Week 5 Discussion Questions

PART 1:
1. What key messages are found on the various food packages? 

Key messages that are found on various food packages consist of the nutritional facts and values along with a small message on the front to get the consumer to buy their product. These key messages could be something like, “Zero Trans fat”, “light”, “great source of fiber” , and etc. These key messages help consumers make a choice they feel is better than the other because they either like the product more or it’s healthier for them.

2. Do the products make any nutrition claims? Explain.

Products such as food packages as I talked about above do make nutritional claims such as the “Zero Trans Fat” exclaimer that lots of food brans add to their packages. This again lets the consumer search for information about the product and recognize if this is this right product for them. 

3. Which demographics do you think are the primary targets for the products?

Especially for food products, companies and sellers are trying to target consumers who are looking for either nutritional value or just a good taste. It definitely depends on the product because chips are not always a healthy choice of snacks but another company might make the same kind of chips into a healthier alternative and add the nutritional claims to get consumers to try their products. An example for the could be with popcorn- Smartfood Popcorn compared to Skinny popcorn. Skinny popcorn gives nutritional claims right on the front while smart food just gives the taste, white cheddar. 

4. Which product has the most appealing package to attract consumers? Explain.

In the vast amount of food products its hard to pick which product is the best fit. Products that have the most appealing packages attract consumers- but just because the package is appealing doesn’t mean its always the better choice. To carry on my example from the popcorn, the Skinny popcorn has a more appealing package that exclaims “pick me because I look better and give you nutritional claims AND I don’t have any GMO’s” while the smart food package just exclaims “everyone knows me for my fabulous taste and simple packaging”. 

5. Which product is the most nutritious? least nutritious?

A product that is the most nutritious would be something in the vegetable and fruit aisles, but going for something that is packaged I would say peanuts of some sort. Peanuts are healthy and a small snack to give people in a rush a good national value in a small amount of time. The least nutritious would be something like cheese balls which are very fattening and have no nutritional value but people still love them for their small snacking, cheap prices, and good taste. 

6. Which product is the most expensive? least expensive?

Products that are the most expensive are typically ones that are healthier while the least expensive ones are the most processed unhealthier food products. The least expensive one is more likely to be bought because people are always looking for a way to save money, while others are always trying to stay healthy and will buy products at high prices to keep them healthy. Products that are typically are expensive consist of fruits and vegetables as mentioned above, while chips are typically less expensive.  

7. A 2-for-$5 is more effective than $2.49 each. If you have a 2-for, you will almost guarantee that every customer will buy the multiple. Why?

Promotions influence a consumers choice when they see it and what it’s for. People are always trying to spend less but get more and that’s exactly what the buy 2-for promotions are offering. Even though the consumer might not need 2 of those products they know in the long run it will be a better deal plus when they run out they won’t have to go back to the store as soon. Also if the consumer has friends and family that shop at the same store, they will now tell their peers about the deal going on causing more purchases. 

PART 2: 

8. It is also said that insurers prefer to insure things where there is no actual risk. Should gun owners have to buy lability insurance? Why?   

The thing about having gun owners with lability insurance is so many people already have guns illegally without registration as it is. For those who already own guns and do it legally with the registration, it would make it more expensive for the owner who is more honest. Putting lability insurance would prevent the amount of guns to be bought by a single person but their will always be a way around the system making something like this hard to enforce. People who have the guns and lability insurance would have to pay any damage that was caused by their gun just like someone who caused damage with their own car. Consumers might find this idea bizarre and not pay their fees that they might have caused. With the most recent shooting, if this gunman was charged with lability insurance, would this person have paid it? Could this person have paid it after being sentenced for his crimes anyway? IF lability insurance was enforced with buying a gun this doesn’t mean everyone will follow the rules, making the time and effort to put this in place almost a waste as the time could have been spent towards another ruling. 

PART 3:

9. How do you form prospects as a consumer? Use an example to justify your answer.

As a consumer, I form prospects by weighing the price and it’s usefulness to me now and in the future. An example for this was when I had to buy a new phone for myself over the summer because mine was suffering water damage. I had the choice of buying a cheap knockoff phone from Walmart that does what I need it to do, such as texting and calling, or spend my summer savings for an newer iPhone that’s more expensive but will last me a long time if I take care of it. When I decided an iPhone was the option for me, I then had to weigh the options of which generation to buy. My previous iPhone was a 5s meaning I could still buy a 5s which is cheaper then the newer ones (by then the iPhone X was already out), or buy one that’s more in trend with my friends and family. I ended up choosing the iPhone 7 which was about in the middle of an overly expensive phone of 1,000, but still in the trend and would last me a long time.

10. Consider two offerings given to you, A (6000, 0.45) B (3000, 0.9). Which one do you choose?  Why? 

This choice is difficult because I don’t know any information about the offerings given to me. I would choose A because the first number is bigger and the second number smaller. If this was for lets say a loan amount and an interest rate, I would want the bigger amount for a smaller interest rate but again not knowing what the offerings are for makes it a little difficult. The numbers in A also look friendlier than those in B.

11. Insurance companies studied two types of insurances of deductible $500 and $1000 with premium $715 and $615 respectively, and found that only 5% chance of paying $500 in the event of claim but they chose to pay extra $100 every year for this. That being said, households are more likely to choose higher premium and lower deductible.

Please use the prospect theory to explain this phenomenon. 

Household are more likely to choose the higher premium and a lower deductible because they want more of a gain than a loss. So when choosing and weighing their options they would rather have a higher premium and the lower deductible because they feel like it’s more of a gain to them than a loss. 

12. Evaluation of gains and losses largely depends on a person’s mental frame and when new information is introduced to change a person’s frame their gains/losses are called framing effects. Often hamburger producers label hamburger as “80% lean” not “20% fat” because 80% lean is framed as a gain. Can you give a different application of this theory in marketing?

Another example in marketing would be for marketing brands for condoms. When people are looking to buy this product, they would much rather see a “95% prevention rate” on the package than a “5% failure rate”. This marking effect tells the consumer that it’s 95% effective which sounds a lot better than a 5% failure.