerful mechanism. I shifted much of my                                       Similar mechanism for load balancing as double the dayrate amount for the service and so I
                                 out business users as well as to               talk patterns to off-peak hours (although not all of it).   EUNet was a dial-up             well as differentiation against business was seeing the night rate as a convenient "benefit"
                                 "persuade" non-business users (such as         Where I am indifferent between hours (such as call          internet provider I was         usage. The company was charging          (when it happened that I was online at night) but was
T-Mobile; wireless               myself) to shift their calling patterns to     for various customer service centers for items I            using in Romania in the         double rates during the day as opposed not sensitive enough to the monetary incentive to
communication services           non-peak hours                                 bought) - I am ok with calling after 9pm / off-peak         late 90's                       to night time.                           shift my sleep hours/behavior patterns
                                 HRES apparently is sick of me
                                 perpetually paying my rent late. I usually                                                                                                 They have been trying to get me to
                                 pay every 2-3 months, instead of                                                                           Vanguard. I have an             switch to electronic statements for a long   I declined because the offer of a very small amount
                                 monthly, as I am billed. To change my                                                                      account with them, and I        time, which would save them on paper         of money wasn't enough to overcome my desire to
Harvard Real Estate              behavior, they sent me a warning of            the threat of substantial financial penalties was more      receive paper statements        and postage costs. they have offered a       have paper records (even though I rarely use them
Company. Product/service         $100 penalty that I'll be forced to pay if I   than sufficient for me to stop being lazy and to pay        every month showing             $5 or $10 reward for switching to            given the ease of accessing the information
was the use of my apartment.     don't start paying on time                     the bill on time.                                           activity for that account.      electronic based statements                  electronically)
                                 Making me carry and assemble my
                                 furniture. They achieve it by making their
                                 warehouse part of the store and having         Because the separate charges for delivery and
                                 customers pick up their packed furniture,      assembly make the furniture cheaper, and because            Espresso (a newspaper).
Ikea. Buying, carrying and       and by charging separately for delivery        the furniture itself is easy to access in the store and     Reading an online               The online newspaper was free and            Because I had so many free alternatives, I just
assembling furniture.            and assembly.                                  easy to assemble.                                           newspaper.                      started charging for access.                 stopped reading that newspaper altogether.

                                                                                                                                  Page 7 of 16

        Consider a company's successful attempt to influence your behavior as a customer as you answer Questions 1-3.                           Consider a company's unsuccessful attempt to influence your behavior as a customer as you answer Questions 4-6.

What was the name of the        Which behavior was the company trying                                                                    What was the name of the          Which behavior was the company trying
company? What product or        to influence? What mechanism(s) did it                                                                   company? What product             to influence? What mechanism(s) did it
service were you using?         use? ______                                   In your opinion, why was the attempt successful?           or service were you using?        use?                                         In your opinion, why was the attempt unsuccessful?
                                                                              Ikea offers lower prices than competitors who offer
                                                                              comparable quality furniture, so I am willing to go out                                      Tried to create a successor to the           Insufficient dissatisfaction with the existing
                                                                              of my way to a store, walk through the winding maze        Sony. Minidisc player (or         walkman (leapfrogging portable cd            alternatives and too high of a price. Was eventually
                                Successfully changed the way I buy            of showrooms, carry the boxes home, and assemble           more recently the Aibo            players) employing superior technology I     made obsolete by solid-state memory & hard-drive
Ikea. Home furnishings.         furniture primarily through pricing.          the furniture myself.                                      robotic dog).                     believe as the primary selling point.        based alternatives.

                                BMW was trying to influence having your
                                oil changes and routine maintenance
                                done at the dealership. To do this it
                                provided free maintenance up to 30,000                                                                                                     The company was trying to increase the
                                miles, sent reminders, provided a loaner                                                                                                   number of CDs I purchased. To do this        The attempt was unsuccessful because you could
                                car, had food and beverages in waiting        The attempt was successful for me because it was so                                          it would send a card with the CD of the      just put return to sender and return the CD with no
                                room, personalized service, followed up       easy and efficient. I could stop on my way to work                                           month, if you did not reply to the card it   cost to me. If I forgot to send in the card, I was not
BMW, service department (oil    afterwards, and was always fast and           and be in and out with my loaner car in 15 minutes  Columbia House, mail-                    would automatically send you and bill        punished for it and the company had to pay for
change)                         efficient.                                    and grab coffee and a muffin.                       order CD purchasing.                     you for the CD.                              shipping the CD.

                                The company was attempting to get me          The attempt was successful because Verizon
                                to switch carriers. The mechanisms it         developed a buzz that the company had the best                                                                                            The attempt was unsuccessful because I never used
The name of the company         used included the company's large             coverage in this area. Even though Verizon did not                                   Apple tried to influence me to buy a new             an Apple computer in my previous professional
was Verizon Wireless. The       network, the free mobile-to-mobile            have the best phone selection and was most                 The name of the company Apple laptop. The company's main push                  experiences and I did not want a laptop that would
product and service was my      minutes, and the perception that it has       expensive, I still chose to go with the carrier with the   was Apple and the product was that Apple laptops were "cool" to                be different or incompatible with something I would
cell phone and a mobile plan.   the best coverage in the Boston area.         best coverage.                                             offering was a laptop.    own and also protected from viruses.                 probably use in my future jobs.

                                They were trying to get me to buy more
                                books. They a) had books on a 3-for-2
                                offer, and so I bought 3 books when I
                                only needed one; and b) got me to sign
                                up for their rewards program by giving
                                me an instant reward and promising no                                                                                                      They were trying to get me in the door by
                                junk mail or phone calls. I also returned                                                                                                  offering me a "one day only" sale. This
                                to the store to buy another book later                                                                                                     sale was not good on all items, so they
                                that month, because they sent me a            They didn't force it on me, they made it extremely fast                                      hoped that in the hunt for a 20% off      It's a well-established fact that Macy's is constantly
                                "thank you for signing up" 20% off            to sign up for, and they didn't require a phone                                              Cuisinart I would buy some fashion        having a "one day only" sale. Things are never NOT
Borders. I was buying books.    coupon that was only good for a week.         number or require me to receive junk email.                Macy's - department store.        jewelry for absurdly high markups.        on sale at Macy's, so why bother going today?
                                                                                                                                         Musicmatch is similar to
                                                                                                                                         iTunes and it came
                                                                                                                                         preloaded on my dell              The company was attempting to get me
                                                                                                                                         desktop. I initially used it to   to use their product more through pop        Musicmatch was much too pushy with their product
                                Returning movies on time. Blockbuster                                                                    store my music library and        up advertising and preventing me from        asking me every time I opened the program if I
Name: Blockbuster Service:      used a late fee system to encourage                                                                      started to use it to buy          using certain "premium" services such        wanted to upgrade. Also, their product did not work
Video Rental                    return of movies on time                      Because I did not want to pay late fees                    music                             as printing song lists for CDs               all that well, so I was not inclined to purchase it

                                Amex is trying to get me to put all of my
                                spending on my Amex Blue Card. Amex
                                provides different cash back
                                percentages depending on how much I
                                spend in a given year. This encourages                                                                                                                                                  I have frequent flyer accounts for all of the airlines I
                                me to first make sure that my spending                                                                                                                                                  fly and do not feel compelled to be loyal. I am driven
                                qualifies me for the highest return, and                                                                                                                                                by convenience and price more than any other
                                then to maximize my return (1.5% cash     Very successful. I have stopped using other cards                                                Frequent Flyer Miles, which aim to           factors (and the ability to use frequent flyer miles is
                                back) by using credit whenever possible, and use credit all of the time, even for everyday                                                 convince me to use Delta for all of my       not compelling enough, in terms of the price
American Express Blue Card      rather than debit or cash.                smaller purchases.                                             Delta Airlines                    flights.                                     argument) for me.
                                                                                                                                                                           (Same as above)Behavior: Returning the
                                Behavior: Returning the car on time for                                                                                                    car on time for the next customer.
                                the next customer. Intended                                                                                                                Intended Mechanisms: Threat of late
                                Mechanisms: Threat of late fees, phone        It was. I was late and knew it, but there was not                                            fees, phone calls once you are late,         No. About 6 months later, I was late again, and after
                                calls once you are late, threat to revoke     much I could do about it. The worst part was                                                 threat to revoke driving privileges after    the second late fee, I decided I would be better off
                                driving privileges after multiple offences.   meeting my section-mate waiting for the car. After                                           multiple offences. Unintended: Social        boxing errands that required a car together and
                                Unintended: Social awkwardness of             that experience, I took extra steps to avoid being late,                                     awkwardness of having to meet the            doing a one-day rental from Enterprise or Budget.
                                having to meet the person waiting for the     such as adding extra time to initial reservations to       Zip Car - Car rental (same        person waiting for the car when you are      Zip Car lost me as a customer. However, they no
Zip Car - Car rental            car when you are late!                        avoid being late.                                          as above)                         late!                                        longer have to deal with me returning cars late!

The company name was          The company was trying to influence my          The attempt was successful since the company went
Fantagraphics Comics. The     buying behavior and ensure customer             beyond the contract terms and conditions to satisfy a                                                                                     The attempt was unsuccessful since there were
product I had purchased was   retention. It used the mechanism of             customer. I purchased the book 3 months ago and it                                                                                        riders attached to the compensation - it was not
a hardcover collection of     offering to send me a brand new copy of         was delivered to the student mail center while I was in    The name of the company           The company was trying to influence          redeemable online! I found it an insincere attempt at
Krazy Kat (a newspaper        the book that had arrived in damaged            Philadelphia. I opened it for the first time 3 months      was JetBlue Airways. The          customer satisfaction. It offered a $25      compensation and would have preferred a simple
comic strip) reprints from    condition. It also did not want me to           after delivery despite which the company offered me a      service I was using was Air       compensation towards future flights to       apology. I came away with the feeling that the
1925-1934.                    send them the old book back.                    new replacement copy.                                      Travel.                           make up for a 4 hour delay.                  compensation was designed to never be used.
                              They were encouraging me to trade up
                              to the more expensive items on the                                                                                                           Nars was encouraging me to buy more
                              menu. Used the limited time only                Clear description of why the suggested dish was                                              product than what I was planning on.
                              "specials" story--saying the ingredients        "better" than all the rest. Waiter provided his own                                          Tried to convince me that I "needed" the
Frank. Restaurant in New      were fresher, and that it wouldn't last         personal testimonial on the dish. It felt more like a      Nars. High-end makeup             product and that they knew what was
York City for dinner.         long.                                           reference than a sell.                                     brand.                            best for me because they were "experts." The sale felt too pushy and almost condescending.
                              Behaviors being influenced: likelihood of
                              drinking coffee, frequency of purchase,                                                                                                      Behavior: Using investment                   The attempt was unsuccessful because they did not
Company: Starbucks.           willingness to spend $3+ on a coffee.           The product is of a consistently good quality, and the     Company: Fidelity                 professionals to manage my portfolio.        offer a compelling value proposition for me to use
Product: drinking coffees and Mechanisms: Convenience, atmosphere             cafes are generally conveniently located (which            Investments. Product:             Mechanisms: They sent a letter               their service - the service seemed expensive and I
frapuccinos                   created in the cafes.                           attracts both repeat purchases and impulse buys).          Brokerage account                 advertising the service.                     didn't think it was worth it.
                              Tried to copy the Western pharmacy                                                                                                           Tried to convince me, through use of
                              store model (ie a one-stop convenience                                                                                                       search engines and good advertising,
                              shop for all needs, not just a place            Good service from smiling, young staff (as opposed                                           that it was better to purchase tickets
                              where sick people go - traditional              to traditional, grim pharmacist sitting behind lab-glass                                     through intermediaries than directly from    In case anything goes wrong (ie paper ticket is lost)
                              Russian pharmacies only sold medicine           window). Also, name "36-6" stands for a good,                                                airlines as they had access to many          their after-sales service is extremely poor and ends
                              and looked and felt grim and depressing         healthy temperature (Celcius) makes customers feel         Expedia - online flights          airlines and basically "did the search for   up costing you much more stress and money than
36-6 (Russian pharmacy store) places to visit)                                that they are in a health store rather than pharmacy       bookings                          you".                                        purchasing tickets directly from airline.
                                                                                                                                                                           Company was perhaps trying to have
                                                                                                                                                                           people used recycled products and be
                                Buying organic products over non-                                                                                                          willing to pay for them. I didn't really
                                organic. It used/uses pamphlets, etc to       People understood what the company was explaining                                            have a clear mechanism other than to
                                educate consumers about the positive          in a very clear way, and the literature is everywhere.                                       sell notebooks that said the paper was       Lacked the education/communication that Whole
                                aspects of organic products over non-         Plus, their stores have an aura/aesthetic about them                                         recycled, with an earthy aesthetic on the    Foods used. People don't feel compelled to pay
Whole Foods. Organic Milk.      organic.                                      that make you feel good about buying organic.          Mead. Recycled paper.                 cover.                                       more for recycled paper.
                                                                                                                                                                                                                        Did not feel comfortable with the reliability of the
                                Influencing increased product purchases                                                                                                                                                 product being provided for that price. Miles are not
                                from their department store vs. other         I was happy to get discounts on otherwise full retail-                                                                                    as secure and useful as they once were, especially
                                dept. stores or other retailers by offering   priced items and to continue to get discounts and                                            Trying to charge $140 annual fee in          with so many airline companies going bankrupt and
                                significant discounts on the first            information on new items that arrive throughout the                                          order to use the Platinum card for which     applying black-out dates and other restrictions on
                                purchase and recurring discount               year. They provided discounts on products I was                                              I would earn 2 miles for every dollar        using miles. Plus, I already have enough miles to
Bloomingdale's (retail          coupons sent with new product mailers         going to buy anyway and information that I would not       Visa - United Platinum            spent and a free companion ticket on         purchase free tickets for me and a companion using
shopping)                       throughout the year.                          have otherwise had.                                        Card.                             United.                                      the basic United Visa card.
                                Trying to influence many different
                                behaviors because cosmetics are an
                                emotional, aspirational, and
                                creative/artistic buy. The Laura Mercier
                                rep knew exactly how to play up to those                                                                                            Trying to influence buying behavior.                Trying to upsell an untested and flawed product.
                                emotions but spending a lot of time                                                                                                 Used price as the sole basis for why the            The sales reps on the phone were clearly out for a
                                showing how each product is properly                                                                                                customer should switch to the digital               commission and neglecting to consider the
                                used, what colors go well with your           Her knowledge and passion for the product- you can                                    phone. There's a quote somewhere on                 experience of the customer. This initiative came
Neiman Marcus - Laura           skin/coloration, and what will enhance        tell she believed in it. Plus, she used it herself and     Time Warner Cable - trying being weary of the cheapest provider....            from the top of the company, so all along the way,
Mercier                         the health of your own skin.                  could see firsthand it was great.                          to upsell digital phone    this is such a case.                                incentives were not properly aligned.

                                                                                                                                 Page 8 of 16

         Consider a company's successful attempt to influence your behavior as a customer as you answer Questions 1-3.                              Consider a company's unsuccessful attempt to influence your behavior as a customer as you answer Questions 4-6.

What was the name of the             Which behavior was the company trying                                                                    What was the name of the      Which behavior was the company trying
company? What product or             to influence? What mechanism(s) did it                                                                   company? What product         to influence? What mechanism(s) did it
service were you using?              use? ______                                    In your opinion, why was the attempt successful?          or service were you using?    use?                                           In your opinion, why was the attempt unsuccessful?

                                     Customer loyalty on what is otherwise a
                                     completely price-sensitive route and
                                     complete usage of the website over the
                                     phone service. The website is quite                                                                                                    They gave me a credit on the airline due
                                     helpful, while the phone service seems                                                                                                 to a canceled flight. However, I then
                                     almost intentionally slow. That one's                                                                                                  learned that I couldn't use the credit if I
                                     simple. The Rapid Reward system is                                                                                                     booked online and would have to call to
                                     more relevant, in that they give a single                                                                                              redeem it. Calling in limited me only to
                                     credit for each leg and then reward free                                                                                               flights that were double the price of the
                                     tickets at 12 credits, as opposed to the                                                                                               flights booked online. It was then
                                     earned mileage system. Because I fly                                                                                                   actually less expensive for me to throw
                                     frequently from San Francisco to Los                                                                                                   the credit away and book online than
                                     Angeles, I appreciate the consideration        9 times out of 10, this system makes more sense for                                     redeem a $100 airline credit. I'm sure
                                     this suggests for their short route            me as a customer trying to earn free tickets.                                           this smoothes their accounting
Southwest Airlines, Rapid            passengers and book with them                  However, as I mentioned above, I fall for it even when                                  expectations and means they can give           The frustration and ridiculousness of the scheme
Reward Frequent Flier                consistently, even when other airlines         it's less economical because it suggests they             Airtran Airlines - use of     away credits left and right to satisfy         made me annoyed enough that I know refuse to fly
Program                              are on sale.                                   understand people in my situation.                        credit voucher.               inconvenienced customers.                      with them.
                                     Trying to encourage you to service your
                                     new vehicle frequently. The normal                                                                                                                                                    This warranty would replace your mp3 player if
                                     warranty was for 4 years. They were                                                                                                                                                   broken for virtually any reason during the first 2 years
                                     selling an additional warranty that covers     So far, it seems to be a pretty good plan. The hope is                                                                                 of the products life. Encourages you to use the
                                     the vehicle in years 4-7. If you do not use    that you don't have to use the warranty in years 4-7                                                                                   player for 2 years (normal operational life for mp3
                                     the warranty in years 4-7, they refund         and can get the refund. However, for large                                                                                             players), then replace with a new and most likely
Honda Motor Corporation              you the original warranty price at that        breakdowns, you have the option. Either way, they                                       Warranty again, this time on consumer          upgraded model. I would not recommend this as a
(Automobiles)                        time.                                          get more money out of you at POS.                      Best Buy                         products (ie, mp3 player)                      successful model.
                                                                                                                                                                            Purchases of their hamburgers and
                                     Flight purchases. Advertising that                                                                                                     sandwiches. Advertising that featured          The commercials were just plain disgusting. All the
                                     highlighted low prices and quality             The company convinced me I was getting a lot of                                         multiple patty meat cheeseburgers with         characters chewing sounds could be heard and
                                     customer service (unlimited snacks,            value for my money, especially when compared to                                         people eating them and getting burger          messy burger was all over the place. No appeal at
Jetblue. Air travel.                 leather seats, and personal televisions).      other carriers.                                           Carl's Jr. Fast Food.         stuff all over themselves.                     all!

                                                                                                                                                                                                                           because the discounts did not apply to products that
                                     increase my use of that particular credit                                                                                              They were trying to increase my                I usually buy. Additionally, the coupons must be
                                     card vs. the other ones that I have by         Because it benefited me and did not require any extra                                   purchases by offering discounts on             brought in the store and nothing that I buy I buy
                                     offering cashback bonuses for certain          work on my part (I already owned the card and had     CVS drugs and beauty              certain products as my spending                there warranties the extra effort or is so expensive
Discover credit card                 types of use                                   no preference for the other cards)                    products                          increases                                      that I would switch products based on price.

                                                                                                                                                                                                                           I found the service did not function properly because
                                                                                    Because I found the online interface to be extremely                                                                                   it was at the whim of the internet connection.
                                     Wells Fargo converted me to online             intuitive. It was an improvement on the usual service                                                                                  However, the bigger issue is that I felt like I was
                                     banking. First, they involved me in a          in that I could see all my account activity whenever I                                  The company was trying to create a             sending my emails down a black hole. I did not get
Wells Fargo - I had a                focus group that allowed me to have a          wanted instead of waiting for monthly statements.                                       consumer base that all relied upon IP          confirmation emails when I submitted a complaint
checking and savings                 sense of ownership over the process.           This made it worth it to use this as opposed to                                         based phone service. They also tried to        and I did not receive responses on many of my
account, that offered online         They offered me features such as online        traditional banking. The focus group also increased       Vonage - internet-based       make all their customer service virtual        emails. As a result, I felt powerless as a customer
banking                              bill pay to incent me to use the system.       my positivity around the process.                         phone line                    through email.                                 and discontinued the service.
                                     Drive higher sales (average revenue per
                                     passenger); mechanism used to                  Successful because maximizes value from both price-                                                                                    No limit on how long or frequently would have to use
                                     maximize revenue and profit per                sensitive and price-insensitive customer segments;                                                                                     the card to receive promotional miles. Many took
                                     passenger through charging higher              serves to drive high initial volume for price-sensitive Visa -- Credit card        Want customers to sign up for and use               advantage of the offer by signing up for the card,
Southwest Airlines --                prices to last-minute travelers higher         customers who benefit from low initial prices and       partnership with Southwest Southwest Visa. Offered 10,000 miles                making a small purchase, and then closing the
Commercial air travel                prices                                         charges higher prices to price insensitive customers    airlines                   for signing up and making first purchase.           account.

                                                                                    Starbucks was successful because it converted my                                                                                       I think that JetBlue was initially successful.
                                                                                    attitude towards its product. Initially, I would not have                                                                              Customers not only took advantage of the reduced
                                                                                    considered paying $3+ for a cup of coffee.                                                                                             fares but the company seemed to have the feeling of
                                     Starbucks was trying to influence my           Additionally, Starbucks coffee seemed too strong for                                                                                   being an "alternative", more new age company
                                     behavior as a frequent buyer of its            my American palate. However, because I enjoyed                                                                                         (funny stewards, brochures for doing yoga on the
                                     product. Mechanisms used include               the experience of purchasing the coffee from the                                                                                       plane, etc.). However, I have discovered that service
                                     widespread penetration of the market           Starbucks store, I accepted paying this premium, and                                                                                   has declined, and its differentiated, low-fare model
                                     (i.e., a store on every other block of the     my taste/palate for coffee actually shifted to preferring                               JetBlue was trying to convert me to            has been copied by some of the larger airlines. I no
                                     city) , samples distributed outside its        Starbucks'. Lastly, I knew that no matter what                                          become a dedicated consumer of its             longer feel incentivized to fly with JetBlue because
                                     stores, friendly and quick service, and        Starbucks I was in around the world, I would get the                                    airlines through its low prices and high       they cannot offer me a service that other airlines do
Starbucks' Coffee                    consistently high quality.                     same coffee and the same level of quality.                JetBlue Airlines              quality service.                               not.

                                     switching to online banking services                                                                                                   using my cell phone for more services
Bank of America, retail              (online bill payments, online statements they clearly conveyed the benefit to me and the                                               than just a phone (camera, music               I didn't see the need in these services in my phone
banking (checking account )          etc.) , advertisement and email messages environment                                                     Verizon, cell phone           listening etc. ), advertisements               when I get better quality from my camera, IPod etc.

Citibank gave extra "bonus
dollars" in cash back if I used
its credit card at grocery
stores. Lo and behold, I                                                                                                                      Delta tried to get me to buy
started using the credit card                                                                                                                 car rental services when I   They were using "bundling" to try to
more than any other when I           Citibank used using financial incentives       Because I 1) noticed the policy, and 2) wanted the        bought a plane ticket from convince me to adjust my buying
shopped at grocery stores.           to influence my buying behavior.               extra money.                                              them.                        behavior.                                       I knew I could get a better deal elsewhere.
                                     Use of cell phone and Palm pilot. It used      It simplifies my life, I no longer need to use two
                                     a product that merges both of these            products because their product consolidates both of                                     How I transport myself. It used on             I thought that that the process was complicated and
Palm Treo Cell phone                 products.                                      these functions.                                          Zipcar, car rental            campus advertising.                            that they asked for extra paperwork for foreigners.

                                                                                    It was definitely successful. By giving me quick
                                     It was trying to influence my choice of        access to an increasing number of benefits,
                                     the hotel whenever I was visiting a city. It   Starwood influenced my choice of hotel whenever I
Starwood Hotels. I was               used the membership reward program             was traveling, both for business and work. Whenever                                   It was trying to influence my purchasing         It was unsuccessful. I never got used to the new
staying at their hotels, initially   to influence my decision process. Such         possible, I always stay in one of their hotels. I also                                behavior when selecting an ice-cream,            flavors as I found them too rich compared to the
when traveling for work, and         program included various benefits              switched from one hotel I used to visit quite often for   Algida Ice Cream. I used to by discontinuing some old flavors and            delicious simple old ones. It became more difficult to
joined their membership              connected to the number of stays at the        work to a new one, as soon as the old ceased to be        be a big fan of their ice-  introducing more sophisticated (and              find the old types and I ended up switching to other
program.                             hotels that were part of the group.            part of the Starwood Hotels Group.                        creams.                     expensive) flavors.                              brands, whenever buying an ice-cream.

                                 The behavior the company was targeting
                                 was to limit the 'comparison shopping'             The reward of free travel accumulated through using                                     The store was attempting to increase the
                                 when looking for air transportation. (to           the company airline provided enough value to use the                                    number of times I would frequent the
                                 become the defacto airline that I would            airline even when sometimes offering a less                                             store by using a reward loyalty program        There were a lot of other lunch choices available and
                                 use) The airline loyalty program provided          convenient flight. The reward is tangible, something The soup nutsy, the had a          (ie after 10 free soups) I'd get a free        I didn't like to eat a spot more than once / week. I
                                  'reward' tickets based distance traveled          that I use, and associate positive feelings with (ie variety of different soups         soup. I never took a 'loyalty card' as I       also didn't care about spending $5 on a soup or a
Air Canada - air transportation. with the airline                                   going on a holiday)                                  offered during lunch rushes        didn't think I would frequent that often       different lunch so the reward wasn't enticing.
                                 Bloomingdales was trying to increase
                                 consumer spending. They invited me to
                                 their "Private Sale," by giving me
Bloomingdale's was very          coupons for $25 off every $100 I spent.                                                                                                    I think the goal is to get me to sign up for
successful in influencing my     I bought more regularly priced items than          Their attempt was successful, because I am a more         United Airlines sends me a    a credit card to accrue more United
behavior. I began to annually I usually would. They also offered $10                loyal Bloomingdales shopper. I wait for the Private       lot of credit card            Airlines miles with my mileage account.        I am already tied into other credit card award
shop their private sale and      gift cards for every $100 I spent, which           Sale, but I will also go back afterwards. The Private     applications. The service     However, their mechanism has not been          programs, and I think that airline loyalty is already
return later to buy regularly    encouraged me to come back for                     Sale during the Christmas season is where I do all my     that I use is their mileage   very effective, since I consistently throw     very difficult to redeem. So, continued attempts to
priced items.                    another visit later.                               holiday shopping.                                         loyalty program.              away all the credit card applications.         send me credit card applications are not effective.
                                 company was trying to influence both my
                                 buying and traveling behaviors. Having
                                 the credit card means that I will probably         successful because buying things with a credit card is                                  sprint was trying to get me to buy a new
United Airlines. The product is travel more on United than on other                 something I do anyway and I will be traveling a lot this                                cell phone by offering great "deals" on        I felt it was a hassle to switch to a new cell phone
their credit card that allows    airlines to earn miles and also that I will        year so free miles are attractive to me. successful                                     new phones and advertising heavily             (choose one among the many, exchange the old
customers to earn additional     use their credit card more often for the           because the company makes it relatively easy for me Sprint. product was a cell          about the great features on the new            phone for a new one, pay more money etc) and I
miles                            same reasons                                       to earn the benefits I want without sacrificing much     phone                          phones                                         was already very happy with my current phone.

                                                                                                                                     Page 9 of 16

        Consider a company's successful attempt to influence your behavior as a customer as you answer Questions 1-3.                           Consider a company's unsuccessful attempt to influence your behavior as a customer as you answer Questions 4-6.

What was the name of the          Which behavior was the company trying                                                                     What was the name of the      Which behavior was the company trying
company? What product or          to influence? What mechanism(s) did it                                                                    company? What product         to influence? What mechanism(s) did it
service were you using?           use? ______                                    In your opinion, why was the attempt successful?           or service were you using?    use?                                         In your opinion, why was the attempt unsuccessful?

                                                                                                                                                                          They were trying to migrate customers
                                  Behavior: - Trying to influence                                                                                                         from the analogue service to the digital
                                  purchasing behavior for t-shirts and                                                                                                    network, which came with different
                                  other wardrobe staples - Trying to                                                                                                      channel bundles and pricing structure.
                                  influence customer thinking about                                                                                                       Used: - direct marketing of the product
                                  products made locally, under fair labor                                                                                                 benefits of digital, including more
                                  conditions - People buy it like                                                                                                         channels, onscreen programs, menus,
                                  disposable fashion, even though it's not                                                                                                possibility of upgrading to a DVR - also
                                  particularly cheap Mechanisms - Offers                                                                                                  repackaged the channel offering, so
                                  a complete lifestyle/image package, with                                                                                                customers would get more channels in
                                  tie-ins to magazines, art, events, staff &                                                                                              each package, but frequently not in the
American Apparel Sells t-         marketing that fits a specific "hipster"                                                                                                combination they already had, unless
shirts and other casual           profile - Makes shopping accessible &                                                                                                   they paid more. - had a deadline date at     For the many customers who didn't value the
clothing, accessories etc. I've   social, is open extended hours in cool                                                                                                  which they were switching off analogue       technological benefits of digital, and who wanted to
bought a number of t-shirts       neighborhoods (so you can drop in                                                                                                       transmission, effectively forcing            keep their existing range of channels, the migration
and workout clothes, my           between a restaurant and a bar or club) -                                                                 FOXTEL, the cable &           customers onto digital, since they           offer was not compelling. Effectively forcing
boyfriend has about a million      "Productized" range, can purchase         - Buy for the emotional, affective package - To have           satellite TV company I        penalized you for ending your contract       customers to pay more for the same service, by a
of their hoodies.                 multiple colors in each style              the same "look" as the hipsters                                used to work for.             early.                                       given date, raised customer resistance.

                                                                                 The discount is substantial enough and the program
                                                                                 is generously extended for members no longer
                                  Loyalty. Participation in the Patagonia        working outdoors. Additionally, Patagonia is working
                                  Pro Program, offering deeply discounted        from a solid foundation of high quality products and                                                                                  Because I apparently prefer to drink far less soda
                                  apparel to current and former outdoor          customer service, and further connects with its            AMC Theaters.                 The classic pricing scheme to try to get     than the average customer and was not swayed by
Patagonia. Outdoor apparel.       professionals.                                 customers through its corporate mission.                   Concessions.                  customers to purchase larger sizes.          the pricing scheme.
                                                                                                                                                                                                                       The flier had restricted times and dates that it could
                                  Trying to get me to be a loyal consumer.                                                                                                Company tried to encourage customers         be used. So, you had to save it for next week
                                  Its rewards card offers a gift certificate                                                                                              to purchase other products. Used fliers      somewhere you wouldn't lose it and remember to
                                  once a consumer spends a certain            The attempt was successful because you often wind                                           giving away free products for the            bring it in. Plus, if you already really liked a product,
DSW. Purchased shoes              amount and it costs nothing to sign up.     up spending more with the perception that you will be Pump. Purchased energy                following week. I got one each time I        chances are you weren't going to go with another
there.                            I'd never seen this in a shoe store before. getting some of the $ back.                           shakes daily.                         made a purchase.                             one.

Company: Netflix Service: 2-      The company was trying to get me to            • I did not feel like my behavior was being modified; I
at-a-time rental plan Other       rate its movies using the rating toolbar.      could avoid rating movies easily if I felt like • The
such companies: -                 This would ostensibly make their movie         user interface was well designed and easy to use,                                        Use the phone banking service for
Starbucks – describe the drink    purchases more accurate. The rating            similar to the iTunes rating system of 5 stars. • Did                                    questions and clarifications not found on    - The waiting time on the phone was too high -
exactly to help the Barista at    toolbar was prominently displayed below        not interfere with website navigation (no unwanted                                       the website, instead of visiting the         The service seemed to assume that I needed a lot of
the counter - Wholefoods –        all the movies, rented or not. Also, the       redirections or popups) • Results were there to be                                       branch. The mechanisms were the              handholding - “real” branch was close to my
increase average pickup –         homepage sidebar had prompts that              seen – the quality of recommendations improved as I        Company: Bank of              advertisements on the website and            residence - No easy interface between, say, the
browse store more because of      asked the user to rate movies to get           rated more movies (though its still does not pick up       America Service:              marketing outreach through e-mail and        website and phone banking (like a one-click VoIP
the layout                        better recommendations.                        my love for Jackie Chan actions flicks)                    Checking Account              mail-ins.                                    service
                                                                                                                                                                          The company tried to limit my calls
                                  The company was trying to ensure that I                                                                                                 during peak hours by letting me use only     The attempt was unsuccessful because I could
                                  would not return the device to the store       This attempt was effective because I needed to                                           a certain number of minutes during the       change my plan after the fact. That is, when I
                                  for a refund or exchange. They did this        remove the packaging to transport the unit home and                                      day and charging higher rates for any        realized I had used too many daytime minutes, I
Best Buy. I purchased a           by requiring that the unit be returned in      thus could not put it back together to return it to the                                  minutes over that amount ("overage           could call customer service to increase the number
portable Air Conditioning unit.   its complete packaging at the store.           store (when the device did not work).                   Verizon cell phone service.      charges").                                   of minutes and avoid paying "overage charges".
                                                                                 Rather than gradually increasing the fare as the travel
                                                                                 date approaches, which would have allowed me to                                                                                       Car companies seem to have over-used incentives
                                  Tries to get customers to purchase             delay the purchase (keeping flexibility) a few more                                                                                   to get customers to purchase at certain times. Since
                                  tickets in advance by increasing fares         days with minimal financial impact, the drastic                                          Tries to sell extra models at the end of     I could buy a car at a discount at nearly any time, my
                                  dramatically if purchased within two           increase in price forces me to make a decision earlier                                   the year by offering deals such as zero      needs, not the advertising of specials is what drives
US Airways - flights              weeks of travel.                               than two weeks before the                               Ford cars.                       percent financing.                           my purchasing decision.

                                  I believe that Yahoo! wanted to capitalize     YES! I love Yahoo and currently use it for a large
Yahoo! I was using Yahoo!         on my use of its Finance section to sell       portion of my internet needs, including email, search                                    They tried to sell me on the importance
finance on a daily basis to       me on other products/services. The             engine, music player, live sport updates, national                                       of 'protecting' my computer and the
collect recent articles on my     most powerful mechanism Yahoo!                 news across a variety of topics, fantasy sports,      Best Buy tried to sell me an       many benefits, such as peace of mind,
former company, track             employed was the design of their pages,        games, etc. I'm even willing to pay for some of these extended warranty for a            lower costs in the event of a problem,       My background knowledge about warranties and my
company performance, etc.         which included links to other services.        services.                                             computer.                          etc, by using scare tactics.                 lack of trust in the sales person.
                                                                                                                                                                          The company offered a bundled
                                                                                                                                                                          pedicure/manicure combination Mon-
                                  The company was trying to make me                                                                                                       Wed, where you could get a pedicure
                                  buy more chocolate. It offered a free 12                                                                                                and manicure for what amounted to the
                                  pack for every 2 12 packs I bought. So         The attempt was successful because I love the Nestle                                     price of a pedicure on other days. They      It was unsuccessful because I never had time to go
                                  where I might normally just have bought        version of Kit Kat which I don't have access to in the                                   were trying to encourage people to buy       get pedicures or manicures during the week, and
Heathrow Duty Free. Kit Kat       1 12 pack, I wound up having to lug 3          States, and the Duty Free folks were able to                                             more of their services and attract more      also because I am not a huge fan of manicures, and
(Nestle).                         around.                                        successfully tap into and take advantage of my greed. Top Nails. Pedicure.               clientele.                                   so the bundled offering wasn't really that appealing.

                                                                                                                                                                          The way in which I purchase gasoline.
                                                                                                                                                                          They positioned their swipeless card as
                                                                                 It's in both my and Continental's best interest - faster                                 faster and ambiguously 'superior' to
                                  The way in which I check in for flights.       for me, cheaper for Continental. Ultimately, it is                                       standard credit cards. I believe they also The product/service wasn't materially better than
Continental Airlines online       Continental offered free headsets and          simply a superior alternative to checking in at the                                      offered discounts (perhaps a couple of     using a standard credit card, so it wasn't worth the
check-in                          advertised the service fairly heavily.         airport.                                                   Exxon Mobil's 'Speedpass'     cents per gallon) for a short period.      switch.

                                  My online purchasing was infrequent in                                                                                                                                               The company never asked me what was important
                                  the past, especially for clothing. The                                                                                                  Wanted me to consider Virgin Atlantic        to me, and what my criteria for choosing a carrier
                                  company sent emails focusing more on           The company understood what issues to address in                                         for transatlantic airplane tickets instead   were. They focused on price and did not provide me
                                  the ease of the buying process than on         order to change my behavior, i.e. they understood my Virgin Atlantic, airplane           of other carriers. I had never flown         with an opportunity to customize the product to my
Bluefly - online clothing store   specific items they offer.                     decision making process.                             tickets                             Virgin Atlantic before.                      needs, for which I was prepared to pay a premium.

                                                                                 Because you know you are already paying for the            Davivienda (Colombian
                                  Instead of charging for each movie you         service and therefore, you choose a movie to watch         Bank) and other major         Forcing people to maintain their credit      Because you finally find your way to do so and then
                                  rent, they offer a fixed subscription per      at home rather than going to the movies or other           banks that try to enroll you card by making it hard for you to             you don't want to have anything to do with the bank
Netflix. Rented Movies            month                                          entertainment alternatives                                 in a Credit Card with no fee. terminate the contract.                      afterwards.
                                  The company was trying to influence my
                                  recurrent purchasing behavior. The
                                  company used incrementally improved                                                                                                     The company was trying to increase its
Electronic Arts. Madden           products year over year combined with a        The attempt was successful because of its strong                                         share of wallet from me by advertising
video game franchise for          barrage of marketing to influence my           brand and the network effects associated with the          Verizon. Cellular phone       additional phones and calling plan           There were too many stipulations involved, including
Playstation 2.                    behavior.                                      numerous users of the product.                             plan.                         features, with some discounts included.      being locked into a contract for 2+ years.

                                  Starbucks was trying to influence my
                                  visits to the store even though I am not a
                                  coffee drinker. Through innovative
                                  products that can customized,                  It was successful because Starbucks created an                                                                                        The attempt is unsuccessful because my primary
                                  successful marketing and omnipresence          image of a beverage/breakfast/snack cool place                                           The company is trying to get me to make      criterion when I plan a vacation is price and then the
                                  of its stores, it effectively created a need   rather than a place for coffee connoisseurs only. Also,                                  hotel reservations with Marriott with        location of the hotel: I would rather pay less or select
Starbucks for non-coffee          for chai lattes and blendes creams on a        their campaign for free trade made me think that at                                      special weekend promotions (via email)       a hotel with a better location in spite of any points I
products                          daily basis.                                   least part of my money was used for a good cause.       Marriott for hotel stays.        and bonus reward points                      would have collected by staying at a Marriott.
                                                                                 I consider American to be my airline of choice &
                                  AA was encouraging travelers to                frequently search first for tickets before using
                                  purchase their tickets via They        the larger travel sites. If I am on a travel site like                                                                                Sprint's service level was so poor in customer
                                  rewarded travelers with additional air         Orbitz and find that American offers the lowest fare, I                                  Repeat service; prevent customers from       interactions and their reception was poor - so they
American Airlines Online          miles for every ticket purchased thru          will switch to to purchase via their site and    Sprint PCS wireless phone        switching. New phone rebates &               couldn't retain me as a customer even after their
reservation system                                              earn the extra air miles.                               service                          discounts for returning customers.           attempts.

                                                                                                                                                                        Trying to get me to enroll in a account        Unsuccessful because the rep was extremely pushy
                                  trying to attract new customers to             the higher interest rate offered during a period of low    Citibank, I was using their protection program for a small monthly         and was obviously reading from a script. Seemed
ING Direct, online savings        transfer their savings accounts to ING         interest rates was very attractive, and online account     customer services over the fee that would be debited from my               like just another sales push and I was eager to get
account service                   Direct in return for a higher interest rate    management was becoming increasingly easy to use           phone                       account.                                       off the phone after refusing several times.

                                                                                                                                  Page 10 of 16

        Consider a company's successful attempt to influence your behavior as a customer as you answer Questions 1-3.                          Consider a company's unsuccessful attempt to influence your behavior as a customer as you answer Questions 4-6.

What was the name of the           Which behavior was the company trying                                                                   What was the name of the      Which behavior was the company trying
company? What product or           to influence? What mechanism(s) did it                                                                  company? What product         to influence? What mechanism(s) did it
service were you using?            use? ______                                   In your opinion, why was the attempt successful?          or service were you using?    use?                                          In your opinion, why was the attempt unsuccessful?

                                                                                                                                                                                                                       The attempt was unsuccessful for a couple of
                                                                                                                                                                         They were trying to get me to buy "liquid     reasons. First, I am a part of the "healthy revolution"
                                   My entire outlook on leadership, life, and                                                                                            refreshment" through television               that leans now toward fruit juice or water rather than
                                   how they relate to business. It used the                                                                                              advertising. The particular ad campaign       carbonated beverages. Second, Sprite is caffeine
                                   brand equity of its name, the promised        First, I came to the school. Second I recommend it to                                   shows one yellow and one green sumo           free, so if I was going to drink soda, that wouldn't
                                   access to talented professors and             other people. Third, I pay my tuition. Fourth, I now                                    wrestler colliding on a man sitting on a      give me what I need out of it. Third, I am not a part
                                   students, a residential campus with           think about problems through an entirely new series                                     tree stump in a darkened forest. There        of the cohort that ad is trying to reach, although I do
Harvard Business School.           proximity to a major city, and finally it's   of lenses. Therefore, the company has effectively                                       was another ad with a guy watering            think that it is a brilliant ad because it is so arresting
Their educational services.        barriers to entry.                            changed my outlook on leadership and life.                Coca Cola: Sprite.            plants out of minority report.                and "DVR" compatible.

                                                                                                                                                                                                                       Their simple solicitations are ineffective because they
                                                                                                                                                                                                                       come off as pushy and I generally know what I need
                                                                                                                                                                                                                       already. Their high costs per minute for exceeding
                                                                                                                                                                                                                       my minutes, however, are objectively influential
                                                                                                                                                                         Verizon wants me to simply buy and/or         because I can see it might cost me more but
                                   To get me to use United for all my airline                                                                                            use more minutes or add-on services           subjectively it makes me very angry because the
                                   travel by providing me longer-term                                                                                                    than I currently do through a variety of      cost seems unfair. At the end of the day, I tolerate
United Airlines. Mileage Plus      incentives to combat my short-term            Mostly because I understand what the rewards can          Verizon Wireless monthly      methods, from simple solicitations to         Verizon for the lowest cost I possibly can, mostly
frequent flyer program.            pricing concerns.                             be used for and I consider them to be valuable.           cell phone service.           tiered pricing.                               because their coverage is the best in the area.

                                                                           The company successfully persuaded me to                                                                                                    This was unsuccessful because, in my opinion,
                                                                           subscribe to digital phone service by bundling this                                                                                         Citibank is clearly saving money if I drop paper
                                                                           service with the other two services (TV and internet).                                        The company has been trying for years         statements. However, I don't get much more than
                                   The company was trying to influence me Before this, I did not have a land-line phone for                                              to get me to stop getting paper bank          less hassle and some satisfaction for saving trees (I
Comcast. I was originally          to (1) subscribe to more cable channels almost 5 years. They were successful because the                Citibank. Online banking      statements. The only mechanism they           already use online statements). So, I refuse to drop
using just cable and high-         and (2) subscribe to digital phone      bundled price was only a few dollars more than I paid           and paper bank                have used is repeatedly badgering me to       paper statements until they offer me something - like
speed internet.                    service.                                previously.                                                     statements.                   do this.                                      a coupon or rebate. Maybe I am just being spiteful?

                                Influencing buying patterns through                                                                                                      Trying to lock me in to only using their      Not enough incentive: I had to use them 10 times
J Crew: online clothes          incentive mechanism ($25 off any                                                                                                         dry cleaning services through a frequent      with no regard to how many items I had dry-cleaned
shopping                        purchase over $100)                              Yes - I am a sucker for the "free" $25                    Lucky Dry Cleaners            use card.                                     in order to get a discount on my 11th order.
                                The company was trying to persuade me
                                to "trade up" either the current Tide
                                product I was using or to switch from                                                                      When my Cingular wireless
                                another detergent. And they were trying          The attempt was successful because it appealed to         phone expired, Cingular       The company was trying to retain me as        Cingular was unsuccessful because I had
Just yesterday, while buying    to convince me to buy the Downey fabric          my desire to buy a premium product to better treat my     tried to convince me to get   a customer. They used direct mail trying      encountered a number of service problems (both
laundry detergent, I decided to softener to go with it. The mechanism            somewhat expensive clothes. The product is directly       a new phone and sign a        to entice me with discounts on a new          with geographic coverage and customer support
buy this new Tide product with was through print ads and T.V.                    targeted at me -- a female consumer that is not           new contract. But I           phone. Also, they tried to talk me into       service). In addition, many friends said that Verizon
a new scent. I think P&G sells commercials. The T.V. commercials                 particularly price sensitive on most products and is      decided to switch to          staying with them when I called to cancel     was a much better carrier so I was determined to
Tide.                           had piqued my interest.                          willing to trade up for premium value.                    Verizon Wireless instead.     my contract.                                  switch.
                                Behavior while playing soccer Used               Used some of the best professional players and they                                     Behavior while playing soccer Used            I simply do not believe Nike can make better soccer
Adidas soccer shoes             professional players                             make the tricks look easy                                 Nike soccer shoes             professional players                          shoes than Adidas

                                                                                                                                           Radio Shack. I was going      My choice of cell phone provider. He did
                                                                                                                                           in to buy an earpiece for     this by focusing on price - he showed
                                                                                                                                           my cell phone, and the        me the plans and where I could save
                                                                                                                                           sales person tried to         money. He also said Verizon tends to          The salesperson didn't even ask me if I was satisfied
                                   Starbucks was trying to get me to pay up                                                                persuade me to switch         view themselves as too high class to          with Verizon, or if I would be interested in changing.
Starbucks. A Starbucks card        front for coffee, and to keep me coming                                                                 carriers from Verizon to      lower their prices - he said they charge      He just went into the sale. I also am happy with my
/ coffee.                          in. It worked.                                                       #NAME?                             Sprint or Cingular.           too high a premium for their service.         service (even though I do wish it was cheaper).
The company was Esso, and I                                                                                                                                                                                            The attempt was unsuccessful because of my
would fill-up my car with gas at   The company wanted me to always buy                                                                                                                                                 skepticism towards Air Canada's seat sales. I have
an Esso station if it was the      my gas at Esso. They did this by                                                                        The company was Air           They were trying to get me to fly more,       rarely had success getting the price advertised in
closest station when I needed      aligning themselves with Aeroplan, Air        This attempt was successful, as it offered me             Canada, and I frequently      by offering good prices on many of the        one of their seat sales, and now I ignore any seat
gas.                               Canada's air miles rewards program.           something more valuable than any other gas station.       travel with them.             locations I travel to.                        sale info I see.
                                   Instead of writing checks to pay my bills
                                   Bank of America wanted me to use their                                                                                                Target offers private label facial products   Target was unsuccessful in getting me to switch to
                                   on-line bill payment service. They                                                                                                    through it's own brand, Market Pantry.        their face cleansers because I think the quality of
                                   offered this as a free service and                                                                                                    To try and get me to use their products       their products is poor. As a result of purchasing a
                                   demonstrated how through using this                                                                                                   they offer Market Pantry products at a        Market Pantry face cleanser that did not meet my
                                   service my bill payment history will be       Bank of America was successful because they were          Company -- Target             significant discount to other major           standards of quality and was not comparable to the
Company -- Bank of America         stored, which helps me manage my              able to convince me that I saved time and money in        Product -- Target brand       brands and on their products will say         normal face wash that I use, I will not buy any Market
Service -- Bill payment on-line    budget.                                       using their service.                                      facial products               "Compare to XXX".                             Pantry toiletries.

                                                                                                                                                                         Purchase pattern: buy cheaper by
                                                                                                                                                                         buying soon. (EasyJet proposes low air        I'm naturally not inclined to plan trips well in advance,
                                                                           Its convenience changed my shopping and almost                                                fares for customers who buy their tickets     and certainly not willing to risk losing my ticket if I
                                   Fidelization of the customer by         eating behavior: I rarely go to the supermarket, and                                          well in advance). Tries to create an          can't finally fly. Tickets are not always cheaper: it's
                                   proposing shopping through the Internet frequently buy the same set of products from my                                               image of consistently low prices to steal     easy to compare actual prices with other regular
Peapod: grocery shopping.          and home delivery.                      previous lists of purchases.                                    EasyJet, for plane tickets.   customers from regular airlines.              companies.
                                                                                                                                                                                                                       The attempt has been unsuccessful because
                                                                                                                                                                                                                       Amtrak's rates are much higher than Greyhound's
                                                                                                                                                                                                                       rates, which means that the 15% off is not enough
                                                                                                                                                                                                                       to make it worth it for me to take the train. Also,
                                                                                                                                                                                                                       students need to go online and apply for the
                                   The company needed to incentivize                                                                                                                                                   discount card, which I keep forgetting to do. I think
                                   customers to use their online channel         The attempt was successful because it made the                                                                                        that if they came to campus and provided the card
                                   rather than calling its customer              transition a "no brainer" for customer. Why would I                                                                                   on the spot (like Zipcar does), that would allow
                                   representatives for things such as buying     want to pay a fee if I can do everything online and get                                                                               students to give it a try right away rather than just
                                   tickets, getting upgrades, redeeming          bonus miles? The customer would tend to see the                                        Amtrak is trying to influence my decision      waiting until they have time to fill out the online
                                   miles, etc. To achieve this, AA started       booking fee as an annoyance more than a penalty                                        to take the train rather than the bus for      application. Also, discounts are not valid on the fast
Company: American Airlines         charging a fee for booking tickets online     and is happy to go online to get the extra miles. Plus                                 weekly trips to New York to see my             train, so there's less incentive to take the train and
Product: Airline tickets,          while awarding bonus miles to                 they provided an online site that can answer a lot of                                  husband while attending school. The            pay more when it would take the same amount of
upgrades, mile redemption,         customers that went online to complete        the questions people tend to ask, so that customers       Company: Amtrak              company provides a 15% discount for            time taking the bus, for which you only pay 1/5 of the
etc.                               these transactions.                           can find answers to questions anytime.                    Product: Rail transportation students and has a rewards program.            cost.
                                                                                                                                                                        Trying to get me to communicate more
                                                                                                                                                                        often through text messages so I could
                                   Changing how I drank wine. Conducts                                                                                                  spend additional fees per month on text-
                                   wine tours where guides spend time                                                                                                   messaging charges. Mechanism used              Unsuccessful because I received spam text
Jackson Triggs Winery in           teaching you how to hold a glass, swish                                                                                              included: Service already on phone             messages all month and was charged for messages
Niagara-On-The-Lake,               the wine, smell the wine, and enjoy it                                                                                               when I bought it Certain number of free        I received from people I didn't know. It turned me off
Ontario. Product was wine.         more.                                         I now drink more wine because I enjoy it more.            Cingular. Text-messaging. text-messages                                     of text-messaging and I disabled the service.
                                                                                                                                                                                                                       Not tailored to me and what my needs are -- I don't
                                                                                                                                                                                                                       need the services of Gold & Platinum at this point in
                                   Trying to ensure/increase product             Came to be expected by me -- deal was inevitable so                                                                                   my life. For me, the products have attributes which
General Mills -- Honey Nut         purchasing by using trade dollars (e.g. 2     I became a consistent purchaser. If deal wasn't on in American Express -- credit        Wanted to upsell me from Amex Blue to         aren't relevant (but this could certainly change in
Cheerios cereal                    boxes for $5, etc.)                           one week, came to expect that it would be in the next. cards                            Amex Gold and Amex Platinum                   time)

                                                                                                                                                                                                                  Perhaps for many customers, it is successful
                                                                                                                                                                                                                  because most customers may see Dunkin as a
                                   Shaws tries to influence repeat business                                                                                                                                       place to get donuts and coffee to go. However, their
                                   and customer loyalty thru its Shaw's                                                                                                  Dunkin provides minimal seating which    attempt is not successful for me because it is one of
                                   Rewards Card. The card provides               Yes. The discounts provided by the card make me           Dunkin Donuts.                is generally uncomfortable to discourage the few places near my home that provides a
Shaws Supermarket. Grocery         substantial discounts on a wide variety       prefer shopping at Shaws over other comparable            Coffee/donuts and seating     customers from sitting around for too    relatively quiet atmosphere for me to study and read
shopping at Shaws.                 on grocery items.                             supermarkets.                                             area.                         long.                                    my HBS cases - which can take many hours.
                                   The company influenced me to stay at
                                   Starwood hotels, even when other hotels                                                                                                                                             Discover card is not accepted by many merchants.
                                   with better location or lower rates were      The benefits of the customer loyalty program were                                       The company was trying to prevent me          The card had one of the best cash back programs in
                                   available. It used an effective customer      superior compared to the competition. Frequent                                          from cancelling my credit card. It used       the past, but other card companies (w/ the
                                   loyalty program and high level of service     stays allowed me to earn status that gave me even                                       lower interest rates and other nominal        ubiquitous Visa/Mastercard brands) now offer
Starwood, hotels                   for frequent guests.                          more benefits and services.                               Discover, credit card         financial incentives.                         comparable programs.

                                                                                                                                 Page 11 of 16

        Consider a company's successful attempt to influence your behavior as a customer as you answer Questions 1-3.                            Consider a company's unsuccessful attempt to influence your behavior as a customer as you answer Questions 4-6.

What was the name of the           Which behavior was the company trying                                                                    What was the name of the      Which behavior was the company trying
company? What product or           to influence? What mechanism(s) did it                                                                   company? What product         to influence? What mechanism(s) did it
service were you using?            use? ______                                    In your opinion, why was the attempt successful?          or service were you using?    use?                                           In your opinion, why was the attempt unsuccessful?
                                   UPS tries to affect "trust." By hiring and
                                   training great delivery drivers, customers                                                                                             Sprint tried to influences price sensitivity
                                   get to know their UPS delivery man and         My neighborhood delivery man Ray was always                                             by offering prices and packages that on
UPS - using their delivery and     develops a trusting relationship with          pleasant, always attempted to find me if I had a          Sprint - using their phones   paper seem a lot more attractive than          You pay for what you get - and you don't get any
pick-up service                    them.                                          package.                                                  and telephone service         their competitors'.                            customer service with Sprint!
                                                                                  Yes. I shaved something like 0.125% off my student
                                                                                  loan rate by setting up and using automatic bill pay.                                                                              No. I only use a teller 3-4 times per year and do not
Sallie Mae. Undergraduate          Automatic bill pay. Discounted interest        Providing an incentive was a useful way of directing                                    Stop me from using a teller by limiting my want to pay extra if 2 of those visits happen to fall in
student loan.                      rate.                                          my behavior.                                              Bank One Teller services      "free" visits to one per month.            the same month.

                                                                                                                                            Bank of America
                                                                                                                                            introduced a "Keep the
                                                                                                                                            Change" program to
                                                                                                                                            encourage its customers to    BofA was attempting to have its
                                                                                                                                            use their debit cards more    customers get used to using their debit
                                   Vegas casinos are known to influence                                                                     often. It would round up      cards for ALL purchases - even the
                                   their customers by encouraging them to                                                                   any purchase to the           smallest ones. This would cut back on          Despite the fact that I said I would use my debit card
                                   stay longer than they might want to on                                                                   nearest dollar (ie, a $2.12   people coming to the bank for cash and         for every purchase, that plan only lasted for about a
                                   their own. By not having any windows or                                                                  purchase would become         be easier for the bank to administer.          week. I think that even though I knew the total
                                   clocks, offering free drinks, and              Combined, all of the mechanisms make it seem              $3.00) and deposit the        The mechanism used was purely                  matched amount could end up being significant,
                                   otherwise stimulating their customer's         foolish to leave a casino when you are winning, and       $0.88 in your savings         financial - the company match could add        each individual reward (only a few cents sometimes)
                                   senses, gamblers forget the time and           difficult to leave when you are losing..... so I always   account, and the bank         up to a few hundred dollars by the end         was not worth the embarrassment I felt when paying
Las Vegas casinos.                 stay all night.                                end up staying too long!                                  would match the $0.88.        of the program.                                for a tiny purchase with a debit card.
                                                                                                                                                                          The restaurant wants to knew about all
                                   They were trying to fill up their restaurant                                                                                           groups that will be dining there so that       They didn't take the time to listen to my specific
                                   during off-peak hours and get rid of the                                                                                               they can plan accordingly. But when            needs and their policy didn't allow for flexibility. I
                                   remaining fresh fish at the end of the                                                                                                 making a group reservation they asked          didn't know the final count, but I had a good guess.
                                   night. To encourage customers to come                                                                                                  me to pre-pay for the entire group. I          I would have been happy to put down a small
                                   in late, they offer a 50% discount on          It was successful because the discount was more                                         wasn't willing to do this because I don't      deposit to hold the space, but they did not allow that.
                                   food if you are seated for dinner after        valuable to me than eating an early dinner. They          Caesars Palace, Las           know the exact final count. So instead, I       The result is that we will be dissatisfied if we have to
Sansei Restaurant, Maui            10:00pm. The also have free karaoke            understood the needs of their business and the            Vegas. I was trying to        will not make a reservation and our            wait while they prepare a table and they will be
Hawaii. I was eating Sushi         starting at 10 to keep the atmosphere          needs of the customers and developed an incentive         book a buffet breakfast for   group will just show up for breakfast          rushed and unprepared for our arrival. Everyone
and drinking Sake.                 lively.                                        plan that meets both.                                     a the Las Vegas Trek.         unannounced.                                   loses!

                                                                                  Prior to the prevalence of ATMs, I went to the bank
                                                                                  approximately 1/week to either cash a check, or                                       Of course, catfish is more expensive
                                   The company was trying to 1. Minimize          withdraw money from an account. Each time I went                                      than hush puppies or bread. The Fish
                                   the amount of time I spent interacting         in and spent a few minutes of the teller's time, and                                  Fry believed itself an expert in slow-           As stubborn as the good people of The Fish Fry are,
                                   with a teller for minor transactions (like     was not charged for the visit. Now, I interact with a                                 playing its succulent catfish while it           they met their match with me. As I am wise to the
                                   withdrawing $100 on Friday before a            teller only a few times/year (maybe 4 or 5), and use                                  wanted me to fill-up on the cheap stuff.         tricks of the all-you-can-eat restaurants, I did not eat
                                   weekend out), so as to reduce their            ATMs for my weekly transactions. And, while I try to                                  So, after I ordered the all-you-can-eat          any bread or hush puppies (in fact in subsequent
                                   labor costs, or put them to better use. 2.     use my bank's ATMs to avoid an extra charge, I still                                  catfish, they would bring a big basket of        visits to the restaurant, I told them not to even bring it
                                    Gain extra revenue from my                    find myself withdrawing money from other bank's                                       bread and some hush puppies to the               to the table because it would just be a waste of good
                                   transactions at the bank. The bank put         ATMs 1-2/month and paying a small fee each time.                                      table and try to wait me out while I filled      food). I know they have piles of fried catfish right on
Regions Bank I had a               up ATMs at convenient locations                Surely the bank benefited from both my reduced            The Fish Fry (restaurant in up. They'd wait about 10 or 15 minutes           the other side of the wall and I ask them to just bring
standard checking/savings          throughout the city and allowed me to          facetime with the teller and the increased revenue in     Paris, TX) The all-you-can- before bringing me any fish. And if you          me the fish. Wow is it good catfish - and I could
account.                           use them at no charge.                         ATM transaction fees.                                     eat catfish dinner.         order more, expect to wait.                      eat at least twice as much of it....

American Express - their
policy of losing points on their
charge cards if the bill is not
paid on time motivates me to                                                                                                                                              J Crew wants its customers to use its
always pay my bill on time. It     Their model encourages customers to            Because there is a membership fee associated with                                       credit card in order to get the financing
also motivates me to use my        pay their bills on time (late payment          the credit card, I want to get the most of my                                           charges from late payments. In order to
American Express card more         results in forfeiture of points) as well as    membership fee; thus, I use my card to get more                                         encourage customers to sign up for the
than cash in order to              use their credit card over other forms of      points. It is successful because I do not view my                                       card, it offers a discount on first            In order to increase the use of its card, it needs to
accumulate points to redeem        payment (in order to increase the              behavior as making profits for Amex (which it does);                                    purchase but afterwards offers no              offer a loyalty/rewards program to its customers to
for products.                      amount of points a cardmember has).            instead, I view it as behavior that benefits me.          J Crew - credit card.         reason to use the card.                        encourage ongoing spending on its card.

                                                                                                                                                                          Trying to influence my buying behavior.
                                                                                                                                                                          Interested in selling me supplemental
                                                                                                                                                                          two-year service agreement in case my
                                   How I managed my digital music files                                                                                                   purchased product was damaged. Their
                                   and ultimately how I accessed (listened        Ease of use, ease of integration between iTunes and       Best Buy: purchasing a        mechanism was the front-line cashier           I was a well-informed customer to know that such
                                   to) them. The utility value of iTunes          the iPod. They were yin and ying. I couldn't simply       technology product            trained to give me the 5-second pitch          coverage is generally unnecessary if the
                                   made my purchase of an iPod an                 have iTunes on my computer without an iPod in my          (desktop speaker for my       about why I should purchase the                manufacturer's warranty covers damage within the
Apple: iTunes and an iPod.         inevitability.                                 pocket.                                                   laptop).                      coverage.                                      first X number of years.
                                   Repeat purchase - the site let me know
                                   what books/CDs/etc I would like based                                                                                                                                                 Too aggressive - should know that since they have a
                                   on my prior purchases. This was                The attempt was successful because it personalized                                      They were trying aggressively to upsell        website most people know what they want when I use their            extremely helpful for me b/c I like to         the shopping for me and made me want to buy things FTD/1800FLOWERS. I                   me. Very forward sales technique where         they call. Also I somehow can't get my email
website to purchase                browse books based on what genres I            that I didn't know I wanted (b/c I didn't know they bought delivery flowers             I just kept repeating that I wanted what I     address off their distribution and get 20 emails a
books/CDs/etc.                     enjoy - this did all that for me.              were out there)                                     from them once.                     originally had stated.                         week from them on specials.

                                                                                                                                                                                                                         No - service level is still (and perhaps now more than
                                                                                                                                                                                                                         ever since phones are a commodity) important and
                                                                                                                                                                                                                         they have both weak coverage in this part of the
                                   repeat purchase - AAdvantage miles                                                                                                                                                    country and slow response time to problems. In
                                   earned and "status" acquired to get free       Very successful while I lived in Dallas. DFW is the                                                                                    addition, the penalty payment for early termination of
                                   trips, upgrades, priority boarding, etc. to    airline hub so there are flights to just about anywhere                                                                                my contract is less than the amount of money I
                                   drive loyalty (and profitability since I       from that location. Now that I live in Boston and there                                 Provider loyalty - discount on purchase        saved on the initial phone purchase so the switching
American Airlines - domestic       would pay slightly more for the same           are fewer (direct) flights to my desired locations, I am                                of equipment with long-term (2 year)           costs is not as high as it could be. I'm now in the
and international air tickets      ticket if it meant that I could fly AA)        much less loyal.                                         Sprint - cell phone service    service agreement.                             market for a new phone and service provider.

                                   Gmail required users to do a significant
                                   and difficult switch to use gmail as their
                                   account - runs risks of losing contacts,
                                   need to advice contacts of new address
                                   etc. Mechanisms: 1) Distinctive product
                                   features/ benefits - conversation thread-
                                   based filing system, huge space such                                                                     Shopper discounts and                                                        1) Not a heavy online shopper - even when I do,
                                   that never have to delete mails                                                                          rewards - Pay a monthly                                                      tend to visit sites that are not affiliated 2) Monthly
                                   2)Customer acquisition through             1) Word-of-mouth gave it credibility 2) Beta version -        subscription fee of $10 to    1) Commitment to site through monthly          subscription even if not using service seems wasteful
Gmail - free, web-based email      recommendations - can only get account always expecting new add-ons, users are more                      get discounts off selected    subscription even before knowing the            3) Online deals abound - likely to find better deals
service                            if recommended by existing user            forgiving when service is not up to par                       online sites (500 sites)      exact benefits                                 just by shopping around online
                                                                              While I am just generally a sucker for loyalty
                                                                              programs, BR's program seems particularly effective
                                   Banana Republic uses a customer            because it doesn't require a lot of effort on the
                                   loyalty program -specifically, it provides customer’s part as well as gives the customer the
                                   loyal customers (those who have            perception that he/she is receiving cash (giving her                                        Knowing my predilection for Diet Dr.
                                   accumulated "points" through past          the idea that she can afford something that she                                             Pepper, a favorite retailer provided me
                                   purchases) with a credit that can be       couldn't have otherwise, thereby creating a wealth                                          coupons to buy the new Diet Dr. Pepper         I used one of the coupons to buy the new flavor
                                   applied to future purchases (e.g., a card effect of sorts). Unlike coupons, where a minimum                                            Cherry Vanilla flavor for a drastically        soda, but the new soda tasted so bad that I ended
                                   with a $20 balance is sent to you by the amount usually has to be purchased in order to use                                            reduced price. The manufacture’s               up throwing half of it away (and therefore not
                                   company) in order to encourage the         the coupon, the credit can be applied to any                                                coupons were trying to encourage               becoming a convert). The company's strategy
                                   customer to continue shopping at its       purchase irrespective of its size. The card is also sent                                    existing cola drinkers to try and continue     would have probably been much more effective if the
Banana Republic; buying            stores and encourage the customers to to you directly to your home, so does not require any              Dr. Pepper (PepsiCo, I        consuming its new flavor of Diet Dr.           underlying product they had been selling had been
clothes                            buy more than they might otherwise.        extra steps by the customer.                                  believe); Diet Dr. Pepper     Pepper.                                        better.
                                   frequent traveling; free upgrade
                                   vouchers to frequent travels and those                                                                                                 frequent flying;mileage program and free limited network so mileage usage is restrictive and
Jet Airways in India               that have jet airways credit cards         yes                                                           virgin Atlantic               car service from airport.                lousy connections from Heathrow airport

                                                                                                                                   Page 12 of 16

       Consider a company's successful attempt to influence your behavior as a customer as you answer Questions 1-3.                         Consider a company's unsuccessful attempt to influence your behavior as a customer as you answer Questions 4-6.

What was the name of the         Which behavior was the company trying                                                                   What was the name of the     Which behavior was the company trying
company? What product or         to influence? What mechanism(s) did it                                                                  company? What product        to influence? What mechanism(s) did it
service were you using?          use? ______                                    In your opinion, why was the attempt successful?         or service were you using?   use?                                       In your opinion, why was the attempt unsuccessful?

I was supposed to buy a lotion
of one brand at a cosmetic
retail store in Hong Kong (Sha   Used good service to change my
Sha), and then ended up          previous perception of certain brand,                                                                   I tried to buy a term
buying a whole new set of        and articulated better functions of                                                                     insurance in China, and
products of another brand.       another products to tailor to my needs.                                                                 the agent tried to sell me
The professionalism and care     Then they helped to explore latent             Shape opinion and then change behavior. Really           general investment backed The agent used complicated way to             First, I understand the product, and don't want the
of the sales lady do help me     demands by keeping asking questions,           attempt to know what I need instead of what I want,      insurance, but failed in   describe the product, and unrealistically    agent to make up something. Second, the agent
spend the money.                 and making me feel that I knew nothing.        e.g., a brand                                            doing both.                mentioned its benefits instead of risks.     himself is not very objective, and lose my trust.
                                 The company was trying to convince
                                 people into using the Acela train (faster                                                                                            Apple was trying to sell new computers
                                 but more expensive than the normal                                                                                                   with the option of switching from a mac
                                 train). Amtrak offered more mileage                                                                                                  to a windows platform. The company
                                 points (similar to an airline) for the Acela                                                                                         promised flawless operational
                                 train so that, if you took 2 round trips per   It favored heavy users and rewarded them with better                                  capabilities with this computer,           Once you actually work with a windows platform on
Amtrak Train Service New         month, the Acela service ended up              service (faster trains, more comfortable) by reducing                                 regardless of the platform used (mac or    the mac computer, many things don't work they way
York - Boston                    being cheaper.                                 the price. Purely economic reward.                       Apple. Mac computer          windows).                                  they do with a normal windows laptop.
                                 TO reduce costs, the bank was trying to
                                 get me to switch to internet-only bank                                                                                               The company was trying to get me to
                                 statements, to save on the monthly                                                                                                   subscribe to another magazine from the
                                 paper-version mailing. The bank decided                                                                 Magazine WIRED -             same media group. It included one
A French bank - product was      to start charging me for that service (the     Yes, convincing attempt, made easier by my habit to      product is a tech-focused    release of the other magazine in one of    Focus on the ease of distribution through an existing
monthly account statement        paper version).                                manage many other personal things through internet.      magazine                     my monthly issues' packages.               channel but wrong customer targeting.

                                The company was trying to convince me
                                to not switch to another credit card. It                                                                                                                                       It was unsuccessful because the prices of the books
                                used my greed to do so -- it bribed me          I think they were successful because I am in general                                                                           were too high compared with what I could get at
                                with a lot of Blue Points to stay (these        very impressed with the customer service of American                                                                           Amazon. Amazon also has been able to solve the
I was using the Blue Card       points enable me to purchase various            Express. Over the past 5 years, I have had no                                                                                  problem of instant gratification by allowing me to buy
from American Express. I had items). It also used great customer                problems with them, and they have done little things                                Borders was trying to entice me to buy     my books and pick them up the same day at the
called to cancel my credit card service to convince me. The woman               which mean a lot to me, such as waiving certain          I was browsing in Borders books from them. It had laid out all the    Borders bookstore. Most importantly, I had gone
as a result of a bad customer who helped me spent over an hour on               account fees, etc. I am not sure if I would have         for some books. I ended    bestsellers on tables, and there was a     into the store to browse, with no idea of what to buy.
service experience. The         the phone. I was able to vent my                stayed if I had been truly unhappy as a whole with       up not purchasing anything coffee shop inside the bookstore. It tried This bookstore hadn't displayed any staff
woman who handled my call       frustration to her, which calmed me             American Express. As it was, this one bad                and instead went home      to thus present a relaxing environment     recommendations that could interest me in any
eventually persuaded me to      down, and she made me feel like she             experience was an isolated one, and the agent            and ordered my books       for me to find something interesting to    books, whereas Amazon is able to do so through
stay with American Express.     was on "my side."                               handled it well.                                         from Amazon.               buy.                                       user reviews.
                                                                                                                                                                    Rhapsody wanted me to move from a
                                                                                                                                                                    free-trial to a paid subscription. At the
                                 Trying to get me to upgrade to business                                                                                            end of the free-trial, I called to cancel,
                                 class. They offered extravagant mileage                                                                                            and they explained the benefits of the
                                 awards for using business class on                                                                                                 pay-service and offered me 3 more
                                 transatlantic flights (50K miles per round- The reward was incredibly generous. I was not               Real networks.             months of free trial. Three months later I I had already tried it for three months. Unclear why
American Airlines.               trip)                                       paying for the ticket (my firm picked up the tab).          "Rhapsody" music service cancelled it.                                three more months would change my mind.

                                 The company is trying to influence the
                                 way in which consumers
                                 download/obtain music online. Prior to
                                 Itunes, i almost always downloaded
                                 songs illegally via the internet. Apple
                                 applied several mechanisms to get me to
                                 pay for music rather than getting it
                                 illegally/for free online. They publicly
                                 discussed the potential penalties from
                                 obtaining free music: they were very
                                 public about the legal penalties, they
                                 discussed on their website the dangers                                                                                                                                           it was unsuccessful because the 2 times I've been
                                 such as viruses, etc. from free music.                                                                                                                                           there I've only ended up getting coffee, which takes
                                 They also created an extremely easy to                                                                                                                                           up valuable table space for a low priced/low margin
                                 use service (itunes) which actually had                                                                                                                                          product from them. Their attempt failed because
                                 more centrally available music than other                                                                                                                                        the 2 times I've been there's been a very long delay
                                 online/free sources. This made it easier                                                                                                                                         between when they ask for my drink order (coffee)
                                 for me as a consumer to get music.             It was successful for the reasons discussed above.                                                                                and when they ask for my food/dessert order. In
                                 They also created a product (Ipod) with        They made me very aware of the downside of not                                        They want to incent customers to            these 2 cases, the coffee arrived and I actually drank
                                 proprietary software and hardware which        modifying my behavior (via the discussions of viruses                                 purchase not only coffee but also the       more than half of it before they even asked for my
                                 creates switching costs so that once i've      etc.). They also made it easy for me to change my                                     high priced desserts that they sell (in     dessert order. As a result, by the time they asked for
                                 already downloaded some songs from             behavior (high music availability, very intuitive        The company is Finale        order to drive average bill/table up).      my order, I was already over the prospect of getting
The company is Apple. The        Itunes, i'm less likely to download songs      software). And they created "switching costs" of sorts   (restaurant in Cambridge     The mechanism they use is primarily the anything else, and as a result, ended up only buying
product/service is "purchased    from other sources (as they may not play       via the IPod Hardware so that once I began using I-      and Boston). The             wait service that is delivered by servers   a drink, rather than food. The service levels were
songs" from the I-tunes          on my Ipod). In this sense, they locked        tunes, there were network effects of sorts which         product/service is after     as well as the host/hostess at the front of not matched with what I needed in order to capture
service.                         me in.                                         made me more likely to continue using it.                dinner drinks and dessert.   the restaurant.                             my full potential spend.

                                                                                Yes, it was very effective because even though the
                                                                                customer service on the card is not great and I have
                                                                                been sincere in my threats to cancel it, I never do                                                                              No. I still do not fully understand the ramifications of
                                                                                because I like getting the merchandise credits/points.                                                                           not returning my movie on time but all the fine print
                                 Long-term buying - allowed you to              They make me feel like I got something for free. Also,                                Blockbuster was trying to match the        suggests that there are some, and so rather than try
                                 accumulate points to earn merchandise          the free shipping online makes me feel like I am not                                  ease of not worrying about late returns    to understand it, I just assumed that something
Banana Republic - the            credit. Frequent buying - offered free         losing anything by making an online purchase, so I                                    that people enjoy with NetFlix. It ran a   would still happen and I should avoid it, so I still liked
"LUXE" credit card               shipping online.                               might buy even if I can't make it to a store.          Blockbuster - movie rentals    campaign called "No more late fees."       the ease of NetFlix.

                                 First Republic was trying to get me to
                                 open an account and then consolidate
                                 my banking business with them. FRB
                                 used a variety of mechanisms, focused
                                 on convenience and customer service.
                                 The most attractive offering of the bank
                                 was that I never had to pay ATM fees for
                                 any transactions from a non-FRB ATM.
                                 This was particularly attractive b/c they
                                 only have branches and ATM's in the
                                 San Francisco Bay Area, around Los
                                 Angeles, Las Vegas, New York, and,
                                 recently, Boston. As a result, many
                                 places I traveled, particularly abroad,
                                 required substantial fees, but not having
                                 to pay them, regardless of the ATM I
                                 visited, was a real selling point. In                                                                                                                                           The offering was unsuccessful because they did not
                                 addition, they place a premium on                                                                       TravelGuru. TravelGuru is                                               offer a sufficient number of hotel and airline partners
                                 service, with beautifully appointed            The premium that they placed on convenience and          similar to Orbitz or         They were trying to persuade me to         and, more importantly, because I could not book
First Republic Bank --           offices, plenty of tellers, and a very         customer service, as well as the ability to go to any    Expedia, but for people      purchase travel through their own          less than 3 days in advance. There are only 5 or so
consumer banking services        personalized approach (I have my own           ATM, were much more important than a large,              traveling within India or    website in order to generate               domestic airlines in India, so it was far more effective
(primarily savings and           private banker, despite not being an           impersonal branch network, as offered by many of         from India abroad (online    commissions by offering a wide selection   for me to go to their individual sites at the last minute
checking)                        important/wealthy client).                     their much larger competitors.                           travel shopping).            of airline and hotel partners.             than try to plan in advance and use TravelGuru.
                                 Impulse purchase of a Snickers bar
                                 when hungry. Mars used                         Absolutely. I was hungry, I saw the Snickers bar, I                                   Family dinner in a casual neighborhood
                                 advertisements with pictures of Snickers       remembered the ad, I wanted the Snickers bar, I                                       setting. The used advertisements with      No. Because there are so many other casual dining
Mars Inc. I bought a Snickers    bars and words such as satisfaction and        bought and ate it, and my hunger was indeed              Applebee's. Restaurant       happy family's and a jingle about eating   options that provide better service and better food
bar.                             satisfy your hunger.                           satisfied.                                               Dining.                      good in the neighborhood.                  than Applebee's. I'd rather eat at Chili's.

                                                                                                                                Page 13 of 16

        Consider a company's successful attempt to influence your behavior as a customer as you answer Questions 1-3.                        Consider a company's unsuccessful attempt to influence your behavior as a customer as you answer Questions 4-6.

What was the name of the         Which behavior was the company trying                                                                   What was the name of the     Which behavior was the company trying
company? What product or         to influence? What mechanism(s) did it                                                                  company? What product        to influence? What mechanism(s) did it
service were you using?          use? ______                                  In your opinion, why was the attempt successful?           or service were you using?   use?                                           In your opinion, why was the attempt unsuccessful?

                                                                                                                                                                      I wanted to mail a couple of check
                                                                                                                                                                      deposits in to INGDirect because I was         The attempt was only unsuccessful because in this
                                 Wanted me to check-in online so I would                                                                                              traveling and didn't have access to my         circumstance I really wanted to deposit my checks
                                 not take up their agent's time. I was only   The attempt was successful because I had an                                             normal local bank. They much prefer to         and wouldn't have been able to do so in their
                                 allowed to choose my seats once I had        incentive to check in as early as possible (e.g., before                                take deposits electronically, so buried        preferred manner ... and was willing to overcome
AirTran - taking a flight back   checked in (based on the class of ticket I   arriving at the airport), given my desire to get a good    INGDirect - I have a bank    the information on their website as to         any inconvenience of calling INGDirect to get the
to Boston                        had purchased).                              seat together with my traveling partner.                   account with them.           how to mail deposits to them.                  information I needed.

                                                                                                                                                                      Sports Authority offered a discount on
                                                                                                                                                                      certain running shoes which provided an
                                                                                                                                                                      incentive for me to go there to buy shoes      The attempt was unsuccessful because Sports
                                 The company wanted me to purchase                                                                                                    versus another retail outlet. However,         Authority could not provide the shoes I wanted (and
                                 the tickets in advance by charging a                                                                                                 when I got there they didn't have the          they advertised). The lesson seems to be that it is
                                 lower fee for advance purchases versus                                                                                               shoes in stock and attempted to sell me        ok to manipulate service to affect consumer behavior
American Airlines - I was        a more expensive fee for late bookings.                                                                                              other shoes of less quality. As a result, I    as long as the level of service (or product) provided
looking to buy a round-trip      The mechanism used was the price of          It was very successful - I booked a couple of months       Sports Authority - running   will not go to Sports Authority again for      isn't so poor that it negatively affects consumer
ticket to San Francisco.         the ticket.                                  in advance                                                 shoes                        running shoes.                                 behavior/attitudes towards the company.

                                                                                                                                                                      The Company wanted me to feel that my
                                                                                                                                                                      identity and credit was in danger of being
                                                                                                                                                                      stolen and exploited. In order to make its
                                                                                                                                                                      argument, the company sent me regular
                                                                                                                                                                      letters about unauthorized attempts to
                                                                                                                                                                      access my personal information and my
                                                                                                                                                                      credit score, and they reported how,
                                                                                                                                                                      each time, they detected the attempt and
                                 The company was trying to convert PC         They appealed to a real sense of frustration and a                                      squelched it. They continually wrote to
                                 users to Mac through a powerful add          latent disappointment with a lack of style in PC                                        tell me about the things they had done to      I felt like they never asked me in person if I wanted
                                 campaign focusing on the friendliness        computers. The purchasing decision felt good, the                                       "help me", and all the while the               this "help", and while I found the letters convincing,
                                 and ease of use of the Mac juxtaposed        experience of buying the computer felt even better,                                     subscription renewed automatically             the automatic renewal (and the difficulty in finding
Apple Computer - laptop          to the complications and dull image of       and the service after the sale made the entire             PrivacyGuard - A a credit    annually unless I contacted them in            their address to send a cancellation letter) made me
computer                         many PC products.                            experience a complete success.                             fraud reporting service.     writing to cancel it.                          distrustful. Henceforth, I cancelled the service.

                                                                                                                                                                                                                     They failed on several counts: personnel turnover,
                                                                                                                                                                                                                     order placement and tracking, and delivery times.
                                                                                                                                                                                                                     First, my orders kept getting lost and I was forced to
                                 The company wanted me to purchase a                                                                                                                                                 go into the store to straighten out my order on
                                 lot of food and products, becoming a                                                                                                                                                multiple occasions. Second, my original sales
                                 regular customer of their's (probably to                                                                                                                                            person quit and so I had to form a "new" relationship
                                 the exclusion of other grocery stores).      They made grocery shopping enjoyable. Everything                                                                                       with a sales person. My orders were delivered very
                                 They provided delightful sales people        that I poor at other stores, they did well. Most stores    City Schemes in              They wanted me to purchase furniture,          late (months late) and the only thing I was credited
                                 (around whom I enjoy shopping), great        have grumpy, ignorant sales staff, cramped and/or          Cambridge--purchased         hopefully multiple times. They used            was one shipping charge (but only because they
Whole Foods--grocery store       products, and a great physical space.        confusing stores, poor produce and empty shelves.          furniture                    sales to allure me.                            were forced to deliver in multiple shipments).

                                                                                                                                                                                                                     The attempt was unsuccessful because the fine print
                                                                                                                                                                                                                     showed that they would share my information with
                                                                              1) Because their customer service is so great; Their                                                                                   thir party providers which include credit card
                                                                              salespeople at the luggage store were very                                                                                             companies, insurance companies, etc. Since it's a
                                                                              knowledgeable and helpful about their product and                                                                                      rental car company, they collect a lot of information,
                                                                              brand, even though they sold all different types of                                                                                    including driver's license number and age. I felt like
                                                                              luggage. Their luggage repair service people were                                       They were also trying to influence my          they were being sneaky in the way that they were
                                                                              also great; I've had to use it once and it's amazingly                                  customer loyalty. They wanted me to            trying to get me to sign up and felt like my privacy
                                 To purchase their luggage and become         easy and convenient. 2) They stand by their product Hertz Rent-A-Car. I was             allow them to send me emails with              would be invaded if I did. If you don't allow them to
Briggs & Riley. They sell        a loyal customer. They used their free       and seem to not have any hidden gimmicks. Now,         renting a car and was            special deals exclusively for club             share your information, you don't get any of the loyal
luggage.                         no-hassles lifetime warranty.                I'm fully addicted to the briggs riley line.           signing up for the #1 club.      members.                                       customer deals. I resented that a lot.

                               The company was trying to influence my
                               staying with their cell phone company,         They were successful because I was changing my
                               and not switching to one of their              behavior (more minutes on the phone since I dropped
                               competitors. In order to keep me they          my land line and more text messages between                                             The company was trying to get me to            They were unsuccessful because I did not go in to
                               adjusted a bill when I went over my            meetings) and I was sensitive to its effect on my                                       purchase additional items to go with my        purchase food or a large beverage. I knew exactly
Cingular Wireless. I was       minutes and enrolled me in a flat rate         pocket book. They succeeded by adjusting one bill   Dunkin' Donuts. I was               coffee. The cashier reminded me of             what I wanted and in my mind there was no benefit
using a monthly cell phone     text messaging program after I used            and locking me into a higher monthly fee that       purchasing a cup of coffee          various value meals and the cheap ways         to me to spend extra money on something I knew I
plan with text messaging.      many many messages in a single month.          extended my commitment with their company.          before going to work.               I could purchase a larger size beverage.       wouldn't drink or wouldn't enjoy eating.
                               They were trying to get us to commit to a
                               higher level of spending and services.                                                                                                 Trying to get me to pay a premium for
Four Seasons Resorts.          They used the following mechanisms:                                                                                                    ordinary binders. Basing their attempt
Reserving space for wedding Discount total rates with total higher            Yes, it provided more goods and services and better        Student Ventures trying to   on the convenience of having them sized The value-proposition and the urgency of the
and negotiating the prices and spending levels and offered more               pricing for the total cost, although more expensive        get me to buy binders for    and bundled on campus rather than       purchase were not a fit. The tradeoff of spending
services.                      incentives to spend more.                      overall.                                                   school.                      needing to get them from elsewhere.     more vs the perceived benefits of the offering.

                              The company was trying to make me
                              choose them as my broker for my home
                              mortgage. They used a very soft sell.
                              Made very bold promises, acted very             The salesperson's behavior was so different from
                              authentic, and tried to create trust and        other mortgage brokers. They realized that I was a                                      They offered a "buy one, get the other
                              partnership. They said "You should              comparison shopper, and they knew that their rates                                      item 50% off gimmick". They were trying        I was totally going to buy more, but couldn't
                              definitely make your own decision. I'm          were more or less comparable to others I was                                            to get me to spend more than I normally        immediately find something that I really wanted. I
                              confident that you'll choose us, but if not,    receiving. So he used a tactic of being a nice and         Off Saks 5th Retailer in     would have at the store. They used a           then stepped back and realized that I was totally
                              we understand". They totally tricked me,        trustworthy guy, unlike the other slimy sales guys that    Wrentham Outlets.            mechanism of scarcity (ie: this sale is        allowing myself to by manipulated, so I left the store
Nation Point. Mortgage Broker because they were horrible to work with.        I spoke to.                                                Clothing retailer.           only available Labor Day Weekend)              buying only one item.

                                 Company was trying to influence me to
                                 purchase more make-up products than I
                                 originally intended. To do so, I was
                                 approached by the counter girl who
                                 asked me if I had the necessary
                                 accompanying products to make my
                                 purchased eye-shadow look the best                                                                                                  The casino was trying to get me to buy
                                 possible. She then gave me her                                                                                                      insurance against a black-jack dealer's         The attempt was unsuccessful because 1) my
                                 "personal" advice on how best to match                                                                                              possible hand of 21. The mechanism              friends, who were playing with me, advised me not
                                 the eye-shadow with the correct lipstick     The attempt was successful because she positioned                                      used was having the dealer personally           to buy the insurance and did not do so themselves
                                 "from a friend's perspective". Lastly, she   herself as a friendly, trusted advisor who only had my                                 ask each member at the table if he/she          2) the dealer asked if we wanted to buy the
Bobbi Brown in the               assured me that I should ignore the          best interests at heart. In addition, I believe she was    Green Valley Ranch          wanted to buy insurance against a hand          insurance in a very perfunctory manner and did not
purchasing of various            costs of the makeup because "it was a        able to discern that I had the ability to spend            Casino where I was playing of 21 before the dealer revealed his             try to dissuade any of the players when they rejected
cosmetic products.               worthy investment".                          additional funds for my make-up.                           black-jack with my friends. cards.                                          the insurance offer
                                                                              The companies identified a customer need, took
                                                                              advantage of advancements in technology and
                                                                              designed services that were aligned with the                                            The company is trying to influence the
Two examples of online           Both companies are trying to influence       customer needs (flexibility and convenience). High                                      way I accomplish my investment                 Not all processes were aligned with the main value
retailers: "Peapod" in the US    the way I accomplish my shopping             quality pre sales and after sales support were                                          activities by offering a unique service that   proposition of their service. Poor "out of the shelf"
and "Farmacia em Casa"           activities by offering a unique service that important factors to guarantee my satisfaction and         IG Direct. Online "banking   fulfill my needs for flexibility and           solutions to my issues were not provided considering
(Pharmacy at home) in Brazil.    fulfill my needs.                            repeated purchases.                                        account".                    convenience.                                   that I was looking for convenience and flexibility.

                                                                                                                               Page 14 of 16

        Consider a company's successful attempt to influence your behavior as a customer as you answer Questions 1-3.                              Consider a company's unsuccessful attempt to influence your behavior as a customer as you answer Questions 4-6.

What was the name of the           Which behavior was the company trying                                                                       What was the name of the      Which behavior was the company trying
company? What product or           to influence? What mechanism(s) did it                                                                      company? What product         to influence? What mechanism(s) did it
service were you using?            use? ______                                     In your opinion, why was the attempt successful?            or service were you using?    use?                                          In your opinion, why was the attempt unsuccessful?

                                   Citibank was trying to stop me from
                                   canceling my Citi MasterCard. After
                                   explaining that I recently opened a
                                   Capital One MasterCard and therefore
                                   no longer needed my Citi MasterCard,
                                   the Citi sales lady thanked me for my
                                   more than 5 years of service with the
                                   company, and then proceeded to offer                                                                                                      Hewlett-Packard was trying to charge          Hewlett-Packard was unsuccessful in influencing my
                                   to refund the annual fee, give me 5,000         Citibank was successful in influencing my behavior                                        me $30 for over-the-phone technical           behavior because it was immediately clear to me
                                   bonus miles or a give me a free                 because the sales lady found out what was important                                       support. By telling me that if I didn't pay   through speaking with their phone support that this
                                   companion airline ticket to stay with           to me (i.e. what I found attractive in Capital One over                                   to speak with one of their trained            was simply another channel for them to make
                                   Citibank. By providing financial                Citibank) and effectively matched some of their                                           technicians who were supposedly the           money, even if the solution was quick and simple. I
                                   incentives and free gifts, the sales lady       benefits (e.g. no annual fee). She also convinced me        The name of the company       only people who could help me solve my        felt as though the company was more focused on
The name of the company            convinced me to keep my Citi                    that given my tenure as a customer, my business was         was Hewlett-Packard. I        problem, they tried to scare me into          making money off of customer problems than
was Citibank. The product I        MasterCard, and if I find that I am not         highly valued and I could therefore expect to continue      was using my HP               paying for an unnecessary service. I          providing service to ensure that their customers are
was using was my Citi              happy with Capital One, I will likely return    to receive additional benefits and a high level of          Photosmart 2710 All-In-       chose not to pay and ultimately solved        satisfied and likely to continue to purchase HP
MasterCard.                        to Citibank as a full-time customer again.      service from the company.                                   One printer.                  the problem myself.                           products.

                                   Purchase shoes - casual and work use.
                                   The company focused on advertising its
                                   link to Nike "air" technology. Thus
                                   creating comfortable and functional
                                   shoes for both work and play. * The
                                   company focused on value and durability
                                   - for the most part the shoes are under
                                   $150 and have a good usage life. *              The shoe already has a high quality name but they
                                   The company also used brand, Cole               succeeded by adding a very "hip and cool" dimension                                       Blockbuster tried to sell me its mailing
                                   Haan is a respected name sold only at           to the already durable and high quality shoe. The                                         video rental plan by offering me 3 free
                                   fairly high quality stores and in their own     price point is reasonable and I know I can trust the                                      months. They focused on * Price - low         The value proposition was not there for me because
                                   retail outlets. * finally, they have made       quality. Over years I have increased my purchasing   Blockbuster Video - mailing          monthly fees, no late fees *                  I don't think I really rent enough movies to make it
                                   the shoes pretty hip with the combination       of this brand and this the spring/summer I purchased rental agreement (like               Convenience - videos to your door *           useful in the longer term. Perhaps if I were a more
Cole Haan - shoes                  of technology and design                        4 pairs - I will continue to buy.                    netflix)                             Availability - movies you want to see         hard core watcher of movies I would get it.
                                   The company wanted to encourage
                                   people to come into the store and
                                   thought if they could get people in the                                                                                                   Sears wanted to get the customer into
                                   door, they would likely buy something.          I was open to this kind of promotion because I                                            the habit of using the card, so that the
The Gap. I would go into the       The Gap sent out mailings with stickers         already shopped there occasionally and knowing I                                          card did not just sit in the envelope in
store and see what they had        for the first Tuesday of the month that         could save 10% on a specific day was a compelling           Sears. My new Sears           which it arrived. They offered this           Inundated by mail, I was late paying my first Sears
on the first Tuesday of the        you could put on your calendar. The             reason to go on that day versus any other day. Plus, I      credit card saved me $10      discount as an incentive to use the card      bill, the late fee was $10, which completely offset the
month, which they called           stickers were meant to remind you to            used to live so close by that it was no trouble at all to   on my first purchase, if I    that first time, which Sears hoped would      $10 I saved. I was thoroughly annoyed and never
"10% Tuesdays."                    stop in.                                        head over.                                                  remember correctly.           be the first of countless purchases.          used the card again.

                                   The company was trying to keep me
                                   flying on their airline as opposed to
                                   competing airlines. They used a loyalty
                                   program (Mileage Plus) to create
                                   incentives for me to use their services. I
                                   would accrue points for each flight I
                                   booked with them, or for using my                                                                                                                                                       First, I didn't find their service offerings particularly
                                   Mileage Plus credit card, and these                                                                                                       I had quit my service contract with BMG,      valuable - the prices they charged for their CDs were
                                   points could be redeemed as part of                                                                                                       and they kept trying to get me to             not that different from major brick-and-mortar
                                   their loyalty program. The loyalty              By building my "loyalty" to a specific airline, I could                                   reactivate as a customer. They sent me        retailers. Also, for almost the same price, I could buy
                                   program had several components,                 focus my points accrual and redeem the points for                                         emails and direct mailers providing           the CD at a store and have instant gratification, as
                                   including: free flights (points                 something that had value to me (e.g., free flights,                                       incentives for me to resubscribe to them      opposed to waiting several weeks for my CD to
                                   accrual/redemption), flight upgrades,           upgrades on long flights, etc.). They made the                                            (e.g., x # free CDs with resubscription).     arrive from BMG. Second, the emails and direct
                                   free drink tickets, priority check-in, better   program easy to sign up for, and then the points            BMG Music Service - mail      The language they used in their               mailers they sent to me to get me to resubscribe
United Airlines - Mileage Plus     seats, co-promotions/points accrual with        accrual and redemption process wasn't overly                order catalog company         marketing materials tried to emphasize        didn't have a compelling reactivation offer. The
(loyalty program)                  partners like Marriott hotels, etc.             burdensome.                                                 that sells CDs                how valuable of a customer I was, etc.        emails and direct mailers also were fairly impersonal.
                                                                                   Yes. Lufthansa's miles were more valuable than those
                                                                                   from other airlines. E.g. Fewer miles were needed to                                                                                    I dislike any pre-paid services. It always makes me
                                                                                     - To buy a free ticket - To have an easier check-in                                                                                   nervous that I haven't used it often enough to make
                                   Lufthansa wanted to increase my flying          at major airports One could also use them on flights                                      To subscribe as a monthly user.               the true cost acceptable. I also didn't want to use it
                                   frequency, especially long-distance             with other airlines. In combination with Lufthansa's air                                  Provided lower monthly fees for fewer         while paying for regular cable and on-demand
Lufthansa. Flying to Europe        (across the Atlantic). The company              network, this provided for a very good network of                                         DVDs to make it more flexible for low-        services. Most of my friends who use Netflix use
and back on regular basis.         offered a frequent flyer card.                  airports.                                                   Netflix. Monthly rental.      usage customers.                              them instead of TV.
Whole Foods - The products I
purchase there include             The company was trying to influence me
produce, flowers, groceries,       to buy my food items at their store rather                                                                                                MAC was trying to influence me to
and wine. However, there is        than at other grocery stores. To do so, it                                                                                                "upgrade" my makeup collection by
also a service component to        has positioned itself through advertising                                                                                                 purchasing new colors and textures of
my decision to shop there          and word-of-mouth as a healthier,                                                                                                         products. To do so, they sent me
because of the cleanliness of      fresher, and cleaner source of food.            Although the prices at Whole Foods are higher than                                        regular emails and postcards advertising      I was not convinced to purchase these new
the store,                         Within the store, it uses colorful displays,    competing grocery stores, I continue to buy my food                                       that certain new colors and products are      products. I am happy with the makeup products I
friendliness/helpfulness of the    attractive signage, and shelf positioning       there. I do view products at Whole Foods as fresher         MAC Cosmetics - I use         now in fashion, and offered me free           already have, and am not convinced that I need to
staff, and wide variety of         to influence me to purchase certain             and healthier than food from other grocery stores,          their line of makeup          shipping if I ordered these products on       buy new colors every season to keep up with
products.                          products.                                       even though I have no factual basis to rely upon.           exclusively.                  the internet.                                 fashion trends.

                                                                                   It was successful because the website is easy to use
                                                                                   and offers the same prices as calling the airline, so                                     Wanted me to set up automatic                 It was unsuccessful because there was no incentive
                                                                                   there is no real incentive to call instead (I also think                                  recurring payments on paperless               for me vs. my usual habit of receiving the paper bill
                                  Trying to encourage booking on line              they may have cut back on phone agents and                                                statements. Sent many notifications of        then paying each time separately on line; however, I
                                  through guaranteeing low prices and              increased wait times so calling was less appealing);        Comcast - using cable         the service via email and with my paper       frequently get misbilled so there was a downside of
Jet Blue - buying airline tickets providing financial incentives                   additionally, there is the upside of a cheaper fare.        service                       statement explaining ease of use.             having to argue for a credit after the fact.

Express sent me a $15                                                                                                                          Express, the same
coupon in the mail, which wasExpress was trying to just get me to the                                                                          company, tried to get me
                             store. I think they knew that once I was
valid during a 2 week period. I                                                                                                                to open an Express credit
                             there, I would buy enough merchandise
went to the store to look at the                                                                                                               card, to save 10% on my
clothes, and did not even    to make the coupon more than worth                                                                                purchase. The sales           The company was hoping that if I
realize that I was shopping  their investment. They might have also                                                                            person was aggressive         opened an Express account, I would            The attempt was unsuccessful because the sales
before the period of the     known that I would not check the small                                                                            and I was not interested. I   shop at their store more frequently and       person was pushy and because I actually already
                             print of the date of the coupon. The
coupon. I bought clothing that                                                     The attempt was successful because it was easy for          had opened such cards         buy larger purchases because they had         had opened an Express account years ago and
I otherwise would not have   mechanism was a discount, making the                  me to use (I received the coupon in the mail) and           before and never used         extended me credit. They were also            never used the card again. I also did this with
purchased and didn't even    consumer feel as though they would get                because the pictures on the coupon showed                   them again. They are a        hoping to achieve loyalty. The                Banana Republic, Saks and other stores. I never
use the coupon.              a bargain.                                            fashionable clothing.                                       hassle.                       mechanism was a branded credit card.          end up having those cards in my wallet.
                             Trying to influence my regular shaving                                                                                                          They were trying to influence my
                             purchases through repeated media                                                                                                                purchasing behavior and methods. Used
Gillette (now P&G). The Mach advertisements and in-store product                   It appealed to the "macho" side and made shaving            American Express. Their       targeted mailing to try to switch credit      Too much marketing can have the reverse effect, a
3 razor.                     placement.                                            seem enjoyable. I am now a very loyal customer.             green/gold cards.             cards.                                        negative image of the brand.
                             Company was trying to induce me to                                                                                                              Company was trying to get me to
                             purchase more product. The primary                                                                                                              increase my credit card balance. It did
                             mechanism was a recommendation                        This attempt was successful because the                                                   this in a couple of ways: Offered checks      Its lack of success had to do with my idiosyncratic
Company:          function on the website that highlighted              recommendations were targeted and relevant. It led       Company: Capital One             that would be drawn from my credit;           belief in the evilness of credit cards. I try to use them
Product: Book                similar products.                                     me to products that I had a high probability of wanting. Product: Credit Card             balance transfer teasers.                     only when I have to.

                                                                                                                                    Page 15 of 16

       Consider a company's successful attempt to influence your behavior as a customer as you answer Questions 1-3.                      Consider a company's unsuccessful attempt to influence your behavior as a customer as you answer Questions 4-6.

What was the name of the       Which behavior was the company trying                                                                  What was the name of the     Which behavior was the company trying
company? What product or       to influence? What mechanism(s) did it                                                                 company? What product        to influence? What mechanism(s) did it
service were you using?        use? ______                                    In your opinion, why was the attempt successful?        or service were you using?   use?                                          In your opinion, why was the attempt unsuccessful?

                               Apple was trying to encourage
                               consumers to legally purchase digital
                               music online. The mechanisms used
                               include: 1. Affordability - at $0.99 per
                               song, the cost is affordable to a
                               significant segment of consumers. 2.
                               Accessibility - the online music store
                               means that anyone can purchase music
                               over the internet. More importantly, the
                               service is available on both Windows                                                                                                                                              In my opinion, the attempt was unsuccessful
                               and Macintosh platforms, allowing for                                                                                                                                             because: 1. Virgin was competing against an
                               greater penetration to computer users.                                                                                                                                            established market player that consumers had come
                               Library of music - critically, songs are                                                                                            The company was trying to provide an          to relate just cola-flavored sodas to its name - Coca
                               available on iTunes almost immediately     It was successful in switching customer behavior from                                    alternative to Coca Cola. The                 Cola. 2. Slight difference in taste to Coca Cola's
                               after they're released by the label. Also, downloading songs illegally and purchasing physical                                      mechanisms used were: 1. Similar              offering meant that even though the packaging was
Apple. iTunes music store on                                              CDs because it fundamentally removed the barriers to
                               the large library of music serves to attract                                                                                        bottle shape to Coca Cola 2. Similar          similar, consumers were highlighted to a
the Internet.                  a diversified customer base.               purchasing music easily and legally online.           Virgin. Virgin Cola.               marketing                                     "fundamental" difference.
                                                                          Before the introduction of the card, we were
                                                                          infrequent renters, and we were living in Cincinnati,
                                                                          where frankly, there wasn't a lot going on. We
                                                                          happened to be in the store (which at the time was a
                                                                          block from our apartment), and we were offered the
                                                                          card by a friendly clerk. We knew we wanted a copy                                                                                    The program worked very well on us for a while. $5
                                                                          of Finding Nemo, and I did the math and realized                                                                                      off for $50 in spend seemed great when our average
                                                                          we'd breakeven by renting five movies. We figured                                                                                     trip was $45. As the coupons increased in value and
                                                                          we'd be able to rent a movie every week (which                                                                                        spend amount, we converted purchases that would
                                                                          ultimately we did, over a ten week period.) We were                                                                                   have been made elsewhere, namely at Target, to
                                                                          thinking about the short term... Renting a movie one                                                                                  Shaws purchases. However, we reached a point
                                                                          night a week during the summer seemed reasonable.                                                                                     where we couldn't substitute spend from other
                                                                          Ultimately, we wound up getting used to renting                                          The company was trying to convert us         places to spend at Shaws. Our last coupon received
                               Blockbuster was trying to encourage        movies, and we participated in similar programs                                          into loyal customers, and to purchase        from Shaws was for $10 off for $120 in spend.
                               Trisha and I to rent more movies, and to several times. Often we'd rent movies because we                                           more groceries from them. They used a We're back to shopping at Target, Shaws, Stop and
                               make renting movies a part of our          had already paid for them, not have time to watch                                        loyalty program with a loyalty card at the Shop, CVS, Walgreens, or anywhere that our
                               lifestyle. The mechanism was a pre-paid them, return them late, and pay late fees. What's                                           checkout and coupons that were mailed frequently purchased items are on sale. Shaws failed
                               rental card that we purchased, that        more, we ended up getting copies of free movies that                                     to our home address. The coupons took because they didn't recognize that there was a limit
                               enabled us to rent a movie a week for      we had no interest in (e.g. Spiderman). The                                              into account the amount of money we          to our ability to purchase groceries. Had they
                               ten weeks at a discounted rate. At the     madness ended when we moved out of Cincinnati,                                           spent on an average trip to the store,       brought the spend value of the coupons back down
                               end of the 10 weeks, we'd receive a free but Blockbuster definitely wrestled their way into our                                     and sent us coupons that would give us to a reasonable/sustainable level for our budget, they
Blockbuster Video: DVD         copy of Finding Nemo (in its first week of lifestyle, and got us to spend a lot more money with                                     discounts if we spent just a little bit more would have captured more of our business for a
rentals                        release).                                  them than we would have otherwise.                    Shaws: groceries                   (e.g. $5 off if you spend $50).              longer period of time.

                                                                                                                                                                   The Company was trying to entice me           The attempt was unsuccessful, because I deemed it
                               It was trying to make me switch to online                                                                                           into living a more highly levered lifestyle   to be only beneficial for the Company and not for
                               use for tracking flights, booking flights,                                                                                          by offering me checks to cash, higher         me. SO I felt they were enticing me with things that
Continental                    and managing my frequent flyer account. Yes                                                            Chase                        credit limits with low interest rates etc.    would actually be harmful to my financial position.

                                                                         The experience was simply incredible. This is perhaps
                                                                         cliché, but I think a large part has to do with “know                                                                                   The saleslady was over zealous. Everything I picked
                                                                         your customer. ” The restaurant knew even before we                                                                                     out “was just gorgeous” and everything I tried on
                               Relaxation, luxury, leisure, feeling      came in that we were corporate clients. With expense                                      A sense of feeling attractive, a simple       “looked stunning” – I know it might be her job, but I
                               pampered and serious sensory overload. not being a major factor, the waitress took charge of                                        way of transforming me from “ordinary” (I     felt like she was insincere without really being helpful
                               I think I would summaries it by saying it the ordering while at the same time involving us in the                                   was in jeans and a t-shirt) to                at all. She was also trying (too hard) to sell me things
                               was an overall attempt to perfect the     decisions she was making, and explaining every item                                       “glamorous”. In terms of mechanisms,          I wasn’t interested in at that point in time – i.e.
                               “experience of eating.” In terms of       she was suggesting we order. The quality of the food                                      the saleslady showered me with                accessories before I had even made up my mind
                               mechanisms, (1) Product excellence -      at Nobu speaks for itself, but more impressive was                                        compliments after I tried on each dress.      about the dress. Even though the dress was pretty,
                               The food is fresh, inventive and          the near-perfect variety and sequencing of each                                           She then tried to cross-sell other            her approach simply rubbed me the wrong way and
The New York City restaurant   delectable. (2) Top-class service -       course. I am a true foodie and can be critical of       Bloomingdales, New York.          products (handbag, shoes) saying how          all I wanted to do was leave the store. In retrospect I
Nobu, serving high-end         waitresses are attentive, polite and      restaurants, but Nobu left me wishing I could come      I was trying to buy a dress       well they complimented the dress (and         should have bought the dress, but these things are
Japanese food                  extremely knowledgeable                   back more often on my own dime!                         for a wedding                     me).                                          sometimes not rational!

                             Getting me to switch insurance as well
                             as upgrade coverage. Clearly showed                                                                      Chase Credit Card - Called
                             the cost of various policy options and                                                                   about a charge on my card Tried to sell extra consumer protection          I was not in a buying mode and was already
Geico - Buying car insurance allowed you to customized real time and                                                                  and they tried to sell me  services. Once it had me on the phone,          annoyed at the company and not looking to buy
on the internet              see the cost differential.                       Easy to use and quick.                                  multiple extra services.   offered a free 30 day trial.                    anything else.
                             The company wanted to encourage
                             going to the movies on slower days of                                                                                                 The company regularly mails out               It failed because they do not stock enough items in
                             the week. By signing up for the Regal            It succeeded because getting free popcorn made it                                    coupons for a free item of underwear,         my size and the lines for the cashier are very long. I
                             card, you get a free small popcorn every         more attractive to go to the theater, rather than                                    plus $10 off any bra. They are                pick up my free item and leave because I cannot find
Regal Cinemas - the company time you go to the movies on Tuesdays.            renting a movie at home. Plus, since popcorn is so                                   encouraging people to enter the store on      items that fit and it is frustrating to see something
owns a chain of movie        As a side benefit, Regal gets to track           expensive at the theater, it felt nice to be rewarded                                the hope they use the bra discount or         cute and then after extensive searching realize it is
theaters.                    what movies you attend.                          with something free for being a loyal customer.         Victoria's Secret            buy other items.                              not in my size.
                                                                                                                                                                   They used promotion to buy customer
                               They have made coffee drinking into a                                                                                               loyalty and cross sell. They tried to         Pricing based behavior conversion is not
                               social behavior. They have shown their         They have used customers to educate customers, so                                    convince their salon goers to get facial,     sustainable. I found out that it was really not that
                               customers how this idea can be used by         people learn by observing and doing. In a sense,        Wang Lei Hair salon          massage and manicure all at the same          convenient to always get everything together, and
Starbucks                      creating a space as a demonstration.           their way of advertising feels less commercial.         (shanghai, China)            time through pricing.                         stopped after first try.
                                                                                                                                                                   Wanted me to watch more television. It
                                                                                                                                                                   used advertising during the show to
Harrah's Entertainment.        Spend more money. Comps to                                                                             Disney. Watching             cross promote other upcoming shows
Gambling                       restaurants and comps to gamble more           Yes.                                                    television (ABC)             during the week.                              Because I have Tivo I skip the advertisements.

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