Case Study 1 Using Sampling in Low-Effort Decision-Making (35 marks)

Sampling is a critical marketing technique used by marketers for low-effort decision-making situations to encourage consumers to try out new products as they do not devote much time and efforts into thinking and evaluating the purchase prior to making decisions. With the objective to expand its appeal beyond lovers of espresso and similar beverages and to encourage customers from habitual buying, Starbucks recently introduced its everyday Pike Place Roast coffee with free sample cups in all of its 7,100 U.S. stores. By doing this, Starbucks aims to encourage its customers to learn using other choice tactics such as using variety-seeking choice tactic (i.e. trying different varieties of beverages) when ordering beverages instead of buying on habit (i.e. ordering the regular espresso and similar beverages every time they visit Starbucks) when it comes to repeat purchasing.

During the same week, some McDonalds stores began offering free samples of the new McDonalds espresso and latte drinksan attempt to attract consumers to engage in immediate consumption of the new espresso and latte drinks in the hope that they will develop positive feelings and liking towards the new items after consumption. This is only one example of McDonalds using sampling to encourage trial and consumption of the new items and to reduce consumers level of perceived risks over the taste and flavour of the new items.

Stores and magazines are not the only places where consumers can experience sampling. College students at summer camps are a prime target audience for samples distributed by companies. Some samples are handed out to students at hotel registration desks along with room keys. Others take the form of contests and experiential activities.

For example, at Neutrogenas Acne Stress Control summer camp, students can try out samples of Acne Stress Control Face Wash, register to win a big gift basket of Acne Stress Control products, and stay for a free facial massage. By doing so, Neutrogena attempts to encourage the use of normative choice tactics by the peers and friends of those students who tried out the samples. Given that they are inexperienced and have little knowledge about acne products, those peers and friends are likely to seek for the advice of those students who have tried out the samples at the summer camp. Those who have tried out the samples are likely to have a strong normative influence on their peers in a number of ways. They can often directly persuade their peers into using the same acne products as them. Given their close social relationships with one another, they also tend to study the behaviour and the products used by each other. In addition, they often tend to seek for the advice of each other when making decisions.

(a) Examine the hierarchy of efforts for low-effort situation. Then, using the hierarchy of effects for low- effort situation, analyse how McDonalds used sampling (i.e. giving out free samples of the new McDonalds espresso and latte drinks) to change the hierarchy order of thinking- behaving (consumption)-evaluation (feelings) to behaving (consumption)-evaluation (feelings)-thinking. (4 marks)

(b) Applying the concept of perceived risks, discuss the ONE type of perceived risk that can be

reduced by McDonalds sampling (i.e. giving out free samples of the new McDonalds

espresso and latte drinks) to consumers. (6 marks)

(c) Instead of buying the regular expresso and similar beverages, consumers engage in evaluation

of Starbucks Pike Place Roast coffee during consumption/usage of the sample. According to

the learning process for low-effort repeat purchases shown in Picture 1 below,

this behaviour can result in three outcomes. Using this learning process for low-effort repeat purchases,

analyse these THREE possible outcomes. Do you think Starbucks would face any problems

if consumers DO NOT like the sample of Pike Place Roast Coffee? Justify your answer. (13 marks)