Citation
Kids' consumption

Material Information

Title:
Kids' consumption how children perceive the relationships between advertisements and products
Creator:
Moore-Shay, Elizabeth S., 1957-
Publication Date:
Language:
English
Physical Description:
vii, 271 leaves : ill. ; 29 cm.

Subjects

Subjects / Keywords:
Advertising ( jstor )
Advertising campaigns ( jstor )
Advertising research ( jstor )
Brands ( jstor )
Child psychology ( jstor )
Consumer advertising ( jstor )
Consumer research ( jstor )
Depth interviews ( jstor )
Psychological attitudes ( jstor )
Television commercials ( jstor )
Advertising and children ( lcsh )
Child consumers ( lcsh )
Dissertations, Academic -- Marketing -- UF
Marketing thesis Ph.D
Genre:
bibliography ( marcgt )
non-fiction ( marcgt )

Notes

Thesis:
Thesis (Ph. D.)--University of Florida, 1994.
Bibliography:
Includes bibliographical references (leaves 253-270).
General Note:
Typescript.
General Note:
Vita.
Statement of Responsibility:
by Elizabeth S. Moore-Shay.

Record Information

Source Institution:
University of Florida
Holding Location:
University of Florida
Rights Management:
Copyright [name of dissertation author]. Permission granted to the University of Florida to digitize, archive and distribute this item for non-profit research and educational purposes. Any reuse of this item in excess of fair use or other copyright exemptions requires permission of the copyright holder.
Resource Identifier:
030580449 ( ALEPH )
31913489 ( OCLC )

Downloads

This item has the following downloads:


Full Text










KIDS' CONSUMPTION: HOW CHILDREN PERCEIVE
THE RELATIONSHIPS BETWEEN ADVERTISEMENTS AND PRODUCTS
















By

ELIZABETH S. MOORE-SHAY


A DISSERTATION PRESENTED TO THE GRADUATE SCHOOL
OF THE UNIVERSITY OF FLORIDA IN PARTIAL FULFILLMENT
OF THE REQUIREMENTS FOR THE DEGREE OF
DOCTOR OF PHILOSOPHY

UNIVERSITY OF FLORIDA


1994














To Neil and Laura Jane













ACKNOWLEDGEMENTS

As my graduate education draws to a close, I would like to acknowledge the

support of a number of individuals. First, I would like to thank the members of the

marketing faculty at the University of Florida, both former and present who have

provided valued guidance over the years. In particular, appreciation is extended to

Professors Joel Cohen, John Lynch and William Wilkie who have generously shared their

time and expertise. I would like to thank the members of my committee, Professors

David Mick and Richard Romano, for their time and efforts regarding this project and

especially Alan Sawyer for his insight and support throughout my graduate education.

Special thanks go to Professor Pamela Richards for her help in discovering the joys of

qualitative research, and to Joan Levy for her friendship and transcription skills. Thanks

also go to the children who so willingly shared their thoughts, delights and frustrations,

and to the teachers and school administrators who supported this project.

My deepest appreciation is extended to Professor Richard J. Lutz, for his

invaluable guidance and unwavering support of this project and my professional

development. With a wisdom and generosity of spirit that is rare, he has challenged and

enriched my thinking, and helped to bring out the best in me.

Finally, I would like to thank my husband, Neil, my daughter, Laura, and my

parents for their boundless love and encouragement.














TABLE OF CONTENTS

page

ACKNOWLEDGEMENTS ................................ ....iii

ABSTRACT ............................................. vi

CHAPTERS

1 INTRODUCTION .................................... 1

The Primacy of Product Consumption ...................... 4
The Nature of Children's Advertising ........................ 7
Research Purpose and Direction ......................... 13

2 REVIEW OF LITERATURE .......................... 20

The Pervasive Influence of Advertising .................... 25
Product Consumption: A Primary Source of Meaning
and Influence ................................ 34
Translating Product Meaning: From the Mundane
to the Magical ............................... 37
A Call for a Meaning-Based Perspective .................... 44
The Interaction of Advertising and Product Trial ................. 48
Prevailing Paradigms and Children's Reality .................. 55

3 STUDY 1 ....................................... 61

Research Approach ................................. 63
Method ......................................... 70
Research Findings .................................. 77
Discussion ....................................... 89
Conclusions ...................................... 93








4 STUDY 2 ....................


Conceptual Background and Hypotheses .................... 100
Method ........................................ 130
Analysis and Results ................................. 142
Discussion ...................................... 160
Notes .......................................... 165

5 STUDY 3 ...................................... 166

The Functions of Qualitative Inquiry ..................... 167
Methodological Pluralism ............................ 169
Overview ....................................... 173
Method ........................................ 175
Research Findings ................................. 185
Discussion ...................................... 217

6 CONCLUSIONS AND FUTURE DIRECTIONS .............. 220

APPENDICES

A PRELIMINARY STUDY INTERVIEW SCHEDULE ........... 229

B SAMPLE EXPERIMENTAL QUESTIONNAIRE .............. 234

C AD TEXTS ..................................... 244

D INTERVIEW SCHEDULE FOR STUDY 3 .................. 248

REFERENCES ....................................... 253

BIOGRAPHICAL SKETCH ................................. 271














v


. 95













Abstract of Dissertation Presented to the Graduate School
of the University of Florida in Partial Fulfillment of the
Requirements for the Degree of Doctor of Philosophy

KIDS' CONSUMPTION: HOW CHILDREN PERCEIVE
THE RELATIONSHIPS BETWEEN ADVERTISEMENTS AND PRODUCTS

By

Elizabeth S. Moore-Shay

April 1994


Chairperson: Richard J. Lutz
Major Department: Marketing

Multiple perspectives and methods are used to investigate the relationships

children (ages 7-11 years) perceive between advertisements and their consumption

experiences. While advertising's effects on children have been studied extensively,

rarely have researchers considered the broader context in which products are also

purchased and consumed. Products and their use are a focal point of consumer behavior

and the most readily available source of marketplace information to young consumers.

Combining both experimentation and depth interviews, this research examines whether

advertising influences children's interpretations of their product experiences. The hybrid

research design incorporates the precision and rigor of a causal analysis as well as the

rich insights of interpretive approaches. Three studies were conducted: a preliminary

phenomenological investigation, an experimental study of the interaction between








advertising and product trial and an in-depth qualitative investigation that replicates the

basic experimental framework. The experiment examines the relationships among

children's affective reactions to ads, brand perceptions and attitudes within a consumption

context. The qualitative studies focus on the advertising-consumption relationship from

the child's perspective. Drawing from grounded theory, this research reflects the view

that understanding of human phenomena must be grounded in the reality of events and

situations as they are subjectively experienced.

The preliminary study revealed that children focus extensively on the

entertainment value of commercial messages, sometimes at the expense of the brand

appeal. The centrality of executional dimensions in children's interpretations of

advertising was most evident among the older age group (10 to 11-year olds). The

experimental results were consistent with emergent patterns, indicating that advertising

does have the capacity to frame a child's consumption experience, though age-related

differences were observed. It was the older children who allowed their affective

reactions to advertisements to color their perceptions of usage experience. Reinforcing

the findings of the first two studies, the in-depth qualitative study revealed two distinct

perspectives on advertising-consumption relations. Younger children tended to view

advertisements from a more functional perspective, focusing primarily on the brand. The

older children seemed to approach advertising from the perspective of an art critic,

drawing extensively on advertising's creative properties and design.













CHAPTER 1
INTRODUCTION

Advertising is a pervasive factor in the lives of most American children. Within

the last decade manufacturers have dramatically stepped up their efforts to reach children

through new advertising media, sophisticated production techniques and creative appeals.

Television commercials, movies, video games and specialty magazines all carry a vast

and exciting array of persuasive messages targeted at a young audience (Pereira 1990).

Television is a particularly accessible and effective medium for reaching children. For

many, time spent in front of the television may equal or even exceed the number of hours

spent in school each week. Recent estimates suggest that children between the ages of

6 and 11 watch about 25 hours of television per week and are exposed to as many as

20,000-25,000 commercials in a single year (Raju and Lonial 1990; Weisskoff 1985).

Concerns about children's ability to fully comprehend and evaluate advertised

messages has stimulated substantial research and heated debate among scholars and

practitioners since the early 1970s. The controversy surrounding children's responses

to advertising has absorbed the attention of researchers from a number of academic

disciplines and political orientations. Critics assert that advertising to children is

inherently unfair because children lack the cognitive skills and life experiences needed

to resist persuasive product claims. Supporters argue, on the other hand, that children's

vulnerabilities are often overstated and that by providing product information, advertising

helps both parents and children make more informed choices.








2

Though the controversy continues, research evidence does suggest that children

may alter their preferences and behavior as a consequence of advertising exposure.

There is little doubt that children, especially young children, are drawn to the exciting

array of products manufacturers offer them. In attempting to understand the precise

nature of this influence, researchers have addressed a number of issues of both applied

and theoretical interest over the years. A substantial literature has accumulated (see

Adler et al. 1980; McNeal 1987; Raju and Lonial 1990 for reviews). A bibliography

published over a decade ago listed approximately 500 entries, of which over 200 were

research studies assessing the impact of advertising on children's consumer activities

(Meringoff 1980). Though research activity slowed during the deregulatory era of the

1980s, a small group of researchers has continued to raise important theoretical and

methodological issues.

Of fundamental interest to both researchers and practitioners alike is

understanding the specific nature of advertising's influence on children's attitudes and

behavior. The relative effectiveness of specific techniques or strategies used in

advertisements targeted at children has been examined across a variety of contexts and

with children of varying developmental skills or abilities. This is a research area that

subsumes a wide variety of substantive issues and methodological concerns. Questions

such as (1) do children desire the products they see advertised? (2) are they motivated

to ask their parents for them? and, (3) are they more likely to choose products they have

seen advertised than others? have guided a number of research studies over the last 20








3

years. Common to these investigations is the focus on advertising's role in the product

acquisition process.

In general terms, there can be little doubt that children attend to ads, try to

understand them and are often attracted to the products they see depicted. Not

surprisingly, clear age-related patterns have been detected in terms of children's belief

in or acceptance of advertised claims. Relative to their younger counterparts, older

children (10-13) tend to be much more skeptical of advertising (Bever, Smith, Bengen

and Johnson 1975; Robertson and Rossiter 1974; Rossiter 1977; Ward, Wackman and

Wartella 1977). They readily acknowledge that advertising does not always tell the truth

and are more likely to express negative feelings toward the institution of advertising

(Blatt, Spencer and Ward 1972; Bever et al. 1975; Robertson and Rossiter 1974).

However, these kinds of generalized indicators may overstate children's actual rejection

of specific advertisements and persuasive claims (Atkin 1980; Gorn and Goldberg 1977;

Rossiter 1979). Even a broad knowledge base and a generalized skepticism do not insure

immunity from well-crafted advertisements. Though as adults we recognize advertising's

persuasive character, we are still drawn to certain products through commercial messages

that touch our hearts and minds. Children are no different; when asked, they may

express a more adult-like view of advertising that bears little relationship to advertising's

actual influence on their responses to specific products or commercial messages. Though

younger children tend to be affected more strongly by advertising, older children who

presumably have the ability to discount an advertiser's message may not do so

spontaneously (Brucks, Armstrong and Goldberg 1988).







4

What emerges from the research literature is a view of children and their

responses to advertising that is seemingly contradictory. Though it is clear that by the

time children reach the age of 9 or 10 they are well aware of advertising's purpose and

are likely to express rather skeptical views of advertising, they may still be persuaded

to want products that are made to look intriguing, useful or fun. When given the

opportunity, they tend to choose advertised products over others and are not beyond

asking their parents for them on occasion. How children interpret or evaluate their

experiences once they actually obtain the products they have seen advertised is not at all

clear.

The Primacy of Product Consumption

Products are a primary focal point of consumer behavior, yet the impact of their

use on children's consumer learning has been virtually ignored. The most readily

available sources of marketplace information to children are the products they encounter

and their own consumption experiences. Consider how many opportunities children have

each day to observe the use of products by members of their family. However, even

very young children are not simply bystanders. Children learn a wealth of information

through their own product experiences. The taste, appearance, function and performance

of a product provide a great deal of information to a child who is learning what it means

to be a consumer in our society. Through consumption, children learn what products are

good and bad, whether advertising claims are truthful, what brands they prefer, and even

that products convey meanings apart from their functional properties. Children







5

develop evaluative criteria based on their product experiences and learn to compare

products to one another and to the advertisements that promote them.

While there is compelling evidence that a well-crafted advertisement can persuade

children that a product is desirable, we know little about how or when these perceptions

are altered once the product leaves the retailer's shelf. Given that a goal of advertising

is to stimulate not only an initial purchase but also repeat purchase behavior, the need

to understand the impact of consumption on children's product perceptions and attitudes

seems obvious. From the child's perspective, it is the benefits provided by a product that

are focal. The pleasure, disappointment, understanding and confusion that result from

product experiences are the basis for more enduring beliefs and attitudes about the

marketplace and its operation. How children perceive and evaluate the relationships

between advertising claims and their consumption experiences is an issue that touches on

the interests of marketers as well as public policymakers.

Concerns about advertising's capacity to foster unrealistic expectations of products

has long been an issue among consumer protectionists as well as the industry

representatives charged with regulating children's advertising. Both the Children's

Advertising Unit and the National Association of Broadcasters include specific provisions

in their guidelines discouraging the use of portrayals that might explicitly or implicitly

foster unreasonable expectations of product quality or performance (Children's

Advertising Review Unit 1983; National Association of Broadcasters 1977). Clearly,

these codes are based on the assumption that at least young children have difficulty

recognizing and discounting exaggeration in the context of persuasive messages. To what








6

extent advertising actually engenders exaggerated expectations that are subsequently

disappointed is unknown. Neither have researchers investigated situations where

children's product experiences actually exceed their expectations.

Though the dynamics of the advertising-consumption relationship have not been

examined empirically, researchers nevertheless have assumed that this relationship has

a significant impact on children's perceptions and responsiveness to persuasive attempts.

For example, it has been suggested that until children actually experience discrepancies

between products as advertised and as consumed, they are unable to fully comprehend

advertising's persuasive intent (Robertson and Rossiter 1974). Increased distrust or

skepticism of advertising has also been linked to children's negative experiences with

heavily promoted products (Ward 1972). Critics of advertising have suggested that

commercials may present information that differs from the child's actual experiences with

those products, causing confusion and potentially undermining his(her) trust in external

sources of information (e.g., Feldman and Wolf 1974). Collectively, these arguments

suggest that how children interpret and evaluate the relationship between advertising and

their product experiences is important not only in the context of a single purchase

decision but also in a much larger or long-term sense. Children's general attitudes about

advertising, as well as their perceptions of how the marketplace functions, may be

influenced by the many experiences they have had, both good and bad, with heavily

advertised products.

Within the research literature on adult consumer behavior, there is a growing

consensus that advertising's effects are felt not only at the time of exposure but








7

subsequently when the consumer comes into contact with a product. What a consumer

discovers through product consumption is not a mere reflection of objective reality but

an interpretation that may be influenced by the images and language of advertising

(Deighton 1984; Hoch and Deighton 1989; Hoch and Ha 1986; Puto and Wells 1984;

Wells 1986). Many everyday consumption experiences are open to multiple

interpretations. From the clothes we wear to the food we eat, product use is laden with

meaning that accrues from sources beyond its structural features or form (McCracken

1986). Even the simple act of eating a bowl of cereal may be subject to diverse

interpretations. The experience is sufficiently bland and potentially uninformative enough

to support a variety of assertions gleaned from other sources, such as advertising

(Deighton 1984). In these kinds of situations, advertisements have the potential to alter

the experience by suggesting what features should be noticed and remembered. They

may provide clues that consumers use to understand their feelings and reactions.

Advertisements seem to have the greatest capacity to reach into the product experience

when they are plausible and attractive, yet difficult to dispute directly. Well-executed

advertisements use striking images and language to enlarge a product's meaning and

value. Advertising claims are frequently more affective than factually based. This is

particularly true in the realm of children's advertising where fun, excitement and

adventure are overriding themes (Barcus 1980). How these kinds of advertisements may

influence children's interpretations of their product experiences is unknown. Researchers

interested in the interaction of advertising and evidence have confined their efforts to

understanding adult responses and processing strategies.








8

The Nature of Children's Advertising

To fully understand how children perceive the relationship between the products

they consume and the commercial messages that promote them requires an appreciation

for the special character of children's advertising and its potential to affect the

interpretation of product experiences. Advertisements targeted at children are frequently

as enchanting and captivating as the programs in which they are embedded. These ads

use special effects, sophisticated animation, and humor to entertain and pique children's

interest. Creative visuals depict action and events in a striking and memorable way.

Children's ads are rarely informational in the sense of rational appeals based on product

features (Barcus 1980). Objective product information emphasizing product ingredients

or materials, economic value, or design quality is rarely included in these advertisements.

Instead, persuasive appeals tend to focus on the hedonic aspects of consumption.

Merriment and fun are the dominant themes across product categories and stylistic

conventions. Fantasy is often used to convey excitement and adventure. Animated

figures interacting with real children, mysterious flights of fantasy, mythical kingdoms,

outer-space beings, and magical transformations of objects are widely used to promote

children's products.

In recent years, program-length commercials, host-selling and other techniques

using program characters to promote products have emerged in response to a 1984

Federal Communications Commission deregulation order. The promotion of toys and

other products associated with program themes and characters has become part of

well-coordinated and very successful marketing strategies. In 1990, for example,








9

Teenage Mutant Ninja Turtles generated approximately $400 million in retail sales from

the action figures alone (Pereira 1991). This figure does not include additional revenue

generated from the sale of licensed products such as turtle cereal, fruit juice, pajamas,

sheets, t-shirts, books and videotapes. The television program is a vehicle to provide

additional product exposure to the child audience, in the hope of stimulating additional

sales that in turn may help to sustain program popularity. Though the marketing of

products linked to television themes and characters is nothing new, the line between

commercial and program content has become increasingly blurred. Persuasive messages

are in some sense becoming more subtle, as programming, advertisements and the

products themselves flow into and reinforce one another.

Children's advertisements have become more elaborate, sophisticated and

penetrating in recent years. Advertisers rely extensively on the power of captivating

visuals and subjective claims to touch the hearts and minds of young consumers. It is

in the context of these kinds of persuasive messages that children must somehow interpret

and evaluate their product experiences.

How children relate what they see and hear in these advertisements to their

subsequent product experiences is not well-understood. Without the benefit of substantial

marketplace experience and mature processing strategies to guide them, children

somehow manage to make sense of the enticing array of persuasive messages and

products that permeate their everyday lives.

To understand how children interpret and evaluate these relationships requires a

sensitivity not only to children's cognitive skills and limitations but also to their unique








10

perspective on advertising and its place within their lives. Research strategies are needed

that reliably and accurately reflect children's particular needs and perspectives. In many

studies of children's media reception, adult responses or explanations have served as the

expressed or implied standard for performance (Anderson 1981; Dorr 1986).

Researchers have taken their own interpretations of televised content as the standard and

evaluated children's responses against that adult baseline. With this criterion, children's

understandings implicitly represent some sort of flawed approximation to the

interpretation an adult might provide, rather than a unique and valid perspective on the

world. To understand how children perceive the advertising-consumption relationship

will require a sensitivity to the concepts and categories children use to define their

experiences.

The general paradigm that has been adopted by researchers to understand the

linkages between advertising and consumption incorporates key assumptions about

consumers that may not accurately reflect how children respond to persuasive messages.

Within this framework consumers are depicted as more or less logical thinkers who (1)

search out and manipulate information in order to make choices among goods and

services; (2) respond to advertising as a partisan source; and (3) treat advertising claims

as provisional hypotheses that are subsequently used to evaluate product experiences.

Each of these assumptions has a direct bearing on the way the advertising-consumption

relationship is conceptualized and measured. Violation of these assumptions may

suggest that alternative approaches are needed to understand children's unique and often

surprising responses. The model of adult processing that has developed provides both








11

important insight into the advertising-consumption relationship and a useful counterpoint

from which to understand children's reactions.

Current models of the advertising-consumption relationship assume that consumers

approach advertising with a certain amount of skepticism. The performance expectations

adults form as a consequence of advertising exposure are rather tentative because they

respond to advertisements as partisan sources of information. Adults both recognize and

act on the knowledge that advertising is inherently biased. Product claims are treated

merely as conjectures that may or may not prove to be accurate.

While this presumption of skepticism clearly holds for most adults, children are

much more likely to believe what they see in advertisements. Children enjoy

commercials and are often attracted to the products they see portrayed. Even as they

begin to acknowledge advertisers' motives, children may not spontaneously apply what

they know while viewing (Brucks et al. 1988). Without a reminder to critically evaluate

the contents of a message while viewing, children tend to focus their energies on the

product and the captivating way it is portrayed. Though children become increasingly

skeptical of advertising during middle childhood, this skepticism is relatively fragile.

They may express rather negative attitudes about TV advertising that bear little

relationship to an advertisement's actual influence on their attitudes or purchase

inclinations (Rossiter 1979). Difficulties may arise because children do not fully

understand how or why advertising works. Familiarity with the range of influence

strategies used by advertisers allows adults to take a more detached view of what they

see and hear. Children lack this experience and the critical eye it engenders. As a








12

result, they are more easily persuaded by advertising techniques that are readily

discounted by more experienced consumers. Without this knowledge to guide them,

children may find it more difficult to differentiate obviously true and obviously false

claims from those of a more intermediate or uncertain nature.

Emerging from the research literature is a view of the school age child who is

quite capable of discounting an advertiser's message but may not always be inclined to

do so. Though this may be troubling from a policy perspective, it is neither illogical nor

particularly surprising. Advertisements offer children an exciting and dazzling array of

product alternatives. Without economic responsibility or concern, children are free to

enjoy what they see before them. From the child's perspective, each new toy, cereal or

snack represents a fresh opportunity for pleasure or amusement. Advertisers tout these

benefits with humor and a singular charm. Without specific instructions or reminders

to discount what the advertiser has to say, children may be more inclined to simply sit

back and enjoy the special effects and flights of fantasy they see before them.

Concerns about children's ability and inclination to differentiate among ad claims

and discount them appropriately are critically important issues in terms of children's

advertising response. Children's greater proclivity to accept advertising claims may have

important implications for how consumption experiences are judged or evaluated. What

may be regarded as mere supposition by an adult may take on the trappings of fact

through the eyes of a young and inexperienced consumer. Under these circumstances,

consumption experiences may be shaped by attractive yet vague promises of

performance. The key to understanding children's responses to products and the








13

advertisements that promote them rests with the children themselves. Rather than

mapping their responses onto adult models, it is important to look at these relationships

in terms of the structure and units children perceive. There is much to be learned by

allowing children to tell their side of the story, through their own language and point of

view. Clearly, there is a need for research into the nature of children's expectations and

how they are brought into play in the context of consumption experiences. To be useful,

such research requires a sensitivity to the child's unique perspective of advertising and

how it works. Multiple research approaches are needed to learn about the

advertising-consumption relationship and its implications for children and their

understanding of the marketplace.

Research Purpose and Direction

The general paradigm that has been adopted by consumer researchers to

understand the linkages between advertising and consumption is firmly grounded within

the information processing framework. Of fundamental interest within this perspective

are the cognitive mechanisms that may be used to explain how consumers assimilate and

utilize information. Developmental researchers have adopted a similar theoretical and

methodological orientation to the study of advertising response. Though very little is

known about the role of consumption, the information processing perspective has

provided a number of insights into children's ability to select, manipulate and retrieve

information conveyed through advertising (e.g., Brucks et al. 1988; Costley and Brucks

1987; Roedder 1981; Roedder, Stemrnthal and Calder 1983; Wartella et al. 1979).

Without an appreciation for and sensitivity to these cognitive mechanisms, our








14

understanding of children's responses would certainly be limited. However, cognitive

explanations alone are not able to capture the range and complexity of children's

reactions to advertisements and products.

The broad purpose of this research project is to learn more about how children

perceive the relationships between the advertisements they see and the products they

consume. To understand fully how advertising affects children requires greater insight

into how the consumption experience is assessed and managed. Children's advertising

responses are embedded within a larger system in which products are also purchased and

consumed. It is through trial and experience that children have the opportunity to test

the validity and relevance of what an advertiser has said. Studying children's reactions

to advertising within the context of this larger embedding system brings to light

unanticipated factors and relationships. Consumer researchers with both theoretical and

substantive interests have stressed the importance of trying to identify key contextual

factors and their operation within larger embedding systems (Lutz 1991; Lynch 1982,

1983). Needed are research approaches that have the capacity to address advertising

response issues within this broader context.

To begin to address these needs, this research project incorporates both

experimental methods and more discovery-oriented depth interviews to understand the

substantive issues that define children's perceptions of the relationships between

advertising and their consumption experiences. Over the course of eighteen months and

interviews with approximately 160 children between the ages of 7 and 11, three studies,

designed to complement and enrich one another, were conducted.








15

The first study was a qualitative investigation with both substantive and

methodological aims. This portion of the project was designed to develop a preliminary

understanding of how children perceive and evaluate ad-product interrelationships and

to assess the viability of an inductive approach with elementary school children. The

depth and breadth of children's responses quickly put to rest any doubts about children's

ability or willingness to participate in the research in a meaningful way. Findings from

the preliminary study served as input to the conceptual development and design of an

experimental investigation as well as a source of hypotheses for subsequent qualitative

inquiry.

The second study extends children's advertising research by looking beyond

prepurchase activities to product use or consumption. Using advertisements specifically

intended for children and broadcast within the context of children's programming, the

experiment examines the interaction of advertising and evidence. At a micro-theoretical

level, the experiment addresses whether and how advertisements may influence children's

cognitive and affective responses in the context of product consumption. The

relationships among a number of variables previously neglected in the children's research

literature were examined, including attitude toward the advertisement, entertainment,

brand perceptions and attitudes. Though the experimental design allowed for the testing

of key conceptual relationships, it was not particularly well suited for discovering new

or unanticipated phenomena or relationships of significance. The discovery-oriented

design of the preliminary study had shown that there was much to be learned by simply

allowing the children "to talk." This approach enables the researcher "to learn more; be








16

surprised; to find out what one does not already expect, predict or hypothesize" (Mahrer

1988, p. 697). It is particularly well suited not only for approaching new topics but to

gain fresh slants on phenomena about which a great deal is already known, such as

children's responses to advertising.

Utilizing grounded theory perspectives and analytic strategies, the third study

represented a return to the field for a more in-depth qualitative examination of the ideas

and hypotheses that had been suggested earlier. The third study was designed to learn

more about how children think about advertisements and products in the context of their

everyday lives. Depth interviews were used to learn about children's systems of meaning

rather than those imposed by the adult world. Discovery-oriented in nature, the

grounded theory approach attempts to understand the world from the perspective of the

individual who lives, feels or experiences it. Rather than entering the field with

ready-made categories or interpretive schemes, the grounded theorist attempts to gather

rich descriptions that reflect the perspectives and experiences of the interviewees. By

obtaining extensive descriptions of specific events or situations the researcher acquires

material of sufficient depth and detail to construct a grounded theory, which is

inductively derived from the substantive phenomenon it represents (Corbin and Strauss

1990; Glaser and Strauss 1967).

Though interpretive modes of inquiry have gained increased acceptance among

consumer researchers, these approaches have not been applied to children's research

issues. Why this is the case is not entirely clear. Perhaps, it is due in part to the oft

cited concern that young children do not have the ability to answer questions accurately








17

because of memory and perceptual deficits. Young children, in particular, are viewed

as inaccurate and unreliable observers of their own consumption-related activities

(Goldberg and Gorn 1983; Peracchio 1990). As any parent or teacher will attest, older

children (7 to 12-year olds) are much better able to express their opinions, concerns and

feelings directly and without hesitation. It is interesting to note that some of the earliest

and still most widely cited studies within the children's advertising literature relied on

interviews to understand children's responses (e.g., Bever et al. 1975; Blatt et al. 1972;

Ward 1972; Ward et al. 1977). Though not phenomenological in orientation, these

studies provided initial insight into the ways children think about and relate to advertising

and other marketing stimuli. As research on children's advertising responses matured,

this type of approach was criticized for its exploratory character and largely abandoned.

In the ensuing years, a great deal has been learned about children's cognitive structures

and processes but very little about their consumption related experiences and perceptions.

The potential benefits of utilizing a grounded theory approach to understand

children's experiences as consumers are numerous. First, very little is known about how

children think about the relationships between the advertisements they see and the

products they obtain. Open-ended interviews are a useful tool for learning about how

children perceive these relationships, unfettered by adult biases and perspectives. It is

tempting yet misleading to view children as miniature adults who simply lack the

cognitive skills or sophistication needed to be effective decision makers. Among social

scientists and practitioners there is mounting criticism of research practices that fail to

adequately represent and reflect children's beliefs and practices (e.g., Goode 1986;








18

Rojcewicz 1987; Waksler 1986). Discovery-based research methods offer the

opportunity to strip away "adultcentric" interpretations of children's consumer activities.

Rather than translating children's experiences into adult categories or commonsense views

of the world, this approach attempts to understand the child's experience as it is.

Discovery-oriented research recognizes that children's consciousness differs from adults'

but views this as a positive phenomenon to be understood and respected. The child's

realm is depicted as natural, everyday or phenomenal rather than scientific or theoretical.

The qualitative investigation offers the opportunity to view the

advertising-consumption relationship through the eyes of a child. In combination with

more traditional experimental methods, a great deal can be learned about how children

evaluate what they consume. A hybrid research design brings to bear the strengths of

multiple approaches and perspectives (Lutz 1991). The potential contributions of such

a study are both substantive and methodological. From a substantive perspective, very

little is known about product use, though it is a critical element of the consumption cycle.

The investigation is designed to provide specific knowledge about how children perceive

and evaluate the relationship between the advertisements they see and the products they

consume. The ways in which advertisements may potentially alter children's product

experiences has important consequences both in an immediate sense and in terms of

advertising's broader impact on children and their understanding of the marketplace.

Methodologically, the investigation represents one of the first attempts within the

consumer literature to approach issues affecting children from a phenomenological

perspective. This approach offers the opportunity to question assumptions made about








19

children's perceptions of the advertising-consumption relationship that have implicitly

guided prior thinking and analysis. By combining experimental and phenomenological

methods within a single research project, this investigation has the capacity to capitalize

on the strengths and merits of both. What emerges is a richer and more detailed

understanding of a significant yet little understood facet of children's consumer

experience.














CHAPTER 2
REVIEW OF LITERATURE

Few consumer issues in recent memory have stimulated as spirited and protracted

a dialogue as the question of how advertising affects children. Educators, academic

researchers, regulatory agencies, public policymakers, public interest groups,

broadcasters and advertisers and their ad agencies have all contributed to the complex and

often fiery debate about the impact of advertising in children's lives. Issues of social and

regulatory policy are at the heart of this controversy (Huston, Watkins and Kunkel 1989).

Though virtually all interested parties agree that children constitute a special audience

with distinct needs and vulnerabilities, there is substantial disagreement regarding issues

of fairness in advertising to children and its broader impact on the socialization process

(Armstrong and Brucks 1988; Kinsey 1987; Kline 1989; Liebert and Sprafkin 1988).

During the last twenty years, Americans have witnessed the rise and fall of the

Federal Trade Commission's proposal to ban children's television advertising, the advent

of program-length commercials, substantial fluctuation in the number of commercial

minutes the Federal Communications Commission allows during children's programming

and the latest innovation, Channel One (Condry, Bence and Scheibe 1987; Federal Trade

Commission 1978; Greenberg and Brand 1993; Kunkel 1988a, 1988b, 1991; Kunkel and

Watkins 1987; Mueller and Wulfemeyer 1992). It is within this social and political

context that research questions have been framed, methods chosen and knowledge








21

accumulated. The nature and depth of our scientific insight into how children respond

to advertising is derived from the research agenda that has been shaped in some measure

by this broader social context.

Concerns about children's ability to comprehend advertising's persuasive

character, evaluate specific techniques and strategies, and make appropriate product

choices have motivated the majority of research efforts since the early 1970s. To address

these issues, developmental-stage and information processing models have been utilized

to understand how children's cognitive skills in dealing with advertised information

evolve with age and accumulated experience. Without question, this research focus is

both important and necessary on social policy as well as economic grounds. However,

it is also important to recognize that it represents but a single perspective.

Fundamental concerns about children's ability to cope with advertised messages

have led to a rather narrowly defined research agenda. Researchers have tended to focus

on matters of public policy, to the exclusion of other issues and modes of thinking that

may be useful in furthering our understanding of children's responsiveness to marketplace

stimuli. Other potentially interesting questions about advertising and its role within

children's lives have simply not been posed because they lie outside our traditional

construal of the aims and methods of children's advertising research. At a very

fundamental level, a research agenda is a function of the social and political context that

produces it. A Zeitgeist prevails within a research community that tends to constrain

how issues are conceptualized and investigated. This is particularly true in the case of








22

children's advertising, where at issue are deep concerns about fairness and cultural

values, as well as appropriate business practice.

Guiding this research project from its inception is the notion that while a great

deal has been learned about children's advertising response over the years, the prevailing

paradigm is limited in its ability to capture the full range of issues that define

advertising's meaning and purpose in children's lives. Without doubt, tremendous insight

into the development of children's cognitive skills and their deployment during ad

processing has been gained. However, prevailing modes of thinking have the capacity

to capture only the outlines of a more complex and multihued picture. Kuhn (1962)

suggests that a research paradigm, however specialized, incorporates theory, application

and instrumentation that are accepted and adhered to by members of a scientific

community. Paradigmatic assumptions guide conceptualization, research design and

analysis. Indicating the maturing of a scientific discipline, paradigm-based research

offers the advantages of increased precision, specification and rigor. Basic premises and

fundamental relationships are established, thus allowing for detailed investigation.

However, paradigmatic research or "normal science" is limited in discovering radically

new phenomena.

An explicit and fundamental assumption of this research project is that broader,

more discovery-oriented perspectives that look beyond information processing and policy-

driven concerns are needed, to begin to capture the rich color and essence of

advertising's meaning in children's lives. What appear to be basic, substantive questions

about how children make sense of, interpret and use ads have not been asked because








23
they lie outside traditional modes of thinking and communication among researchers.

With the caveat firmly in mind that a single research project can only begin to

demonstrate the value of a broadened conceptualization, this investigation focuses on

perceived relationships between advertisements and product consumption. The approach

taken represents a departure from traditional models on three levels. First, it looks

beyond prepurchase issues. It is grounded upon the simple assumption that neither the

decision process nor children's attempt to construct product meaning end at the point of

purchase. Children's product-related thoughts and perceptions derive as much from their

direct experiences with consumption objects as from the advertisements designed to

promote them. To neglect this very powerful source of marketplace information

represents a tremendous oversight. From a child's perspective, it is the product and the

fun, excitement or disappointment it offers that ultimately matters. Second, a meaning-

based model of advertising is utilized to guide the research process (McCracken 1987).

This perspective explicitly recognizes that advertising is a reflection of the culture that

creates its form and content. An advertisement is not a fixed or neutral object but a

kaleidoscopic, cultural product containing different layers of meaning, ranging from the

obvious to the culturally interpreted. When children respond to advertising or other

types of marketplace stimuli, they are responding to products of a particular era and

social context (Kline 1989; Watkins 1985). Thoughts and feelings are generated

according to their emerging understanding of cultural conventions, beliefs and values.

The child is not simply extracting product information from an advertisement that (s)he

then stores in memory for use in subsequent decisions, but is an active participant in the








24

construction and communication of cultural meanings. Fully occupied in the process of

learning and negotiating their notions of self and community, children may use

advertisements as a window on the larger culture. To the child engaged in the process

of discovering what it means to be a child and a consumer, advertisements are more than

simply product information. They are rich sources of cultural knowledge and insight.

This perspective departs from the prevailing paradigm by viewing the child not just as

a passive recipient of information but as an active participant in the construction of

meaning. Children construct and shape meanings that are multifaceted, intriguing and

often complex yet may bear little relationship to adult interpretations. This research

project departs from traditional approaches by explicitly focusing on the child's unique

perspective on the advertising-consumption relationship. Though children's responses

legitimately reflect the situations and objects that they confront in daily life, relatively

little is known about their unique perspective. In many studies of children's media

reception, adult responses are used as the asserted or implied standard of performance

(Anderson 1981; Anderson and Avery 1988; Bever et al. 1975; Dorr 1986; Rossiter and

Robertson 1974). Researchers have utilized their own interpretations of televised content

as the standard and evaluated children's responses against it. With this criterion,

children's perceptions are implicitly regarded as some sort of flawed approximation to

the adult model, rather than a true and valuable perspective on the world. This research

is based on the assumption that children's reactions to the situations and objects they

confront in daily life are far more complex than theory often gives them credit (Denzin

1977). Until this complexity is recognized and incorporated into empirical studies of








25

children's consumer behavior, our images of consumer socialization will remain

incomplete.

The Persuasive Influence of Advertising

The investigation of advertising's effects on children has a relatively long and rich

tradition within consumer research. After over 20 years of research, the empirical

evidence distinctly shows that advertising influences young children's product awareness,

preferences and behavior. It is clear that children pay attention to ads, delight in the

flights of fantasy and fun they depict and are often attracted to the products they

promote. Of fundamental interest to researchers and marketing practitioners alike is

understanding the precise nature of this influence and the processes by which it occurs.

This is a research area that incorporates an array of specific substantive and theoretical

issues. Much of the research on children's responses to advertising can be cast in terms

of four major areas. These are (1) children's attention to advertising, (2) children's

comprehension of commercial messages, (3) advertising's persuasive impact on children's

product preferences and (4) the behavioral consequences of exposure, particularly on

choice and requests for advertised products (see Atkin 1980; McNeal 1987, Raju and

Lonial 1990, and Wartella 1980 for alternative classification schemes). Within this broad

categorization fall a number of studies that have been designed to test the relative

effectiveness of specific techniques or strategies used in advertisements targeted at

children. For example, the persuasive impact of product characters, premium offers,

disclaimers and the type of claims made have all been the subject of extensive research

study (e.g., Adler et al. 1980). Of primary interest here is the research that focuses








26

more generally on advertising's impact on the attitudes and behavior of school-age (5 to

12-year-old) children. This work provides the foundation necessary to begin to consider

how advertising might influence children's interpretations and evaluations within the

broader context of product consumption.

Research on children's beliefs in or acceptance of advertising has been focused

at two levels (1) their willingness to accept specific claims made about products and (2)

their more general attitudes about the truthfulness of advertising. As might be expected,

clear age-related patterns emerge. Older children (10 to 13-year-olds), tend to be much

more skeptical of advertising than their younger counterparts (Bever et al. 1975;

Robertson and Rossiter 1974; Rossiter 1977; Ward et al. 1977). They are quick to

concede that advertising does not always tell the truth and frequently express rather

negative attitudes toward the institution of advertising itself (Blatt et al. 1972; Bever et

al. 1975; Robertson and Rossiter 1974).

Underpinning research effort in this area is the question of when children

understand advertising's persuasive intent and profit motive. Long-standing concern

about young children's failure to recognize the persuasive purpose that is intrinsic to

commercial advertising led to a number of research investigations during the 1970s and

1980s (e.g., Blosser and Roberts 1985; Donohue, Henke and Donohue 1980; Macklin

1985, 1987; Roberts 1982; Robertson and Rossiter 1974; Ward et al. 1977). Though the

age at which children fully comprehend advertising's purpose has not been established

with certainty, there is substantial evidence indicating that by 7 or 8 years-old, most

children have at least a preliminary understanding (Roberts 1982; Robertson and Rossiter







27

1974; Ward et al. 1977; Wartella and Hunter 1983). The recognition of persuasive intent

is considered a basic developmental milestone by both researchers and policymakers.

Traditionally, it has been assumed that once children understand the persuasive purpose

of advertising they become more skeptical and are then capable of resisting its appeal

(Brucks, Armstrong and Goldberg 1988; Federal Trade Commission 1978; Robertson and

Rossiter 1974; Rossiter and Robertson 1974). Without the recognition that advertising

intends to persuade, children are presumed to accept advertising claims as truthful rather

than question them as adults often do. Young children are believed to be in need of

protection due to their inability to detect persuasive intent in advertising, making them

especially vulnerable to its appeals. Older children, on the other hand, equipped with

an understanding of commercial intent, begin to mistrust advertising and arm themselves

with "cognitive defenses" to resist its persuasive aims (Robertson and Rossiter 1974;

Rossiter and Robertson 1974). They are presumed to have less need for protection as

a consequence of their ability to comprehend advertising's persuasive function and erect

appropriate defenses against it.

However, for this enhanced awareness or knowledge of advertising to provide a

viable defense against persuasive messages, children must draw upon it while they watch

television commercials. Recent research suggests, however, that generalized attitudinal

measures may be only weakly related to children's actual rejection of specific

advertisements and message claims in a viewing context (Atkin 1980; Goldberg and Gomrn

1974; Gomrn and Florsheim 1985; Gomrn and Goldberg 1977; Rossiter 1979). Knowledge

of the intent of advertising is not sufficient. An exciting, funny or compelling







28

presentation may simply overwhelm any cognitive defenses that a child might bring to

bear. So, while older children may utter rather negative views about advertising in

general, these opinions may have little to do with their natural reactions while viewing.

To make sense of this apparent dilemma, researchers have turned to cognitive

developmental concepts and information processing theories. During middle childhood

and early adolescence, children gradually develop the ability to direct or control their

information processing strategies (Roedder 1981). However, this is a gradual process.

In the early stages, children will often be influenced by immediate, engaging product

presentations and tend to respond accordingly. Children of this age group (8-12 year-

olds), tend not to think critically about advertisements unless explicitly encouraged to do

so. They are unlikely to generate counterarguments spontaneously in response to an

advertisement, due to their inability to (1) focus attention on message arguments rather

than peripheral content and (2) retrieve knowledge relevant to the evaluation of these

arguments, without specific cues (Brucks et al. 1988). For the cuedd processor", the

organized retrieval and use of available information is possible only in the presence of

appropriate cues. Unless advertising knowledge is expressly activated, children tend not

to rebut advertised claims (Brucks et al. 1988). Of course, adults are also susceptible

to the persuasive power of an attractive portrayal. However, there is a critical

difference. While adults may choose to suspend their disbelief on occasion, they have

the capacity to manage their information processing strategies. For children, however,

even once they know that advertising is expressly designed to sell products, advertising








29

may still affect their established preferences because they lack the ability to control the

allocation of their cognitive resources (Roedder, Stemrnthal and Calder 1983).

This muddle of emerging competencies, skills and perhaps motivations makes this

age group a particularly interesting one to study. While they possess appropriate

background knowledge to assess advertised claims in a critical fashion, they must be

reminded to do so. Though aware of specific ad techniques and seemingly skeptical of

its approach, even older children are responsive to ad content, both central and

peripheral. While this duality of response can be accounted for in terms of cognitive

deficits, it is also important to recognize that this explanation implicitly assumes that

children's perceived meaning centers on brand evaluation and assessing the veridicality

of ad claims. That children may have a broader agenda in reading advertisements either

is not explicitly considered or is deemed irrelevant. Ads are not merely sources of brand

information but reflections of a playful world of fantasy, status and cultural norms. By

delimiting investigation to a set of researcher-defined response categories, it may be that

equally meaningful dimensions are neglected. The notion of counterargumentation is an

adult construction as is the a priori specification of peripheral content (e.g., Ross et al.

1981; Rossiter 1979). Unencumbered by the realities of economic obligation and with

$4.7 billion dollars to spend, American children may have little interest in generating

counterarguments in response to the fantasy and amusement that commercials offer

(Solomon 1992). The presumption that children view a selling motive as inherently

negative may simply be inaccurate. It is the assumption that children view commercial

aims as somehow duplicitous that underpins adult expectations that children not only








30

should but will erect defenses against advertised messages once they acquire the capacity

to do so. However, it is perfectly reasonable that a child will be fully aware of an

advertisement's aim, and interpret it as such, without any negative feeling or connotation.

There is no reason why recognition of advertising's persuasive purpose necessitates a

decline in a child's responsiveness to specific commercial messages.

Children's awareness of persuasive intent is an important issue not only because

of its link to the acquisition of cognitive defenses, but because a child's interpretation of

a particular advertisement depends on his(her) understanding of the nature and function

of advertising in general. Unlike other forms of mass communications a child

encounters, advertising transmits its sales plea through the symbolism of idealized

settings and situations. To make sense of these appeals, a child learns that ads use

dramatized episodes, characters and emotions to symbolize or represent real situations

(Robertson and Rossiter 1974). Before a child can fully grasp the meaning of a

commercial, (s)he needs to understand that the primary focus of the message is not

information but persuasion. Inherent in the content of the advertisement is a systematic

partiality or bias such that those features that enhance persuasion are emphasized and

those that impede it are de-emphasized. From this perspective, the key characteristic of

an ad is not simply that there is an intent to sell but that, in order to do so, the content

of the appeal is crafted in specific ways. If a child is aware of the purpose and form of

advertising as communications designed for commercial aims, then the imagery will be

interpreted within that broader context. Identifying a message as an advertisement helps

the child to draw on knowledge relevant to decoding the specific meanings of text and








31

images (Pateman 1983). How children bring this knowledge to bear in the context of

viewing is not well-understood. It is important to look beyond traditional schemes used

to categorize cognitive responses. Though the questions of whether and when children

generate counterarguments is critical, these schemes do not adequately capture the depth

and complexity of children's response. Until conceptual models are firmly grounded in

the reality of children's experiences and perspectives, understanding of advertising's

persuasive power is necessarily limited.

Researchers with an interest in advertising's persuasive effects have sought

behavioral as well as attitudinal evidence of its influence. Two types of behavioral

variables have been the focus of much of this research: the frequency of children's

product-related requests and their choice behavior in experimental settings. Correlational

measures have been used to assess relationships among a child's age, exposure to

advertising and the frequency of product requests to parents. Although the weight of

evidence seems to suggest that the frequency of children's product requests diminish with

age, the data are somewhat difficult to interpret (Galst and White 1976; Robertson and

Rossiter 1974; Robertson and Rossiter 1976; Rossiter 1979; Ward and Wackman 1972).

When product class differences are controlled for, the relationship becomes increasingly

murky. Not surprisingly, requests for toys decline with age while requests for clothing

and bicycles increase (Isler, Popper and Ward 1987; Ward and Wackman 1972).

Requests for heavily advertised products, such as snack foods and soda, that are relevant

to children of all ages do not appear to decline significantly as a child matures (Ward and

Wackman 1972). Collectively, the evidence seems to suggest that the frequency of







32

children's advertising-induced requests to parents declines slightly with age. When age

is controlled for, children who watch more television are more likely to make product

requests than children who spend less time viewing (Goldberg 1990; Robertson and

Rossiter 1977). It should be noted, however, that these findings are based primarily on

global indicators of advertising exposure rather than more difficult to isolate linkages

between specific advertisements and subsequent product requests. The impact of

advertising exposure on children's product choices has also been investigated in a variety

of experimental settings. Under controlled circumstances, a relatively consistent pattern

between advertising exposure and product choice emerges. Television commercials can

and do persuade children to select the products they see advertised. These results appear

to hold across age groups and in both laboratory and field settings (Goldberg, Gomrn and

Gibson 1978; Gomrn and Goldberg 1982; Resnik and Stern 1977). The impact of

advertising exposure on choice behavior is apparently not limited to the specific product

advertised, but may generalize across product categories. Goldberg et al. (1978) found,

for example, that exposure to commercials for highly sugared snacks and cereals led

young children (5 to 6-year-olds) to choose these kinds of sugared foods more readily

than children who had been exposed to pro-nutritional messages. A similar pattern of

findings was observed by Gorn and Goldberg (1982), who observed children's snack

choices (5-8 year-olds) over a two-week period. Though these studies have focused on

younger children (5-8 year-olds), there is evidence that advertising may influence the

choices of older children as well. Roedder, Sternthal and Calder (1983) found that as

a consequence of advertising exposure older children (9-13 year-olds) made product








33

choices that were inconsistent with their pre-existing attitudes, particularly when the

choice task was complex. Advertisements seemed to encourage children to select

products they saw advertised, instead of products they generally prefer but that were not

advertised in the context of the study. Fourth graders (9-10 year-olds), in particular,

tended to choose advertised products despite more favorable attitudes toward other

alternatives. They ignored their initial preferences, and focused instead, on the

immediate ad content in making their choices. Thirteen year-olds, on the other hand,

remained faithful to their initial preferences, regardless of the advertisement that they had

just seen. While eighth graders (13 year-olds) appeared to consider their attitudes toward

each product and then select the one they most preferred regardless of advertising, fourth

graders made their choices exclusively on the basis of their evaluation of the advertised

product. The adolescents resorted to this strategy only when the decision task was

complex, involving a large number of choice alternatives. Both of these age groups

possess at least a rudimentary understanding of advertising's purpose and the cognitive

defenses it presumably provides.

The causal links between advertising exposure and children's product choices have

been well-established under controlled conditions. These effects are much more difficult

to study and observe in the context of a child's every day life. Though the

generalizability of these results is an issue, the findings indicate that children can be

influenced not only to prefer advertised products but to seek them out when given the

opportunity to do so.







34

Product Consumption: A Primary Source of Meaning and Influence

Given the policy orientation that underpins research effort in this area, it is not

surprising that investigators have focused their attention on understanding advertising's

ability to shape children's product preferences, requests and choices. If advertisements

have the capacity to influence children's desire for particular products, then policymakers

have an unquestioned responsibility to insure that the contents of these communications

are fair, given the unique nature of the target audience. Both the processes by which

advertising affects children's judgments and the persuasive techniques that are most

effective are of primary interest. Implicitly, it is assumed that advertising exerts its

primary influence prior to a purchase decision and therefore investigation tends to focus

on variables that somehow affect children's initial product preferences. However, long-

standing conceptual models of consumer decision making recognize that the purchase

process ends not with choice but with product consumption, use and evaluation (Engel,

Kollat and Blackwell 1968). From the consumer's perspective, it is through consumption

that the significance of product benefits are expressed and enjoyed. Children respond to

advertisements, not in isolation but in the context of the experiences they have had, both

good and bad with heavily promoted products. Advertising and consumption are

interwoven, their relationship circular rather than linear. Children view ads, try products

and often view those same ads again, this time accompanied by newfound insight and

understanding. Advertisements are interpreted in the context of this ongoing stream of

increased awareness and experience. However, as researchers we know very little about

how children relate these everyday experiences to the captivating visuals, flights of







35

fantasy and mythical figures that tend to dominate children's advertising. Where this

investigation departs from traditional models of children's advertising response, is with

the explicit recognition that product consumption plays a central role in guiding

children's comprehension and interpretation of advertisements. What occurs once a

product leaves a retailer's shelf is as critical as what happens before.

How children characterize or interpret their product experiences is significant both

in terms of the immediate situation or product as well as with regard to their more

enduring notions about marketing activities and influence. Though children have ample

opportunity to learn about products through advertising, many commercial sources that

an adult might consult for additional information are relatively inaccessible to a young

consumer. For example, until they are functionally literate, children are denied access

to most information conveyed through the print media. Information on packages and

labels or in non-commercial media may be not only difficult to decipher but of little

interest to children. Children also lack information about price, one of the most

important sources of information in adult decision making (Barcus 1980; Meringoff and

Lesser 1980). Concerns about how best to allocate limited income are simply not salient

nor well understood until much later. While adults may ponder the opportunity costs of

their decisions, children's consumption experiences are characterized by aesthetic

enjoyment, playful activity and fun. Products can be evaluated and consumed without

the attendant economic responsibility or concern.

What may appear initially to be a simple issue of determining the veridicality of

advertising-induced expectations turns out to have much broader implications for the







36

child's understanding of marketplace behavior. On the one hand, product experiences

may serve as a kind of corrective to the type of exaggerated expectations advertisements

may sometimes foster. Any confusion created by an advertisement can be rectified when

a child has the opportunity to compare ad claims to the objective reality represented by

the product. On the other hand, when children's expectations are realistic, product

experiences provide evidence of advertising's reliability as a source of information and

ideas. In either case, the implicit comparison between the product as advertised and the

product as experienced provides the fledgling consumer with valuable information about

what advertising is and how it works. What may seem obvious to adults about what and

how advertisers communicate with consumers is novel information to children.

Advertising is a communications genre unlike any other that children come in contact

with, and they will attempt to make sense of it. Learning about advertising, its unique

characteristics and modes of expression is an important part of what children are doing

in responding to ads. Over time they begin to develop tacit knowledge or intuitive

theories about how advertising works (Wright 1986). Product experiences serve an

important role in this process not only as a sort of reality check but as the basis for

learning about marketplace interaction. Although children can learn a great deal through

advertising alone, it is the comparison of the ad to the product that provides the evidence

needed to evaluate what the advertiser has stated or implied. Children's broader

perceptions of marketers and marketing activity are grounded in the simple pleasures or

disappointments these experiences yield.








37

Translating Product Meaning: From the Mundane to the Magical

The associations children construct between advertisements and the products they

promote are fundamental to their emerging understanding of the marketplace. Without

the opportunity to contrast their own experiences with the idealized images conveyed by

advertisements, children would lose the most basic source of information they have

available about marketing activity and influence. However, the specific character of

these linkages are neither simple nor necessarily direct. To begin to appreciate how

children perceive the ad-consumption relationship, requires first, an understanding of the

nature of the task with which they are faced.

Broadly speaking, children encounter consumer products in one of two distinct

contexts. On the one hand, they may learn about a brand through their own direct

experiences. Sitting on a kitchen shelf, in a lunch box or sampled at a friend's house,

the brand may be part of a child's familiar, everyday world. The brand is acquired,

consumed and disposed of, through the ordinary course of day-to-day life. It exists in

the realm of the commonplace or conventional. Alternatively, children may be exposed

to a brand through the imagery of an advertisement. Here, the brand is located in a

figurative or symbolic world, explicitly fashioned to extend the brand's meaning and

appeal. The advertiser's task is to transport the brand from the world of the mundane

and familiar, to the more ephemeral symbolic realm (Young 1990). Through the

language and images of advertising, the brand is elevated from the ordinary or everyday

context of existence to one replete with fantasy, play and adventure. To depict the

product in its most appealing light, the advertiser seeks to move the brand from the realm








38

of the everyday, to a world imbued with appealing signs and symbols. Through the

advertisement, a broader context is crafted for the brand, one that not only positions the

brand within the marketplace but mirrors the desires and interests of a young audience.

The advertiser must not only select desired properties for the product among a wide

range of possibilities but successfully evoke intended consumer reaction in the narrow

frame of an advertisement. An advertisement is not a neutral entity but a fluid, cultural

construction. The potential for meaning resides at a number of levels from the obvious

to the culturally interpreted (McCracken 1987). The content of persuasive appeals shapes

the meanings brands ultimately acquire. Advertising is one of the primary mechanisms

through which cultural beliefs, assumptions and values are transferred to consumer goods

(McCracken 1986). The transition from brand in the world to brand in the ad is a

complex process, not only from the advertiser's perspective but from the receiver's

perspective as well.

How children interpret or perhaps reconcile these varying sources of brand

information is neither clear nor necessarily simple. The seemingly objective reality of

a consumption experience is juxtaposed against the symbolic experience of an

advertisement. Both of these experiences have the potential to shape or transform the

interpretation of the other. That product experience may affect a child's subsequent

responsiveness and reactions to an advertisement makes sense, intuitively. That an

advertisement may have the capacity to alter a child's interpretations of his(her)

consumption experience is both intriguing and potentially disturbing (Hoch and Ha 1986;

Puto and Wells 1984). Research that attempts to characterize the process by which







39

children integrate and internalize these disparate marketplace stimuli represents an

important first step towards understanding the likely consequences of ad-consumption

interactions.

From the child's perspective, the transition requires the capacity to translate

product representations between disparate experiential and viewing contexts. The

advertiser takes the simple or mundane and envelops it with symbolic properties or

significance. To the extent that the consumption experience represents a kind of literal

reality, the depiction of the brand in the ad appears to require more figuratively based

interpretive strategies (Young 1990). Children's advertisers frequently employ fantasy,

hyperbole, humor and simple metaphors to create attractive brand images. Mythical

beings, magical transformations and whimsical flights of fantasy are the rule rather than

the exception. The development of an understanding of non-literal uses of language and

visual images is an important mediator of the meaning children assign to ads utilizing

these creative techniques. However, the process of learning to interpret media

communications on a figurative level is both complex and protracted (Young 1986). At

a very simple level, preschool children spontaneously generate creative metaphors,

playfully fusing literal reality and fantasy (Winner 1988). School-age children, on the

other hand, seem to approach communications from a much more literal perspective.

Messages tend to be strictly interpreted or taken at face value. Though an eight year-old

recognizes the discrepancy between the message and reality in an advertisement that

incorporates obvious exaggeration (s)he may not fully understand the communicator's

purpose in employing this technique (Young 1990). The advertiser is likely to be








40

regarded as having simply made a mistake rather than having intentionally selected a non-

literal execution. As children enter late childhood or early adolescence (approximately

11-12 years-old) their fascination with and use of figurative language seems to re-emerge

in a more sophisticated fashion (Winner 1988).

There is no single competency that suddenly allows children to fully appreciate

the use of non-literal portrayals in advertising or other types of communications. Rather,

a collection of interpretive skills gradually emerges which allow children to assess both

the form and content of a message as well as its source. The concept of persuasive intent

captures only a subset of the skills needed to achieve full "adult" comprehension of

commercial messages employing hyperbole, metaphor and visual imagery to persuade.

Children's understanding of the meaning of advertised messages also depends on their

capacity to (1) distinguish fantasy from reality, (2) differentiate between literal and non-

literal uses of visual and verbal message elements, (3) recognize that there is both a

source and an audience for the message who have distinct perspectives and motives and

(4) recognize that advertisements require different interpretive strategies than educational

or entertainment oriented messages (Roberts 1982; Robertson and Rossiter 1974; Young

1990). These emerging capabilities are rooted in children's expanding experience in

social and economic spheres as well as their information processing achievements.

At the most basic level, children need to be able to step outside their own point

of view and understand the point of view of another person before they can begin to

appreciate an advertiser's profit orientation (Faber, Perloff and Hawkins 1982). In

straightforward informational contexts, even very young children are able to mentally








41

represent the knowledge and beliefs of other people (Ackerman 1981; Pemrner 1988).

However, they may encounter interpretive difficulty when someone breaks with

conversational convention through non-literal or figurative uses of language. Until

children are ten to eleven years-old, they tend to be rather literal in their interpretive

strategies. In situations where there is a lack of simple agreement between what is said

and what is meant, young children have difficulty not so much in recognizing, but in

reconciling the apparent discrepancy. Children tend to assume that people say what they

mean, so that the possibility that someone might employ puns, irony or pretense may not

occur to them (Winner 1988; Young 1990). Given the symbolic character of advertising

and the frequency of non-literal executions, the literal character of young children's

comprehension strategies may have important consequences for how children reconcile

these images with the concrete day-to-day reality of the brand in a consumption context.

Though a fundamental shift in children's processing strategies and awareness of

advertising's selling intent seems to occur at around seven or eight years of age, the

evolution in children's interpretive strategies continues throughout the elementary school

years. While children as young as second grade (6 to 7 years of age) have the capacity

to recognize symbolic properties in consumer products, it is between fourth and sixth

grades (9 to 12 years) that children begin to suggest more symbolic interpretations of

marketing stimuli (Belk, Bahn and Mayer 1982; Belk, Mayer and Driscoll 1984). Rather

than simply reading ads as a series of events or incidents, children of this age group may

interpret message elements in terms of their symbolic properties, as reflective of cultural

meanings. While younger children may tend to focus on the perceptual qualities of an








42

advertisement or their emotional reactions to it, older children have the capacity to

comment on the ad as a cultural object. No longer drawn primarily to perceptual

features, older children begin to distance themselves from the immediate message and

think about, evaluate and judge it in a more reflective fashion (Ward et al. 1977; Young

1986, 1990).

One of the developmental accomplishments of the elementary school period is an

increasingly sophisticated approach to judging fantasy and reality in television programs

and print media (Kelly 1981; Winnick and Winnick 1979). The criteria older children

(10-12 year-olds) apply to judging reality are multifaceted and complex. While a seven

year-old tends to judge reality on the basis of outward appearance or format, and physical

possibility or impossibility, older children's assessments reflect a sensitivity to the inner

content of a message. Issues of possibility are considered not only in terms of physical

phenomena but in relation to social and psychological reality as well (Kelly 1981; Young

1990). Plausibility on a number of dimensions enters the judgment equation, making a

child's appraisal of what constitutes reality, like an adult's, increasingly complex. The

consequences of possessing multiple criteria for judging fantasy and reality in an

advertising context remain unexplored. While this enhanced sophistication might be

expected to aid comprehension, its likely impact on persuasion is not as clear. Whether

older children might entertain a broader array of plausible hypotheses regarding the

meaning of the ad, and its links to the brand, warrants future research attention.

What does seem apparent, is clear developmental change in the breadth and depth

with which children interpret and evaluate media content during middle childhood.








43

Extending what are initially simple concepts of selling intent and advertising technique,

a host of interpretive skills emerge that allow older children to construct meaning on a

number of levels ranging from the articulation of basic facts to their cultural significance.

A gradual shift in children's perspectives emerges; from a point of view embedded in the

textual features of an ad and the world it portrays, to a more detached perspective in

which the perceiver begins to step outside the ad to think about it in a broader and more

critical fashion (Desmond 1985; Young 1990). Among older children, deeper and

socially meaningful levels of meaning may be extracted that are not directly expressed.

Inferences about situations and their significance, characters' motives and values are

readily drawn by children (5th-8th graders) in response to television programming

(Collins 1983). However, relatively little is known about how children use their

newfound interpretive abilities in the context of television advertising and inferred

relationships to product consumption.

Where children's responses are concerned, many uncertainties remain. How

children perceive the relationships between the advertisements they see and the products

they consume is not well-understood. The way an adult is likely to respond to an

advertisement differs from what might be expected from a child in several important

respects. Adults are not only more skeptical than children but much more likely to act

on this knowledge as they interpret and evaluate advertisements. They recognize that the

utility of advertised information varies widely. Ads are perceived to be more or less

believable depending on the nature of the claims made. Adults readily recognize puffery

and appeals to emotion and are more skeptical of ad claims that are difficult to verify.








44

They rely on their knowledge of advertisers' influence tactics to evaluate advertising

claims and adapt their performance expectations accordingly. When an advertiser's

message can be easily and inexpensively verified before purchase, adults are more likely

to assume that what the advertiser says is true. On the other hand, when product claims

can be evaluated only by purchasing and using a product, adults tend to be much less

willing to believe what they see advertised (Ford, Smith and Swasy 1990; Smith, Ford

and Swasy 1990). Claims that have a high probability of truth are differentiated from

those of a more uncertain character and evaluated on that basis. Children, on the other

hand, may not readily appreciate nor be concerned with the quality of information

provided by advertisers. Though they may articulate adult-like attitudes about

advertising, these generalized indicators may bear little relationship to how they respond

to specific messages or persuasive claims. Whether children judge the veracity of ad

claims, recognizing the difference between claims that are easily verified and those that

are not, is not as clear. The question is one of performance as much as capacity.

Claims that are plausible and attractive yet difficult to verify may be more readily

believed and confirmed through a pleasant consumption experience.

A Call for a Meaning-Based Perspective

Children's advertising research clearly highlights the need to embed understanding

in the context of how children of various ages comprehend and evaluate persuasive

messages. There is no question that children's ability to process information conveyed

through advertising differs as a function of their relative experience and cognitive

sophistication. Serious inquiry must take into account children's emerging skills,







45

proclivities, and the contingencies in which they operate. Theories of cognitive

development have provided useful frameworks for both conceptualization and empirical

efforts investigating children's responses to advertising. Paradigmatically, an

information-centered young consumer is assumed. Advertisements are viewed primarily

as purveyors of brand information. Age-related changes in children's ability to store,

manipulate and retrieve information are examined in terms of their impact on children's

comprehension of advertised claims and attitudes toward the brand promoted. Insights

gleaned from these studies provide the necessary basis for understanding how children's

judgments and processing strategies evolve. However, while this research provides depth

of insight into the functioning of information processing variables, it sacrifices breadth

of insight into the broader cultural and affective context in which children think about

advertisements and consume products.

In this investigation, a meaning-based model provides the basic framework for

examination of children's perceptions of the advertising-consumption relationship.

Insight into how children construe these relationships is sought, within the general

constraints imposed by developmental capabilities for acquiring, retaining and utilizing

marketplace information. The meaning-based approach, focused at a broader level than

information processing approaches, expressly recognizes the cultural context of

consumption (McCracken 1987; Watkins 1985). Investigation of consumer experience

originates from the position that individuals live and consume in a meaningfully

constituted world, that has been structured by the beliefs and values of a culture.

Advertisements and consumer goods each play a key role in the transmission and








46

expression of these cultural norms and values (McCracken 1986). Through their

anticipation, choice and consumption, products are a prominent source of meanings that

individuals draw upon in constructing notions of self, status and community. This

process of negotiating and refining conceptions of self and the social world is an ongoing

developmental process throughout the life-span. Movement through the life cycle,

changing circumstances, as well as evolving needs and preferences each bring about re-

evaluation and refinement. Children, actively and primarily engaged in the process of

defining their sense of self and society, may be particularly responsive, within the

general constraints imposed by information processing capabilities, to the meanings

contained in consumer goods. These are not meanings in a deep, philosophical sense but

useful ideas about the structure, expectations and values of the culture in which they live.

The central developmental task of childhood is to learn what it means to be an adult, in

all its complexity and nuance. Consumer goods, in their acquisition and use, are a key

source of cultural material and insight for the child.

Advertising is also implicated in the transmission and expression of cultural

meanings. It is the channel through which meanings are transported from the world of

everyday existence to consumer goods. Advertising, in a sense, captures cultural

meanings and invests them in consumer goods (McCracken 1986, 1987). It makes

accessible to children expressions of the culture in which they are learning to live and

contribute. As active participants in this process, children learn about the contents and

range of cultural meaning that exist in consumer goods (McCracken 1986). The picture

of the world as conveyed through advertising shapes or influences the picture of the








47

world that is constructed through childhood. Children attend to advertising in search of

meaning, things that can be used in the process of constructing emerging definitions of

the self, the larger community in which they live and the marketplace arena. They

search not only for product information but for insight into what it means to be a child,

and what a child becomes. Research grounded in a meaning-based approach, explicitly

adopts this more inclusive perspective on children's advertising response. It provides the

conceptual foundation necessary to begin to address issues that look beyond purely

cognitive construals of how children make sense of the advertisements and products that

permeate their lives.

Where cognitive processing models may fall short, is in their failure to consider

that the individual who is processing information is immersed in a highly structured and

meaningful environment. In viewing an advertisement, consuming a product, or

comparing the two, a child is a recipient not just of information but of meaning. How

(s)he interprets and evaluates these experiences is a consequence of the cultural

understanding (s)he brings to bear, as well as her(his) information processing capabilities.

Meaning is created and confirmed through the process of interpretation, definition and

interaction (Reid and Frazer 1980). Without benefit of substantial marketplace

experience and fully mature processing strategies, children unravel, shape and construct

meaningful interpretations of their consumption related experiences. Though these

constructions may sometimes bear little relationship to adult explanations, they represent

a valid database for furthering scientific insight. What do not seem to exist in any

substantial way, are investigations documenting how children's natural responses to








48

marketplace stimuli represent a successful adaptation to the condition and environment

of being a child. Minimal data on children's perspectives of their consumer experiences

is available, a perspective that only becomes accessible if researchers are willing to

suspend belief in traditional notions of children as in process, cognitively limited and

lacking real understanding. Much like an ethnocentric bias in anthropological study, the

interpretation of children's behavior exclusively in adult terms, severely limits the scope

of scientific understanding. To understand how children make sense of their experiences,

requires a sensitivity not only to their cognitive skills and limitations but to their unique

perspectives on the marketplace and its impact on their lives. Their perceptions,

judgments and opinions provide valuable information not obtainable through any other

source.

The Interaction of Advertising and Product Trial

Though researchers have traditionally focused on advertising's prepurchase impact

on consumer behavior, there is growing consensus that advertising's effects may be

detected not only at the time of exposure, but later, in the context of product use (Aaker

and Stayman 1992; Deighton 1984; Deighton and Schindler 1988; Hoch and Ha 1986;

Levin and Gaeth 1988; Marks and Kamins 1988; Olson and Dover 1979; Puto and Hoyer

1990; Puto and Wells 1984). Though conceptual perspectives and aims differ,

researchers agree that an advertisement may help to cultivate associations with a product

experience, so that the experience is different than it would have been without exposure

to the ad. Advertising may engender feelings that are linked to the experience of using

the product, so that it becomes more fun, exciting, or intriguing than it would otherwise








49

be (Aaker and Stayman 1992; Puto and Wells 1984). Alternatively, advertised claims

may be construed as hypotheses that consumers subsequently test out in the context of

using a product, shaping their interpretations and evaluations (Hoch and Ha 1986).

Irrespective of whether cognitive or affective explanations are sought, there is clear

evidence, at least among adult consumers, that advertisers have the ability to reach into

the consumption experience and influence how it is perceived and evaluated (Aaker and

Stayman 1992; Deighton 1984; Deighton and Schindler 1988; Hoch and Ha 1986; Levin

and Gaeth 1988; Marks and Kamins 1988; Olson and Dover 1979).

Whether, and to what extent, advertising actually affects product use depends on

the character of the consumption experience itself. When product performance is easily

and unambiguously judged, advertising is easily discounted. In this situation, adults are

unlikely to rely on advertising to direct the interpretive process (Hoch and Ha 1986).

However, there are many consumption occasions when the indicants of product

performance are neither obvious nor easily assessed. Typically, product quality is not

solely a function of a product's concrete attributes but of more intangible, subjective

properties as well. Questions of product quality or value are often not unequivocally

resolved through product consumption. When a product experience is potentially

ambiguous or open to multiple interpretations, advertising may exert a significant

influence on consumers' assessments of quality and enjoyment. Though adults recognize

that advertisements are partisan sources, they may develop tentative expectations on the

basis of ad claims that are difficult to verify directly (Deighton 1984). Many

commonplace product experiences are supportive of multiple interpretations. From soft








50

drinks to the latest in hip-hop fashions, product use is laden with meaning that accrues

from sources beyond its physical form (McCracken 1986). In these types of situations,

advertisements have the capacity to alter the consumer's experience by suggesting what

features should be attended to and remembered (Deighton 1984, 1988). Ads may offer

clues that consumers rely on to interpret their feelings and perceptions.

As a relatively new area of inquiry, research investigation into the effects of

advertising on consumption naturally reflects many unresolved conceptual and

measurement issues. One of the clear challenges in this area is to develop methods that

effectively capture advertising's experiential influence. New, non-traditional approaches

are required to isolate these effects, their consequences and determinants (Aaker and

Stayman 1992; Puto and Wells 1984; Wells 1986). Continued conceptual clarification

and refinement is also needed to promote understanding. Ambiguity surrounding the

precise nature of advertising's impact on consumption is evident in the terms and

methods used to investigate this topic (Deighton 1988).

Most of the research investigating the relationship between advertising and

product experience can be identified with one of two conceptual approaches (1)

transformational advertising or (2) the experiential learning or "hypothesis-testing"

approach. Though the explanatory bases for these models clearly differ, they retain

important commonalities. Both suggest that advertising can influence what consumers

think about in the context of consumption. Both seem to cast advertising's persuasive

power in terms of its ability to direct consumer conclusions or inference (Deighton 1986,

1988). Both suggest that the consumption experience changes as a consequence of








51

advertising exposure. Precisely how these changes are hypothesized to occur, however,

differs across the two approaches.

The hypothesis-testing model adopts an information-centered orientation, focusing

on how advertising influences what consumers learn from their product experiences

(Hoch and Ha 1986). Claims made by an advertiser may affect how consumers judge,

interpret and evaluate their product experiences. According to this model, consumers

treat advertised claims as tentative hypotheses or expectations about product performance.

From an adult's perspective, advertisers are viewed as partisan sources who lack full

credibility. Before adults are willing to accept a claim made by an advertiser, they seek

some sort of independent evidence or corroboration. Either product consumption or a

search for additional information provides the opportunity to test a hypothesis engendered

by an advertisement. How the ad-based information and experiential evidence are

integrated depends on the characteristics of the decision environment and the consumer's

competence within it (Hoch and Ha 1986). The hypothesis-testing model implicitly

assumes an experienced if not infallible consumer. Even as adults, processing may be

distorted by confirmatory biases and overconfidence (Deighton 1984; Hoch and Deighton

1989). Unless the consumption experience provides unambiguous evidence about product

quality, adults tend to confirm their original expectations (Hoch and Ha 1986). By

helping consumers to make sense of their product experiences, advertising can influence

what consumers come to believe about the products they consume.

The "transformational" model, on the other hand, focuses more directly on

advertising's affective consequences. It suggests that advertising can shape a








52

consumption experience by inextricably attaching feelings and impressions to a brand so

that the consumer's experience is fundamentally different than it would have been in the

absence of ad exposure (Puto and Wells 1984). The feelings and thoughts evoked by the

advertisement become so closely tied to the consumption experience that the brand cannot

be recalled apart from the ad. In effect, the ad "transforms" or alters the experience of

consuming the brand by helping the consumer to understand and appreciate their feelings.

Not to be confused with transformational argumentation, which is a form rather than a

consequence of advertising, transformational effects occur when an advertisement

influences what consumers notice, attend or react to during product consumption

(Deighton 1988; Deighton, Romer and McQueen 1989; Wells 1986, 1988). Persuasion

is a function of the audience's willingness to enter into the story, to suspend disbelief

temporarily and allow the advertiser to set the agenda. The advertisement's persuasive

power derives not from its ability to change consumers' beliefs directly but in its capacity

to tell consumers what to think or feel, its ability to frame the consumption experience

(Deighton 1988).

Where the concept of transformation seems to depart most clearly from the

experiential learning approach, is in the former's explicit inclusion of affective influences

(Puto and Hoyer 1990; Puto and Wells 1984; Wells 1986). Not only can advertising

influence what consumers attend to and what product expectations they might develop,

but what feelings are evoked in the context of a consumption experience. When

researchers focus on transformational effects, it is the ad-induced feelings brought

forward into the usage context, that are of primary interest.








53
This emphasis on advertising's emotional impact has led some researchers to

equate incorrectly, affect-based or image advertising with the transformational concept.

However, transformational effects are not intrinsic to an advertisement but are defined

by consumers' perceptions of message contents. An advertisement may have

transformational aims, but not effects, if consumers fail to construct linkages between the

message and their consumption experiences. An advertisement may have the capacity

to stir powerful emotions that are never directly associated with the experience of

consuming the brand. In that situation, the ad may be persuasive but it is not

transformational. Though ecologically correlated with emotional or dramatic executions,

transformational effects may occur in connection with informational appeals as well

(Aaker and Stayman 1992; Deighton 1988). The key is the advertisement's capacity to

alter the experience, whether the appeal is emotional, informational or both.

The finding that adults may rely on advertising claims to interpret their product

experiences is surprising and perhaps even disconcerting. What has been assumed to be

beyond the realm of marketing's influence may often be well within its reaches (Hoch

and Deighton 1989). Marketing managers seemingly have the capacity to reach into the

consumption experience and alter its meaning and value. Current research approaches

have provided key insights into the scope and character of advertising's influence on

consumers' interpretations of their product experiences. Though the primary emphases

of the transformational and hypothesis-testing models differ, these approaches clearly

complement and enhance one another. Both models implicitly recognize the interplay of

affective and cognitive factors in consumers' interpretations of advertising-consumption








54

relationships. However, neither explanation fully captures the influence of both. The

learning or hypothesis-testing model draws almost exclusively on cognitive concepts and

processes to conceptualize the interaction between advertising and product evidence.

According to this approach, advertising can exert substantial influence on what

consumers learn from their product experiences. Of primary interest, is the process

underlying advertising's impact on consumers' beliefs and product evaluations. The

transformational approach, on the other hand, focuses on the ad's capacity to create

affective associations that alter the consumption experience. It is the advertisement's

ability to create, modify or intensify the feelings consumers experience while using the

product that has captured researcher attention and interest. While the transformational

approach emphasizes affective consequences, it seems to draw implicitly on the logic of

the hypothesis-testing model as well. A central tenet of the transformational model is

that advertising helps to direct consumers' attention and interpretive strategies in the

context of product consumption (Wells 1986). That the ad helps the consumer to

interpret his(her) consumption related thoughts and feelings, is compatible with the

learning explanation offered by proponents of the hypothesis-testing model. Both of

these approaches provide a useful perspective on the relationship between advertising and

use experience. Neither approach is incompatible with the observation that

advertisements often evoke both cognitive and affective responses, particularly in the

realm of children's advertising where brand information is typically conveyed through

the filter of lighthearted, creative and playful appeals.







55

It is in the context of children's advertisements, products and common experiences

that the utility of these models now needs to be assessed. Effective children's ads use

striking imagery and language to enlarge a brand's meaning and value. To transport a

brand from the realm of everyday life to a more attractive and symbolic context,

children's advertisers frequently rely on fanciful and imaginative executions.

Advertisements may have the greatest potential to affect a child's product experience

when they are plausible and engaging, but elusive and difficult to dispute directly. Not

only is the product experience potentially ambiguous, as researchers have suggested (Ha

and Hoch 1989; Hoch and Ha 1986), but the advertisement itself is cast in such a way

that its content can be construed along multiple, equally credible paths. Whether, and

how children draw on these intriguing but beguiling formats in the context of their

experiences is not clear. Researchers with an interest in this topic have focused their

efforts on understanding adult processing strategies. Though current conceptualizations

provide insight into how advertising may help children interpret their consumption

experiences, the validity of these models can't simply be assumed but must re-examined

in the context of children's lives.

Prevailing Paradigms and Children's Reality

The theoretical models that have been developed to study the relationship between

advertising and product experience embody several key assumptions about how adults

respond to marketer-controlled sources of information (e.g., Deighton 1984; Hoch and

Deighton 1989). Within this general framework, consumers are characterized as skilled

but pragmatic thinkers who: (1) search for product information in order to make choices







56

among consumer goods; (2) typically respond to advertising with skepticism because of

its inherently partisan character; and (3) treat advertised claims as tentative expectations

to be assessed through additional information search or product experience. Because

these assumptions underpin current conceptualizations of the relationship between

advertising and use experience, their validity in the context of children's responses is an

important issue.

Like children's advertising research, current models of the advertising-

consumption relationship presume that ads are evaluated primarily in terms of the

information they provide about a product's features and performance. Advertisements

make claims about products, and if the claims are judged to be reasonable, they may be

used to make sense of subsequent product experiences. These claims are treated as

tentative expectations to be examined through subsequent experience or additional

information available in the marketplace. Predisposed to respond skeptically, adults treat

advertised claims as mere conjectures that may or may not prove to be correct. Only

when the decision environment is ambiguous do advertisements influence how these

experiences are interpreted or judged (Ha and Hoch 1989; Hoch and Deighton 1989;

Hoch and Ha 1986; Wells 1986). Children, on the other hand, are more likely to accept

ad claims, are often drawn to the products they see depicted and tend not to respond

skeptically unless reminded to do so (Adler et al. 1980; Brucks et al. 1988; Roedder et

al. 1983; Ward et al. 1977).

Whether children treat advertised claims as provisional hypotheses that are

subsequently used to evaluate the products they obtain, is not clear. Conceptual models








57

of the advertising-consumption relationship seem to assume that by exposing consumers

to advertised information a set of clear expectations about a product will be formed.

Though children between the ages of 7 and 12 have the cognitive capacity to form

specific expectations about product performance, the precise nature of product

performance claims is not always obvious in children's advertisements. While

informational ads intended for adults frequently provide attribute information in a clear

and concise manner, children's advertisements tend to embed performance claims in

imaginary or fanciful scenes. Though these creative executions may be quite persuasive,

they may not serve as a basis for the formation of specific performance expectations.

The hypothesis-testing model, in particular, rests on the assumption that advertisements

provide concrete, accessible information about a brand that consumers can easily draw

upon as they form tentative expectations about its performance. Though this is certainly

true of informational appeals, it does not accurately reflect ads that employ

transformational argumentation (Deighton 1988; Deighton et al. 1989; Wells 1986,

1988). Informational appeals are those that attempt to educate and persuade through

concrete, well-substantiated performance claims. Explicit benefits are presented and

when effective, consumers accept or believe message arguments. Transformational

appeals, on the other hand, rely on stories, drama, vivid examples and emotion to shape

product meaning and value (Deighton et al. 1989; Wells 1988). With these executional

styles, the brand's appeal may be richer, more abstract and difficult to reduce to a single

theme. Here, persuasion is not the result of solid argumentation but compelling example,

the capacity of the ad to draw the consumer into the situation or story (Deighton 1988).








58
In the realm of children's advertising, transformational appeals are quite common.

Even the most information laden commercials targeted at children typically retain

transformational properties, so that the distinction, in practice, does not reflect mutually

exclusive categories. Because children's ads frequently rely on whimsy and tales of

adventure to persuade, the link between the message and specific performance dimensions

may not be clear. When Cap'n Crunch and his crew through great ingenuity and effort

rescue the crunchberries from their foes, "the soggies", what expectations about the

product might a child be likely to generate? Clearly, there is information about the

cereal's crunchiness and its ability to remain so with time, but even this simple idea has

to be extracted from a narrative structure that embeds notions about the triumph of right

over wrong, skill over ignorance, and teamwork, in an attempt to enhance the product's

perceived value. To transcend a commonplace event such as eating a bowl of cereal, the

advertiser creates a world of excitement and adventure. The brand may acquire added

value and meaning through this process. However, the consumer's ability to translate

advertised claims into specific hypotheses about performance may be compromised.

Children may be less likely than adults to generate clear expectations about product

performance, not because they are cognitively ill-equipped but because of the way

children's advertisements are designed and executed. Both the development of relevant

hypotheses by the young viewer and the testing of these expectations in a usage context

may be complicated by the creative strategies commonly adopted by children's

advertisers. Though at some level, the meaning creation process requires that children

forge links between the advertisement and the consumption experience, these links may








59
not necessarily take the form of hypotheses. Both the hypothesis-testing model and

children's advertising research, more generally, clearly reflect an information-oriented

approach to studying persuasive effects.

Implicit within the research literature is the assumption that children think about

advertisements primarily in terms of the product related information they provide.

Researchers have studied whether children understand and are persuaded by advertised

claims, while paying relatively little attention to how children spontaneously relate to the

advertisements they encounter. Children's responses to advertising may be governed by

contingencies that have little to do with hypothesis-testing or the verification of ad

claims. Rather than thinking about advertisements purely in terms of their information

value, children may also be inclined to base their responses on affective dimensions that

have little to do with product claims. An ad's capacity to elicit emotion or feeling among

young viewers certainly plays a more important role in the persuasion process than

traditional approaches to studying children's advertising response represent (Wartella

1984). To the extent that transformational ads are most persuasive when they charm,

entertain or captivate attention, an exclusive reliance on cognitive concepts and theory

may paint a rather narrow picture of advertising's influence and meaning in children's

lives. With its greater emphasis on the affective dimensions of ad response, the

transformational model offers a perspective on the advertising-consumption relationship

that is more closely aligned with the unique style and character of children's advertising.

However, this paradigm is of less value in understanding the ad-consumption relation in

terms of its broader implications for children's understanding of the marketplace.








60

Alternative approaches that focus attention at a more molar level are also needed

to address basic substantive questions. From a child's perspective, how focal are the

links between advertisements and consumption? What are the categories of meaning that

children draw upon in thinking about advertisements and their product experiences? How

are these categories embedded in children's larger conceptions of what advertising is and

how it works? Only through acknowledging the validity of children's perspectives can

these questions be answered. By allowing children to tell their side of the story, through

their own language and point of view, real insight can be gained. Rather than

constraining investigation to "adultcentric" models, it is important to adopt a more

inclusive perspective, one that reflects children's categories, culture and experience.

Without doubt, there is need for research into children's expectations and their potential

impact on product experience. However, to understand fully children's consumption

experiences requires a broader research agenda, one that begins to look beyond policy-

driven applications and reflects an openness to new methods and perspectives. Drawing

on a meaning-based model of advertising experience, this set of studies departs from

traditional approaches to children's advertising response. Insight into how children make

sense of the advertisements and the products they consume, is sought, within the

constraints imposed by their developmental abilities to process marketplace information.

Until the validity of children's unique perspectives is incorporated into the theories that

guide empirical research, our collective insight into children's experiences and the

consumer socialization process remains incomplete.













CHAPTER 3
STUDY 1

Though children's responses to advertising have been the focus of numerous

research investigations, rarely have these investigations explicitly considered the broader

context in which products are also purchased and consumed. Examining children's

reactions within this larger embedding system opens the door to new insights, concepts

and relationships. At the same time, it poses new conceptual and methodological

challenges. That product consumption affects how children think about advertisements

is obvious; how best to study the nature and scope of its influence is not nearly so clear.

What little research investigating advertising-consumption relationships exists, has

focused on adult populations and processing strategies (e.g., Deighton 1984; Deighton

and Schindler 1988; Hoch and Ha 1986; Puto and Wells 1984). Adult skills and breadth

of experience is presumed, serving as the basis for continuing conceptualization and

measurement. Still in its infancy as a research area, significant methodological

challenges remain, particularly with respect to advertisements with transformational alms

(Wells 1986). Traditional recall and attitude measures may not fully capture

advertising's more subtle impact on consumers' product experiences (Puto and Wells

1984). Until new research techniques and procedures evolve, understanding of

advertising's capacity to shape a consumption experience is necessarily limited.

Questions about how to approach the study of advertising-consumption

relationships are magnified considerably when the consumers are children. Not only are








62

questions about measurement at issue, but at a more fundamental level, the conceptual

fit of current models in terms of children's experiences and abilities also warrants careful

reflection. Whether the hypothesis-testing model, which presumes a fully literate

information-centered consumer, is relevant to how children attach meaning to

advertisements and products is not clear. Intuitively, this approach, derived from a

cognitively driven explanatory framework and tested in the context of informational

advertising, does not seem to mirror either children's proclivities or the ads designed to

reach a young audience. Even the transformational model, which expressly calls into

play affective dimensions and a broader array of advertising formats, has not been

subjected to empirical testing among either adult or youth populations. Empirical

examination of the transformational concept has focused exclusively on the measurement

of the construct rather than its impact in judgment or choice contexts (e.g., Aaker and

Stayman 1992; Puto and Hoyer 1990; Puto and Wells 1984). The elusiveness of

advertising's transformational properties and the inadequacy of traditional research

methods may explain why this intriguing concept remains largely unexplored. At this

juncture, existing conceptualizations of the interaction between advertising and product

experience can best be characterized as very useful but tentative tools for understanding

children's responses. Whether they map onto children's reality or are sufficiently broad

enough to capture the range and complexity of children's thoughts and feelings is an

empirical question, or, more accurately, a series of empirical questions. The legitimacy

of these conceptual frameworks in the realm of children's media experience can not

simply be assumed. Understanding must be grounded in the reality of children's








63

everyday encounters with products and advertisements. Without this grounding, the

authenticity and value of research conclusions would be compromised.

Research Approach

In the first phase of this research project, a qualitative investigation with both

substantive and methodological aims was carried out. This study was designed to

develop a preliminary understanding of how children conceive of the relationships

between advertisements and products, and to evaluate the validity of phenomenological

interview research methods with school aged children. Discovery-oriented research

approaches which enable the researcher to remain true to the perspectives of respondents,

offer the opportunity to gain substantive insight into how children assess and manage

their consumption experiences. Because the context of consumption is so little

understood, initial research aims for this project were open-ended and broadly focused.

Uncertainty about the relevance of adult-derived models and the heretofore neglect of

consumption issues within the area of children's research, led to the choice of an

inductive research approach focusing on the generation of conceptual categories and

relationships. Rather than beginning with a theory and attempting to test it, the research

began with the substantive area and what is relevant to that area was allowed to emerge

(Denzin 1988; Kvale 1983; Lincoln and Guba 1985; McCracken 1988; Thompson,

Locander and Pollio 1989; Strauss and Corbin 1990).

Without insight into the primary factors that motivate and shape children's

marketplace perceptions, researchers may run the risk of creating abstract representations

that have little basis in real-world events (Wells 1993). This hazard may be particularly








64

enticing in developmental research studies where the temptation to adopt adultlike

performance standards abounds (Anderson 1981; Dorr 1986; Rust and Hyatt 1991).

Though children have been the focus of numerous research investigations, rarely have

they been asked to share their own, unique accounts of the commercial environment.

When asked to describe their experiences, their responses are coded into theoretically

derived developmental categories established prior to data collection (e.g., Bever et al.

1975; Rossiter and Robertson 1974; Ward et al 1977). The substantive import of their

subjective perceptions tends either to be lost through the coding process or simply

discounted. To approach children from a phenomenological orientation requires that

researchers recognize that children have their own perspectives and strategies for dealing

with the world that surrounds them. Children interpret the world differently than adults

not simply because they have not yet learned to process information "properly" but

because they view the world in their own terms.

Two alternative views of children, one as hapless victim of marketer tactics and

the other as savvy consumer, are reflected in the research literature. At the extremes,

children's advertising is either powerfully seductive or so uninspiring as to simply be

ignored. Though these views oppose one another, both reflect researcher driven views

of how children respond to advertising. So ingrained are conventional views of children,

that it becomes difficult to set aside what may amount to cultural presumptions and

biases. The idea that children's perspectives may differ, at least in part, because the

world they encounter is populated by people, situations and objects with which adults

have little contact, is rarely acknowledged. From this world, they construct a reality that








65

is a rational, ordered and organized response to the condition of being a child (Fine and

Sandstrom 1988; Goode 1986).

The notion of "constructed realities" which recognizes the contribution of the

individual in creating a meaningful view of the world is a central premise of naturalistic

inquiry (Hirschman 1985; Hudson and Ozanne 1988; Kvale 1983; Lincoln and Guba

1985; Morgan and Smircich 1980; Thompson et al. 1989). Ontologically, the

constructivist position asserts that reality is created in the minds of individuals. At all

stages of the life-cycle, people are engaged in the creation of a meaningful view of the

world and their relation to it (McCracken 1987). The meanings derived from or ascribed

to objects, events or media are not intrinsic to the tangible entities themselves, but a

product of the individual's interpretation. Reality is constructed by the perceiver in order

to make sense of oneself, and to organize a belief system that will serve as a guide to

action. The assumption that reality is not objective but rather subjectively defined, has

important consequences for the design and conduct of research. Because each individual

views the world from a unique vantage point, understanding of human phenomena must

be grounded in the reality of how events and situations are subjectively lived or

experienced (Thompson et al. 1989). Rather than discounting or disregarding children's

subjective perceptions and experiences, these become the central focus of study.

How children make sense of their marketplace experiences is patterned by socially

organized ways of perceiving and acting upon the world. Children of a given social and

historical context have a set of interests and everyday experiences in common, that both

distinguish and unite them. That children constitute a special audience as a consequence








66

of their cognitive limitations is widely acknowledged. That children share what might

be considered a separate culture replete with norms, conventions and meaning that also

affects their interpretation of advertisements is a more novel concept (Fine and Sandstrom

1988; Goode 1986; Young 1990). Communications scholars have adopted the notion of

interpretive communities to differentiate media recipients along shared lines of interest

and usage (e.g., Anderson and Meyer 1988; Lindlof 1988). An interpretive community

is a specific audience group united by common experiences, affiliations and concerns that

shape their interpretation of media content. Though the notion of interpretive

communities has not yet been extended to investigations of children's media response,

it offers an intriguing counterpoint to traditional models. Much like an interpretive

community, a separate "kids' culture" generationally transmitted by children to other

children may play an important yet unrecognized role in children's interpretation of

advertising. Challenging conventional wisdom, a small group of social scientists and

educators have argued that critical observation of children reveals an interpretive

competence, creativity and honesty that is often masked in empirical research and broad

based models of the socialization process (e.g., Goode 1986; Waksler 1986; Young

1990). As cultural outsiders, adults may have only limited access to, and superficial

knowledge of, the norms and values that structure meaning creation. This is evident

even in the gestures and words children use in day to day interactions. As adults, we

may sometimes assume that we know what children mean, when, in fact, our perceptions

are filtered through the lens of adult expectations, mores and common sense. From a

marketing perspective, the potential for disaster in the design of communications certainly








67

exists; but, at a more fundamental level, our adult presumptions may lead to erroneous

conclusions about what children intend and understand. The epistemological implication

of this unique brand of ethnocentrism is that the research community has in large

measure failed to encounter children as children, to enter their world and render it

understandable from the perspective of the "natives".

Traditional advertising effects research implicitly reflects an objective orientation

to ad processing and comprehension (Mick 1992). Meanings are contained in the

message, and with the acquisition of sufficient decoding skill and experience with the

genre, children eventually unlock the message housed within. Meanings are intrinsic to

the message and intended by the advertiser. Research questions focus on children's

emerging ability to extract key message elements and their subsequent persuasive impact

(e.g., Liebert et al. 1977; Linn, de Benedictis and Delucchi 1982; Meringoff and Lesser

1980; Roedder et al. 1983; Ward 1972, 1980). Within the children's advertising

literature, the objective orientation has wide appeal, both theoretically and pragmatically.

Measurement procedures that establish children's accuracy or inaccuracy in decoding

advertising messages are quite useful in grappling with traditional areas of concern and

interest. Objective measures, easily developed and administered, can be used to mark

and subsequently predict key developmental transitions. Concerns about

miscomprehension as well as issues of fairness can be resolved; and the individual level

impact of specific regulatory proposals can be assessed. However, this perspective tends

to disregard receiver-based meanings. The child's point of view or subjective experience

is lost, except where it happens to coincide with the researcher's. Close-ended questions








68

about ad claims and recall measures leave little room for respondent perceptions or

reaction. What constitutes an appropriate response is determined a priori by researchers

who adopt their own interpretations of ad content as the baseline and evaluate children's

responses against it.

In contrast, the subjective orientation to advertising reception recognizes that

children actively and selectively impose meanings to understand more completely, their

world and themselves. These meanings are not fully bounded by the text of an

advertisement but are negotiated through the lens of the child's prior experience, both

personal and cultural (Jensen 1987; McCracken 1987; Mick and Buhl 1992). According

to reader response or reception theory, meaning is not an immutable property of a text

but the product of the text structure and the individual, interacting within a specific

interpretive context (Allen 1987). When a child views a television commercial, the

explicit message contents serve as a kind of blueprint to structure understanding, but text

is by nature, incomplete. Coherent interpretation rests on the child's capacity to draw

upon his(her) unique experiences and background knowledge to fill in gaps left vacant

by the text (Collins 1983). Within the boundaries established by (his)her level of

cognitive sophistication, the young viewer infers concepts, intentions, actions to make

sense of even simple narrative messages (Anderson and Pearson 1984; Durkin 1989;

Flood 1981; Trabasso 1981). Derived from the explicit contents of a message, these

inferred relations may range from very simple, straightforward connections needed to

establish coherence, to personalized elaborations that draw upon the receiver's self-








69

knowledge and experience (Alba and Hutchinson 1987; Mick 1992). According to this

perspective, it is the child who is the final arbiter of advertising meanings.

Qualitative inquiry is particularly well suited for discerning the categories

consumers use to interpret specific media and consumption experiences (Jensen 1987;

Lannon and Cooper 1983; McQuarrie and Mick 1992; Mick and Buhl 1992). Consumer

researchers have turned to qualitative modes of inquiry to study a wide range of

consumer issues and phenomena. Drawing on ethnographic, semiotic and

phenomenological traditions, these research efforts have helped to broaden the scope of

consumer research and provide insight into substantive consumer behavior topics (e.g.,

Belk, Sherry and Wallendorf 1988; Hill and Stamey 1990; McQuarrie and Mick 1992;

O'Guinn and Faber 1989; Wallendorf and Arnould 1991). Though each of these

traditions is distinct, they share a fundamental interest in the perspectives of those being

studied. The tie that secures these traditions within the qualitative paradigm is a direct

concern with experience as it is "lived", "felt" or "undergone". The primary aim of

qualitative investigation is to understand experience as nearly as possible as its

participants feel or perceive it. Methods of inquiry are diverse, depending on the

specific research issue. However, in-depth interviews or participant observation are

widely employed in sociology, anthropology and education to understand people's

perceptions of their everyday world. An interview methodology offers the opportunity

to gain insight into the child's subjective experience of advertisements and the products

they promote. It may represent the only means for attaining this type of understanding

(Hughes 1989; Tammivaara and Enright 1986). Within the consumer literature,








70
researchers have focused their efforts on issues that impact adults. These kinds of

approaches may also be fruitfully applied to furthering our understanding of how children

perceive and evaluate marketplace stimuli.

Method

Overview

The primary objective of the first study was to develop a preliminary

understanding of how children think about the relationship between ads they see and

products they consume. A secondary objective of the initial investigation was to evaluate

the viability of using depth interviews in research with school-aged children. Though

consumer researchers have been critical of the use of interview methods in research with

children, these criticisms are primarily focused on their use with very young children

who are not yet able to articulate their thoughts and feelings clearly (Goldberg and Gorn

1983; Perrachio 1990). For many years, open-ended interviews have been widely used

with school-aged children by educators and psychologists for both clinical and research

purposes (Barker 1990; Bierman and Schwartz 1986; Garbarino and Stott 1989;

Greenspan 1981; Hughes 1989; Parker 1984; Tammivaara and Enright 1986). The depth

and breadth of children's responses quickly put to rest any concerns about their ability

and willingness to participate in the research in a meaningful way. Twenty-two children,

between the ages of seven and eleven were interviewed. Reflecting an "emic" approach,

the interviews were loosely structured, open-ended and designed to discover significant

meanings from the perspective of the children. Flexible in nature, the interviews

encouraged children to recount their own product-related experiences. With few







71

exceptions, the children readily described a variety of experiences, both good and bad,

with heavily promoted products. Specific ads and products were also introduced into the

interview process to enhance understanding of the meaning creation process. The

primary data for the study were the verbatim transcripts of these interviews. It is from

these transcripts that conceptual relationships are suggested. Findings from this study

served as input to the conceptual development and design of the experimental

investigation as well as a source of a priori themes for subsequent qualitative inquiry.

Research Process

Emergent design. In this initial investigation, the research design was allowed

to emerge or unfold, rather than constructed a priori. Given the existence of multiple

realities, it is inconceivable that enough could be known ahead of time about children's

subjective experiences to design the research well (Lincoln and Guba 1985; Glaser and

Strauss 1967; Strauss and Corbin 1990). A design emanating from the investigator's

perspective would have seriously compromised the overall intent of the research inquiry.

In these early phases, the inability to predict how children would respond and the

substantive issues that would emerge, clearly called for an open-ended research approach

(Lincoln and Guba 1985). When the research design is emergent, subsequent

methodological steps are based on those that precede them. Data collection and analysis

are not separate but interrelated processes (Corbin and Strauss 1990; Glaser and Strauss

1967; Strauss 1987). Each interview takes into account all that has been learned before,

and uses it to direct succeeding observations and interviews. Salient questions,

provisional hypotheses and gaps are identified and pursued as the research progresses.








72

The systematic and sequential nature of data collection and analysis allows the researcher

to capture all potentially relevant aspects of the phenomenon, while discarding those that

are not repeatedly present in the data (Glaser and Strauss 1967; Corbin and Strauss

1990). As the inquiry proceeds, the design becomes more focused as salient concepts

begin to emerge, hypotheses develop and theory begins to be grounded in the data

obtained.

Field notes. Throughout the study, detailed field notes were written, summarizing

the progress and conduct of the research. These field notes are of three types: additional

data, methodological issues, and analytic memos. Detailed are initial theoretical

assumptions, the project's emerging design and hypotheses, a summary of each interview

both in terms of process and content, as well as preliminary interpretations of data. To

minimize the potential impact of investigator bias, it is imperative that researchers specify

in detail their assumptions, methodological decisions and the progress of their analysis

on an ongoing basis. These field notes as well as the interview transcripts themselves,

were reviewed on a weekly basis by two independent auditors. One of these auditors

was a researcher with extensive qualitative research experience, the other was an expert

in the field of consumer research. Their questions and reactions were noted, reviewed

and discussed on a weekly basis throughout the data collection and analysis phases of the

study.

Interviews and sampling procedure. Over the course of the study, twenty-two

individual in-depth interviews were conducted. Informants were children between the

ages of 7 and 11, many of whom were acquainted with the author through volunteer








73

school activities. This familiarity encouraged their participation and candor, while

providing valuable background knowledge for interpreting the interview data. A

purposive rather than a representative sampling procedure was used; in keeping with the

aim of maximizing phenomenological insight rather than facilitating generalization across

people (Corbin and Strauss 1990; Lincoln and Guba 1985; Strauss and Corbin 1990).

Within the grounded theory framework, it is the representativeness of concepts not of

persons that is critical. Since the ultimate aim is to build a theoretical account that

specifies the nature of ad-consumption relationships, its forms, and consequences,

samples are drawn which will best illuminate this relationship (Glaser and Strauss 1967;

Strauss and Corbin 1990). Informants were chosen on the basis of their ability and

willingness to offer substantive insight into the ad-consumption relationship. The

children were quite interested in the topic, knowledgeable and highly motivated to

participate. The respondents seemed to enjoy the interviews thoroughly, particularly the

product samples and the rare opportunity to watch television in school. Most approached

the interviews as a fun experience yet with a seriousness of purpose in that they wanted

to be clear and thorough in educating the nice but unenlightened adult researcher.

Eighteen of the participants were in fourth and fifth grades and four were in

second grade. By this time, they are relatively articulate and have had substantial

experience with the advertisements targeted at them. Initially, the study was to be

centered on the experiences of older children (9 to 11-year-olds), however as patterns

began to unfold, it became clear that comparative data was needed to begin to define the

limits of the emerging explanation. Making comparisons helps the researcher to guard








74

against bias by challenging provisional concepts with new data. A basic operational

strategy common to both grounded theory research and other forms of naturalistic

inquiry, is to seek systematically the widest variation in the phenomenon under

investigation. Through careful, ongoing comparison and the deliberate search for

negative case examples, the consistency of provisional concepts is assessed (Glaser and

Strauss 1967; Lincoln and Guba 1985; Strauss and Corbin 1990). Greater precision is

achieved as comparisons warrant the subdivision or elimination of original concepts.

Concepts and categories must earn their way into the emerging explanation through

repeated observation and demonstration of their relationship to the phenomena in

question. In this study, insight into the experiences of the younger children was initially

sought as part of the researcher's obligation to seek negative instances or data that would

be most likely to disconfirm the evolving theory (Wallendorf and Belk 1989). Though

age-related differences began to emerge even with such a small sample size, the available

evidence in this study provides little more than a suggestion of how these differences

might be manifested.

The interviews ranged from 45 to 75 minutes, depending on the child's interest

level and schedule. Several of these interviews were conducted over two sessions, which

proved quite interesting as the children would often return wanting to add something they

had "forgotten to say the other day". The informants were free to describe their

reactions to particular ads and products and typically recounted a range of experiences.

The format of the interview was flexible so as to allow informants to discuss their

personal experiences, feelings and reactions. The interviews were rather loosely








75

structured so as to permit lines of inquiry that allowed the child's perspective to emerge

(see Appendix A for a copy of the interview schedule). This type of interviewing has

been adopted successfully in many studies with adults, but has rarely been used to study

children's media reception. When children's advertising researchers have adopted an

open-ended interview format, they have tended to apply predetermined coding schemes

or theoretical models that mask children's substantive interpretations and conclusions

(e.g., Bever et al. 1972, Rossiter and Robertson 1974; Ward et al. 1977). Adult models

of thinking may influence the substantive conclusions that are drawn about children's

assimilation and use of commercial content. In many studies of children's

comprehension of television, the expressed or implied criterion for understanding is the

adult explanation or the formal, literate meaning of a message that fully socialized

members of a society might offer. Researchers have often used their own interpretation

of televised content as a standard and evaluated children's perceptions against it

(Anderson 1981; Dorr 1986). Under these circumstances, it is not surprising that

children frequently "fail" to understand an advertisement the way an adult might. With

this as the baseline, children's interpretations implicitly represent a flawed approximation

to the reading an adult might provide, rather than an equally valid point of view. A

loosely structured dialogue permits exploration of how children perceive advertisements,

reflect on them and relate their contents to their own consumption experiences, ideas and

knowledge.

Data analysis. Research conclusions are based on the verbatim transcripts of

these depth interviews. These transcripts are the data from which conceptual








76

relationships are discovered, clarified and provisionally verified. The ultimate objective

is the development of an inductively derived substantive theory, grounded in the reality

of children's experiences with ads and products. The research findings constitute a rich,

tightly woven explanatory theory of the phenomena under investigation, rather than a set

of loosely related themes (Glaser and Strauss 1967; Strauss and Corbin 1990).

Systematic analysis techniques and procedures give the research process the precision and

rigor necessary to establish the trustworthiness of the findings (Lincoln and Guba 1985;

Wallendorf and Belk 1989).

Coding, is the fundamental analytic process in grounded theory research (Corbin

and Strauss 1990; Strauss 1987; Strauss and Corbin 1990). There are three major types:

(1) open coding (2) axial coding and (3) selective coding. Open coding is the interpretive

process by which data are initially broken down and conceptualized. Specific incidents,

events and actions are compared, provisional concepts are identified and their properties

dimensionalized. Open coding stimulates generative and comparative questions to guide

subsequent data collection. In axial coding, conceptual categories are related to one

another, and the relationships tested against data. In this phase of the analytic process,

contextual factors, antecedent conditions and consequences are specified, enhancing the

precision of the evolving explanatory network. Selective coding is the final step of the

analytic process. In this phase, the central phenomenon or "core category" is identified

and systematically related to other categories, validating those relationships and isolating

those that need refinement. Ultimately, a richly textured, well-integrated theoretical

formulation is derived, one that closely approximates the everyday reality it represents.








77

As the first phase of the research process, the findings of this preliminary study

represent provisional concepts and categories, rather than a fully articulated grounded

theory. The primary objective of the initial set of interviews was to learn what was

relevant and irrelevant, significant and trivial in the realm of children's product related

experiences. As is characteristic of the open coding phase of the analytic process, a

variety of generative and comparative questions arose, guiding the conceptual

development and design of studies two and three. The findings from this study provided

a rich source of hypotheses, questions and issues for subsequent inquiry.

Research Findings

The original aims of this research were embedded in a theoretical perspective that

views advertising as a vehicle for communicating cultural information and values. From

an adult's perspective, children's advertisements seem to be filled with messages about

friendship, acceptance, social status and family relationships. Part of the initial focus

was to understand how children respond to these kinds of themes in commercial

messages. Early interviews quickly revealed that these sorts of symbolic elements were

not necessarily focal in children's minds. Questions about the characteristics or motives

of the characters in commercials drew confused responses. However, the children

seemed to have relatively strong opinions about the quality of particular advertisements

and a clear understanding of their intent or purpose. When asked to evaluate the

commercials, the children were able to focus on specific elements and describe how and

why these features were effective or ineffective. What seemed to become clear was that

children, of this age group had developed some pretty clear ideas about advertising as







78

a communications genre. Children naturally try to make sense of the world around them

and advertising is very much a part of their everyday lives. By the time they reach the

age of 10 or 11 most American children have seen tens of thousands of commercials.

Evidence of this exposure was apparent almost immediately. Most of the children

interviewed were well-aware of the content of recently broadcast children's commercials.

With little invitation they sang jingles, pantomimed, mimicked dance steps, described in

detail particular advertisements or even the evolution of entire ad campaigns.

Three consecutive strategies for the use of concrete props or stimuli, were adopted

in this set of preliminary interviews (1) advertisements alone, (2) advertisements followed

by product samples and (3) product samples followed by advertisements. In each of

these cases, the stimuli were used primarily as tools to encourage children to draw upon

their own experiences with ads and products, rather than as an end in and of themselves.

These particular approaches arose as a consequence of the nature and substantive content

of the children's responses in early interview sessions. Careful steps were taken

throughout the research process to ensure that the interviews remained open and

reflective of the child's perspective rather than being directed by the researcher through

the interview structure. The evolution of the interview strategy was documented in

extensive field notes kept throughout the research project.

Initially, children were shown advertisements and asked to describe what they

noticed, liked, disliked and any other reactions they might have. This approach

prompted a range of responses, focusing on the form and content of the ads as well as

their perceived reliability. These early interviews provided a logical transition point from







79

the traditional research focus on prepurchase issues. Incorporating actual commercials

within the interviews, provides a very different pattern of response than that obtained by

asking children to talk about advertising in a more abstract sense, a strategy that has

often been employed in research with children (e.g., Bever et al. 1975; Rossiter and

Robertson 1974; Ward et al. 1977). With real ads, the children are exposed to all the

excitement and creativity of the commercials in the context of the interview. The

children respond to a concrete stimulus and all that it conveys during the interview. This

is a positive feature of this approach in that it seems to force mixed feelings and

uncertainty to the surface. When children talk about advertising in general rather than

in specific terms, they tend to be fairly negative or skeptical. However, when they

watch specific ads they may be singing along, laughing or enjoying the cinematic

techniques that merge fantasy and reality. This approach to interviewing thus seems to

help tap into both the positive and negative aspects of children's perceptions of

advertising.

One of the things that was immediately striking in the first interviews was that

children's responses to the advertisements seemed to have little to do with their

perceptions or attitudes about the products advertised. Advertisements were perceived

to be funny or stupid, silly or cool, but not necessarily, informative or uninformative.

Rather than being evaluated as information sources about what a brand contains or how

it works, ads were evaluated primarily in terms of their entertainment value. However,

the initial interview strategy may have inadvertently encouraged children to reflect on the

ad's capacity to amuse or entertain. By asking children to view and then "tell me what








80

you think" about specific advertisements, they are essentially invited to critique the ads

on whatever dimensions they deem most relevant. To the extent that this interview

strategy somehow directs the child's focus to creative aspects of the commercial, this

approach may have inspired children to assume the role of art critic. To the extent that

this is true, a more explicit focus within the interviews on the nature of the relationship

between ads and products might be expected to deflect attention away from the ad's

executional elements.

To highlight directly the relationship between advertising and consumption,

products were introduced into the research process. Children were shown commercials

and given products to sample, such as a cereal, fruit snack or cookies. With few

exceptions, the children were highly involved, clearly enjoying the opportunity to try the

products and talk about their reactions. The ad-product pairs typically prompted a

number of comparisons to other products and commercials, prior experiences with a

range of products as well as probable reactions of friends or parents. With the inclusion

of product samples, the content of the interviews began to shift slightly, drawing more

extensively on children's prior experiences both as consumers and shoppers.

Based on both children's advertising research and early studies of advertising-trial

interactions, it was anticipated that children's reactions to specific brands would be

affected by having seen advertisements for them (e.g., Goldberg, Gomrn and Gibson 1978;

Gomrn and Goldberg 1982; Hoch and Ha 1986; Marks and Kamins 1988; Robertson and

Rossiter 1976; Roedder et al. 1983; Smith 1993). Though it wasn't clear how this

influence might manifest itself, it seemed reasonable to assume that children would








81

compare the performance of the product to claims made in the ad. However, when asked

about their reactions to the products, their responses typically were only superficially

related to advertised claims. Though most of the children did not have previous

experience with these products, many spontaneously mentioned that they had seen

commercials for them. They readily described the contents of these commercials, though

their comments again tended to focus on the ad themes or execution rather than specific

attributes of the product. The children talked at length about what they perceived to be

funny or entertaining yet had relatively little to say about the brand's specific features or

benefits as depicted in the ad. Their reactions to the brands, on the other hand, were

dominated by sensory characteristics such as taste, texture, smell and appearance. What

seemed to emerge was a picture of children's reactions to advertisements that had little

to do with what they felt and believed about the products they consumed. It began to

seem as though children view the products and the advertisements that promote them as

quasi-independent entities. This pattern of findings seems to conflict with both intuition

and previous research findings.

Both experimental and survey research provides clear evidence that advertising

influences children's preferences and behavior. Children may alter their brand

preferences as a consequence of advertising exposure, request the products they see

advertised and choose advertised products over others when given the opportunity to do

so (Goldberg and Gorn 1974; Goldberg et al. 1978; Gorn and Florsheim 1985; Gorn and

Goldberg 1982; Robertson and Rossiter 1976; Roedder et al. 1983). Though children

grow increasingly skeptical of advertising as they mature, they may still be persuaded by








82

specific advertisements they see or hear. Given this pattern of findings, the seemingly

weak links between advertising and product related responses seemed puzzling. If

children are persuaded by an advertisement they must have some expectations about the

characteristics and benefits the product has to offer. However, it is not clear from

existing research what the nature of these expectations are or how they might influence

the interpretation of subsequent product experience. Though the dynamics of the

advertising-consumption relationship have not been examined empirically, researchers

have assumed that this relationship has a significant impact on children's perceptions and

responsiveness to persuasive attempts. For example, it has been suggested that until

children actually experience discrepancies between products as advertised and the

products they obtain, they are unable to fully comprehend advertising's persuasive intent

(Robertson and Rossiter 1974).

If, as the research community has assumed, children spontaneously compare their

product experiences to the images conveyed by advertising, it is surprising that more of

these direct comparisons were not evident in the interviews. On the one hand, it might

be argued that these are implicit comparisons that somehow simply haven't been or can't

be articulated in an interview format. Though this eventuality can't be ruled out entirely,

a variety of questioning strategies have been employed to get at these relationships.

Further, the children have been able to articulate their opinions and feelings on other

equally difficult issues. Perhaps the more likely explanation is that these comparisons

are neither complex nor specific. Children have expectations about the products they see

advertised but they are simple and often tentative. In really listening to what the children








83

were saying about the brands, it became clear that they view advertisements as pretty

straightforward messages, with common themes and exhortations. Questions about what

the advertiser was trying to communicate drew initial responses such as "It has honey in

it and they want you to buy it". When after viewing a commercial, children were asked

what people could learn about the product by watching it, their answers reflected multiple

versions of "not very much". A second grader was able to state it quite succinctly when

he said "They all say they are the best since 1983. They all say they are good". For

this young boy, his understanding of what advertising is, leads him to entertain only the

most tentative kind of expectation. Given the nature of children's advertising and the

thousands of commercials children come in contact with, his reaction makes a great deal

of sense. Industry research suggests that young children understand products as entities,

tending not to focus on specific attributes (Rust 1986). Product quality is not perceived

in a dimensional fashion, either a product has it or it doesn't. This perspective may be

due in part to the way advertisers communicate with children. Advertisements targeted

to children are frequently entertaining and delightful, yet contain little more than vague

and subjective promises of performance. Many of the claims made are as simple as "it

tastes good", "it has honey", "it will make you strong", "everybody wants it", "you'll

do anything to get it" or "eating is an adventure" expressed in any number of

entertaining and captivating ways. It would be difficult given the content of these ads

to develop very fine-grained expectations about a particular brand. So, in that sense it

is not surprising that children have difficulty relating their understanding of a commercial

to their consumption experience. The experience of trying a product is dominated by








84

specific features, a cinnamon taste, how it smells, whether it contains sugar or

marshmallows and how fast it gets soggy. The experience of the ad, on the other hand,

occurs at the level of: is it good or bad entertainment?, is it fantastic or real?, and

sometimes, can I relate to the characters or not?

The link between the brand conveyed through the imaginative and fanciful world

of advertising and its reality in the everyday world, may be forged not so much on the

basis of specific expectations about performance but on a much more diffuse basis,

drawing extensively on the ad's affective appeal as well as the brand's overall perceived

value. Given the content of these ads, it would be difficult to develop detailed

expectations about a particular brand. In this situation, it is not surprising that children

may approach advertising primarily as a source of entertainment and amusement rather

than as a source of brand information. Further, most ads with which they come in

contact, are for products in which they have little interest or likelihood of obtaining. Not

surprisingly, the interviews suggest that these ads are neither likely to be ignored nor

processed deeply in terms of the brand information they convey. Instead, they may best

be characterized as a repository of cultural insight and expression to be mined by a young

inexperienced audience, as well as a source of entertainment and diversion. The

information centered perspective which has dominated the study of children's advertising

response may not fully capture this possibility. Dominated by issues involving children's

cognitive abilities and limitations, it fails to consider children's broader interests, motives

and the everyday world in which advertisements are encountered.








85

Emerging from the initial interviews is a perspective of advertising that highlights

its role as an entertainment vehicle as well as a source of brand communications.

Though at best preliminary, the evidence does suggest that children's reactions to

commercials encompass a rich, multi-dimensional array of form and content dimensions

that are only tangentially related to the brand advertised. The older children, in

particular, talked extensively about the creative merging of fantasy and reality within

specific advertisements, the predictability of actors' portrayals, specific features that

make a commercial funny or not, and specific strategies used to attract viewer attention

and interest. What the implications of this finding are and whether it will continue to

hold as more interviews are conducted remains an open question. Though researchers

clearly recognize that children are entertained by commercials, this fact seems to have

little bearing on how children's responses are conceptualized or measured. What is

interesting is that this finding was not predicted or hypothesized a priori. The

phenomenological interview allowed the discovery of what may or may not prove to be

an important facet of the way children think about the advertising-consumption

relationship. Adult models of the advertising-experience interaction would have

suggested a much more information-centered consumer than children may turn out to be.

Using research techniques such as the constant comparative method, the

significance of this type of result can be subjected to rigorous analysis and evaluation

(Glaser and Strauss 1967). As major concepts and categories are developed, they are

immediately challenged. Negative instances are sought and additional data are collected.

For example, as the entertainment dimensions of advertising surfaced in the interviews,








86

a search for negative or qualifying evidence began. On a substantive level, questions

were shifted to thinking about circumstances when executional elements might be less

focal. From a methodological perspective, the interview structure was altered in order

to minimize any directive influence of the structure itself. Rather than beginning the

interviews talking about advertising, the interviews were instead oriented around

children's experiences with products, their likes, dislikes and perceived involvement in

shopping. Shifting the focus away from advertising to consumption was designed to

illuminate how these kinds of products fit into children's lives.

To begin the interviews, children were asked about what they like to eat for

breakfast. From this very simple question, a variety of topics were raised ranging from

their feelings about bad product experiences to the impact of peers, siblings and

advertising on what they know and like. They talked about their brand preferences and

loyalties, how they learned about new products, why they liked brand name products

more than generics, as well their own and others' criteria for choosing particular brands.

They talked about using brand names as a cue to quality, how premiums might be used

to promote sagging sales, loyalty to specific brands and store preferences. With the shift

in focus, family members were mentioned more often. The children were well aware

of their siblings' and parents' preferences as well as their criteria for choosing particular

brands. They readily took family members into account in describing what they like and

why. Within this group, there was a great deal of variation in terms of their level of

participation in the family shopping and decision making. In a few cases, children were

active participants in virtually all shopping expeditions. One fourth grader described how








87

he gets his own shopping basket and then goes off on his own to choose cereals, snacks,

sodas and fruit drinks within loose guidelines that his mother has established. Most of

the children interviewed indicated that they accompany their parents to the grocery store

on a fairly regular basis, but that it did not necessarily mean they had substantial

influence on the brands chosen. Whether and how their experiences as a shopper and

consumer are influenced by advertising can not be determined on the basis of this

preliminary study. However, these interviews did provide some initial insights worthy

of further exploration. The understanding of how children interpret and evaluate

advertising can only be enriched by a deeper appreciation of their role as both shopper

and consumer.

One of the primary issues in the third wave of interviews, was to determine

whether and how children would talk about advertising in the context of products they

like and dislike. Without exception, children raised the issue of advertising's impact at

some point during the conversation. Though consumption tends to be viewed as the most

important source of information about frequently purchased packaged goods, family

members, friends and advertisements were readily mentioned. In these interviews,

advertising was viewed more critically. Though the participants discussed things that

they thought were funny or entertaining about advertisements, they tended to focus as

well on advertising's capacity to "trick" or "fool" people. Perhaps thinking about their

product preferences first establishes a different mind set, a "logical or rational" young

consumer. In their interpretations of ads, the children seemed to think more about the

brand and what is said about it, than its capacity to entertain or its stylistic features. In








88
these discussions, the format of the commercial (e.g., technical sophistication, animation,

music, camera angles) played less prominent a role. Instead, more attention was paid

to whether the commercial did an effective job of portraying a product accurately. They

made global comparisons between the quality of the product based on their own

experiences and claims made about it in an ad. For example, comments such as "They

say it's so perfect but I've tried it and it tastes yucky", were common. So while they did

directly compare the commercial to the product, these comparisons tended not to be in

terms of specific attributes but more in terms of their overall evaluations.

As the interview strategy evolved, the relative importance and attention paid to

particular lines of questioning shifted. Given the focus on advertising's entertainment

value evident in the initial data, subsequent interviews were designed to probe the

meaning and limits of these findings. The use of concrete props proved to be a valuable

tool in encouraging children to draw upon their own experiences with ads and products.

While advertising's creative side remained a distinct focus of attention, the accuracy of

the product portrayal began to assume a more prominent position in the third interview

wave. When the children were asked to share their reactions in the context of products

with which they had had substantial usage experience, their perspective shifted to

incorporate both informational and executional dimensions. Use of the brands and ads

within the interview aids the investigation of what appear to be context-dependent

relationships. To explore the limits of the observed patterns further, initial interviews

with younger children were conducted. Inclusion of the younger group was not planned

at the outset of the study. However, the somewhat counterintuitive content of the early








89

interviews suggested the need for continued comparison and contrast.

Based on these preliminary interviews, there appears to be great diversity among

the younger children, making any conclusions relative to the older group problematic.

However, these age related differences promise to be quite interesting and worthy of

further investigation. The younger children clearly recognize advertising's selling

purpose yet use this knowledge in very different ways. The younger children seemed to

focus to a much greater extent on the products and how they are portrayed in

advertisements. They appeared to be much less focused on the execution of the ads,

judging them instead on the basis of the product depicted. They were much less

concerned about deception though this varied across children. Their evaluative criteria

appeared relatively simple and their understanding of what advertising is, more vague.

Clearly, these age related patterns warrant investigation. Interviewing the younger

children is more difficult, yet it provides a counterpoint which helps to clarify how the

older children view the relationships between products and advertisements.

Discussion

What has become apparent over the course of this study is that children between

the ages of 7 and 11 recognize that advertisements have a clear purpose and mode of

communication. The older children, in particular, can appreciate ads as entertainment but

they know they are not real and can discount them on that basis. From the perspective

of at least the older children, commercials don't provide much in the way of product

information. They accurately recognize that kids' commercials have the capacity to

entertain, bore or amuse them while saying little about the product or its features. They







90

know that commercials exaggerate product performance and can readily identify puffery

in the context of an ad. They know that cereal can't make them powerful, strong or even

feel good all day. By the time they reach the age of 10 or 11 children recognize that

commercials are designed to attract their attention and pique their interest. They

understand that advertisers employ all kinds of techniques to make their products appear

inviting to children. They recognize when commercial messages are specifically created

with a young audience in mind. They know that advertisements targeted to adults are

much more likely to rely on real product information and specific nutritional claims to

persuade. They expect children's commercials to be entertaining and are harshly critical

when they are not.

Perhaps because they realize that commercials are more fantastic than real, they

develop only relatively simple product expectations on the basis of advertising exposure.

It was evident from the first interview that the children were taking great care to separate

fact from fiction. Teasing out what was believable and what was not was clearly an

important component of how the older children responded to what they saw. It appeared

as though they were attempting to categorize ad elements as if to test out their new found

understanding of advertising's unique communicative form. They may decide that they

might like to try a product on the basis of an ad without having any real specific

expectations.

While some of the children seem to be bothered by advertising's potential to

deceive, others appear to be much less concerned. It is as if it is so obvious to them that

commercials aren't real that they find it difficult to believe that anyone would accept








91

them as truth. However, they are generally quick to point out that they have had to learn

on their own about how advertising works and that younger children might easily be

fooled. Though all of the older children evaluated advertising in terms of its

entertainment value, some of them were quick to describe what they perceived to be

advertisers' "tricks". It was in relation to their descriptions of products they had prior

experience with, where this became most apparent. They were quick to point out when

an advertisement was making claims that they perceived to be false. In most cases their

descriptions were derived from product experiences they had had outside the context of

the interview. The children were clearly using their prior experience with a product to

evaluate subsequent ads they came in contact with. Comparisons between a consumption

experience and the claims made in an ad were more often made when a child had a

strong dislike for a product. When a product proves to be disappointing, subsequent

advertisements are judged rather harshly. These kinds of experiences promote a certain

skepticism on the part of the young consumer. However, it is important to remember

that many experiences children have with products are positive. Advertising seems to

reinforce both positive and negative experiences. When a child likes a product,

additional advertising may serve not only as a reminder to buy it but may actually

promote greater positive feelings toward the product. Once a positive attitude is

established, new advertising and additional product experiences may tend to be viewed

with a less critical eye. Advertising may promote a kind of loyalty once a child has a

positive experience with a product. There were several occasions when the children

actually defended their preferred brands and talked about how the ads for competitors







92

were stupid or boring. It was both surprising and interesting that most of the children

seemed to have relatively well-defined brand preferences.

The older and most sophisticated children were much more likely to separate their

reactions to a product from their reactions to the advertisements promoting it. However,

this separation was more readily accomplished when the product was liked rather than

disliked. When a product is disliked, advertisements for it tend to be discounted as well.

However, when a product is evaluated positively, advertisements seem to be judged on

the basis of their capacity to entertain or amuse. Some of the children readily cited

examples of products that they thought were much better than the advertisements seemed

to show. However, these kinds of distinctions were reserved for the most articulate and

experienced of the interviewees. Though the younger children are something of an

enigma at this point, one thing that seems to clearly emerge is that their reactions to

products and ads are much more closely linked. While older children may have the

capacity to sort of distance themselves from the product in viewing an ad, younger

children seem to judge ads more strictly in terms of product performance.

The fact that products may either confirm or disconfirm a child's expectations

makes the issue of truth a complex one. When product experiences are negative, ads

may be perceived as lies or simply mistakes. One second grader explained that a cereal

company was unaware that its product was bad because no one who worked there had

ever tasted it. What this example illustrates is that even when an ad doesn't mesh with

experience, it doesn't necessarily mean that children will assume deliberate deception.

The developmental literature indicates that the capacity to infer someone else's motives








93
may not be evident until the later elementary years. Though children can cite examples

of being disappointed, it is important to remember that much of what they see is true at

some level. Many of the products they consume, they like. When they see

advertisements for these products and an animated character says they taste good, the

children perceive the commercial to be true. If an advertisement says that a cereal

contains honey and nuts and it has these ingredients, the commercial is considered true

and accurate. The older children may evaluate the truth of an ad at multiple levels. For

example, they may argue that an advertisement is true because the cereal does taste good

but false in the sense that it can't make you more strong or powerful as it promises to

do. The younger children, on the other hand, are much less likely to go beyond an

initial global assessment of truth. Though advertisements are not always true, from the

child's perspective they often are, at least at some level. Because much of what children

see they perceive to be true, it is not surprising that they are not as obviously skeptical

as they have the capacity to be. Children are not motivated to dislike the things they see

advertised. Advertisements present products in a creative and entertaining way, and

children are oriented to respond to them positively. Unlike adults, they are relatively

unconstrained by economic realities, at least in terms of their desires and reactions.

Conclusions

This study seems to raise fundamental questions about how children perceive the

relations between advertisements and the brands they promote. Rather than viewing

advertisements simply as purveyors of brand information, these children revealed a

broader, more-inclusive perspective that has executional elements at its core. While




Full Text
266
Pemer, J. (1988), "Higher-Order Beliefs and Intentions in Childrens Understanding of
Social Interaction," in Developing Theories of Mind, eds. J. W. Astington, P. L.
Harris and D. R. Olson, New York, NY: Cambridge University Press, 271-294.
Peshkin, A. (1988), "Understanding Complexity: A Gift of Qualitative Inquiry,"
Anthropology and Education Quarterly. 19, 416-424.
Puto, C. P. & R. W. Hoyer (1990), "Transformational Advertising: Current State of
the Art," in Emotion in Advertising, eds. S. J. Agres, J. A. Edell & T. M.
Dubitsky, New York, NY: Quorum Books, 69-80.
Puto, C. P. & W. D. Wells (1984), "Informational and Transformational Advertising:
The Differential Effects of Time," in Advances in Consumer Research. Vol. 11
ed. T. C. Kinnear, Ann Arbor, MI: Association for Consumer Research,
638-643.
Raju, P. S. & S. C. Lonial (1990), "Advertising to Children: Findings and
Implications," in Current Issues and Research in Advertising. Vol. 12 (2), eds.
J. H. Leigh and C. R. Martin, Jr., Ann Arbor, MI: University of Michigan,
231-274.
Reid, L. N. & C. F. Frazer (1980), "Studying the Child/Television Advertising
Relationship: A Symbolic Interactionist Approach," Journal of Advertising. 9,
13-19.
Resnik, A. & B. L. Stem (1977), "Childrens Television Advertising and Brand Choice:
A Laboratory Experiment," Journal of Advertising. 6 (Summer), 11-17.
Riecken, G. & A. C. Samli (1981), "Measuring Childrens Attitudes Toward Television
Commercials: Extension and Replication," Journal of Consumer Research. 8,
57-61.
Roberts, D. F. (1982), "Children and Commercials: Issues, Evidence, Intervention,"
Prevention in Human Services. 2 (1-2), 19-35.
Robertson, T. S. & J. R. Rossiter (1974), "Children and Commercial Persuasion: An
Attribution Theory Analysis," Journal of Consumer Research. 1, 13-20.
Robertson, T. S. & J. R. Rossiter (1977), "Childrens Responsiveness to Commercials,"
Journal of Communication. 27 (Winter), 101-106.
Robertson, T. S. & J. R. Rossiter (1976), "Short-Run Advertising Effects on Children:
A Field Study," Journal of Marketing Research. 13 (February), 68-70.


178
third studies, the children were highly-involved in the interviews, approaching the task
with a seriousness of purpose that was not altogether expected at the outset of the project.
Interestingly, some of the children seemed to adopt almost the role of teacher as they
conveyed their opinions and impressions. This was particularly common among the
younger age group.
Although the preliminary findings seemed to point to interpretive differences
between the younger and older children, additional interviews were needed to assess the
dependability of these patterns (Wallendorf and Belk 1989). A clear limitation of the
initial study was insufficient interview data among the younger age group. Only four of
the twenty-two interviews in that study involved second graders. Though age-related
differences began to surface even with such a small sample, extensive comparative data
are needed to define the limits of the emergent patterns. Common to grounded theory
as well as other forms of naturalistic inquiry is careful, ongoing comparison and the
systematic search for negative case examples (Lincoln and Guba 1985; Strauss 1987;
Strauss and Corbin 1967). Use of the constant comparative method helps the researcher
to guard against bias by challenging provisional concepts with new data (Corbin and
Strauss 1990; Glaser and Strauss 1967; Strauss and Corbin 1990). Inclusion of the two
age groups is necessary to ascertain the extent to which the explanation advanced in the
initial study is enduring, and the extent to which it derives from the idiosyncratic
convergence of a particular time and place.
The interviews ranged from 45 to 130 minutes, varying as a function of the
childs interest, depth of insight and schedule. Most of these interviews were carried out


168
who is both less strident and more complex in his(her) reactions to advertising than
theory seems to suggest. Jointly, these studies point to an increased sensitivity to
advertisings meaning and intent among the older children that draws not only on
relatively sophisticated notions of fantasy and reality, but demanding standards for
creativity, novelty and credibility in advertising execution. The first study revealed how
central a role entertainment plays in childrens thinking about ads and what they mean.
Evident was a fascination with the creative dimensions of ads and its unique properties
as a communications genre. Drawing on the concepts suggested by the preliminary
study, the experimental investigation showed how childrens affective responses to
advertising, both positive and negative, may spill over to the consumption experience,
affecting how that experience is subsequently interpreted and evaluated. Younger
children, on the other hand, seem to view ads in a more utilitarian fashion. While
advertisements are perceived as a means of acquiring brand information, they have little
incremental impact when coupled with product consumption. Further qualitative inquiry
offers the opportunity to question and to challenge observed patterns, thereby enhancing
the trustworthiness of the collective findings. It may also deepen interpretation of
statistical relationships, both by enriching construct specification as well as through
identification of contextual issues and constraints. While the experiment allowed for the
testing of very specific conceptual relationships based on traditional assumptions and
theoretical constructs, it was less well-equipped to capture the unexpected or the
character of childrens spontaneous reactions. The close-ended measures lend insight into
theoretically derived aspects of childrens cognitive and affective responses, under


52
consumption experience by inextricably attaching feelings and impressions to a brand so
that the consumers experience is fundamentally different than it would have been in the
absence of ad exposure (Puto and Wells 1984). The feelings and thoughts evoked by the
advertisement become so closely tied to the consumption experience that the brand cannot
be recalled apart from the ad. In effect, the ad "transforms" or alters the experience of
consuming the brand by helping the consumer to understand and appreciate their feelings.
Not to be confused with transformational argumentation, which is a form rather than a
consequence of advertising, transformational effects occur when an advertisement
influences what consumers notice, attend or react to during product consumption
(Deighton 1988; Deighton, Romer and McQueen 1989; Wells 1986, 1988). Persuasion
is a function of the audiences willingness to enter into the story, to suspend disbelief
temporarily and allow the advertiser to set the agenda. The advertisements persuasive
power derives not from its ability to change consumers beliefs directly but in its capacity
to tell consumers what to think or feel, its ability to frame the consumption experience
(Deighton 1988).
Where the concept of transformation seems to depart most clearly from the
experiential learning approach, is in the formers explicit inclusion of affective influences
(Puto and Hoyer 1990; Puto and Wells 1984; Wells 1986). Not only can advertising
influence what consumers attend to and what product expectations they might develop,
but what feelings are evoked in the context of a consumption experience. When
researchers focus on transformational effects, it is the ad-induced feelings brought
forward into the usage context, that are of primary interest.


TABLE OF CONTENTS
page
ACKNOWLEDGEMENTS iii
ABSTRACT vi
CHAPTERS
1 INTRODUCTION 1
The Primacy of Product Consumption 4
The Nature of Childrens Advertising 7
Research Purpose and Direction 13
2 REVIEW OF LITERATURE 20
The Pervasive Influence of Advertising 25
Product Consumption: A Primary Source of Meaning
and Influence 34
Translating Product Meaning: From the Mundane
to the Magical 37
A Call for a Meaning-Based Perspective 44
The Interaction of Advertising and Product Trial 48
Prevailing Paradigms and Childrens Reality 55
3 STUDY 1 61
Research Approach 63
Method 70
Research Findings 77
Discussion 89
Conclusions 93
IV


117
Figure 1. The Dual Mediation Model of Advertising Response.
Mackenzie. Lutz, and Belch (1986).


230
General Product Experience and Shopping Involvement
Products
1. What kinds of things do you eat for breakfast?
2. Do you eat cereals? (Every day/some days)
3. What kinds of cereal do you like? dislike?
4. What is it that you like(dislike) about ?
A. What makes good? not so good?
B. What do you look for in a cereal?
5. How did you find about ?
(ONLY IF AD MENTIONED)
A. Tell me about a commercial for .
B. What do you think a commercial for should say or have in it?
6. What are the ways that you find about different kinds of cereals?
7. At your house, how do you decide what kinds to buy? Who chooses? How does
that work?
Shopping
8. Do you go grocery shopping with your parents? How often?
9. Think about the last time you went to the grocery store. Can you tell me about
it? What did you do? Where did you go in the store? What did you look at?
10. Do you like to go grocery shopping? What is it that you like/dislike about it?


42
advertisement or their emotional reactions to it, older children have the capacity to
comment on the ad as a cultural object. No longer drawn primarily to perceptual
features, older children begin to distance themselves from the immediate message and
think about, evaluate and judge it in a more reflective fashion (Ward et al. 1977; Young
1986, 1990).
One of the developmental accomplishments of the elementary school period is an
increasingly sophisticated approach to judging fantasy and reality in television programs
and print media (Kelly 1981; Winnick and Winnick 1979). The criteria older children
(10-12 year-olds) apply to judging reality are multifaceted and complex. While a seven
year-old tends to judge reality on the basis of outward appearance or format, and physical
possibility or impossibility, older childrens assessments reflect a sensitivity to the inner
content of a message. Issues of possibility are considered not only in terms of physical
phenomena but in relation to social and psychological reality as well (Kelly 1981; Young
1990). Plausibility on a number of dimensions enters the judgment equation, making a
childs appraisal of what constitutes reality, like an adults, increasingly complex. The
consequences of possessing multiple criteria for judging fantasy and reality in an
advertising context remain unexplored. While this enhanced sophistication might be
expected to aid comprehension, its likely impact on persuasion is not as clear. Whether
older children might entertain a broader array of plausible hypotheses regarding the
meaning of the ad, and its links to the brand, warrants future research attention.
What does seem apparent, is clear developmental change in the breadth and depth
with which children interpret and evaluate media content during middle childhood.


268
Smith, R. E. (1993), "Integrating Information from Advertising and Trial: Processes
and Effects on Consumer Response to Product Information," Journal of Marketing
Research. 30 (May), 204-219.
Smith, R. E. & W. R. Swinyard (1983), "Attitude-Behavior Consistency: The Impact
of Product Trial Versus Advertising," Journal of Marketing Research.
20(August), 257-267.
Smith, R. E. & W. R. Swinyard (1988), "Cognitive Response to Advertising and Trial:
Belief Strength, Belief Confidence and Product Curiosity," Journal of
Advertising. 17(3), 3-14.
Smith, R. E. & W. R. Swinyard (1982), "Information Response Models: An Integrated
Approach," Journal of Marketing. 46 (Winter), 81-92.
Solomon, M. R. (1992), Consumer Behavior. Boston, MA: Allyn and Bacon.
Strauss, A. L. (1987), Qualitative Analysis for Social Scientists. Cambridge, England:
Cambridge University Press.
Strauss, A. & J. Corbin (1990), Basics of Qualitative Research: Grounded Theory
Procedures and Techniques. Newbury Park, CA: Sage.
Tammivaara, J. & D. S. Enright (1986), "On Eliciting Information: Dialogues with
Child Informants," Anthropology and Education Quarterly. 17, 218-238.
Thompson, C. J., W. B. Locander & H. R. Pollio (1989), "Putting Consumer
Experience Back into Consumer Research: The Philosophy and Method of
Existential-Phenomenology," Journal of Consumer Research. 16 (2), 133-146.
Thompson, C. J., B. B. Stem & E. J. Amould (1993), "A Preference for Diversity: A
Postpositivist Approach to Methodological Pluralism in Consumer Research,"
Working Paper, Department of Marketing, University of Wisconsin-Madison.
Trabasso, T. (1981), "On the Making of Inferences During Reading and Their
Assessment," in Comprehension and Teaching: Research Reviews, ed. J. T.
Guthrie, Newark, DE: International Reading Association, 56-76.
Tybout, A. M. & C. A. Scott (1983), "Availability of Well-Defined Internal Knowledge
and the Attitude Formation Process: Information Aggregation Versus
Self-Perception," Journal of Personality and Social Psychology. 44 (3), 474-491.
Waksler, F. C. (1986), "Studying Children: Phenomenological Insights," Human
Studies. 9 (1), 71-82.


56
among consumer goods; (2) typically respond to advertising with skepticism because of
its inherently partisan character; and (3) treat advertised claims as tentative expectations
to be assessed through additional information search or product experience. Because
these assumptions underpin current conceptualizations of the relationship between
advertising and use experience, their validity in the context of childrens responses is an
important issue.
Like childrens advertising research, current models of the advertising-
consumption relationship presume that ads are evaluated primarily in terms of the
information they provide about a products features and performance. Advertisements
make claims about products, and if the claims are judged to be reasonable, they may be
used to make sense of subsequent product experiences. These claims are treated as
tentative expectations to be examined through subsequent experience or additional
information available in the marketplace. Predisposed to respond skeptically, adults treat
advertised claims as mere conjectures that may or may not prove to be correct. Only
when the decision environment is ambiguous do advertisements influence how these
experiences are interpreted or judged (Ha and Hoch 1989; Hoch and Deighton 1989;
Hoch and Ha 1986; Wells 1986). Children, on the other hand, are more likely to accept
ad claims, are often drawn to the products they see depicted and tend not to respond
skeptically unless reminded to do so (Adler et al. 1980; Brucks et al. 1988; Roedder et
al. 1983; Ward et al. 1977).
Whether children treat advertised claims as provisional hypotheses that are
subsequently used to evaluate the products they obtain, is not clear. Conceptual models


162
elements with direct product experience may simply overtax the childs resources at the
integration stage of processing. Greater understanding of the processing demands placed
by multiple sources of marketplace information like advertising and product trial is
needed to determine whether the findings reflect capacity constraints or not. While there
is substantial evidence that young children are persuaded by the advertisements they
encounter, it appears that these messages are not brought forward into the consumption
context. These findings do not in any way suggest that younger children are immune to
commercial messages. What they do suggest, is that among younger children (7-8 years-
old), advertisings impact is felt primarily within a prepurchase context.
A distinctly different response pattern was revealed by the older children. While
advertising theory and research indicates that older children are quick to discount
commercial messages, the findings of this study seem to suggest otherwise. Among the
older children, advertising appears to have the capacity to frame the interpretation of a
consumption experience. Childrens brand-related responses were influenced by
advertising even in the face of presumably unambiguous experiential evidence. It is the
older, rather than the younger child who allows the ad to shape his (her) brand
perceptions and evaluations. Both the preliminary study and recent research indicating
that "cued processors" dont necessarily activate their cognitive defenses spontaneously,
support these findings. The older childs increased cognitive sophistication and
experience with advertising may create a greater sensitivity to commercial content within
a trial context. The findings of the preliminary study revealed that these children are
astute observers of multiple levels of meaning in advertising. Rather than viewing the


45
proclivities, and the contingencies in which they operate. Theories of cognitive
development have provided useful frameworks for both conceptualization and empirical
efforts investigating childrens responses to advertising. Paradigmatically, an
information-centered young consumer is assumed. Advertisements are viewed primarily
as purveyors of brand information. Age-related changes in childrens ability to store,
manipulate and retrieve information are examined in terms of their impact on childrens
comprehension of advertised claims and attitudes toward the brand promoted. Insights
gleaned from these studies provide the necessary basis for understanding how childrens
judgments and processing strategies evolve. However, while this research provides depth
of insight into the functioning of information processing variables, it sacrifices breadth
of insight into the broader cultural and affective context in which children think about
advertisements and consume products.
In this investigation, a meaning-based model provides the basic framework for
examination of childrens perceptions of the advertising-consumption relationship.
Insight into how children construe these relationships is sought, within the general
constraints imposed by developmental capabilities for acquiring, retaining and utilizing
marketplace information. The meaning-based approach, focused at a broader level than
information processing approaches, expressly recognizes the cultural context of
consumption (McCracken 1987; Watkins 1985). Investigation of consumer experience
originates from the position that individuals live and consume in a meaningfully
constituted world, that has been structured by the beliefs and values of a culture.
Advertisements and consumer goods each play a key role in the transmission and


270
Wells, W. D. (1993), "Discovery-Oriented Consumer Research," Journal of Consumer
Research. 19 (March), 489-504.
Wells, W. D. (1988), "Lectures and Dramas," in Cognitive and Affective Responses to
Advertising, eds. P. Cafferata and A. M. Tybout, Lexington, MA: D. C. Heath,
11-21.
Wells, W. D. (1986), "Three Useful Ideas," in Advances in Consumer Research. Vol.
13, ed. R. J. Lutz, Provo, UT: Association for Consumer Research, 9-11.
Winner, E. (1988), The Point of Words. Cambridge, MA: Harvard University Press.
Winnick, M. P. & C. Winnick (1979), The Television Experience. Beverly Hills, CA:
Sage.
Wright, A. A. & R. J. Lutz (1993), "Cognitive and Affective Response to New Product
Advertising and Trial," Working Paper, College of Business Administration,
California State University, Long Beach.
Wright, P. (1986), "Schemer Schema: Consumers Intuitive Theories About Marketers
Influence Tactics," in Advances in Consumer Research. Vol. 13, ed. R.J. Lutz
Provo, UT: Association for Consumer Research, 1-3.
Wright, P. & P. D. Rip (1980), "Product Class Advertising Effects on First-Time
Buyers Decision Strategies," Journal of Consumer Research. 7 (September), 176-
188.
Young, B. M. (1986), "New Approaches to Old Problems-The Growth of Advertising
Literacy," in Commercial Television and European Children, eds. S. Ward, T.
Robertson & R. Brown, Aldershot, England: Gower, 67-83.
Young, B. M. (1990), Television Advertising and Children. Oxford, England: Clarendon
Press.


85
Emerging from the initial interviews is a perspective of advertising that highlights
its role as an entertainment vehicle as well as a source of brand communications.
Though at best preliminary, the evidence does suggest that childrens reactions to
commercials encompass a rich, multi-dimensional array of form and content dimensions
that are only tangentially related to the brand advertised. The older children, in
particular, talked extensively about the creative merging of fantasy and reality within
specific advertisements, the predictability of actors portrayals, specific features that
make a commercial funny or not, and specific strategies used to attract viewer attention
and interest. What the implications of this finding are and whether it will continue to
hold as more interviews are conducted remains an open question. Though researchers
clearly recognize that children are entertained by commercials, this fact seems to have
little bearing on how childrens responses are conceptualized or measured. What is
interesting is that this finding was not predicted or hypothesized a priori. The
phenomenological interview allowed the discovery of what may or may not prove to be
an important facet of the way children think about the advertising-consumption
relationship. Adult models of the advertising-experience interaction would have
suggested a much more information-centered consumer than children may turn out to be.
Using research techniques such as the constant comparative method, the
significance of this type of result can be subjected to rigorous analysis and evaluation
(Glaser and Strauss 1967). As major concepts and categories are developed, they are
immediately challenged. Negative instances are sought and additional data are collected.
For example, as the entertainment dimensions of advertising surfaced in the interviews,


63
everyday encounters with products and advertisements. Without this grounding, the
authenticity and value of research conclusions would be compromised.
Research Approach
In the first phase of this research project, a qualitative investigation with both
substantive and methodological aims was carried out. This study was designed to
develop a preliminary understanding of how children conceive of the relationships
between advertisements and products, and to evaluate the validity of phenomenological
interview research methods with school aged children. Discovery-oriented research
approaches which enable the researcher to remain true to the perspectives of respondents,
offer the opportunity to gain substantive insight into how children assess and manage
their consumption experiences. Because the context of consumption is so little
understood, initial research aims for this project were open-ended and broadly focused.
Uncertainty about the relevance of adult-derived models and the heretofore neglect of
consumption issues within the area of childrens research, led to the choice of an
inductive research approach focusing on the generation of conceptual categories and
relationships. Rather than beginning with a theory and attempting to test it, the research
began with the substantive area and what is relevant to that area was allowed to emerge
(Denzin 1988; Kvale 1983; Lincoln and Guba 1985; McCracken 1988; Thompson,
Locander and Pollio 1989; Strauss and Corbin 1990).
Without insight into the primary factors that motivate and shape childrens
marketplace perceptions, researchers may run the risk of creating abstract representations
that have little basis in real-world events (Wells 1993). This hazard may be particularly


246
Double Dip Crunch Cereal
At the outset of this ad, cereal boxes are dancing as a tune plays in the background.
Then, as the announcer begins to speak (as the music continues), split screens are shown
one a shot of a beehive with puppetlike bees buzzing around it and the other with a girl
watching the bees and smiling. The picture then shifts to steel nuts on the left and a boy
on the right, looking a bit confused. The steel nuts are quickly replaced by a shot of
squirrels gathering nuts and the boy smiles with satisfaction. The two ingredients honey
and nuts are emphasized repeatedly through a series of quick shots showing the product,
the ingredients and the two children happily eating the cereal. The ad concludes with a
shot of the product package as the announcer reiterates "two dips, one great taste."
Adult Announcer: (voiceover) "New Kelloggs Double Dip Crunch cereal is dipped
in two tasty flavors. Once in honey, Mmmmm, the sweet kind,
made by bees. And then in nuts. Not these (pictures steel nuts),
but these! Delicious honey and nuts, the best of both worlds.
New Kelloggs Double Dip Crunch, two delicious dips, one great
taste! And part of a complete breakfast. Two Dips. One Great
Taste!
Advertised Product Attributes Measured in Experimental Questionnaire
1. Cereal is Crunchy (E)
2. Tastes Sweet (E)
3. Made with Honey (S)
4. Contains nuts (S)
5. Part of a complete breakfast (S)
6. Has a great taste (E)
7. Dipped in two flavors (S)


29
may still affect their established preferences because they lack the ability to control the
allocation of their cognitive resources (Roedder, Stemthal and Calder 1983).
This muddle of emerging competencies, skills and perhaps motivations makes this
age group a particularly interesting one to study. While they possess appropriate
background knowledge to assess advertised claims in a critical fashion, they must be
reminded to do so. Though aware of specific ad techniques and seemingly skeptical of
its approach, even older children are responsive to ad content, both central and
peripheral. While this duality of response can be accounted for in terms of cognitive
deficits, it is also important to recognize that this explanation implicitly assumes that
childrens perceived meaning centers on brand evaluation and assessing the veridicality
of ad claims. That children may have a broader agenda in reading advertisements either
is not explicitly considered or is deemed irrelevant. Ads are not merely sources of brand
information but reflections of a playful world of fantasy, status and cultural norms. By
delimiting investigation to a set of researcher-defined response categories, it may be that
equally meaningful dimensions are neglected. The notion of counterargumentation is an
adult construction as is the a priori specification of peripheral content (e.g., Ross et al.
1981; Rossiter 1979). Unencumbered by the realities of economic obligation and with
$4.7 billion dollars to spend, American children may have little interest in generating
counterarguments in response to the fantasy and amusement that commercials offer
(Solomon 1992). The presumption that children view a selling motive as inherently
negative may simply be inaccurate. It is the assumption that children view commercial
aims as somehow duplicitous that underpins adult expectations that children not only


219
the experimental approach has the power to detect subtle and perhaps difficult to
articulate changes in childrens assessments and beliefs, it is less suited to understanding
how children spontaneously interpret their experiences with advertisements and products.
Insight into the complexity and richness of childrens everyday experience is the gift of
qualitative inquiry. By triangulating across sources (informants), materials (ads), and
methods (experimental and interpretive), this design has attempted to maximize the
trustworthiness of the research while gaining a detailed understanding of the meanings
of advertising and consumption experiences in childrens lives.


120
Figure 2. Modified Specification of Dual Mediation Model.


236
PC: CL SS Number: Sequence: Session: Date:
Previous Exposure to Ad
1. Have you seen this commercial before (today)? YES NO NOT SURE
2. (If Yes) Have you seen it: a lot of times or just a few times? LOT FEW
Cognitive Responses (Choice: l=Ad 2=Trial )
Attitude Toward the Ad
"Let's talk about the commercial that you just saw for
How much did you like the commercial you just saw? (sticker)
5 4 3 2 1
LIKE
A LOT
like
some
like
a little
don't
like much
DONT LIKE
AT ALL
How did watching this commercial make you feel? (facial scale)
5 4 3 2 1
REAL
HAPPY
REAL
SAD
How exciting was this commercial to watch? (jumping scale)
5 4 3 2 1
VERY
EXCITING
NOT AT ALL
EXCITING
4. Would you say, this commercial is good or bad? (1st G/B/N)
5 4 3 2 1
REALLY
GOOD
sort of
good
not good sort of
nor bad bad
1
REALLY
BAD


40
regarded as having simply made a mistake rather than having intentionally selected a non
literal execution. As children enter late childhood or early adolescence (approximately
11-12 years-old) their fascination with and use of figurative language seems to re-emerge
in a more sophisticated fashion (Winner 1988).
There is no single competency that suddenly allows children to fully appreciate
the use of non-literal portrayals in advertising or other types of communications. Rather,
a collection of interpretive skills gradually emerges which allow children to assess both
the form and content of a message as well as its source. The concept of persuasive intent
captures only a subset of the skills needed to achieve full "adult" comprehension of
commercial messages employing hyperbole, metaphor and visual imagery to persuade.
Childrens understanding of the meaning of advertised messages also depends on their
capacity to (1) distinguish fantasy from reality, (2) differentiate between literal and non
literal uses of visual and verbal message elements, (3) recognize that there is both a
source and an audience for the message who have distinct perspectives and motives and
(4) recognize that advertisements require different interpretive strategies than educational
or entertainment oriented messages (Roberts 1982; Robertson and Rossiter 1974; Young
1990). These emerging capabilities are rooted in childrens expanding experience in
social and economic spheres as well as their information processing achievements.
At the most basic level, children need to be able to step outside their own point
of view and understand the point of view of another person before they can begin to
appreciate an advertisers profit orientation (Faber, Perloff and Hawkins 1982). In
straightforward informational contexts, even very young children are able to mentally


4 STUDY 2 95
Conceptual Background and Hypotheses 100
Method 130
Analysis and Results 142
Discussion 160
Notes 165
5 STUDY 3 166
The Functions of Qualitative Inquiry 167
Methodological Pluralism 169
Overview 173
Method 175
Research Findings 185
Discussion 217
6 CONCLUSIONS AND FUTURE DIRECTIONS 220
APPENDICES
A PRELIMINARY STUDY INTERVIEW SCHEDULE 229
B SAMPLE EXPERIMENTAL QUESTIONNAIRE 234
C AD TEXTS 244
D INTERVIEW SCHEDULE FOR STUDY 3 248
REFERENCES 253
BIOGRAPHICAL SKETCH 271
v


75
structured so as to permit lines of inquiry that allowed the childs perspective to emerge
(see Appendix A for a copy of the interview schedule). This type of interviewing has
been adopted successfully in many studies with adults, but has rarely been used to study
childrens media reception. When childrens advertising researchers have adopted an
open-ended interview format, they have tended to apply predetermined coding schemes
or theoretical models that mask childrens substantive interpretations and conclusions
(e.g., Bever et al. 1972, Rossiter and Robertson 1974; Ward et al. 1977). Adult models
of thinking may influence the substantive conclusions that are drawn about childrens
assimilation and use of commercial content. In many studies of childrens
comprehension of television, the expressed or implied criterion for understanding is the
adult explanation or the formal, literate meaning of a message that fully socialized
members of a society might offer. Researchers have often used their own interpretation
of televised content as a standard and evaluated childrens perceptions against it
(Anderson 1981; Dorr 1986). Under these circumstances, it is not surprising that
children frequently "fail" to understand an advertisement the way an adult might. With
this as the baseline, childrens interpretations implicitly represent a flawed approximation
to the reading an adult might provide, rather than an equally valid point of view. A
loosely structured dialogue permits exploration of how children perceive advertisements,
reflect on them and relate their contents to their own consumption experiences, ideas and
knowledge.
Data analysis. Research conclusions are based on the verbatim transcripts of
these depth interviews. These transcripts are the data from which conceptual


156
prepurchase context, replicating previous findings and extending them to a young
audience. This relationship was significant across age groups.
While childrens affective responses to ads were expected to mediate advertisings
influence on brand attitude in a prepurchase context, Ha and H7 predicted that Aads
influence would decline when children also had the benefit of product trial, particularly
among the older age group. It was expected that older children would base their brand
attitudes primarily on perceptions derived from product trial, with little evident impact
of the ads affective properties. Contrary to expectations, Aad continued to have a direct
influence on AB, even when the older children had consumption experience. Among the
younger children, on the other hand, support for H7 which predicted a reduction in Aads
influence when trial precedes ad exposure, was evident. A significant decline in Aads
influence was observed between the ad only cell (/3 = .46) and the trial/ad cell (/3 =. 19,
t=2.12, p < .05). Collectively, the evidence indicates that childrens affective responses
to ads directly mediate advertisings influence on brand attitude. Among the younger
children, this influence begins to decline when advertising is coupled with product trial,
particularly when trial follows message exposure. However, irrespective of age group,
Aad continues to influence childrens brand attitudes, even in trial settings.
Indirect effects of A^ on brand perceptions and attitude. H8 through H10 examine
the indirect effects of Aad on AB via brand perceptions. H8A and H8B predict that
childrens affective responses to an advertisement influence their perceptions of the
promoted brand (Aad -* CogB) in a prepurchase context. Childrens reactions to the ad
itself may shape more specific expectations about the brand when there is little other


76
relationships are discovered, clarified and provisionally verified. The ultimate objective
is the development of an inductively derived substantive theory, grounded in the reality
of childrens experiences with ads and products. The research findings constitute a rich,
tightly woven explanatory theory of the phenomena under investigation, rather than a set
of loosely related themes (Glaser and Strauss 1967; Strauss and Corbin 1990).
Systematic analysis techniques and procedures give the research process the precision and
rigor necessary to establish the trustworthiness of the findings (Lincoln and Guba 1985;
Wallendorf and Belk 1989).
Coding, is the fundamental analytic process in grounded theory research (Corbin
and Strauss 1990; Strauss 1987; Strauss and Corbin 1990). There are three major types:
(1) open coding (2) axial coding and (3) selective coding. Open coding is the interpretive
process by which data are initially broken down and conceptualized. Specific incidents,
events and actions are compared, provisional concepts are identified and their properties
dimensionalized. Open coding stimulates generative and comparative questions to guide
subsequent data collection. In axial coding, conceptual categories are related to one
another, and the relationships tested against data. In this phase of the analytic process,
contextual factors, antecedent conditions and consequences are specified, enhancing the
precision of the evolving explanatory network. Selective coding is the final step of the
analytic process. In this phase, the central phenomenon or "core category" is identified
and systematically related to other categories, validating those relationships and isolating
those that need refinement. Ultimately, a richly textured, well-integrated theoretical
formulation is derived, one that closely approximates the everyday reality it represents.


167
performance driven than initially presumed. However, the conditions when childrens
brand specific expectations play a more focal role, and the consequences of childrens
preoccupation with advertisings creative aspects, are not yet clear. The first two studies
suggest that older and younger children differ in their appraisal strategies, the meaning
and stability of these observations remain tentative. Returning to qualitative inquiry at
this stage in the project represents an opportunity to examine the range and limitations
of these patterns as well as embed understanding within the context of childrens
everyday lives and experiences.
The Functions of Qualitative Inquiry
While the value of qualitative inquiry in the exploratory phases of a research
project is widely acknowledged among social scientists, less common is recognition of
its value in enriching experimental or survey findings. Qualitative inquiry is often used
to explore new topics, generate hypotheses or suggest new directions for further study.
It is rarely drawn upon to clarify experimental findings, further test hypotheses suggested
by experimental outcomes, or contextualize relationships isolated through traditional
research methods. Just as this approach may serve as a valuable precursor to causal
analysis, it is also well suited for illuminating the meaning of experimental findings, both
anticipated and not. In the context of this project, return to the qualitative offers the
opportunity not only to clarify unanticipated age-related patterns evident in the
experimental investigation but to develop a richer understanding of how children think
about ads and products, unconstrained by the close-ended measures and the underlying
theory they represent. Emerging from the first two studies is a view of the older child


207
older children. While the younger children readily recognize fantasy in advertisements,
the basis for their judgments rests primarily on issues of physical possibility or
impossibility, outward appearance and format. This is consistent with prior research
which suggests that younger childrens judgments are more closely tied to the perceptual
features of media content (Kelley 1981; Young 1990). Older children, on the other
hand, are more sensitive to the inner content of a message. Judgments about fantasy and
reality no longer rest exclusively on aspects of physical reality but incorporate social and
psychological dimensions as well. Their perceptions of what constitutes reality, like an
adults, become increasingly complex as plausibility enters the judgment equation.
Children of this age group retain the capacity to look beyond a messages literal meaning
to its figurative properties as well. While these interpretive differences are readily
acknowledged in developmental investigations of childrens processing of television and
print media, researchers have been slower to consider how these changes might impact
childrens reception of advertised content (see Young 1990 for an exception). Evidence
for these age-related patterns was quite apparent in childrens reactions to the broad
range of advertisements the respondents brought to mind within the interviews. While
younger childrens comments were largely confined to the realm of physical possibility
or impossibility, the older children seemed to apply a much broader, more-inclusive
perspective in separating fantasy from reality in commercials. Rather than casting reality
in absolute terms, their judgments seemed to incorporate the realm of possibility where
depictions might be literally false yet true at a higher plane where motives, intent and
social conventions apply.


55
It is in the context of childrens advertisements, products and common experiences
that the utility of these models now needs to be assessed. Effective childrens ads use
striking imagery and language to enlarge a brands meaning and value. To transport a
brand from the realm of everyday life to a more attractive and symbolic context,
childrens advertisers frequently rely on fanciful and imaginative executions.
Advertisements may have the greatest potential to affect a childs product experience
when they are plausible and engaging, but elusive and difficult to dispute directly. Not
only is the product experience potentially ambiguous, as researchers have suggested (Ha
and Hoch 1989; Hoch and Ha 1986), but the advertisement itself is cast in such a way
that its content can be construed along multiple, equally credible paths. Whether, and
how children draw on these intriguing but beguiling formats in the context of their
experiences is not clear. Researchers with an interest in this topic have focused their
efforts on understanding adult processing strategies. Though current conceptualizations
provide insight into how advertising may help children interpret their consumption
experiences, the validity of these models cant simply be assumed but must re-examined
in the context of childrens lives.
Prevailing Paradigms and Childrens Reality
The theoretical models that have been developed to study the relationship between
advertising and product experience embody several key assumptions about how adults
respond to marketer-controlled sources of information (e.g., Deighton 1984; Hoch and
Deighton 1989). Within this general framework, consumers are characterized as skilled
but pragmatic thinkers who: (1) search for product information in order to make choices


123
formed on the basis of indirect experience (e.g., advertising) alone (Fazio 1986).
Though the role of Aad in ad-trial interactions was not specifically addressed by either
Hoch and Ha (1986) or Levin and Gaeth (1988), both seem to suggest that when a
product experience is unambiguous, it swamps the effects of advertising. Collectively,
the evidence clearly suggests that Aad plays a diminished role within a trial setting.
Smith (1993) offers empirical support for this proposition in the context of a new,
unfamiliar advertisement and brand.
Current theory suggesting a limited role for Aad within a trial setting rests on
assumptions that may not hold in the context of childrens advertising response. First,
the literature seems to rely on a central processing perspective on the origins of Aad, to
the exclusion of more peripheral mechanisms (Lutz 1985). While researchers have
shown that Aads antecedents are both cognitive and affective, the theoretical rationale
for Aads diminished role is based primarily on cognitive dimensions, most notably ad
credibility.3 However, to the extent that Aad is reflective of consumers responses to
executional elements, it is not clear that product trial necessarily blunts its effect.
Theoretical arguments in support of a diminished role for Aad, implicitly presume a weak
or uncompelling execution.
With the exception of Smith (1993) and Wright and Lutz (1993), there is little
direct empirical evidence that assesses whether Aad retains its mediating role in the
context of consumption. While incorporating affective dimensions broadens current
models of ad-trial relationships, neither of these studies may fully capture the influence
f Aad, particularly those dimensions that derive from the executional elements of the ad.


258
Feldman, S. & A. Wolf (1974), "Whats Wrong With Childrens Commercials?,"
Journal of Advertising Research. 14 (1), 39-43.
Fine, G. A. & K. L. Sandstrom (1988), Knowing Children: Participant Observation with
Minors. Newbury Park, CA: Sage.
Fischer, E. & S. J. Arnold (1990), "More Than a Labor of Love: Gender Roles and
Christmas GiftShopping," Journal of Consumer Research. 17 (Devember), 333-
345.
Flood, J. (1981), "Prose Comprehension: A Selected Review of Literature on Inference-
Generation as a Requisite for Understanding Text," in Comprehension and the
Competent Reader, eds. D. F. Fisher and C. W. Peters, New York, NY:
Praeger, 51-68.
Ford, G. T., D. B. Smith & J. L. Swasy (1990), "Consumer Skepticism of Advertising
Claims: Testing Hypotheses from Economics of Information," Journal of
Consumer Research. 16 (4), 433-441.
Galst, J. P. & M. A. White (1976), "The Unhealthy Persuader: The Reinforcing Value
of Television and Childrens Purchase Influencing Attempts at the Supermarket,"
Child Development. 17, 1089-1096.
Garbarino, J. & F. M. Stott (1989), What Children Can Tell Us: Eliciting. Interpreting,
and Evaluating Information from Children. San Francisco, CA: Jossey-Bass.
Gardner, M. P. (1985), "Does Attitude Toward the Ad Affect Brand Attitude Under a
Brand Evaluation Set?," Journal of Marketing Research. 22, 192-198.
Gelman, S. A. & K. E. Kremer (1991), "Understanding Natural Cause: Childrens
Explanations of How Objects and Their Properties Originate," Child
Development. 62, 396-414.
Ginosar, Z. & Y. Trope (1980), "The Effects of Base Rates and Individuating
Information on Judgments about Another Person," Journal of Experimental Social
Psychology. 16, 228-242.
Glaser, B. G. & A. L. Strauss (1967), The Discovery of Grounded Theory: Strategies
for Qualitative Research. Chicago, IL: Aldine.
Goldberg, M. E. (1990), "A Quasi-Experiment Assessing the Effectiveness of TV
Advertising Directed to Children," Journal of Marketing Research. 27
(November), 445-454.



68
about ad claims and recall measures leave little room for respondent perceptions or
reaction. What constitutes an appropriate response is determined a priori by researchers
who adopt their own interpretations of ad content as the baseline and evaluate childrens
responses against it.
In contrast, the subjective orientation to advertising reception recognizes that
children actively and selectively impose meanings to understand more completely, their
world and themselves. These meanings are not fully bounded by the text of an
advertisement but are negotiated through the lens of the childs prior experience, both
personal and cultural (Jensen 1987; McCracken 1987; Mick and Buhl 1992). According
to reader response or reception theory, meaning is not an immutable property of a text
but the product of the text structure and the individual, interacting within a specific
interpretive context (Allen 1987). When a child views a television commercial, the
explicit message contents serve as a kind of blueprint to structure understanding, but text
is by nature, incomplete. Coherent interpretation rests on the childs capacity to draw
upon his(her) unique experiences and background knowledge to fill in gaps left vacant
by the text (Collins 1983). Within the boundaries established by (his)her level of
cognitive sophistication, the young viewer infers concepts, intentions, actions to make
sense of even simple narrative messages (Anderson and Pearson 1984; Durkin 1989;
Flood 1981; Trabasso 1981). Derived from the explicit contents of a message, these
inferred relations may range from very simple, straightforward connections needed to
establish coherence, to personalized elaborations that draw upon the receivers self-


216
Rossiter 1974; Rossiter 1977; Ward et al. 1977). By the time they reach the age of 10
to 11, they are presumed to be openly critical of advertising and its creators. This
skepticism results, at least, in some measure from disappointment with heavily promoted
products (Robertson and Rossiter 1974). With the emergence of skepticism come
cognitive and attitudinal defenses that serve to protect children from advertisings
persuasive appeal. Consequently, as a child matures (s)he acquires a better
understanding of advertising, becomes more skeptical of its content and is less likely to
be persuaded by it. Traditional research perspectives thus implicitly presume a linear
relationship between age and susceptibility to advertisings influence. Both the results
of the experiment and the differential age-related perspectives apparent in this study,
suggest that this may oversimplify actual patterns of receptivity to advertising,
particularly in terms of its impact on childrens perceptions and attitudes in a
consumption context.
There is no question that older children are generally more skeptical of advertising
than their younger counterparts. They are frustrated and angered by commercials that
they perceive to be unfair or exploitative. They understand not only that advertisers
present their products in the best possible light but know why that is so. Their
skepticism does not seemed to be based on negative prior experiences or concerns about
obtaining bad products. Little evidence of disappointment with heavily promoted
products was revealed in this study, among either age group. Rather, skepticism seems
tied to the level of overstatement within specific advertisements. It is not that a
particular product is bad, but that an advertisement steps over the line between


71
exceptions, the children readily described a variety of experiences, both good and bad,
with heavily promoted products. Specific ads and products were also introduced into the
interview process to enhance understanding of the meaning creation process. The
primary data for the study were the verbatim transcripts of these interviews. It is from
these transcripts that conceptual relationships are suggested. Findings from this study
served as input to the conceptual development and design of the experimental
investigation as well as a source of a priori themes for subsequent qualitative inquiry.
Research Process
Emergent design. In this initial investigation, the research design was allowed
to emerge or unfold, rather than constructed a priori. Given the existence of multiple
realities, it is inconceivable that enough could be known ahead of time about childrens
subjective experiences to design the research well (Lincoln and Guba 1985; Glaser and
Strauss 1967; Strauss and Corbin 1990). A design emanating from the investigators
perspective would have seriously compromised the overall intent of the research inquiry.
In these early phases, the inability to predict how children would respond and the
substantive issues that would emerge, clearly called for an open-ended research approach
(Lincoln and Guba 1985). When the research design is emergent, subsequent
methodological steps are based on those that precede them. Data collection and analysis
are not separate but interrelated processes (Corbin and Strauss 1990; Glaser and Strauss
1967; Strauss 1987). Each interview takes into account all that has been learned before,
and uses it to direct succeeding observations and interviews. Salient questions,
provisional hypotheses and gaps are identified and pursued as the research progresses.


191
Commercials represent a valued source of product information, particularly with respect
to new toys, features or line extensions.
I really, really watch some commercials about Barbie. I like to watch them
because I like to see how pretty the Barbies are and if there is going to be like
a new kind of Barbie. There is one Barbie that I got on a commercial where she
could dance with a Ken doll. Then it comes with some little lipstick type thing
on a towel. You dip it in cold water and put the lipstick on the Barbie. The
Barbies lipstick turns darker. {203, F}
Not surprisingly, girls are quick to describe seemingly limitless variants of Barbie dolls,
clothes and accessories as well as the contents of commercials that depict them.
Similarly, boys readily list available Super Soaker models, new Nintendo games and
recent Lego line extensions. Their depth of knowledge is impressive, both in terms of
the products themselves and the advertisements that promote them. The most easily
brought-to-mind commercials, are those that promote toys, games, snack foods or
cereals. Unlike their older counterparts, the younger children view ads very much in
functional terms. That is not to say they do not appreciate what is funny or silly. These
dimensions may help to draw their attention, but they are simply not of primary interest.
The children talk about whether they like specific advertisements on the basis of whether
they find the brand appealing, and, whether they think their mom or dad will buy it.
I like the one where you get the concentrated color water junk. You put it in the
gun and it shoots and its disappearing ink, that stuff. It has a motorized one that
you have to buy batteries for, and you can shoot it and its concentrated so if it
gets in your eyes it wont bum. I havent gotten it yet, but I want my mom to
get it for me. {204, M}
This utilitarian perspective is evident both in the types of ads they used as examples and
in the terms they used to describe them. While the older children were equally likely to
draw on a carpet, chicken or cat food commercial to illustrate their reasoning, the


To Neil and Laura Jane


233
General Perceptions of Television and Advertising
1. Do you like to watch television? What are your favorite shows?
2. When you are watching television, do you watch the commercials?
3. What are some commercials that you remember?
(Discuss each ad individually; probe for comparisons/contrasts where
possible)
A. Tell me about (commercials mentioned!.
B. Is that a commercial you like/dislike?
C. What is it about that you like/dislike?
D. You said you liked the commercial for (brand name!, how is that
different than (the same as) the commercial for (brand name)?
4. What are commercials on TV for?
Revisions: 2/12, 2/20, 4/20


187
of brand information. With additional insight into childrens perceptions, the need for
such refinements can be assessed.
Thematic Analysis and Interpretation
Overview. Consonant with patterns emerging from the first two studies, distinct
age-related perspectives of ad-consumption relations were revealed in this investigation.
Material differences in how younger and older children think about ads and products
were evident across the situations, events and issues the informants brought to bear
within the interviews. Emerging from the data were two seemingly disparate points-of-
view, one that is rather narrow and product focused, and the other that is more-inclusive,
yet firmly centered on creative dimensions. These two perspectives labelled "art critic"
versus "informed shopper" frame the interpretation, providing the core conceptual
category or central phenomenon around which all other categories are integrated.
Discussion of the findings is organized around elucidating the meaning of these two
perspectives, as well as their relationship to secondary themes emerging through the
analytic process. In attempting to understand how younger and older children differ in
their approach to consumption-related issues, significant supporting themes arose, relating
to (1) the perceived interdependence of ads and brands, (2) childrens judgments of
fantasy and reality (3) considerations of advertisings unique character and form and (4)
the role of skepticism in a viewing context. Use of the ad and brand props facilitated the
interview process and helped to illuminate the nature and consequences of these differing
approaches to interpreting ad-consumption relations. Subtle differences in childrens
interpretive strategies were evident across exposure contexts. However, these differences
tended to be overshadowed by age-related distinctions. As a consequence, discussion of


116
The dual mediation model. One of the most prominent directions in recent
research on Aad has focused on testing the causal relationships among Aad and other
measures of advertising effectiveness, including brand cognitions, brand attitude and
purchase intentions. Four alternative models of Aads mediating role on brand attitudes
and purchase intentions were first proposed and tested by Lutz, MacKenzie and Belch
(1983) and MacKenzie, Lutz and Belch (1986). This initial work provided support for
one of the models, the "dual mediation hypothesis" which has subsequently proven robust
to factors such as consumers level of involvement and processing objectives (Gardner
1985; Homer 1990). In a recent meta-analytic test of the dual mediation model, Brown
and Stay man (1992) reported strong support for the overall model.
Five constructs form the basis of the dual mediation model (1) ad cognitions
(CogAAD) consumers perceptions of the advertising stimulus, including executional
factors, (2) brand cognitions (CogB) consumers perceptions of the brand advertised,
(3) attitude toward the ad (Aad) consumers affective and evaluative reactions to the ad,
(4) brand attitude (AB) consumers affective reactions to the brand and (5) purchase
intentions (Ig) consumers perceptions of the likelihood that they will purchase the brand
in the future (Lutz, MacKenzie and Belch 1983). Figure 1 depicts the hypothesized
linkages among these constructs (MacKenzie et al. 1986). Of particular interest in the
context of this study, are three structural relationships (Aad -* AB; Aad -* CogB; and CogB
-*> Ab). These relationships provide the basis for examining whether and how Aads role
shifts when children are exposed to brand information through product trial as well as
advertisements.


237
Ad Perceptions
Instructions: Now, I'm going to read you some sentences about the commercial you just
saw and I want to know what you think. (Read ft 1) Tell me if your answer is yes or no.
(Get yes/nol Do you reallv think or sort of think ? If vou "reallv think"
give it a BIG (YES/NO), if you "sort of think" then give it a little yes/no). Okav?
(After example, review all 5 options (including ?:
"if you just can't
decide")
1.
The commercial was lots
of fun to watch and listen to.
5
4
3
2
1
2.
There were too many things
going on in this commercial.
5
4
3
2
1
3.
I liked the things the
people did in this commercial.
5
4
3
0
1
4.
The commercial was dull and boring.
5
4
3
2
1
5.
It's the kind of commercial that
keeps going through my mind
after I've seen it.
5
4
3
2
1
6.
I think this commercial is hard
to understand.
5
4
3
2
1
7.
I wish there were more commercials
like this on TV.
5
4
3
7
Zr
1
8.
I've seen this commercial so many
times before-I'm tired of it.
5
4
3
2
1
9.
I thought this commercial was
really neat.
5
4
3
7
1
10.
The story in the commercial
was dumb.
5
4
3
2
1
11.
This commercial is better than
most other commercials on TV.
5
4
3
2
1
12.
I just laughed -- I thought
the commercial was very funny.
5
4
3
2
1


8
The Nature of Childrens Advertising
To fully understand how children perceive the relationship between the products
they consume and the commercial messages that promote them requires an appreciation
for the special character of childrens advertising and its potential to affect the
interpretation of product experiences. Advertisements targeted at children are frequently
as enchanting and captivating as the programs in which they are embedded. These ads
use special effects, sophisticated animation, and humor to entertain and pique childrens
interest. Creative visuals depict action and events in a striking and memorable way.
Childrens ads are rarely informational in the sense of rational appeals based on product
features (Barcus 1980). Objective product information emphasizing product ingredients
or materials, economic value, or design quality is rarely included in these advertisements.
Instead, persuasive appeals tend to focus on the hedonic aspects of consumption.
Merriment and fun are the dominant themes across product categories and stylistic
conventions. Fantasy is often used to convey excitement and adventure. Animated
figures interacting with real children, mysterious flights of fantasy, mythical kingdoms,
outer-space beings, and magical transformations of objects are widely used to promote
childrens products.
In recent years, program-length commercials, host-selling and other techniques
using program characters to promote products have emerged in response to a 1984
Federal Communications Commission deregulation order. The promotion of toys and
other products associated with program themes and characters has become part of
well-coordinated and very successful marketing strategies. In 1990, for example,


21
accumulated. The nature and depth of our scientific insight into how children respond
to advertising is derived from the research agenda that has been shaped in some measure
by this broader social context.
Concerns about childrens ability to comprehend advertisings persuasive
character, evaluate specific techniques and strategies, and make appropriate product
choices have motivated the majority of research efforts since the early 1970s. To address
these issues, developmental-stage and information processing models have been utilized
to understand how childrens cognitive skills in dealing with advertised information
evolve with age and accumulated experience. Without question, this research focus is
both important and necessary on social policy as well as economic grounds. However,
it is also important to recognize that it represents but a single perspective.
Fundamental concerns about childrens ability to cope with advertised messages
have led to a rather narrowly defined research agenda. Researchers have tended to focus
on matters of public policy, to the exclusion of other issues and modes of thinking that
may be useful in furthering our understanding of childrens responsiveness to marketplace
stimuli. Other potentially interesting questions about advertising and its role within
childrens lives have simply not been posed because they lie outside our traditional
construal of the aims and methods of childrens advertising research. At a very
fundamental level, a research agenda is a function of the social and political context that
produces it. A Zeitgeist prevails within a research community that tends to constrain
how issues are conceptualized and investigated. This is particularly true in the case of


APPENDIX D
INTERVIEW SCHEDULE FOR STUDY 3
Introduction
Thank you for talking with me today. If it is okay with you, I am going to show
you some television commercials and products and ask you to tell me what your opinions
are or what you think about them. It can be anything at all The reason Id like to
know these things is to learn about what kids think about the products they see advertised
on TV. People notice different things so I would like to know just what you think.
Before we start, is it okay if I record our conversation so that I can go back to
it later on. I will be talking to so many people that I might forget some things,
otherwise.
As we talk, if there are any questions you dont want to answer thats okay. Or,
if you want to stop, thats okay too. Do you have any questions for me? If you think
of some be sure to ask.
Background Questions
1. Age (Birthday), Siblings
2. Things like to do after school
3. TV Viewing
248


113
of situations, whereby early information is both attended to more heavily and better
remembered, would also support the hypothesized differential impact of advertising when
it precedes as compared to when it follows product trial.
H3: Children exposed to a product trial-advertising sequence and those who rate the
brand on the basis of a trial experience alone, do not differ significantly in
measures of their total expectancy or brand attitudes.
Relationships among Affective Responses to Advertising and Brand-Related Responses
The second major goal of this research was to explore what role affective
reactions to advertisements play in determining childrens brand-related beliefs and
attitudes and how this role might change when children have direct experience with a
brand. If advertising does have the capacity to frame the childs consumption
experience, research on consumers "attitude toward the advertisement" (Aad) is useful
in suggesting a more affective route whereby these effects might occur.
Attitude toward the ad. Advertising researchers, with both theoretical and applied
orientations have a long standing interest in understanding the impact of consumers
affective reactions to advertisements on persuasion. Among industry researchers, research
findings from the Advertising Research Foundation (ARF) copy testing project have
generated substantial debate regarding the validity of consumers general liking for an
ad as a measure of its effectiveness (Haley and Baldinger 1991; Miller 1991, 1992). In
the ARF study, consumers overall reaction to a commercial, or whether they liked the
spot was identified as the best single predictor of advertising effectiveness. Neither
persuasion nor recall, traditional measures of ad success, were highly correlated with
likability. This result seems to suggest that the utility of "likability" measures may bear


REFERENCES
Aaker, D. A. & D. M. Stayman (1992), "Implementing the Concept of Transformational
Advertising," Psychology & Marketing. 9 (3), 237-253.
Ackerman, B. P. (1981), "Young Childrens Understanding of a Speakers Use of a
False Utterance," Developmental Psychology. 4, 472-480.
Adler, R. P., G. S. Lesser, L. K. Meringoff, T. S. Robertson, J. R. Rossiter & S.
Ward (1980), The Effects of Television Advertising on Children. Lexington, MA:
D. C. Heath.
Allen, R. C. (1987), "Reader-Oriented Criticism and Television," in Channels of
Discourse: Television and Contemporary Criticism, ed. R. C. Allen, Chapel
Hill, NC: University of North Carolina Press, 74-112.
Allison, R. I. & K. P. Uhl (1964), "Influences of Beer Brand Identification on Taste
Perception," Journal of Marketing Research. 1 (August), 36-39.
Anderson, J. A. (1981), "Research on Children and Television: A Critique," Journal of
Broadcasting. 25 (4), 395-400.
Anderson, J. A. & R. K. Avery (1988), "The Concept of Effects: Recognizing Our
Personal Judgments," Journal of Broadcast and Electronic Media. 32 (3), 359-
372.
Anderson, J. A. & T. P. Meyer (1988), Mediated Communication: A Social Action
Perspective. Beverly Hills, CA: Sage.
Anderson, N. H. (1980), "Information Integration Theory in Developmental
Psychology," in Information Integration bv Children, eds. F. Wilkening, J.
Becker and T. Trabasso, Hillsdale, NJ: Lawrence Erlbaum, 1-45.
Anderson, P. F. (1986), "On Method in Consumer Research: A Critical Relativist
Perspective," Journal of Consumer Research. 13 (September), 155-173.
Anderson, P. F. (1989), "Relativism Revidivus: In Defense of Critical Relativism,"
Journal of Consumer Research. 15 (December), 403-406.
253


3
years. Common to these investigations is the focus on advertisings role in the product
acquisition process.
In general terms, there can be little doubt that children attend to ads, try to
understand them and are often attracted to the products they see depicted. Not
surprisingly, clear age-related patterns have been detected in terms of childrens belief
in or acceptance of advertised claims. Relative to their younger counterparts, older
children (10-13) tend to be much more skeptical of advertising (Bever, Smith, Bengen
and Johnson 1975; Robertson and Rossiter 1974; Rossiter 1977; Ward, Wackman and
Wartella 1977). They readily acknowledge that advertising does not always tell the truth
and are more likely to express negative feelings toward the institution of advertising
(Blatt, Spencer and Ward 1972; Bever et al. 1975; Robertson and Rossiter 1974).
However, these kinds of generalized indicators may overstate childrens actual rejection
of specific advertisements and persuasive claims (Atkin 1980; Gom and Goldberg 1977;
Rossiter 1979). Even a broad knowledge base and a generalized skepticism do not insure
immunity from well-crafted advertisements. Though as adults we recognize advertisings
persuasive character, we are still drawn to certain products through commercial messages
that touch our hearts and minds. Children are no different; when asked, they may
express a more adult-like view of advertising that bears little relationship to advertisings
actual influence on their responses to specific products or commercial messages. Though
younger children tend to be affected more strongly by advertising, older children who
presumably have the ability to discount an advertisers message may not do so
spontaneously (Brucks, Armstrong and Goldberg 1988).


77
As the first phase of the research process, the findings of this preliminary study
represent provisional concepts and categories, rather than a fully articulated grounded
theory. The primary objective of the initial set of interviews was to learn what was
relevant and irrelevant, significant and trivial in the realm of childrens product related
experiences. As is characteristic of the open coding phase of the analytic process, a
variety of generative and comparative questions arose, guiding the conceptual
development and design of studies two and three. The findings from this study provided
a rich source of hypotheses, questions and issues for subsequent inquiry.
Research Findings
The original aims of this research were embedded in a theoretical perspective that
views advertising as a vehicle for communicating cultural information and values. From
an adults perspective, childrens advertisements seem to be filled with messages about
friendship, acceptance, social status and family relationships. Part of the initial focus
was to understand how children respond to these kinds of themes in commercial
messages. Early interviews quickly revealed that these sorts of symbolic elements were
not necessarily focal in childrens minds. Questions about the characteristics or motives
of the characters in commercials drew confused responses. However, the children
seemed to have relatively strong opinions about the quality of particular advertisements
and a clear understanding of their intent or purpose. When asked to evaluate the
commercials, the children were able to focus on specific elements and describe how and
why these features were effective or ineffective. What seemed to become clear was that
children, of this age group had developed some pretty clear ideas about advertising as


27
1974; Ward et al. 1977; Wartella and Hunter 1983). The recognition of persuasive intent
is considered a basic developmental milestone by both researchers and policymakers.
Traditionally, it has been assumed that once children understand the persuasive purpose
of advertising they become more skeptical and are then capable of resisting its appeal
(Brucks, Armstrong and Goldberg 1988; Federal Trade Commission 1978; Robertson and
Rossiter 1974; Rossiter and Robertson 1974). Without the recognition that advertising
intends to persuade, children are presumed to accept advertising claims as truthful rather
than question them as adults often do. Young children are believed to be in need of
protection due to their inability to detect persuasive intent in advertising, making them
especially vulnerable to its appeals. Older children, on the other hand, equipped with
an understanding of commercial intent, begin to mistrust advertising and arm themselves
with "cognitive defenses" to resist its persuasive aims (Robertson and Rossiter 1974;
Rossiter and Robertson 1974). They are presumed to have less need for protection as
a consequence of their ability to comprehend advertisings persuasive function and erect
appropriate defenses against it.
However, for this enhanced awareness or knowledge of advertising to provide a
viable defense against persuasive messages, children must draw upon it while they watch
television commercials. Recent research suggests, however, that generalized attitudinal
measures may be only weakly related to childrens actual rejection of specific
advertisements and message claims in a viewing context (Atkin 1980; Goldberg and Gom
1974; Gom and Florsheim 1985; Gom and Goldberg 1977; Rossiter 1979). Knowledge
of the intent of advertising is not sufficient. An exciting, funny or compelling


4
What emerges from the research literature is a view of children and their
responses to advertising that is seemingly contradictory. Though it is clear that by the
time children reach the age of 9 or 10 they are well aware of advertisings purpose and
are likely to express rather skeptical views of advertising, they may still be persuaded
to want products that are made to look intriguing, useful or fun. When given the
opportunity, they tend to choose advertised products over others and are not beyond
asking their parents for them on occasion. How children interpret or evaluate their
experiences once they actually obtain the products they have seen advertised is not at all
clear.
The Primacy of Product Consumption
Products are a primary focal point of consumer behavior, yet the impact of their
use on childrens consumer learning has been virtually ignored. The most readily
available sources of marketplace information to children are the products they encounter
and their own consumption experiences. Consider how many opportunities children have
each day to observe the use of products by members of their family. However, even
very young children are not simply bystanders. Children learn a wealth of information
through their own product experiences. The taste, appearance, function and performance
of a product provide a great deal of information to a child who is learning what it means
to be a consumer in our society. Through consumption, children learn what products are
good and bad, whether advertising claims are truthful, what brands they prefer, and even
that products convey meanings apart from their functional properties. Children


128
brand perceptions (Aad -* CogB), replicating previous findings among adult populations.
Affect generated by an advertisement influences the favorability of childrens cognitive
reactions to the brand. However, the brand perceptions children form in response to the
ad may be relatively weak, solidifying only after product trial. Not only are the claims
not perceived to be highly credible so that links to the brand are tenuous, but it may be
that the older children tend to respond to the ad in terms of its entertainment value rather
than purely as brand information. This reasoning is consistent with Gardner (1985) who
found that beliefs were a stronger predictor of brand attitude under a brand than a non
brand set. So, while Aad may be strongly associated with brand perceptions, these weak
expectations may have little causal impact on brand attitude in an ad-only setting.
H8a: When older children receive information from advertising, Aad is positively
associated with brand perceptions (Aad -* CogB), but these perceptions are
independent of brand attitude (CogB AB).
Among younger children, a similar response pattern can be expected between ad affect
and brand perceptions. Favorable reactions to the ad are likely to exert a positive
influence on childrens brand perceptions because a younger child may not clearly
differentiate between their reactions to the ad and their reactions to the brand. However,
in this case, these perceptions may have a direct influence on the brand attitudes children
ultimately form. Unlikely to consider credibility issues, young children may readily
accept what the advertiser claims, forming their brand attitudes on the basis of what they
see depicted.
H8b: When younger children receive information from advertising, Aad is positively
associated with brand perceptions (Aad CogB), and these brand perceptions
positively influence brand attitude (CogB -* AB).


262
Levin, I. P. & G. J. Gaeth (1988), "How Consumers are Affected by the Framing of
Attribute Information Before and After Consuming the Product," Journal of
Consumer Research. 15 (3), 374-378.
Liebert, D. E., J. N. Sprafkin, R. M. Liebert & E. A. Rubinstein (1977), "Effects of
Television Commercial Disclaimers on the Product Expectations of Children,"
Journal of Communication. 27 (Winter), 118-124.
Liebert, R. M. & J. N. Sprafkin (1988), The Early Window: Effects of Television on
Children and Youth, eds. A. P. Goldstein & L. Krasner, New York: Pergamon
Press, 163-186.
Lincoln, Y. S. & E. Guba (1985), Naturalistic Inquiry. Beverly Hills, CA: Sage.
Lindlof, T. R. (1988), "Media Audiences as Interpretive Communities," in
Communication Yearbook. Vol. 11, ed. J. A. Anderson, Beverly Hills, CA:
Sage, 81-107.
Linn, M. C., T. deBenedictis & K. Delucchi (1982), "Adolescent Reasoning about
Advertisements: Preliminary Investigations." Child Development. 53.1599-1613.
Lutz, R. J. (1985), "Affective and Cognitive Antecedents of Attitude Toward the Ad:
A Conceptual Framework," in Psychological Processes and Advertising Effects:
Theory. Research, and Applications, eds. L. F. Alwitt and A. A. Mitchell,
Hillsdale, NJ: Lawrence Erlbaum Associates, 45-63.
Lutz, R. J. (1991), "Editorial," Journal of Consumer Research. 17(4), iii-vii.
Lutz, R. J. (1989), "Positivism, Naturalism and Pluralism in Consumer Research:
Paradigms in Paradise," in Advances in Consumer Research. Vol. 16, ed. T. C.
Srull, Provo, UT: Association for Consumer Research, 1-7.
Lutz, R. J., S. B. MacKenzie & G. E. Belch (1983), "Attitude Toward the Ad as a
Mediator of Advertising Effectiveness: Determinants and Consequences," in
Advances in Consumer Research. Vol. 10, eds. R. P. Bagozzi and A. M. Tybout,
Ann Arbor, MI: Association for Consumer Research, 532-539.
Lynch, J. G. (1982), "On the External Validity of Experiments in Consumer Research,"
Journal of Consumer Research. 9 (3), 225-239.
Lynch, J. G. (1983), "The Role of External Validity in Theoretical Research," Journal
of Consumer Research. 10 (June), 109-111.


199
disappointment with heavily promoted products was rare. Frustration with ads that were
perceived to be highly repetitive and boring was not. Like one might expect from an art
critic, both positive and negative examples were readily generated. In either case, it is
the ad execution that serves as the primary basis for judgment, not interest in the product
itself. While metaphoric, the "art critic" label captures the orientation of the older
children on multiple dimensions. Not only does it suggest that this group tends to
approach commercials primarily as an art form but it also implies a certain level of
detachment. Although the younger children adopted the role of consumer in thinking
about ads and products, this was not the case among the fifth graders. Like professional
critics, they seemed to distance themselves from the message. Reasoned opinions as to
the value and truth of the work of art were common, quite apart from any personal
interest in product acquisition or consumption.
Im old enough and a lot of other people are old enough to understand life, you
know. Thats just the way of expressing something. Life isnt flat without them,
you know. You could probably never taste one of these in your life and youll
be fine. But little kids who love these things and consume them by the tons
wouldnt understand it, because they take things more literally than we do. They
dont understand figures of speech, you know, little quips like that. {511, M}
The product seems to take on diminished importance among the older children as
a consequence of both conceptual and pragmatic considerations. By the time they reach
the fifth grade, these children have extensive experience with the brands that are
marketed to children. They are knowledgeable about the brands available and the
differences among them. Older children understand that advertising and packaging are
designed to highlight product differences where few exist. The concept of parity
products is a familiar one, though they would certainly not recognize the term. They


101
draws on attitude rather than information processing theory to explain the differential
credibility of information obtained through advertising versus product trial. This
research provides a useful starting point for thinking about the differential roles
advertising and product experience may play in shaping childrens brand related beliefs
and attitudes.
The Effects of Advertising and Product Trial on Brand Perceptions and Attitudes
In recent years, marketing and consumer researchers have focused increased
attention on the interaction of advertising and product use in shaping consumers brand
perceptions and attitudes (e.g., Deighton 1984; Hoch and Deighton 1989; Hoch and Ha
1986; Marks and Kamins 1988; Wright and Lutz 1993). Though the effects of the
advertising-experience interaction have long been of interest within the consumer
satisfaction literature (e.g., Olson and Dover 1979; Oliver 1980), it is only recently that
researchers have considered the issue of how consumers draw on these sources in
learning about the marketplace (e.g., Hoch and Deighton 1989; Hoch and Ha 1986).
Advertising versus product trial. One of the primary conceptual foundations for
recent research on ad-trial relationships is the "integrated information response model"
(IIRM) proposed by Smith and Swinyard (1982). This model compares consumer
response to advertising and product experience, and suggests that, in most cases,
advertising exposure creates only tentative or weakly held brand-related beliefs and
attitudes. From an adults perspective, advertising is understood to be a partisan source
of information. Experiential evidence, on the other hand, is presumed to reflect objective
reality. According to the model consumers both recognize that the advertiser presents


26
more generally on advertisings impact on the attitudes and behavior of school-age (5 to
12-year-old) children. This work provides the foundation necessary to begin to consider
how advertising might influence childrens interpretations and evaluations within the
broader context of product consumption.
Research on childrens beliefs in or acceptance of advertising has been focused
at two levels (1) their willingness to accept specific claims made about products and (2)
their more general attitudes about the truthfulness of advertising. As might be expected,
clear age-related patterns emerge. Older children (10 to 13-year-olds), tend to be much
more skeptical of advertising than their younger counterparts (Bever et al. 1975;
Robertson and Rossiter 1974; Rossiter 1977; Ward et al. 1977). They are quick to
concede that advertising does not always tell the truth and frequently express rather
negative attitudes toward the institution of advertising itself (Blatt et al. 1972; Bever et
al. 1975; Robertson and Rossiter 1974).
Underpinning research effort in this area is the question of when children
understand advertisings persuasive intent and profit motive. Long-standing concern
about young childrens failure to recognize the persuasive purpose that is intrinsic to
commercial advertising led to a number of research investigations during the 1970s and
1980s (e.g., Blosser and Roberts 1985; Donohue, Henke and Donohue 1980; Macklin
1985, 1987; Roberts 1982; Robertson and Rossiter 1974; Ward etal. 1977). Though the
age at which children fully comprehend advertisings purpose has not been established
with certainty, there is substantial evidence indicating that by 7 or 8 years-old, most
children have at least a preliminary understanding (Roberts 1982; Robertson and Rossiter


44
They rely on their knowledge of advertisers influence tactics to evaluate advertising
claims and adapt their performance expectations accordingly. When an advertisers
message can be easily and inexpensively verified before purchase, adults are more likely
to assume that what the advertiser says is true. On the other hand, when product claims
can be evaluated only by purchasing and using a product, adults tend to be much less
willing to believe what they see advertised (Ford, Smith and Swasy 1990; Smith, Ford
and Swasy 1990). Claims that have a high probability of truth are differentiated from
those of a more uncertain character and evaluated on that basis. Children, on the other
hand, may not readily appreciate nor be concerned with the quality of information
provided by advertisers. Though they may articulate adult-like attitudes about
advertising, these generalized indicators may bear little relationship to how they respond
to specific messages or persuasive claims. Whether children judge the veracity of ad
claims, recognizing the difference between claims that are easily verified and those that
are not, is not as clear. The question is one of performance as much as capacity.
Claims that are plausible and attractive yet difficult to verify may be more readily
believed and confirmed through a pleasant consumption experience.
A Call for a Meaning-Based Perspective
Childrens advertising research clearly highlights the need to embed understanding
in the context of how children of various ages comprehend and evaluate persuasive
messages. There is no question that childrens ability to process information conveyed
through advertising differs as a function of their relative experience and cognitive
sophistication. Serious inquiry must take into account childrens emerging skills,


97
context, this pattern introduces inconsistencies into current conceptualizations of
childrens advertising response. While the findings of the preliminary study suggest that
the relationship between ads and product consumption may be tenuous, experimentation
provides the opportunity to isolate and test important causal relationships. The
experimental investigation was designed to examine the precise nature and strength of the
linkages between childrens affective reactions to ads, brand perceptions and attitudes
within the context of product consumption.
Despite long standing interest in the nature and effects of consumers affective
reactions to commercial stimuli within consumer research, these issues have received
little attention in the conceptualization and measurement of childrens responses to
advertising. Within consumer research, there is a long and well-established stream of
research addressing issues such as the determinants and impact of consumers ad
attitudes, the role of emotion or feelings in persuasion and the consequences of peripheral
ad processing (e.g., Batra and Ray 1986; Burke and Edell 1986, 1989; Lutz 1985; Lutz,
MacKenzie and Belch 1983; Mitchell and Olson 1981; MacKenzie and Lutz 1989;
MacKenzie, Lutz and Belch 1986; Shimp 1981). Despite this history, traditional
approaches to the study of childrens advertising response make the implicit assumption
that cognitive factors adequately capture the meaningful aspects of how children process
advertisements. Childrens affective reactions to advertisements tend to be ignored or
perceived as inconsequential (Wartella 1984). However, it has become increasingly clear
that the cognitive and affective dimensions of persuasion for adults are interrelated rather
than discrete (Burke and Edell 1989; Edell and Burke 1987; MacKenzie et al. 1986).


advertising and product trial and an in-depth qualitative investigation that replicates the
basic experimental framework. The experiment examines the relationships among
childrens affective reactions to ads, brand perceptions and attitudes within a consumption
context. The qualitative studies focus on the advertising-consumption relationship from
the childs perspective. Drawing from grounded theory, this research reflects the view
that understanding of human phenomena must be grounded in the reality of events and
situations as they are subjectively experienced.
The preliminary study revealed that children focus extensively on the
entertainment value of commercial messages, sometimes at the expense of the brand
appeal. The centrality of executional dimensions in childrens interpretations of
advertising was most evident among the older age group (10 to 11-year olds). The
experimental results were consistent with emergent patterns, indicating that advertising
does have the capacity to frame a childs consumption experience, though age-related
differences were observed. It was the older children who allowed their affective
reactions to advertisements to color their perceptions of usage experience. Reinforcing
the findings of the first two studies, the in-depth qualitative study revealed two distinct
perspectives on advertising-consumption relations. Younger children tended to view
advertisements from a more functional perspective, focusing primarily on the brand. The
older children seemed to approach advertising from the perspective of an art critic,
drawing extensively on advertisings creative properties and design.
Vll


204
the link between the message and the product. It is not that these children fail to
appreciate the linkages between a product and the advertisement designed to promote it,
as implied in the initial study. Rather, this study helps to highlight the multi
dimensionality of this relation. The intrinsic appeal of the product plays a secondary role
relative to the creative and strategic properties of the advertisement. Judgments about
the link between the ad and the brand focus more extensively on how well the ad
communicates the brands appeal and whether the approach taken is appropriate or not.
This orientation may create a greater openness to the commercial message than typically
recognized. This sensitivity was particularly apparent in childrens responses to the
advertisement and brand stimuli used within the first phase of the interviews.
If you leave soda out too long, the fizz in it gets flat and then it doesnt taste very
good. I think they said it. If you eat it, youre not flat or something. Theyre
probably talking about sodalicious tastes like real coke, like real sodas and stuff.
And it doesnt taste like the normal fruit snacks that are supposedly flat in the
commercial. {504, F}
Relative to their younger counterparts, the older children were much more flexible
in their judgments about the brand. By incorporating both creative and performance-
related distinctions in their thinking, the older children seemed to allow the ad greater
latitude in shaping their perceptions of trial experience. Although the younger children
were unlikely to shift their impressions as a consequence of advertising exposure, this
was not the case among the older group. Those that saw the advertisement factored what
they saw and heard into their overall impressions. The older children were more likely
to adapt their initial perceptions because they were actively trying to integrate the two
sources. While the younger children seemed to judge the ad solely in terms of the brand,


198
aware of advertisings selling intent, recognition seems to have little direct bearing on
how they interpret or evaluate ad contents. The literal character of younger childrens
comprehension may account, in part, for their more pragmatic perspective to advertising
reception. The older children, on the other hand, are better able to appreciate the
symbolic nature of advertised messages. While they readily acknowledge that
advertisements are designed to sell products, it is the cinematic techniques, hyperbole and
metaphor used to promote them that are of primary interest. No longer drawn primarily
to the perceptual features within an ad, they begin to distance themselves from the
immediate message and think about in a more reflective fashion (Ward, et al. 1977;
Young 1990). This shift in childrens interpretive strategies was clearly evident in the
perspective the older group adopted. Armed with a greater understanding of
advertisings techniques and character, the older child has the capacity to treat these
communications almost as an art form. Part of the fascination is applying these new
found interpretive powers to the decoding of specific message elements and aims. Unless
these communications are innovative, touching, exciting or funny, they are judged
severely.
I dont have any other way to say this, its stupid. Its unreal. Its like in this
day and age, you know we have all these neat computer graphics. We have neat
ideas, you know. Some of the shows I watch and some of the commercials are
really creative and inventive. Its a way of advertising something while catching
the readers eye or the viewers eye. But this, this was just stupid, a bunch of
kids just standing around eating fruit snacks. Its like big deal! {511, M)
With years of exposure to these ads, children are bored by much of what they see. What
is often characterized as growing skepticism of advertising, may be equally reflective of
boredom with particular ad forms and content. At least among this group,


157
information to guide them. However, these expectations are expected to have little
influence on brand attitude (CogB A^, among the older children. Support for this
hypothesis is shown in Figure 4. The beta coefficient for the Aad -* CogB path is
significant for the fifth graders (j3 = .43) and marginally significant for the second graders
(/3 = .22), replicating the results of prior research among adult populations. However,
the findings are mixed for the second step of the indirect mechanism. Contrary to
expectations, no significant differences between age groups were found. Among the
older children, the CogB to A0 path was weak (/3 = .18), as anticipated, reaching only
marginal significance (t= 1.70, p< .09). However, it was expected that both paths of
the indirect mechanism, Aad -* CogB and CogB - AB, would be significant among the
younger children. This hypothesis was based on the younger childrens greater proclivity
to enjoy watching ads, to trust them and to believe what they see depicted. However,
the findings indicate that young childrens affective responses to the ads had little
influence on their brand perceptions, and as a consequence, little indirect influence on
their brand attitudes. While Aad exerts a direct influence on AB, it has relatively little
impact on shaping young childrens brand perceptions. This pattern continues to hold
when advertising is coupled with product trial, highlighting clear differences between the
older and younger children.
H9 predicted that when advertising precedes product trial, both paths of the
indirect mechanism, Aad -* CogB and CogB -* A0, would be significant among the older
children. This hypothesis was predicated on the idea that childrens positive reactions
to an ad lead to greater receptivity to ad claims, which in turn are reinforced through


31
images (Pateman 1983). How children bring this knowledge to bear in the context of
viewing is not well-understood. It is important to look beyond traditional schemes used
to categorize cognitive responses. Though the questions of whether and when children
generate counterarguments is critical, these schemes do not adequately capture the depth
and complexity of childrens response. Until conceptual models are firmly grounded in
the reality of childrens experiences and perspectives, understanding of advertisings
persuasive power is necessarily limited.
Researchers with an interest in advertisings persuasive effects have sought
behavioral as well as attitudinal evidence of its influence. Two types of behavioral
variables have been the focus of much of this research: the frequency of childrens
product-related requests and their choice behavior in experimental settings. Correlational
measures have been used to assess relationships among a childs age, exposure to
advertising and the frequency of product requests to parents. Although the weight of
evidence seems to suggest that the frequency of childrens product requests diminish with
age, the data are somewhat difficult to interpret (Galst and White 1976; Robertson and
Rossiter 1974; Robertson and Rossiter 1976; Rossiter 1979; Ward and Wackman 1972).
When product class differences are controlled for, the relationship becomes increasingly
murky. Not surprisingly, requests for toys decline with age while requests for clothing
and bicycles increase (Isler, Popper and Ward 1987; Ward and Wackman 1972).
Requests for heavily advertised products, such as snack foods and soda, that are relevant
to children of all ages do not appear to decline significantly as a child matures (Ward and
Wackman 1972). Collectively, the evidence seems to suggest that the frequency of


164
reality of brand experience. However, these linkages may not necessarily take the form
of specific brand expectations which are either confirmed or disconfirmed through trial
experience. Both the initial study revealing the importance of entertainment in
childrens assessments and evidence from this study indicating that Aad has a reliable
impact on childrens perceptions are consistent with the concept of transformational
advertising. Both suggest that the creative elements within advertisements may play a
more central in the persuasion process than previously recognized within the childrens
advertising literature. Ads are not necessarily perceived primarily as conduits of brand
information. Older children may allow their reactions to the ad color their impressions
of the brand experience. Irrespective of whether younger children disregard the
advertisement as a consequence of the greater salience of the product or difficulties
encountered in integrating ad and brand information, they may be immune to
advertisings influence within consumption settings. Adults, on the other hand, are more
likely to draw spontaneously on their skepticism of advertising, blunting its impact except
when the experience is ambiguous. It is, instead, the children who fall between these
two extremes who may be most receptive to advertisings influence within a consumption
context. Armed with new found understanding and appreciation for ad content, this
group may be more susceptible to its suggestion and nuance when it comes to product
use.
Collectively, the findings suggest that in the design of advertising for children,
entertaining or likable ads may be particularly powerful in reaching the older,
presumably more skeptical child. At the same time, the experimental findings serve to


6
extent advertising actually engenders exaggerated expectations that are subsequently
disappointed is unknown. Neither have researchers investigated situations where
childrens product experiences actually exceed their expectations.
Though the dynamics of the advertising-consumption relationship have not been
examined empirically, researchers nevertheless have assumed that this relationship has
a significant impact on childrens perceptions and responsiveness to persuasive attempts.
For example, it has been suggested that until children actually experience discrepancies
between products as advertised and as consumed, they are unable to fully comprehend
advertisings persuasive intent (Robertson and Rossiter 1974). Increased distrust or
skepticism of advertising has also been linked to childrens negative experiences with
heavily promoted products (Ward 1972). Critics of advertising have suggested that
commercials may present information that differs from the childs actual experiences with
those products, causing confusion and potentially undermining his(her) trust in external
sources of information (e.g., Feldman and Wolf 1974). Collectively, these arguments
suggest that how children interpret and evaluate the relationship between advertising and
their product experiences is important not only in the context of a single purchase
decision but also in a much larger or long-term sense. Childrens general attitudes about
advertising, as well as their perceptions of how the marketplace functions, may be
influenced by the many experiences they have had, both good and bad, with heavily
advertised products.
Within the research literature on adult consumer behavior, there is a growing
consensus that advertisings effects are felt not only at the time of exposure but


134
a product sample or exposure to the target commercial, whichever they had not yet
received. During presentation of the stimulus materials, the childs facial expressions
and spontaneous comments were recorded by the experimenter. After all stimulus
materials were presented, dependent measures were collected in the following order
irrespective of experimental condition (1) prior ad exposure, (2) Aad, (3) ad perceptions,
(4) brand familiarity, (5) brand attitude and confidence measures, (6) brand perceptions,
evaluations and confidence, (7) product satisfaction, and (8) brand attitude for filler
brands. Once these measures were completed, the child was thanked and escorted back
to his(her) classroom. On average, the procedure took 20 to 25 minutes to complete,
with a slightly longer time frame for the first session. After completing the final
experimental session, children were asked a series of questions about their grocery
shopping involvement, brand preferences, TV viewing preferences and general attitudes
about advertising. Children were then thanked and given a prize as a small token of
appreciation. Formal permission to conduct the research was obtained from district-level
administrators, principals, teachers and parents.
Substantive Domain
The substantive domain of interest for this investigation are food products
specifically advertised to children. More than 50% of television advertisements targeted
for children promote snacks, cereals, pre-sweetened drinks or candy. Though a variety
of appeals are used to promote childrens products, informational appeals stressing
ingredients or nutritional benefits are relatively rare. More common are advertisements
that rely on indirect appeals to psychological states, associations with established values


175
Method
Research Process
Research design. In this investigation, a two-phased depth interview strategy was
developed to learn more about how children relate advertisements to their consumption
experiences. Rather than relying exclusively on an unstructured interview format, the
broad framework of the experimental design was also preserved in this study. In the first
phase of the interview, a brand and ad pair were used to stimulate discussion. Reflecting
the structure of the experiment, children were exposed to one of four stimulus contexts
(1) the advertisement alone, (2) the advertisement followed by the product, (3) the
product followed by the ad, or (4) the product alone. These props were used as a means
to ground the conversation, at least initially, at a concrete level, rather than at the more
abstract level utilized in early studies of childrens advertising response. The inclusion
of the ad and product within the interview clearly lessens the cognitive demands placed
on the child thus enhancing the trustworthiness of the data obtained (Goldberg and Gom
1983; Peracchio 1990; Wells 1965). Use of the concrete stimuli may also help to clarify
how the character of childrens responses change depending on whether they are asked
to comment on advertising in general or react to specific commercial messages. While
research efforts have often pointed to the growing skepticism of children through the
elementary years (e.g., Robertson and Rossiter 1974; Ward et al. 1977), the findings of
the preliminary study support more recent work suggesting that children may not draw
on these general attitudes in a viewing context. While the props clearly lent some
structure to the interviews, they were utilized primarily as a springboard to the issues and


62
questions about measurement at issue, but at a more fundamental level, the conceptual
fit of current models in terms of childrens experiences and abilities also warrants careful
reflection. Whether the hypothesis-testing model, which presumes a fully literate
information-centered consumer, is relevant to how children attach meaning to
advertisements and products is not clear. Intuitively, this approach, derived from a
cognitively driven explanatory framework and tested in the context of informational
advertising, does not seem to mirror either childrens proclivities or the ads designed to
reach a young audience. Even the transformational model, which expressly calls into
play affective dimensions and a broader array of advertising formats, has not been
subjected to empirical testing among either adult or youth populations. Empirical
examination of the transformational concept has focused exclusively on the measurement
of the construct rather than its impact in judgment or choice contexts (e.g., Aaker and
Stayman 1992; Puto and Hoyer 1990; Puto and Wells 1984). The elusiveness of
advertisings transformational properties and the inadequacy of traditional research
methods may explain why this intriguing concept remains largely unexplored. At this
juncture, existing conceptualizations of the interaction between advertising and product
experience can best be characterized as very useful but tentative tools for understanding
childrens responses. Whether they map onto childrens reality or are sufficiently broad
enough to capture the range and complexity of childrens thoughts and feelings is an
empirical question, or, more accurately, a series of empirical questions. The legitimacy
of these conceptual frameworks in the realm of childrens media experience can not
simply be assumed. Understanding must be grounded in the reality of childrens


108
advertising are likely to exert little influence on consumers interpretations or evaluations.
However, it is important to recognize that these issues have been conceptualized within
an information centered perspective of what advertising is and how consumers respond
to it. The diminished influence of advertising in a trial context is predicated on its
relatively low credibility as a source of insight about brand performance. From this
perspective, advertisings role is defined purely in terms of its capacity to convey brand
information. That advertising may influence the consumption context through more
affective means that have little to do with specific performance claims is not captured by
these models. The IIRM is based on a model of attitude that presumes affect is derived
from cognitive components, specifically beliefs and belief confidence. The hypothesis
testing paradigm draws on information processing concepts such as confirmatory biases
to conceptualize advertisings impact. Only the transformational advertising paradigm
expressly incorporates affective elements, but underlying processes remain largely
unspecified and untested. Without specifically examining both the affective and cognitive
impacts of advertising, it may be premature to conclude that advertising exerts little
influence in a consumption context.
In the realm of childrens responses to ads and products, both the proclivity to
accept ad claims and the ability to integrate multiple information sources across age
groups bear consideration. Relative to the younger children, older children are much
more likely to recognize the differential credibility of information gleaned through direct
product experience versus advertising. To the extent that children focus primarily on
brand related claims in an advertisement, older children are more likely to be skeptical


Lb
mo
. mos
UNIVERSITY OF
FLORIDA


165
move initial qualitative insights beyond the idiosyncratic, enabling a broader and more
comprehensive analysis of how children respond to ads and products.
Notes
1. When the credibility of brand information varies, the individuals expectancy that
a brand and feature are related is based on both belief strength and belief
confidence (Marks and Kamins 1988; Smith 1993; Smith and Swinyard 1983,
1988). Following from the expectancy value model, total expectancy = belief
strength x belief confidence. The probabilistic nature of the belief strength
construct is too complex to utilize in research with young children. In this study
expectancy represents the sum of belief level times belief confidence.
2. Advertisements for four products were used in this study: (1) Pizzaria Chips, (2)
Smarties, (3) Sodalicious Fruit Snacks and (4) Double Dip Crunch Cereal. At the
inception of this study, all of these products were either unavailable in the local
market or had been introduced only recently. These products were chosen in part
on the basis that prior consumption experience would be minimized. Pretest data
indicated that these products fit this criterion. However, three of the four
products had been advertised in the local market prior to introduction.
3. For a thorough explication of the structural antecedents of Aad see Lutz 1985;
MacKenzie and Lutz 1989.


261
Keller, K. L. (1987), "Memory Factors in Advertising: The Effect of Advertising
Retrieval Cues on Brand Evaluations," Journal of Consumer Research, 14
(December), 316-333.
Kelly, H. (1981), "Reasoning about Realities: Childrens Evaluation of Television and
Books," in Viewing Children through Television, eds. H. Kelly and H. Gardner,
SanFrancisco, CA: Jossey-Bass, 59-72.
Kinsey, J. (1987), "The Use of Children in Advertising and the Impact of Advertising
Aimed at Children," International Journal of Advertising. 6, 169-177.
Kline, S. (1989), "Limits to the Imagination: Marketing and Childrens Culture," in
Cultural Politics in Contemporary America, eds. I. Angus and S. Shally, New
York, NY: Routledge.
Kuhn, T. S. (1962), The Structure of Scientific Revolutions. 2nd. ed., International
Encyclopedia of Unified Science, Vol. 2, Chicago, IL: University of Chicago
Press.
Kunkel, D. (1988a), "Children and Host-Selling Television Commercials,"
Communication Research. 15 (1), 71-92.
Kunkel, D. (1991), "Crafting Media Policy," American Behavioral Scientest. 35 (2),
181-202.
Kunkel, D. (1988b), "From a Raised Eyebrow to a Turned Back: The FCC and
Childrens Product-Related Programming," Journal of Communication. 38 (4),
90-108.
Kunkel, D. & B. Watkins (1987), "Evolution of Childrens Television Regulatory
Policy," Journal of Broadcasting & Electronic Media. 31 (4), 367-389.
Kvale, S. (1983), "The Qualitative Research Interview: A Phenomenological and a
Hermeneutical Mode of Understanding," Journal of Phenomenological
Psychology. 14(2), 171-196.
Lannon, J. & P. Cooper (1983), "Humanistic Advertising: A Holistic Cultural
Perspective," International Journal of Advertising. 2, 195-213.
Lastovicka, J. L. (1983), "Convergent and Discriminant Validity of Television
Commercial Rating Scales," Journal of Advertising. 12 (2), 14-23.


163
ad as exclusively true or false, good or bad, entertaining or not, they seemed to think
about it in terms of its possibilities. With greater facility in integrating the fantasy of an
ad and the brand reality it represents, they were more open to the ads appeal within a
trial context than the younger children.
Consistent with the preliminary findings, path analytic results indicate that
advertising seems to exert its influence primarily through its affective properties.
Though researchers have not focused specifically on the mediating influence of attitude
toward the ad on childrens brand attitudes, it seems to play an important role among
older children who have the capacity to discount advertising but may not always be
inclined to do so. Childrens attitude toward the ad influenced their brand attitudes and
perceptions even when they had the benefit of direct product experience. Aads influence
is not confined to a direct transfer to brand affect but may shape childrens beliefs about
a brand as well. Childrens positive reactions to the ad may lead to greater receptivity
to ad claims, which are in turn reinforced through a favorable experience. The presence
of the stimulus interactions also indicates that negative reactions to an ad may impact,
albeit negatively, the interpretation of a consumption experience.
These findings stand in stark contrast both to the responses of the younger
children and research studies involving adults that indicate Aad has little impact in a
consumption context (Smith 1993; Wright and Lutz 1993). While seemingly incongruous
at first glance, 10 and 11 year-olds may differ in important respects from both of these
other groups. Relative to younger children, the older age group has a greater capacity
and inclination to construct linkages between the fantasy conveyed by an ad and the


158
Table 4
Standardized Parameter Estimates
Second Grade Fifth Grade
A
A/T
T/A
A
A/T
T/A
Ad Info -* A^d
3^***
.10
.27
.08
-.07
-.05
Entertain AVD
.75***
.82***
.61***
.74***
.77***
.89***
Prior A Ay,
.12
-.07
.46***
.14
-.05
.03
Aad Expect
.32*
.13
.32
.61**
.62***
.23
Ad Info - Expect
.21
.15
.05
-.02
-.09
.04
.71***
.43***
.37***
.41***
.37**
.33**
Expect -* Ab
.04
-.05
27**
.20*
.35**
.32*
Prior Ab -* Ab
.31***
.17
.45***
.30*
.26*
.04
P < .01: ***
P < .05: **
P<.10: *


82
specific advertisements they see or hear. Given this pattern of findings, the seemingly
weak links between advertising and product related responses seemed puzzling. If
children are persuaded by an advertisement they must have some expectations about the
characteristics and benefits the product has to offer. However, it is not clear from
existing research what the nature of these expectations are or how they might influence
the interpretation of subsequent product experience. Though the dynamics of the
advertising-consumption relationship have not been examined empirically, researchers
have assumed that this relationship has a significant impact on childrens perceptions and
responsiveness to persuasive attempts. For example, it has been suggested that until
children actually experience discrepancies between products as advertised and the
products they obtain, they are unable to fully comprehend advertisings persuasive intent
(Robertson and Rossi ter 1974).
If, as the research community has assumed, children spontaneously compare their
product experiences to the images conveyed by advertising, it is surprising that more of
these direct comparisons were not evident in the interviews. On the one hand, it might
be argued that these are implicit comparisons that somehow simply havent been or cant
be articulated in an interview format. Though this eventuality cant be ruled out entirely,
a variety of questioning strategies have been employed to get at these relationships.
Further, the children have been able to articulate their opinions and feelings on other
equally difficult issues. Perhaps the more likely explanation is that these comparisons
are neither complex nor specific. Children have expectations about the products they see
advertised but they are simple and often tentative. In really listening to what the children


232
Advertising Response Questions
(After Ad Exposure)
1. Tell me about the story in this commercial.
2. What did this commercial make you think of while you were watching it?
3. What does this commercial tell you about (brand name)?
A. What did you find out about by watching this commercial?
B. Describe What is like?
C. What do you think about ? What is like?
D. Is there anything that you think the commercial should have told you
about but didnt?
4. Why did the advertiser show to tell you about ?
5. If you were going to tell a friend about this commercial, what would you say?
6. Do you like this commercial? What is it that you like? dislike?
7. Describe the kids (people) in the commercial. What are they like?
8. Suppose you were making your own commercial for t What would you want
to put in it?
9. What do you think the people who made the commercial are trying to tell kids in
this commercial? Or, what did the advertiser want you to think about?
10. What kind of a person is the advertiser trying to talk to with this commercial?


APPENDIX A
PRELIMINARY STUDY INTERVIEW SCHEDULE
Introduction
Thank you for volunteering to talk with me today, I really appreciate it. Before
we start, I would like to ask you if it is okay if I record our conversation so that I can
go back to it later on. I will be talking to so many people that I might forget things,
otherwise.
If it is okay with you, I am going to show you some television commercials and
products and then ask you to tell me what you think about them. Id like to know what
you think of the commercials, what you think of the products, what you find interesting
or not. It can be anything at all. Im interested in everything you have to say.
The reason Id like to know these things is because grownups dont know very
much about what kids think about the products they see advertised on TV. People
notice different things in a commercial, I would like to know just what you think.
Before we start, let me tell you that if there are any questions you dont want to
answer thats okay. Or, if you want to stop, thats okay too. Do you have any
questions?
Background Questions
1. Age, Birthday
2. Things like to do after school
3. Siblings
229


150
Table 3
Trial/Ad versus Trial: ANOVA Results.
TOTAL
BELIEF
EXPECTANCY
Ab
TRIAL/AD
3.13
11.03
4.35
TRIAL
2.97
10.03
4.23
F = 1.85
F = 5.97
p < .02
F <


53
This emphasis on advertisings emotional impact has led some researchers to
equate incorrectly, affect-based or image advertising with the transformational concept.
However, transformational effects are not intrinsic to an advertisement but are defined
by consumers perceptions of message contents. An advertisement may have
transformational aims, but not effects, if consumers fail to construct linkages between the
message and their consumption experiences. An advertisement may have the capacity
to stir powerful emotions that are never directly associated with the experience of
consuming the brand. In that situation, the ad may be persuasive but it is not
transformational. Though ecologically correlated with emotional or dramatic executions,
transformational effects may occur in connection with informational appeals as well
(Aaker and Stayman 1992; Deighton 1988). The key is the advertisements capacity to
alter the experience, whether the appeal is emotional, informational or both.
The finding that adults may rely on advertising claims to interpret their product
experiences is surprising and perhaps even disconcerting. What has been assumed to be
beyond the realm of marketings influence may often be well within its reaches (Hoch
and Deighton 1989). Marketing managers seemingly have the capacity to reach into the
consumption experience and alter its meaning and value. Current research approaches
have provided key insights into the scope and character of advertisings influence on
consumers interpretations of their product experiences. Though the primary emphases
of the transformational and hypothesis-testing models differ, these approaches clearly
complement and enhance one another. Both models implicitly recognize the interplay of
affective and cognitive factors in consumers interpretations of advertising-consumption


84
specific features, a cinnamon taste, how it smells, whether it contains sugar or
marshmallows and how fast it gets soggy. The experience of the ad, on the other hand,
occurs at the level of: is it good or bad entertainment?, is it fantastic or real?, and
sometimes, can I relate to the characters or not?
The link between the brand conveyed through the imaginative and fanciful world
of advertising and its reality in the everyday world, may be forged not so much on the
basis of specific expectations about performance but on a much more diffuse basis,
drawing extensively on the ads affective appeal as well as the brands overall perceived
value. Given the content of these ads, it would be difficult to develop detailed
expectations about a particular brand. In this situation, it is not surprising that children
may approach advertising primarily as a source of entertainment and amusement rather
than as a source of brand information. Further, most ads with which they come in
contact, are for products in which they have little interest or likelihood of obtaining. Not
surprisingly, the interviews suggest that these ads are neither likely to be ignored nor
processed deeply in terms of the brand information they convey. Instead, they may best
be characterized as a repository of cultural insight and expression to be mined by a young
inexperienced audience, as well as a source of entertainment and diversion. The
information centered perspective which has dominated the study of childrens advertising
response may not fully capture this possibility. Dominated by issues involving childrens
cognitive abilities and limitations, it fails to consider childrens broader interests, motives
and the everyday world in which advertisements are encountered.


92
were stupid or boring. It was both surprising and interesting that most of the children
seemed to have relatively well-defined brand preferences.
The older and most sophisticated children were much more likely to separate their
reactions to a product from their reactions to the advertisements promoting it. However,
this separation was more readily accomplished when the product was liked rather than
disliked. When a product is disliked, advertisements for it tend to be discounted as well.
However, when a product is evaluated positively, advertisements seem to be judged on
the basis of their capacity to entertain or amuse. Some of the children readily cited
examples of products that they thought were much better than the advertisements seemed
to show. However, these kinds of distinctions were reserved for the most articulate and
experienced of the interviewees. Though the younger children are something of an
enigma at this point, one thing that seems to clearly emerge is that their reactions to
products and ads are much more closely linked. While older children may have the
capacity to sort of distance themselves from the product in viewing an ad, younger
children seem to judge ads more strictly in terms of product performance.
The fact that products may either confirm or disconfirm a childs expectations
makes the issue of truth a complex one. When product experiences are negative, ads
may be perceived as lies or simply mistakes. One second grader explained that a cereal
company was unaware that its product was bad because no one who worked there had
ever tasted it. What this example illustrates is that even when an ad doesnt mesh with
experience, it doesnt necessarily mean that children will assume deliberate deception.
The developmental literature indicates that the capacity to infer someone elses motives


2
Though the controversy continues, research evidence does suggest that children
may alter their preferences and behavior as a consequence of advertising exposure.
There is little doubt that children, especially young children, are drawn to the exciting
array of products manufacturers offer them. In attempting to understand the precise
nature of this influence, researchers have addressed a number of issues of both applied
and theoretical interest over the years. A substantial literature has accumulated (see
Adler et al. 1980; McNeal 1987; Raju and Lonial 1990 for reviews). A bibliography
published over a decade ago listed approximately 500 entries, of which over 200 were
research studies assessing the impact of advertising on childrens consumer activities
(Meringoff 1980). Though research activity slowed during the deregulatory era of the
1980s, a small group of researchers has continued to raise important theoretical and
methodological issues.
Of fundamental interest to both researchers and practitioners alike is
understanding the specific nature of advertisings influence on childrens attitudes and
behavior. The relative effectiveness of specific techniques or strategies used in
advertisements targeted at children has been examined across a variety of contexts and
with children of varying developmental skills or abilities. This is a research area that
subsumes a wide variety of substantive issues and methodological concerns. Questions
such as (1) do children desire the products they see advertised? (2) are they motivated
to ask their parents for them? and, (3) are they more likely to choose products they have
seen advertised than others? have guided a number of research studies over the last 20


ACKNOWLEDGEMENTS
As my graduate education draws to a close, I would like to acknowledge the
support of a number of individuals. First, I would like to thank the members of the
marketing faculty at the University of Florida, both former and present who have
provided valued guidance over the years. In particular, appreciation is extended to
Professors Joel Cohen, John Lynch and William Wilkie who have generously shared their
time and expertise. I would like to thank the members of my committee, Professors
David Mick and Richard Romano, for their time and efforts regarding this project and
especially Alan Sawyer for his insight and support throughout my graduate education.
Special thanks go to Professor Pamela Richards for her help in discovering the joys of
qualitative research, and to Joan Levy for her friendship and transcription skills. Thanks
also go to the children who so willingly shared their thoughts, delights and frustrations,
and to the teachers and school administrators who supported this project.
My deepest appreciation is extended to Professor Richard J. Lutz, for his
invaluable guidance and unwavering support of this project and my professional
development. With a wisdom and generosity of spirit that is rare, he has challenged and
enriched my thinking, and helped to bring out the best in me.
Finally, I would like to thank my husband, Neil, my daughter, Laura, and my
parents for their boundless love and encouragement.
m


241
Belief Evaluations
Instructions: Different kids like different things about food. I'm going to read you some
things about cereal and you tell me how much you like these things. Ok? (show scale).
Point to this picture if you really like something a lot, this one if you like it a little and
this one if you don't like it at all. Ok?
"How much do you like cereal that is crunchy?"
1. is crunchy.
2. is made with honey.
3. is dipped in two flavors.
4. tastes sweet.
5. has nuts in it.
6. is part of a complete breakfast.
7. has a great taste.
3
3
3
3
3
3
3
2
2
T
2
2
2
2
1
1
1
1
1
1
1
(3 = like a lot, 1 = don't like at all)


137
the remaining ads were shown to eighteen fourth grade children who were asked to rate
both the commercial and the brand on a number of dimensions including, familiarity,
liking, comprehensibility and prior experience. The final four ads were selected on the
basis of the following criteria (1) childrens prior direct experience with the advertised
brand was low, (2) multiple product categories were represented within the set, (3)
variation existed among the children in terms of their attitudes toward the specific ads
and brands promoted and (4) the ads as a set reflected the continuum found in childrens
ads in terms of quantity of the information provided. To meet these criteria, market
leaders for whom experience is virtually universal were eliminated early in the process
(e.g., Cheerios, Chips Ahoy). The ad/brand pairs ultimately selected for inclusion were
(1) Keebler Pizzaria Chips, (2) Sodalicious Fruit Snacks, (3) Smarties Chocolate Candy
(imported from Canada) and (4) Double Dip Crunch Cereal. Each of these
advertisements incorporated both search and experience based claims. Both animated and
non-animated executions were represented. Subject to the constraints outlined above,
every effort was made to draw on a sample that would well-represent the domain of food
advertisements targeted at children. Appendix C contains both the text and a brief
description of each advertisement.
Children were given the opportunity to sample the products, as well as look at or
read the product package. Products marketed to children frequently contain characters
or other cues designed to remind and reinforce advertising themes (e.g., Keller 1987).
Stimulus set. To assess the generalizability of response patterns across product
categories and advertisements, an additional four level within subjects factor was


250
Stimulus Specific Questions
Product Experience Questions (After Trial)
1. What did you find out about by trying it?
2. Now that youve tried tell me in your words what its like.
3. What do you like about ? dislike?
4. How is compared to what you thought it would be before you tried it?
How is it different?
5. Is like any other products youve tried? How?
6. What kind of people do you think would like ?
7. If you wanted to make the "perfect" what would you change about
? What would you keep the same?
a. If you wanted to let people know about your "perfect what would
be a good way to do that?
8. Have you ever heard of before? Where? (If TV, probe for specifics on
ads seen, If trial, extent of prior use)
Advertising Response Questions (After Viewing)
1. Id like to know what you think of this commercial (pause). What did it make
you think of while you were watching it?
2. What was the story in this commercial?
(Follow-up) What happened?, What did the people in the commercial do? say?
What else can you remember about what the people (characters) said or did?
3. Did you like or dislike this commercial? How much?
a. Whats in it that you like (dislike)?
b. What makes it seem good (bad) to you?
What do you think they were trying to tell you about ?
4.


257
Deighton, J. & R. M. Schindler (1988), "Can Advertising Influence Experience?,"
Psychology & Marketing. 5(2), 103-115.
Denzin, N. K. (1977), Childhood Socialization: Studies in the Development of
Language. Social Behavior and Identity. San Francisco, CA: Jossey-Bass.
Denzin, N. K. (1988), Interpretive Interactionism: Strategies for Qualitative Research.
Newbury Park, CA: Sage.
Denzin, N. K. (1989), The Research Act: A Theoretical Introduction to Sociological
Methods. Englewood Cliffs, NJ: Prentice-Hall.
Desmond, R. J. (1985), "Metacognition: Thinking About Thoughts in Childrens
Comprehension of Television," Critical Studies in Mass Communication. 2,
338-351.
Donohue, T. R., L. L. Henke & W. A. Donohue (1980), "Do Kids Know What TV
Commercials Intend?," Journal of Advertising Research. 20 (5), 51-57.
Dorr, A. (1986), Television and Children: A Special Medium for a Special Audience.
Beverly Hills, CA: Sage.
Dorr, A. & D. Kunkel (1990), "Children and the Media Environment: Change and
Constancy Amid Change," Communication Research. 17 (1), 5-25.
Durkin, D. (1989), Teaching Them to Read. 5th ed., Boston, MA: Allyn and Bacon.
Edell, J. A. & M. C. Burke (1987), "The Power of Feelings in Understanding
Advertising Effects," Journal of Consumer Research. 14 (December), 421-433.
Engel, J. F., D. T. Kollat & R. D. Blackwell (1968), Consumer Behavior. New York,
NY: Holt, Rinehart and Winston.
Faber, R. J., R. M. Perloff & R. P. Hawkins (1982), "Antecedents of Childrens
Comprehension of Television Advertising," Journal of Broadcasting. 26 (2), 575-
584.
Fazio, R. H. (1986), "How do Attitudes Guide Behavior?," in Handbook of Motivation
& Cognition, eds. R. M. Sorrentino and E. T. Higgins, New York, NY: Guilford
Press, 204-243.
Federal Trade Commission (1978), FTC Staff Report on Television Advertising to
Children, Washington, DC: U.S. Government Printing Office.


50
drinks to the latest in hip-hop fashions, product use is laden with meaning that accrues
from sources beyond its physical form (McCracken 1986). In these types of situations,
advertisements have the capacity to alter the consumers experience by suggesting what
features should be attended to and remembered (Deighton 1984, 1988). Ads may offer
clues that consumers rely on to interpret their feelings and perceptions.
As a relatively new area of inquiry, research investigation into the effects of
advertising on consumption naturally reflects many unresolved conceptual and
measurement issues. One of the clear challenges in this area is to develop methods that
effectively capture advertisings experiential influence. New, non-traditional approaches
are required to isolate these effects, their consequences and determinants (Aaker and
Stayman 1992; Puto and Wells 1984; Wells 1986). Continued conceptual clarification
and refinement is also needed to promote understanding. Ambiguity surrounding the
precise nature of advertisings impact on consumption is evident in the terms and
methods used to investigate this topic (Deighton 1988).
Most of the research investigating the relationship between advertising and
product experience can be identified with one of two conceptual approaches (1)
transformational advertising or (2) the experiential learning or "hypothesis-testing"
approach. Though the explanatory bases for these models clearly differ, they retain
important commonalities. Both suggest that advertising can influence what consumers
think about in the context of consumption. Both seem to cast advertisings persuasive
power in terms of its ability to direct consumer conclusions or inference (Deighton 1986,
1988). Both suggest that the consumption experience changes as a consequence of


215
the perspective of the older children, advertisers have legitimate objectives, they are
permitted a certain latitude in achieving them, but fairness to all is essential.
It was clear from the interviews that the children recognize not only that
advertisements incorporate a selling motive but that this motive leads to the creation of
a particular type of message. Fundamentally, advertising is a unique form of
communications that draws on particular types of message elements to gain and maintain
attention. The younger children seemed to appreciate that advertisers develop creative
strategies but stopped short of articulating what shape these strategies might take. The
older children, on the other hand, were aware of specific attention-getting techniques and
strategies. They understood the increased appeal and credibility associated with celebrity
endorsers. They knew that music, humor and fast action are utilized to attract attention
and interest. They recognize the importance of brand name recognition and repetition
in advertising. Cognitive concepts like attention and memory were frequently discussed,
revealing at least a rudimentary understanding of the persuasion process. They readily
identified relationships between these kinds of response variables and specific executional
elements. With this understanding, they were able to apply a variety of disparate
standards in thinking about the relationship between advertisements and product use.
Creative, strategic, equity and value considerations were all factored into their
interpretations and assessments.
Children's skepticism: real or imagined. One of the basic assumptions
underpinning traditional research on children and advertising is that as children mature,
they become increasingly skeptical of ad content (e.g., Bever et al. 1975; Robertson and


14
understanding of childrens responses would certainly be limited. However, cognitive
explanations alone are not able to capture the range and complexity of childrens
reactions to advertisements and products.
The broad purpose of this research project is to learn more about how children
perceive the relationships between the advertisements they see and the products they
consume. To understand fully how advertising affects children requires greater insight
into how the consumption experience is assessed and managed. Childrens advertising
responses are embedded within a larger system in which products are also purchased and
consumed. It is through trial and experience that children have the opportunity to test
the validity and relevance of what an advertiser has said. Studying childrens reactions
to advertising within the context of this larger embedding system brings to light
unanticipated factors and relationships. Consumer researchers with both theoretical and
substantive interests have stressed the importance of trying to identify key contextual
factors and their operation within larger embedding systems (Lutz 1991; Lynch 1982,
1983). Needed are research approaches that have the capacity to address advertising
response issues within this broader context.
To begin to address these needs, this research project incorporates both
experimental methods and more discovery-oriented depth interviews to understand the
substantive issues that define childrens perceptions of the relationships between
advertising and their consumption experiences. Over the course of eighteen months and
interviews with approximately 160 children between the ages of 7 and 11, three studies,
designed to complement and enrich one another, were conducted.


59
not necessarily take the form of hypotheses. Both the hypothesis-testing model and
childrens advertising research, more generally, clearly reflect an information-oriented
approach to studying persuasive effects.
Implicit within the research literature is the assumption that children think about
advertisements primarily in terms of the product related information they provide.
Researchers have studied whether children understand and are persuaded by advertised
claims, while paying relatively little attention to how children spontaneously relate to the
advertisements they encounter. Childrens responses to advertising may be governed by
contingencies that have little to do with hypothesis-testing or the verification of ad
claims. Rather than thinking about advertisements purely in terms of their information
value, children may also be inclined to base their responses on affective dimensions that
have little to do with product claims. An ads capacity to elicit emotion or feeling among
young viewers certainly plays a more important role in the persuasion process than
traditional approaches to studying childrens advertising response represent (Wartella
1984). To the extent that transformational ads are most persuasive when they charm,
entertain or captivate attention, an exclusive reliance on cognitive concepts and theory
may paint a rather narrow picture of advertisings influence and meaning in childrens
lives. With its greater emphasis on the affective dimensions of ad response, the
transformational model offers a perspective on the advertising-consumption relationship
that is more closely aligned with the unique style and character of childrens advertising.
However, this paradigm is of less value in understanding the ad-consumption relation in
terms of its broader implications for childrens understanding of the marketplace.


58
In the realm of childrens advertising, transformational appeals are quite common.
Even the most information laden commercials targeted at children typically retain
transformational properties, so that the distinction, in practice, does not reflect mutually
exclusive categories. Because childrens ads frequently rely on whimsy and tales of
adventure to persuade, the link between the message and specific performance dimensions
may not be clear. When Capn Crunch and his crew through great ingenuity and effort
rescue the crunchberries from their foes, "the soggies", what expectations about the
product might a child be likely to generate? Clearly, there is information about the
cereals crunchiness and its ability to remain so with time, but even this simple idea has
to be extracted from a narrative structure that embeds notions about the triumph of right
over wrong, skill over ignorance, and teamwork, in an attempt to enhance the products
perceived value. To transcend a commonplace event such as eating a bowl of cereal, the
advertiser creates a world of excitement and adventure. The brand may acquire added
value and meaning through this process. However, the consumers ability to translate
advertised claims into specific hypotheses about performance may be compromised.
Children may be less likely than adults to generate clear expectations about product
performance, not because they are cognitively ill-equipped but because of the way
childrens advertisements are designed and executed. Both the development of relevant
hypotheses by the young viewer and the testing of these expectations in a usage context
may be complicated by the creative strategies commonly adopted by childrens
advertisers. Though at some level, the meaning creation process requires that children
forge links between the advertisement and the consumption experience, these links may


183
paragraph or a sentence, is then given a conceptual label. As the analysis proceeds,
specific incidents or ideas are compared with one another so that conceptually similar
phenomena are grouped together to form categories and subcategories. Through the
painstaking process of comparing each new incident to those that precede it, similarities
and differences are identified and conceptual definitions made more precise. As these
categories and their properties are specified, the text is then sorted and restructured
according to its conceptual or thematic content. The researcher can then work from data
files that have been conceptually coded, reorganized and integrated across respondents.
In this study, the coded transcripts were organized by age group and exposure context.
Open coding and the use it makes of questioning and constant comparisons enables the
researcher to minimize bias. Decomposition of the data into its basic components forces
preconceived notions to be examined against the data. Inconsistencies, assumptions not
supported in the data and conceptual discoveries are all detected through open coding
procedures.
While open coding fractures the data, axial coding pieces the data back together
in new ways by relating conceptual categories to one another. Through axial coding, the
analysis begins to evolve beyond a series of discrete categories to an interconnected
conceptual network. Individual themes are specified in greater detail and relationships
among these thematic elements articulated. Essential elements are integrated, identifying
patterns of influence, relationship and consequence. For example, one of the key
categories that emerged both in this study and the preliminary investigation was the role
of entertainment in childrens reactions to ads, and indirectly, products. Through open


CHAPTER 4
STUDY 2
Among social scientists and market researchers, qualitative inquiry has often been
utilized to explore a new research topic, generate hypotheses and suggest directions for
further study. While recent advances in consumer research and other social scientific
disciplines demonstrate the value of a broader, more inclusive role for qualitative inquiry,
its capacity to reveal unanticipated phenomena and relationships remains an undisputed
strength. In the context of this project, fundamental yet not well-understood research
issues were raised by the depth and character of childrens responses in the initial study.
Evident in childrens descriptions was a fascination with the creative dimensions of
advertising, its capacity to entertain and amuse, as well as its unique properties and
freedoms as a form of discourse. Much of what they recounted focused on their feelings
and thoughts about how ads are designed and executed quite apart from the brand itself.
The content of these interviews, while providing initial insight into the categories of
meaning children draw upon in thinking about advertising and their consumption
experiences, also raised some very basic questions. In particular, the interplay of
cognitive and affective factors in childrens advertising response, the role of executional
factors in shaping the responses of different age groups, the meaning of entertainment
per se, as well as the mediating properties of product trial, emerged as directions for
continuing investigation and analysis. While a single investigation can not address all
95


160
While Aad was expected to influence childrens perceptions and attitudes when
advertising precedes trial, it was expected to have little impact when advertising follows
a trial experience. In this situation, beliefs are likely to be based primarily on the
experiential data that is encountered first, reducing the ads capacity to affect product
perceptions. Among the older children, trial may serve as the cue that enlists their
cognitive defenses. As anticipated, the Aad CogB path in the trial/ad cell was not
significant for either age group (2nd: /3 = .20; 5th: 0 = 15). This represents a significant
change from both the ad only (/3 = .43, t= 1.91, p< .06) and ad/trial cells (j8 = .47, t =
2.09 p < .05) within the older age group. These results indicate that childrens affective
responses to an ad have the capacity to influence their perceptions about the brand, when
(1) ads are encountered in prepurchase settings, or (2) advertising exposure precedes
consumption experience. When advertising follows consumption, Aad retains little
influence over childrens brand perceptions. While the path from Aad to CogB was
expected to be weak, the path from CogB - A0 was expected to be significant, as a
consequence of product trial. This path was marginally significant for both age groups,
as shown in Figure 4. For the younger children, this represents a marginal, though
nonsignificant increase from both the ad and ad/trial conditions.
Discussion
Collectively, the findings seem to suggest that the older children are in some
respects more sensitive to the ad information than are the younger children. While the
older children allowed advertisements to influence their interpretations and evaluations
of trial experiences, this was not true of the younger children. Contrary to expectations,


83
were saying about the brands, it became clear that they view advertisements as pretty
straightforward messages, with common themes and exhortations. Questions about what
the advertiser was trying to communicate drew initial responses such as "It has honey in
it and they want you to buy it". When after viewing a commercial, children were asked
what people could learn about the product by watching it, their answers reflected multiple
versions of "not very much". A second grader was able to state it quite succinctly when
he said "They all say they are the best since 1983. They all say they are good". For
this young boy, his understanding of what advertising is, leads him to entertain only the
most tentative kind of expectation. Given the nature of childrens advertising and the
thousands of commercials children come in contact with, his reaction makes a great deal
of sense. Industry research suggests that young children understand products as entities,
tending not to focus on specific attributes (Rust 1986). Product quality is not perceived
in a dimensional fashion, either a product has it or it doesnt. This perspective may be
due in part to the way advertisers communicate with children. Advertisements targeted
to children are frequently entertaining and delightful, yet contain little more than vague
and subjective promises of performance. Many of the claims made are as simple as "it
tastes good", "it has honey", "it will make you strong", "everybody wants it", "youll
do anything to get it" or "eating is an adventure" expressed in any number of
entertaining and captivating ways. It would be difficult given the content of these ads
to develop very fine-grained expectations about a particular brand. So, in that sense it
is not surprising that children have difficulty relating their understanding of a commercial
to their consumption experience. The experience of trying a product is dominated by


148
Rather than viewing the ad unidimensionally as either true or false, or good or bad, they
seemed to think about it more in terms of its possibilities. While they have the capacity
to consider the multi-level meanings within an ad, the skepticism that characterizes adult
processing may not be fully operative within a viewing context. This is a critical issue,
particularly given the assumption within the hypothesis testing model and the 1IRM that
consumers view ads with skepticism and discount them on that basis. While the older
children have the capacity to process the ads meaning at multiple levels, they may not
then spontaneously filter this insight through the appropriate defenses. As a
consequence, the ad may continue to play a suggestive role, even when the consumption
experience is presumably unambiguous.
To examine further the sequence effect observed among the older children, the
means in the ad/trial and trial/ad cells were compared. One explanation that might be
advanced for the framing effects observed within this group is that the quantity of
information provided when an ad precedes trial relative to trial alone accounts for the
changes in childrens perceptions and attitudes. According to this scenario, the observed
differences might be due to the provision of more information rather than the sequence
in which the ad and the product are encountered. However, when the quantity of
information was controlled for, sequence effects were observed on childrens belief levels
for both novel and familiar products (Novel: F=3.62, p<.06; Familiar: F = 17.82,
p< .001). Differences in total expectancy and brand attitude were also observed for the
novel brands (Expectancy: F=22.03, p<.001; Brand Attitude F = 11.12, p<.002).
These findings indicate that, beyond the quantity of information provided, the order in


251
Ad x Product Trial Interaction
1. When you eat is it (would it be) like the commercial? How is it the same?
different?
If different:
a. How did it happen that the commercial makes look different than
it is when you get it?
b. How are the commercial and the snack made? Where? By whom?
2. Do you think the commercial made (makes) the food look better or worse than
it really is? How?
3. What do you think commercials for should tell kids about it? (What do
you think kids would want to know before they try ?)
4. Is there anything the commercial maybe should have said about but didnt?
(Is there anything that maybe would have been good to say in the commercial but
they didnt?)


35
fantasy and mythical figures that tend to dominate childrens advertising. Where this
investigation departs from traditional models of childrens advertising response, is with
the explicit recognition that product consumption plays a central role in guiding
childrens comprehension and interpretation of advertisements. What occurs once a
product leaves a retailers shelf is as critical as what happens before.
How children characterize or interpret their product experiences is significant both
in terms of the immediate situation or product as well as with regard to their more
enduring notions about marketing activities and influence. Though children have ample
opportunity to learn about products through advertising, many commercial sources that
an adult might consult for additional information are relatively inaccessible to a young
consumer. For example, until they are functionally literate, children are denied access
to most information conveyed through the print media. Information on packages and
labels or in non-commercial media may be not only difficult to decipher but of little
interest to children. Children also lack information about price, one of the most
important sources of information in adult decision making (Barcus 1980; Meringoff and
Lesser 1980). Concerns about how best to allocate limited income are simply not salient
nor well understood until much later. While adults may ponder the opportunity costs of
their decisions, childrens consumption experiences are characterized by aesthetic
enjoyment, playful activity and fun. Products can be evaluated and consumed without
the attendant economic responsibility or concern.
What may appear initially to be a simple issue of determining the veridicality of
advertising-induced expectations turns out to have much broader implications for the


69
knowledge and experience (Alba and Hutchinson 1987; Mick 1992). According to this
perspective, it is the child who is the final arbiter of advertising meanings.
Qualitative inquiry is particularly well suited for discerning the categories
consumers use to interpret specific media and consumption experiences (Jensen 1987;
Lannon and Cooper 1983; McQuarrie and Mick 1992; Mick and Buhl 1992). Consumer
researchers have turned to qualitative modes of inquiry to study a wide range of
consumer issues and phenomena. Drawing on ethnographic, semiotic and
phenomenological traditions, these research efforts have helped to broaden the scope of
consumer research and provide insight into substantive consumer behavior topics (e.g.,
Belk, Sherry and Wallendorf 1988; Hill and Stamey 1990; McQuarrie and Mick 1992;
OGuinn and Faber 1989; Wallendorf and Amould 1991). Though each of these
traditions is distinct, they share a fundamental interest in the perspectives of those being
studied. The tie that secures these traditions within the qualitative paradigm is a direct
concern with experience as it is "lived", "felt" or "undergone". The primary aim of
qualitative investigation is to understand experience as nearly as possible as its
participants feel or perceive it. Methods of inquiry are diverse, depending on the
specific research issue. However, in-depth interviews or participant observation are
widely employed in sociology, anthropology and education to understand peoples
perceptions of their everyday world. An interview methodology offers the opportunity
to gain insight into the childs subjective experience of advertisements and the products
they promote. It may represent the only means for attaining this type of understanding
(Hughes 1989; Tammivaara and Enright 1986). Within the consumer literature,


209
There were other people eating it because he did, sort of like he was popular.
He ate it and then all these other people ate it. Its like a lot of people would do
that. One person will buy something and eat it. And then the other people, if
hes popular theyll go and get it too. It happens in real life, a little bit. {501,
M}
In constructing these more figurative meanings, the older children seem to search out the
linkages that make the execution true at some level. The older children appreciate that
figuratively speaking there is some level of reality and truth in the fantasy laden images
of the ad. They recognize that there are differing levels of truth and meaning in
advertising. They understand that when cats dance or flat children magically return to
three dimensional form in an advertisement, these events are not meant to be taken
literally. Older children know that fantasy is utilized to convey an underlying idea or
message. As a consequence, they look to these implicit meanings in making sense of the
advertisement and its relationship to the product.
What makes this particularly interesting, is that the children seemed to draw on
these higher levels of meaning in characterizing their trial experiences. For example,
some of the respondents interpreted the flat execution to mean that the brand can make
you feel better when you are unhappy or having a difficult time. After trying the brand,
they interpreted their response in terms of this implicit claim, suggesting that the brand
did make them feel good. Given the generality of such a claim, it becomes very easy
to find a certain kind of reality within the ad.
They were trying to say that sodalicious will give you energy. And it will,
because its sugary. Its covered in like this sugar stuff, has like sugar sprinkled
on it. Theyre trying to say that youll be better after you try sodalicious. [ ]
After he tried the sodalicious, he popped out and just got a lot of energy. It
didnt happen to me. I mean I did feel good but I was still the same after I tried
it. It tasted good, I liked it. {513, F}


124
Both utilized relatively pallid, experimenter created print ads to assess Aads impact on
consumers beliefs and attitudes. To the extent that Aad is determined by consumers
cognitive evaluations of message claims (Park and Young 1986), as well as executional
elements, some residual impact of ad affect might be anticipated. However, its influence
within a trial context was not substantial in either of these studies. Wright and Lutz
(1993) reported that consumers liking for an ad had a positive impact on their receptivity
to claims made about search attributes but had little impact on their acceptance of claims
made about experience attributes. In the latter case, the direct sensory evidence provided
through trial was found to overpower residual advertising effects. This evidence supports
earlier findings indicating that advertising has little impact in a trial context, except in
limited circumstances. However, neither of these studies utilized advertisements which
have the capacity to draw the consumer in, entertain and amuse. Fanciful, fast-paced
television commercials designed for children may represent an endpoint of a stylistic
continuum, diametrically opposed to the types of advertisements used to date in research
on advertising-trial relationships. On the basis of these studies, it is difficult to
determine whether consumers affective responses to advertising are really
inconsequential within a consumption setting.
Young children may allow their affective reactions to an advertisement to color
their perceptions even when presumably more diagnostic information is available.
Among this age group, advertising is not automatically assumed to be less credible than
trial use. More likely to judge ads on the basis of whether they promote an appealing
product in a fun and exciting manner, they may allow their reactions to the ad spill over


172
to open-ended questions posed by educators and researchers (e.g., Bierman and Schwartz
1986; Capelli, Nakagawa and Madden 1990; Gelman and Kremer 1991; Garbarino and
Stott 1989). Although there is little doubt that interviews with children pose special
challenges, the effective use of these approaches within the social sciences testifies to
their potential value within a consumer domain.
In the context of this project, a critical pluralist perspective was adopted as a
means of capitalizing on the strengths of both interpretive and positivist approaches. An
explicit goal of the design concerned the synergistic insights that might emerge from the
combination of experimentation and depth interviews in research with children. The
experiment allows for the testing of very specific conceptual relationships based on prior
theory and research, while the qualitative studies provide insight into childrens
subjective experiences and systems of meaning. By triangulating across methods, the
design has the potential to capture both the rich insights afforded by interpretive
approaches as well as the precision and replicability of a causal design. Findings from
the initial qualitative study served as input to the design of the experiment by revealing
the complex role affective constructs play in shaping childrens impressions about ads and
their product experiences. The experiment provided the opportunity to isolate and test
a subset of these relationships under controlled conditions. The third study, a more in-
depth qualitative investigation, may help to illuminate the experimental findings by
capturing contextual factors or contingencies that are highly relevant to childrens
everyday lives yet remain undetected in an experimental setting. At a more molar level,
the qualitative investigation addresses a more complex and richer set of issues than an


25
childrens consumer behavior, our images of consumer socialization will remain
incomplete.
The Persuasive Influence of Advertising
The investigation of advertisings effects on children has a relatively long and rich
tradition within consumer research. After over 20 years of research, the empirical
evidence distinctly shows that advertising influences young childrens product awareness,
preferences and behavior. It is clear that children pay attention to ads, delight in the
flights of fantasy and fun they depict and are often attracted to the products they
promote. Of fundamental interest to researchers and marketing practitioners alike is
understanding the precise nature of this influence and the processes by which it occurs.
This is a research area that incorporates an array of specific substantive and theoretical
issues. Much of the research on childrens responses to advertising can be cast in terms
of four major areas. These are (1) childrens attention to advertising, (2) childrens
comprehension of commercial messages, (3) advertisings persuasive impact on childrens
product preferences and (4) the behavioral consequences of exposure, particularly on
choice and requests for advertised products (see Atkin 1980; McNeal 1987, Raju and
Lonial 1990, and Wartella 1980 for alternative classification schemes). Within this broad
categorization fall a number of studies that have been designed to test the relative
effectiveness of specific techniques or strategies used in advertisements targeted at
children. For example, the persuasive impact of product characters, premium offers,
disclaimers and the type of claims made have all been the subject of extensive research
study (e.g., Adler et al. 1980). Of primary interest here is the research that focuses


102
a biased case, and act upon this knowledge by discounting ad claims. As a consequence,
they form "lower order" or tentatively held beliefs and attitudes about the brands
characteristics and performance. In contrast, consumers who have direct experience with
the brand, form much stronger, confidently held brand-related beliefs and attitudes.
These "higher order" responses are based on the enhanced credibility or trustworthiness
of judgments based on personal experience. While an ad may be suspect, rarely do
consumers question the validity of their own experiences. The IIRM suggests that when
a brands important features can be assessed, trial based beliefs and evaluations will
dominate those gleaned through advertising exposure. When the credibility of
information in the environment varies, consumers specific expectations about a brands
performance are a function not only of the strength of their beliefs but of their confidence
in those beliefs as well (Smith and Swinyard 1982, 1983).
Wright and Lutz (1993) have extended the IIRM model by differentiating between
search and experience attributes in their analysis of ad-trial relationships. Experience
attributes are those features of a brand that can only be detected through consumption
(e.g., flavor, texture, smell). Search attributes, on the other hand, are those
characteristics that can easily be assessed prior to purchase (e.g., price, size,
ingredients). This is a particularly important distinction to consider in the domain of
frequently purchased packaged goods where experience attributes may dominate. Within
this domain, Wright and Lutz (1993) have shown that product trial leads to confidently
held beliefs about a brands experiential properties, while having little impact on
consumers perceptions of its performance on search dimensions. Their findings also


256
Chattopadhyay, A. & P. Nedungadi (1992), "Does Attitude toward the Ad Endure? The
Moderating Effects of Attention and Delay," Journal of Consumer Research. 19
(1), 26-33.
Childrens Advertising Review Unit (1983), Self-Regulatory Guidelines for Childrens
Advertising. National Advertising Division, Council of Better Business Bureaus,
Inc., New York, NY.
Coles, R. (1986), The Moral Life of Children. Boston, MA: Atlantic Monthly Press.
Collins, W. A. (1983), "Interpretation and Inference in Childrens Television Viewing,"
in Childrens Understanding of Television: Research on Attention and
Comprehension, eds. J. Bryant & D.R. Anderson, New York, NY: Academic
Press, 125-150.
Condry, J., P. Bence & C. Scheibe (1987), "The Non-Program Content of Childrens
Television," Journal of Broadcasting and Electronic Media. 32, 255-270.
Cooper, W. H. (1981), "Ubiquitous Halo," Psychological Bulletin. 90 (2), 218-244.
Corbin, J. & A. Strauss (1990), "Grounded Theory Research: Procedures, Canons, and
Evaluative Criteria," Qualitative Sociology. 13 (1), 3-21.
Costley, C. L. & M. Brucks (1987), "Product Knowledge as an Explanation for
Age-Related Differences in Childrens Cognitive Responses to Advertising, in
Advances in Consumer Research." Vol. 14, eds. P.F. Anderson and M.
Wallendorf, Provo, UT: Association for Consumer Research, 288-292.
Damon, W. & D. Hart (1988), Self-Understanding in Childhood and Adolescence. New
York NY: Cambridge University Press.
Deighton, J. (1984), "The Interaction of Advertising and Evidence," Journal of
Consumer Research. 11 (December), 763-770.
Deighton, J. (1986), "Persuasion as Directed Inference," in Advances in Consumer
Research. Vol. 13, ed. R.J. Lutz, Provo, UT: Association for Consumer
Research, 558-561.
Deighton, J. (1988), "Two Meanings for Transformation," in Advances in Consumer
Research. Vol. 15, ed. M. Houston, Provo, UT: Association for Consumer
Research, 262-264.
Deighton, J., D. Romer & J. McQueen (1989), "Using Drama to Persuade," Journal of
Consumer Research. 16 (December), 335-343.


32
childrens advertising-induced requests to parents declines slightly with age. When age
is controlled for, children who watch more television are more likely to make product
requests than children who spend less time viewing (Goldberg 1990; Robertson and
Rossiter 1977). It should be noted, however, that these findings are based primarily on
global indicators of advertising exposure rather than more difficult to isolate linkages
between specific advertisements and subsequent product requests. The impact of
advertising exposure on childrens product choices has also been investigated in a variety
of experimental settings. Under controlled circumstances, a relatively consistent pattern
between advertising exposure and product choice emerges. Television commercials can
and do persuade children to select the products they see advertised. These results appear
to hold across age groups and in both laboratory and field settings (Goldberg, Gom and
Gibson 1978; Gom and Goldberg 1982; Resnik and Stem 1977). The impact of
advertising exposure on choice behavior is apparently not limited to the specific product
advertised, but may generalize across product categories. Goldberg et al. (1978) found,
for example, that exposure to commercials for highly sugared snacks and cereals led
young children (5 to 6-year-olds) to choose these kinds of sugared foods more readily
than children who had been exposed to pro-nutritional messages. A similar pattern of
findings was observed by Gom and Goldberg (1982), who observed childrens snack
choices (5-8 year-olds) over a two-week period. Though these studies have focused on
younger children (5-8 year-olds), there is evidence that advertising may influence the
choices of older children as well. Roedder, Stemthal and Calder (1983) found that as
a consequence of advertising exposure older children (9-13 year-olds) made product


194
I didnt like it when he just like walked to a machine because I dont know any
machines that give fruit snacks. I dont like that. You cant just be flat and then
just turn round. {209, M}
Interest in the executional dimensions of this advertisement was apparent in all the
interviews in which the commercial was shown. However, attention to the ads creative
strategy was more pronounced in the ad only exposure context. Without a tangible
product to consider, both the ad and the promise it offers were salient considerations.
Perceptions of the brands flavor, texture, its likeness to real soft drinks and similarity
to other fruit snacks were focal considerations in all interviews.
The shift from a more narrow product-oriented perspective to a more inclusive
view of the ad and its contents may derive in part from the interview method. By
utilizing a real advertisement, the children were exposed to all the creativity and
excitement of the commercial in the context of the interview. An engaging execution
may capture the childs attention and reinforce the brands appeal in a viewing context.
However, the salience of the product overwhelms any interest in the executional
dimensions when children recount ads drawn from the domain of their own experience.
Although an ad may entertain or amuse while conveying relevant brand information,
these executional elements fade into the background relative to the more highly valued
product-oriented message elements. By drawing upon both childrens personal
experiences with ads and products as well as their reactions to concrete stimuli, this
approach to interviewing helps to sort out more completely how and what they think
about advertised messages. Where childrens everyday experiences are of concern, the
product message is the key. Advertisements are of interest to the extent that they speak


126
influence on older childrens brand attitudes in a prepurchase setting, it is likely to have
little impact in the context of product trial.
H6a: When younger children are exposed to advertising prior to product trial, Aads
ability to mediate advertisings effects on AB does not differ from its impact in
an ad-only setting.
H6b: When older children are exposed to advertising prior to product trial, Aads
ability to mediate advertisings effects on AB is reduced relative to its impact in
an ad-only setting.
When trial precedes advertising, Aad may be expected to have little impact on childrens
brand perceptions or attitudes, irrespective of age group. In this situation, the trial
experience will direct childrens attention to the features of the brand, and attitudes are
formed on that basis. Subsequently encountered advertising, however entertaining or
exciting it might be, does not have the capacity to alter these higher-order, sensory based
brand evaluations. Children may like the ad or think it is funny, but these affective
reactions have little consequence when they occur after attitudes have already been
formed.
H7: When children are exposed to advertising following product trial, their affective
reactions to the ad (Aad) are not associated with their brand attitudes, irrespective
of age group.
Indirect effects of A,P on brand perceptions and attitudes. While the direct
influence of Aad on brand attitude has been well-documented in a prepurchase context,
support for its indirect effect via brand perceptions has been mixed (Homer 1990;
MacKenzie and Lutz 1989; MacKenzie et al. 1986). The first stage of the indirect
process (Aad -* CogB), has received strong empirical support indicating that consumers
affective reactions to an ad aid message acceptance. The more positively consumers feel


212
recognize. Within the domain of childrens advertising, it is the message rather than the
consumption experience that is ambiguous and difficult to dispute directly.
Cognizant of advertisings selling intent, the older children recognize that
exaggeration is a necessary ingredient in effective advertising. Rather than looking at
advertising purely from the consumers perspective, they begin to consider the
manufacturers point-of-view as well. Their orientation is relatively complex,
incorporating multiple perspectives or vantage points. Given that manufacturers are
attempting to sell products, they are allowed a certain latitude in presenting them in a
favorable light. Older children recognize that ads are supposed to contain fictional
elements, so they permit manufacturers certain freedoms. Although the younger children
might equate exaggeration and falsehood, the older children are not so inclined. What
the younger children view as patently false, the older children do not. Rather
exaggeration is simply a part of the genre, to be expected and accepted. Unless the
advertiser grossly oversteps the line between exaggeration and deliberate deception, they
are relatively lax in their judgments.
Surprisingly, the older children recognize that advertising serves an important
function for a business firm. They understand that it generates awareness among
consumers and that without it, sales suffer. Sales and profit objectives are recognized
but not fully understood. Not surprisingly, the children did not make the connection that
long-term success ultimately rests on consumer satisfaction and repurchase. So, while
they understand that advertising has a strategic purpose, this purpose is conceived of in
terms of a firms immediate needs. As a result, they believe that advertisers will go to


240
Brand Perceptions: Cereal
1.
the cereal is crunchy.
4
3
9
1
2.
is made with honey.
4
3
9
1
3.
is dipped in two flavors.
4
3
2
1
4.
tastes sweet.
4
3
2
1
5.
has nuts in it.
4
3
9
1
6.
is part of a complete breakfast.
4
3
2
1
7.
has a great taste.
4
3
-i
1
(4 =
= really believe, 1 = don't believe at all)
Belief Confidence
Instructions: "Now I am going to read you some sentences and I want you to tell me
which one is true for you (read options). Let's try one. "You said that you think Double
Dd Crunch is (isn't! crunchv. do vou..."
1.
the cereal is crunchy.
4
3
2
1
2.
is made with honey.
4
3
2
1
3.
is dipped in two flavors.
4
3
2
1
4.
tastes sweet.
4
3
2
1
5.
has nuts in it.
4
3
2
1
6.
is part of a complete breakfast.
4
3
2
1
7.
has a great taste.
4
3
2
1
(4
= really, really think so, 1 = really just
guessed)


104
regarding product quality, advertisements are not necessarily treated as inherently
untrustworthy or uninformative. The IIRM suggests, that, in most cases, advertising
exposure creates "lower order" beliefs about brand benefits as a consequence of
consumers inclination to discount commercial claims (Smith and Swinyard 1982). There
is little evidence to suggest, however, that young children are particularly critical of ad
claims. Among this group, ads may simply represent an alternative source of brand
information rather than a lesser, or less trustworthy source than the product itself. While
children may rely heavily on their direct experiences in forming their brand preferences,
this does not necessitate that advertised information be discounted.
Hla: Older childrens (10-11 year-olds) brand related beliefs and attitudes are more
confidently held when formed on the basis of product trial than on the basis of
advertising exposure.
Hlb: Among younger children (7-8 year-olds), belief and attitude confidence scores are
not significantly different when formed on the basis of product trial than when
formed on the basis of advertising exposure.
In addition to the issue of advertising versus product trial, there are a number of
interesting questions involving the combined impact of advertising and experience on
childrens brand related responses. One of the central issues within this area has
centered on advertisings capacity to frame the interpretation of subsequent brand
experience (Deighton 1988; Hoch and Ha 1986; Levin and Gaeth 1988; Marks and
Kamins 1988; Puto and Wells 1984).
Ad as a frame on product experience. If older childrens brand related beliefs are
relatively tentative and weakly held when based on advertising exposure, the question
becomes one of determining whether these expectations exert any impact on persuasion


169
controlled circumstances. More open-ended qualitative inquiry offers the opportunity to
illuminate observed relationships, providing a glimpse of what underpins the scaled
responses. Potentially consequential aspects of childrens natural responses to ads and
products are not captured through traditional measures. Close ended measures leave little
room for respondent perceptions and reactions. Qualitative study provides the opening
to look back to the experimental variables and assess their import or significance. Its
capacity to illuminate and enrich the findings and conclusions of more traditional research
efforts is perhaps its greatest advantage, one which is certainly lost when limited to
exploratory status.
Methodological Pluralism
The use of diverse research approaches to investigate a single consumer
phenomenon offers both great challenge and opportunity. Although some consumer
researchers have argued that positivist and interpretive approaches are incommensurable
as a consequence of divergent objectives and philosophical assumptions (e.g., Anderson
1986, 1988; Hudson and Ozanne 1988; Thompson, Stem and Amould 1993), others have
been more optimistic (Hirschman 1986; Hunt 1991; Lutz 1989, 1991; McQuarrie and
Mick 1992). Recently, researchers have suggested that through the exploration of
divergence a greater sensitivity to the socio-cultural assumptions that underpin various
methods is obtained (Thompson et al. 1993). Advocates of critical pluralism, on the
other hand, have focused on the complementarity of multiple methods and the potential
synergistic dimensions of their use within the context of a single research project.
According to its proponents, critical pluralism offers a means to converge upon a


112
Children can easily judge their experience, according to their own, perhaps simple and
idiosyncratic, criteria. When they subsequently encounter an ad, they may have little
incentive to reassess what are likely to be confidently held perceptions about the brand.
While the ad may facilitate the evaluative process when it precedes trial, it may actually
complicate matters when it follows trial. To the extent that the child evaluates the
product according to his(her) criteria, the ad may introduce features that have not yet
been considered. Rather than reinterpreting what (s)he believes based on the trial
experience, specific claims within the ad may be considered in a more cursory fashion
than they are in a typical prepurchase context. The greater salience of sensory judgments
may simply overshadow advertised claims. Unless the experience is obviously discrepant
from the ad portrayal, in which case counterarguments might be stimulated, the ad may
receive relatively little attention or weight in the childs product evaluations. A similar
pattern has been reported among adult consumers, though the conceptual foundation has
rested primarily on the differential credibility of advertisements and product trial rather
than the greater salience and ease of interpreting the product experience. According to
the IIRM, once a consumer has acquired direct experience with a brand, it is difficult for
advertising to alter his(her) perceptions. Based on personal experience with a brand,
adult consumers tend to form confidently held beliefs that are resistant to change (Marks
and Kamins 1988). Since advertising results in only lower-order beliefs, it is unlikely
to dislodge higher-order brand perceptions based on trustworthy, sensory data (Tybout
and Scott 1983). Even adults tend to draw heavily on their own sensory based
evaluations in forming attitudes about products. Primacy effects observed in a variety


264
McNeal, J. U. (1987), Children as Consumers. Lexington, MA: D C. Heath.
McQuarrie, E. F. & D. G. Mick (1992), "On Resonance: A Critical Pluralist Inquiry
into Advertising Rhetoric," Journal of Consumer Research. 19 (September), ISO-
197.
Meringoff, L. K. (1980), Children and Advertising: An Annotated Bibliography.
Childrens Advertising Review Unit, New York, NY: Council of Better Business
Bureaus, Inc.
Meringoff, L. K. & G. S. Lesser (1980), "The Influence of Format and Audiovisual
Techniques on Childrens Perceptions of Commercial Messages," in The Effects
of Television Advertising on Children, eds. R. P. Adler, G. S. Lesser, L. K.
Meringoff, T. S. Robertson, J. R. Rossiter & S. Ward, Lexington, MA: D.C.
Heath, 43-59.
Mick, D. G. (1992), "Levels of Subjective Comprehension in Advertising Processing and
Their Relations to Ad Perceptions, Attitudes and Memory," Journal of Consumer
Research. 18 (March), 411-424.
Mick, D. G. & C. Buhl (1992), "A Meaning-Based Model of Advertising Experiences,"
Journal of Consumer Research. 19 (December), 317-338.
Miller, C. (1992), "New Study Downplays Likability as Major Factor in Ad Success,"
Marketing News. 26(2), 7.
Miller, C. (1991), "Study Says Likability Surfaces as Measure of TV Ad Success,"
Marketing News. (January 7), 25 (1), 6.
Miniard, P. W., S. Bhatla & R. L. Rose (1990), "On the Formation and Relationship
of Ad and Brand Attitudes: An Experimental and Causal Analysis," Journal of
Marketing Research. 27 (August), 290-303.
Mitchell, A. A. & J. C. Olson (1981), "Are Product Attribute Beliefs the Only
Mediator of Advertising Effects on Brand Attitude?," Journal of Marketing
Research. 18, 318-332.
Morgan, G. & L. Smircich (1980), "The Case for Qualitative Research," Academy of
Management Review. 5 (4), 491-500.
Mueller, B. & K. T. Wulfemeyer (1992), "Commercial Speech Directed at Captive
Minds: The Regulation of Advertising in Public Secondary Schools," The High
School Journal. 76 (2), 110-117.


93
may not be evident until the later elementary years. Though children can cite examples
of being disappointed, it is important to remember that much of what they see is true at
some level. Many of the products they consume, they like. When they see
advertisements for these products and an animated character says they taste good, the
children perceive the commercial to be true. If an advertisement says that a cereal
contains honey and nuts and it has these ingredients, the commercial is considered true
and accurate. The older children may evaluate the truth of an ad at multiple levels. For
example, they may argue that an advertisement is true because the cereal does taste good
but false in the sense that it cant make you more strong or powerful as it promises to
do. The younger children, on the other hand, are much less likely to go beyond an
initial global assessment of truth. Though advertisements are not always true, from the
childs perspective they often are, at least at some level. Because much of what children
see they perceive to be true, it is not surprising that they are not as obviously skeptical
as they have the capacity to be. Children are not motivated to dislike the things they see
advertised. Advertisements present products in a creative and entertaining way, and
children are oriented to respond to them positively. Unlike adults, they are relatively
unconstrained by economic realities, at least in terms of their desires and reactions.
Conclusions
This study seems to raise fundamental questions about how children perceive the
relations between advertisements and the brands they promote. Rather than viewing
advertisements simply as purveyors of brand information, these children revealed a
broader, more-inclusive perspective that has executional elements at its core. While


192
younger children rarely considered products they were unlikely to consume. When asked
to describe commercial contents, childrens comments focused on the brand and its
features, what it looks like and what it does.
I have a collection of My Little Ponies and I like those commercials. They show
different ponies. They show girls playing with ponies and they make the ponies
like jump and stuff. Just for one certain pony, for one kind, like if you twist it
up or something it will dance. I have one of those. I have like twenty-five My
Little Ponies. I get one for every birthday and stuff. {207, F}
Line extensions and new features were readily recognized, evaluated and comparisons
to other similar brands spontaneously offered. Preoccupied with the toys or foods that
the advertisements present, the execution seemed to represent little more than a pleasant
afterthought. In describing specific ads that they remembered, comments about the
executional elements in commercials were rare. Instead, the younger respondents
concentrated on specific product characteristics and benefits. The children readily shared
the details of related consumption experiences, either their own or their friends, as well
as store visits where theyve seen these items and strategies they have used to influence
their parents purchase decisions. The lack of attention to the creative elements in
advertisements was striking, particularly in light of the patterns observed among the older
children. With few exceptions, the executional elements simply did not enter the
conversation when children shared experiences with ads and products from their everyday
lives. The salience of the product and its appeal seemed to simply overwhelm the impact
of a funny or novel execution. This was true, though moderated, even in the context of
advertisements that employed bizarre or striking executions. For example, a commercial
for the Wacky Warehouse Mall in which a giant Kool-Aid character bursts through walls,


145
obviously discrepant from the ad, the ad may quickly recede into the background
relative to the more salient, sensory based impressions derived from consuming the
product. Though young children may be persuaded by commercials, ask their parents
to buy the brands they see advertised, and choose these products over nonadvertised
brands (e.g., Goldberg et al. 1978; Gom and Goldberg 1982; Isler et al. 1987; Ward et
al. 1977), the ads seem to retain little influence over young childrens interpretations or
brand evaluations in a consumption context.
A very different pattern was observed among the older children. The second
hypothesis suggested that ad exposure prior to product trial would have little impact on
older childrens brand perceptions and attitudes as a consequence of its relatively low
credibility, and the availability of relevant, sensory-based experiential evidence.
Contrary to expectations, childrens responses in an ad/trial sequence were significantly
different than those based exclusively on trial experience. However, an interaction
between stimulus set and experimental condition was present, indicating that the direction
of the ads influence was dependent on the specific advertisement under consideration
(see Table 2). Exposure to either the cereal or snack chip ad prior to product trial had
a positive influence on childrens brand perceptions and attitude (Beliefs: F=6.78,
p<.01; Brand Attitude: F=6.00, p<.02). Post-hoc analyses revealed that these
particular ads were both more familiar (chi-square = 24.90, p<. 0001) and more well-
liked. Exposure to either the candy or fruit snack ad prior to product trial, on the other
hand, led to more negative perceptions and attitudes toward the brand, than trial alone
(F=8.17, p<.007; Brand Attitude: F=9.61, p<.003). So, while the direction of the


88
these discussions, the format of the commercial (e.g., technical sophistication, animation,
music, camera angles) played less prominent a role. Instead, more attention was paid
to whether the commercial did an effective job of portraying a product accurately. They
made global comparisons between the quality of the product based on their own
experiences and claims made about it in an ad. For example, comments such as "They
say its so perfect but Ive tried it and it tastes yucky", were common. So while they did
directly compare the commercial to the product, these comparisons tended not to be in
terms of specific attributes but more in terms of their overall evaluations.
As the interview strategy evolved, the relative importance and attention paid to
particular lines of questioning shifted. Given the focus on advertisings entertainment
value evident in the initial data, subsequent interviews were designed to probe the
meaning and limits of these findings. The use of concrete props proved to be a valuable
tool in encouraging children to draw upon their own experiences with ads and products.
While advertisings creative side remained a distinct focus of attention, the accuracy of
the product portrayal began to assume a more prominent position in the third interview
wave. When the children were asked to share their reactions in the context of products
with which they had had substantial usage experience, their perspective shifted to
incorporate both informational and executional dimensions. Use of the brands and ads
within the interview aids the investigation of what appear to be context-dependent
relationships. To explore the limits of the observed patterns further, initial interviews
with younger children were conducted. Inclusion of the younger group was not plannned
at the outset of the study. However, the somewhat counterintuitive content of the early


136
thoughts, feelings and reactions (Gom and Goldberg 1983). This age group has also had
extensive experience with the types of ads and products selected for study (e.g., snack
foods, pre-sweetened cereals, candy). To ensure continued interest in and use of the
product domain, 10 to 11 year-olds were chosen as the older age group. In pretesting,
both second and fifth graders reported that they watched both Saturday morning and
weekday afternoon television on a regular basis, key commercial slots for these products.
Not surprisingly, both age groups also reported frequent consumption within these
product categories.
Information. Through extensive pre-testing and review, four ad-product pairs
were selected for study. Four advertisements were selected from a large pool of food
commercials broadcast during Saturday morning and weekday afternoon time slots in the
three months preceding the investigation. Immediately eliminated from the pool were
all advertisements containing premium offers (e.g., contests, giveaways, prizes), program
characters acting as endorsers (e.g., Fred Flintstone, Bugs Bunny) and brands that
required cooking or additional preparation (e.g., Kids Cuisine frozen entrees, Eggo
frozen waffles). From this reduced pool of approximately forty commercials, a two step
pretesting procedure was utilized to select the final target ads. First, the entire pool of
ads was shown to a group of four adults who had advertising research and/or agency
experience. They were asked, as a group, to eliminate commercials from the set that
were unrepresentative of the genre with respect to the execution style used, the product
category advertised, the quality of the resolution, or the quantity of information
conveyed. Approximately fifteen ads were eliminated from the set, at this stage. Then,


48
marketplace stimuli represent a successful adaptation to the condition and environment
of being a child. Minimal data on childrens perspectives of their consumer experiences
is available, a perspective that only becomes accessible if researchers are willing to
suspend belief in traditional notions of children as in process, cognitively limited and
lacking real understanding. Much like an ethnocentric bias in anthropological study, the
interpretation of childrens behavior exclusively in adult terms, severely limits the scope
of scientific understanding. To understand how children make sense of their experiences,
requires a sensitivity not only to their cognitive skills and limitations but to their unique
perspectives on the marketplace and its impact on their lives. Their perceptions,
judgments and opinions provide valuable information not obtainable through any other
source.
The Interaction of Advertising and Product Trial
Though researchers have traditionally focused on advertisings prepurchase impact
on consumer behavior, there is growing consensus that advertisings effects may be
detected not only at the time of exposure, but later, in the context of product use (Aaker
and Stayman 1992; Deighton 1984; Deighton and Schindler 1988; Hoch and Ha 1986;
Levin and Gaeth 1988; Marks and Kamins 1988; Olson and Dover 1979; Puto and Hoyer
1990; Puto and Wells 1984). Though conceptual perspectives and aims differ,
researchers agree that an advertisement may help to cultivate associations with a product
experience, so that the experience is different than it would have been without exposure
to the ad. Advertising may engender feelings that are linked to the experience of using
the product, so that it becomes more fun, exciting, or intriguing than it would otherwise


10
perspective on advertising and its place within their lives. Research strategies are needed
that reliably and accurately reflect childrens particular needs and perspectives. In many
studies of childrens media reception, adult responses or explanations have served as the
expressed or implied standard for performance (Anderson 1981; Dorr 1986).
Researchers have taken their own interpretations of televised content as the standard and
evaluated childrens responses against that adult baseline. With this criterion, childrens
understandings implicitly represent some sort of flawed approximation to the
interpretation an adult might provide, rather than a unique and valid perspective on the
world. To understand how children perceive the advertising-consumption relationship
will require a sensitivity to the concepts and categories children use to define their
experiences.
The general paradigm that has been adopted by researchers to understand the
linkages between advertising and consumption incorporates key assumptions about
consumers that may not accurately reflect how children respond to persuasive messages.
Within this framework consumers are depicted as more or less logical thinkers who (1)
search out and manipulate information in order to make choices among goods and
services; (2) respond to advertising as a partisan source; and (3) treat advertising claims
as provisional hypotheses that are subsequently used to evaluate product experiences.
Each of these assumptions has a direct bearing on the way the advertising-consumption
relationship is conceptualized and measured. Violation of these assumptions may
suggest that alternative approaches are needed to understand childrens unique and often
surprising responses. The model of adult processing that has developed provides both


47
world that is constructed through childhood. Children attend to advertising in search of
meaning, things that can be used in the process of constructing emerging definitions of
the self, the larger community in which they live and the marketplace arena. They
search not only for product information but for insight into what it means to be a child,
and what a child becomes. Research grounded in a meaning-based approach, explicitly
adopts this more inclusive perspective on childrens advertising response. It provides the
conceptual foundation necessary to begin to address issues that look beyond purely
cognitive construals of how children make sense of the advertisements and products that
permeate their lives.
Where cognitive processing models may fall short, is in their failure to consider
that the individual who is processing information is immersed in a highly structured and
meaningful environment. In viewing an advertisement, consuming a product, or
comparing the two, a child is a recipient not just of information but of meaning. How
(s)he interprets and evaluates these experiences is a consequence of the cultural
understanding (s)he brings to bear, as well as her(his) information processing capabilities.
Meaning is created and confirmed through the process of interpretation, definition and
interaction (Reid and Frazer 1980). Without benefit of substantial marketplace
experience and fully mature processing strategies, children unravel, shape and construct
meaningful interpretations of their consumption related experiences. Though these
constructions may sometimes bear little relationship to adult explanations, they represent
a valid database for furthering scientific insight. What do not seem to exist in any
substantial way, are investigations documenting how childrens natural responses to


19
childrens perceptions of the advertising-consumption relationship that have implicitly
guided prior thinking and analysis. By combining experimental and phenomenological
methods within a single research project, this investigation has the capacity to capitalize
on the strengths and merits of both. What emerges is a richer and more detailed
understanding of a significant yet little understood facet of childrens consumer
experience.


65
is a rational, ordered and organized response to the condition of being a child (Fine and
Sandstrom 1988; Goode 1986).
The notion of "constructed realities" which recognizes the contribution of the
individual in creating a meaningful view of the world is a central premise of naturalistic
inquiry (Hirschman 1985; Hudson and Ozanne 1988; Kvale 1983; Lincoln and Guba
1985; Morgan and Smircich 1980; Thompson et al. 1989). Ontologically, the
constructivist position asserts that reality is created in the minds of individuals. At all
stages of the life-cycle, people are engaged in the creation of a meaningful view of the
world and their relation to it (McCracken 1987). The meanings derived from or ascribed
to objects, events or media are not intrinsic to the tangible entities themselves, but a
product of the individuals interpretation. Reality is constructed by the perceiver in order
to make sense of oneself, and to organize a belief system that will serve as a guide to
action. The assumption that reality is not objective but rather subjectively defined, has
important consequences for the design and conduct of research. Because each individual
views the world from a unique vantage point, understanding of human phenomena must
be grounded in the reality of how events and situations are subjectively lived or
experienced (Thompson et al. 1989). Rather than discounting or disregarding childrens
subjective perceptions and experiences, these become the central focus of study.
How children make sense of their marketplace experiences is patterned by socially
organized ways of perceiving and acting upon the world. Children of a given social and
historical context have a set of interests and everyday experiences in common, that both
distinguish and unite them. That children constitute a special audience as a consequence


CHAPTER 5
STUDY 3
Collectively, the first two studies paint an intriguing and somewhat
counterintuitive picture of childrens perceptions of ad-product relationships.
Unanticipated age group differences emerged in terms of how children approach ads and
relate them to their consumption experiences. Younger children appeared to adopt a
more utilitarian, brand focused perspective in thinking about ads; older children were
more complex in their judgments, focusing on the creative and strategic dimensions as
well. Although the pattern that emerged offers clear direction for further development
and testing, both conceptual and empirical gaps remain. The third study, an in-depth
qualitative investigation, is designed to address these deficiencies. The initial qualitative
study provides the provisional concepts and categories to frame subsequent investigation.
Without the discovery-oriented interpretive foundation, the experimental investigation
would have rested on a view of advertising-trial relations as a hypothesis-testing process.
Though useful, this approach would have led to a more impoverished perspective than
that obtained by also capturing childrens fascination with advertisings creative
dimensions through the inclusion of affective constructs in the experimental design. The
preliminary investigation also serves as the basis for further qualitative inquiry through
the provision of tentative concepts, generalizations and questions. The relations children
perceive between ad portrayals and their personal experiences appear to be much less
166


182
moving the interpretation beyond a series of discrete categories. Until these additional
analytic steps are taken, the interpretation stops short of a fully developed grounded
theory.
In keeping with the end objective of this research program, grounded theory
analysis techniques were followed. What distinguishes this approach from other methods
of analysis is the systematic analytic procedures and structure it provides. By working
through a well-established set of analytic operations, the research process acquires added
precision and rigor, thus enhancing the trustworthiness of the research conclusions
(Lincoln and Guba 1985; Strauss and Corbin 1990; Wallendorf and Belk 1989).
Research conclusions are based on the verbatim transcripts of the depth
interviews. Approximately eight hundred pages of transcript were generated by thirty-
eight interviews. These transcripts are the data from which conceptual categories and
relationships are discovered, clarified and ultimately integrated. Analysis in grounded
theory consists of three major types of coding (1) open coding, (2) axial coding and (3)
selective coding (Corbin and Strauss 1990; Strauss and Corbin 1990). Coding represents
the operations by which data are broken down analytically, conceptualized and then
recombined in new ways. It is the central process by which theories are built from data.
Open coding is the interpretive process by which data are initially broken down and
conceptual labels applied. This phase of the analytic process pertains specifically to the
naming and categorizing of essential elements and features through close examination of
the interview transcripts. During open coding, the text of each transcript is broken down
into discrete events, ideas, or incidents. Each of these incidents, whether reflected in a


180
Field notes. As in the preliminary study, detailed field notes were kept,
summarizing the progress and direction of the research. Most of these were analytic
memos. Extensive notes were taken detailing the course of the data analysis, the
conceptual development and new questions arising from individual interviews. A
critically important function of analytic field notes is the venue it establishes for
continuous testing of the emerging interpretation against the data and the recording of the
researchers analytic process. Not only are convergent patterns or themes identified, but
also weaknesses in the data, discrepancies and areas of confusion are noted. By
articulating both the strengths and weaknesses of the data, the researcher can assess the
credibility of the interpretation as it develops, carefully documenting the degree to which
conclusions are grounded in the data. To minimize the potential impact of investigator
bias, it is imperative that researchers detail their assumptions, methodological decisions
and the progress of their analysis on a continuing basis.
Analytic Strategy
Grounded theory procedures and aims constitute the primary analytic strategy for
this study (Glaser and Strauss 1967; Strauss 1987; Strauss and Corbin 1990). The
ultimate objective of this approach is the development of an inductively derived
substantive theory, grounded in the reality of childrens experience. This study
represents a step towards the achievement of that objective.
A well-constructed grounded theory constitutes a rich, tightly woven explanatory
theory of a substantive phenomenon. Through this methodology, concepts and
relationships are not only generated but also provisionally tested. Moving beyond the


201
greater freedom of choice, these kinds of products are readily available, frequently
consumed and taken for granted. Given their status in childrens lives, it is not
surprising that advertised claims for these products are processed only superficially. On
the other hand, peers were often mentioned as sources of related product ideas, primarily
as a consequence of incidental exposure at lunchtime or after school. With a wider range
of salient sources of product information available, the importance of any one diminishes.
The shift away from a product-orientation was evident among the fifth graders
irrespective of the particular ad and product exposure situation within the interview.
The interdependence of ads and brands. At the outset of this research, it was
anticipated that childrens perceptions of the links between advertisements and their own
product experiences would be strong and direct. When given the opportunity, it was
expected that children would spontaneously compare their reactions to a brand with the
advertisement designed to promote it. However, the findings of the initial study
suggested that, at least older children, construe this relation in very loose, relaxed terms.
The categories used to describe their reactions to advertisements were very different than
those used to characterize the usage experience. While the children talked at length
about what they perceived to be clever or intriguing about a commercial, they had less
to say about the brands specific attributes or benefits. Their reactions to the usage
experience, conversely, were consumed by sensory characteristics such as taste, texture
and appearance. Given the diffuse links between an ad and perceptions of performance
apparent in the initial study, and the potential implications of these findings for
understanding how advertising persuades, these findings were subjected to more stringent


86
a search for negative or qualifying evidence began. On a substantive level, questions
were shifted to thinking about circumstances when executional elements might be less
focal. From a methodological perspective, the interview structure was altered in order
to minimize any directive influence of the structure itself. Rather than beginning the
interviews talking about advertising, the interviews were instead oriented around
childrens experiences with products, their likes, dislikes and perceived involvement in
shopping. Shifting the focus away from advertising to consumption was designed to
illuminate how these kinds of products fit into childrens lives.
To begin the interviews, children were asked about what they like to eat for
breakfast. From this very simple question, a variety of topics were raised ranging from
their feelings about bad product experiences to the impact of peers, siblings and
advertising on what they know and like. They talked about their brand preferences and
loyalties, how they learned about new products, why they liked brand name products
more than generics, as well their own and others criteria for choosing particular brands.
They talked about using brand names as a cue to quality, how premiums might be used
to promote sagging sales, loyalty to specific brands and store preferences. With the shift
in focus, family members were mentioned more often. The children were well aware
of their siblings and parents preferences as well as their criteria for choosing particular
brands. They readily took family members into account in describing what they like and
why. Within this group, there was a great deal of variation in terms of their level of
participation in the family shopping and decision making. In a few cases, children were
active participants in virtually all shopping expeditions. One fourth grader described how


80
you think" about specific advertisements, they are essentially invited to critique the ads
on whatever dimensions they deem most relevant. To the extent that this interview
strategy somehow directs the childs focus to creative aspects of the commercial, this
approach may have inspired children to assume the role of art critic. To the extent that
this is true, a more explicit focus within the interviews on the nature of the relationship
between ads and products might be expected to deflect attention away from the ads
executional elements.
To highlight directly the relationship between advertising and consumption,
products were introduced into the research process. Children were shown commercials
and given products to sample, such as a cereal, fruit snack or cookies. With few
exceptions, the children were highly involved, clearly enjoying the opportunity to try the
products and talk about their reactions. The ad-product pairs typically prompted a
number of comparisons to other products and commercials, prior experiences with a
range of products as well as probable reactions of friends or parents. With the inclusion
of product samples, the content of the interviews began to shift slightly, drawing more
extensively on childrens prior experiences both as consumers and shoppers.
Based on both childrens advertising research and early studies of advertising-trial
interactions, it was anticipated that childrens reactions to specific brands would be
affected by having seen advertisements for them (e.g., Goldberg, Gom and Gibson 1978;
Gom and Goldberg 1982; Hoch and Ha 1986; Marks and Kamins 1988; Robertson and
Rossiter 1976; Roedder et al. 1983; Smith 1993). Though it wasnt clear how this
influence might manifest itself, it seemed reasonable to assume that children would


146
Table 2
The Interaction of Advertising and Product Trial: ANOVA Results.
AD/TRIAL vs. TRIAL ONLY
BELIEF
TOTAL EXPECTANCY
Ab
SECOND GRADE
AD/TRIAL
3.02
9.90
4.31
TRIAL ONLY
2.90
9.40
4.29
F < 1
F < 1
F < 1
FIFTH GRADE
"FAMILIAR/LIKED .ADS
AD/TRIAL
3.59
13.10
4.63
TRIAL ONLY
3.20
11.67
3.91
F = 6.78
F = 3.91
F = 6.00
P < .0135
P < .0563
P < .0196
ES = .14
ES = .07
ES = .12
"NOVEL/DISLIKED" ADS
AD/TRIAL
2.26
7.28
3.21
TRIAL ONLY
2.89
9.67
4.41
F = 8.17
F = 9.31
F = 9.61
P < .0072
P < .0044
P < .0039
ES = .17
ES = .19
ES = .19
Belief Confidence: AT
3.29
T
3.35 F =
0.55
Ab Confidence: AT
3.65
T
3.76 F =
1.26
AD/TRIAL w. TRIAL/AD
BELIEF
TOTAL EXPECTANCY
Ab
SECOND GRADE
AD/TRIAL
3.02
9.90
4.31
TRIAL/AD
3.05
10.32
4.28
F = 0.09
F = 0.45
F = 0.08
FIFTH GRADE
' FAMILIAR/LIKED" .-IDS
AD/TRIAL
3.59
13.10
4.63
TRIAL/AD
3.33
12.59
4.39
F = 3.62
F < 1
F < 1
P < .0655


ES = .07


"NOVEL/DISLIKED" ADS
AD/TRIAL
2.26
7.28
3.21
TRIAL/AD
3.13
10.93
4.46
F = 17.82
F = 22.03
F = 11.12
P < .0002
P < .0001
P < .0021
ES = .32
ES = .37
ES = .22
Ab Confidence: AT
3.65
TA
3.81 F =
5.44. p < .0229, ES = .03
Belief Confidence: AT
3.29
TA
3.44 F =
5.73. p < .0196. ES = .03
Belief Confidence:


223
the experimental findings were essentially null results. The only significant differences
observed were between advertising and any cell incorporating trial exposure. So, while
this group clearly made a distinction between commercial exposure and product trial,
once trial was implicated further interpretation was problematic.
One of the most valuable benefits of the second qualitative study was its capacity
to clarify and enrich the experimental findings. The depth interviews provide a rich
database from which to understand how these two age groups differ in their approach to
ad-product relations. While the experiment identified important distinctions, the inherent
limitations of close-ended measures make further interpretation difficult. Qualitative
study provides the opportunity to see what lies behind the scaled responses. When it was
the older rather than the younger children who were most affected by commercial
exposure in a consumption setting, it was the qualitative data that helped to understand
what this observation means in the context of childrens everyday experience. The
utilitarian perspective adopted by the younger children in the qualitative investigation
makes their apparent indifference to the advertisements in the experiment understandable.
While advertisements may persuade a young audience, affecting product choice and
parental requests, they have little enduring influence in a consumption setting. If
advertisements are viewed primarily as a means of obtaining product information, then
it is understandable that they hold little residual interest when the child has the product
in hand. Similarly, advertisings influence on the brand-related responses of the older
children makes sense given the lead role entertainment plays in their thinking, as
manifested in both qualitative studies. Qualitative inquiry is rarely utilized as a means


Abstract of Dissertation Presented to the Graduate School
of the University of Florida in Partial Fulfillment of the
Requirements for the Degree of Doctor of Philosophy
KIDS CONSUMPTION: HOW CHILDREN PERCEIVE
THE RELATIONSHIPS BETWEEN ADVERTISEMENTS AND PRODUCTS
By
Elizabeth S. Moore-Shay
April 1994
Chairperson: Richard J. Lutz
Major Department: Marketing
Multiple perspectives and methods are used to investigate the relationships
children (ages 7-11 years) perceive between advertisements and their consumption
experiences. While advertisings effects on children have been studied extensively,
rarely have researchers considered the broader context in which products are also
purchased and consumed. Products and their use are a focal point of consumer behavior
and the most readily available source of marketplace information to young consumers.
Combining both experimentation and depth interviews, this research examines whether
advertising influences childrens interpretations of their product experiences. The hybrid
research design incorporates the precision and rigor of a causal analysis as well as the
rich insights of interpretive approaches. Three studies were conducted: a preliminary
phenomenological investigation, an experimental study of the interaction between
vi


9
Teenage Mutant Ninja Turtles generated approximately $400 million in retail sales from
the action figures alone (Pereira 1991). This figure does not include additional revenue
generated from the sale of licensed products such as turtle cereal, fruit juice, pajamas,
sheets, t-shirts, books and videotapes. The television program is a vehicle to provide
additional product exposure to the child audience, in the hope of stimulating additional
sales that in turn may help to sustain program popularity. Though the marketing of
products linked to television themes and characters is nothing new, the line between
commercial and program content has become increasingly blurred. Persuasive messages
are in some sense becoming more subtle, as programming, advertisements and the
products themselves flow into and reinforce one another.
Childrens advertisements have become more elaborate, sophisticated and
penetrating in recent years. Advertisers rely extensively on the power of captivating
visuals and subjective claims to touch the hearts and minds of young consumers. It is
in the context of these kinds of persuasive messages that children must somehow interpret
and evaluate their product experiences.
How children relate what they see and hear in these advertisements to their
subsequent product experiences is not well-understood. Without the benefit of substantial
marketplace experience and mature processing strategies to guide them, children
somehow manage to make sense of the enticing array of persuasive messages and
products that permeate their everyday lives.
To understand how children interpret and evaluate these relationships requires a
sensitivity not only to childrens cognitive skills and limitations but also to their unique


105
when the child has the benefit of direct experience with a brand. In the decision making
literature more generally, evidence of framing effects within a prepurchase context is
considerable. Researchers have shown that ads or brand labels can frame how consumers
perceive and evaluate subsequent product information (e.g., Allison and Uhl 1964;
MacKenzie and Lutz 1989; Wright and Rip 1980). In a trial context, though ad-based
beliefs are weak, a framing effect may occur whereby advertising directs the consumers
attention to specific, and presumably favorable brand attributes during the use occasion
(Levin and Gaeth 1988). Wright and Lutz (1993) have shown, for example, that
advertising exposure prior to product use shifts consumers attention toward the brands
experiential properties. Hoch and Ha (1986) proposed that beliefs formed on the basis
of advertising exposure have the capacity to frame the interpretation of a product
experience, through a hypothesis-testing mechanism. Based on exposure to an ad,
consumers form tentative beliefs or hypotheses about a brand that they subsequently tend
to confirm through product trial (Deighton 1984; Hoch and Ha 1986; Levin and Gaeth
1988). While the processes are not as well understood, transformational advertising
researchers also argue that advertising may shape the interpretation of a consumption
experience through more affective means (Puto and Wells 1984). The experience of
using the brand is transformed, made more enjoyable, or exciting as a consequence of
repeated advertising exposure. From this perspective, classical conditioning may offer
the most useful perspective for understanding underlying response processes. While
theory reveals a number of mechanisms through which framing effects might arise,
empirical investigation has identified key contextual constraints.


2nd Grade
(hypothesized)
131
5th Grade
(hypothesized)
Figure 3. Hypothesized Relationships Among Ad Affect, Brand Perceptions,
and Attiitudes


81
compare the performance of the product to claims made in the ad. However, when asked
about their reactions to the products, their responses typically were only superficially
related to advertised claims. Though most of the children did not have previous
experience with these products, many spontaneously mentioned that they had seen
commercials for them. They readily described the contents of these commercials, though
their comments again tended to focus on the ad themes or execution rather than specific
attributes of the product. The children talked at length about what they perceived to be
funny or entertaining yet had relatively little to say about the brands specific features or
benefits as depicted in the ad. Their reactions to the brands, on the other hand, were
dominated by sensory characteristics such as taste, texture, smell and appearance. What
seemed to emerge was a picture of childrens reactions to advertisements that had little
to do with what they felt and believed about the products they consumed. It began to
seem as though children view the products and the advertisements that promote them as
quasi-independent entities. This pattern of findings seems to conflict with both intuition
and previous research findings.
Both experimental and survey research provides clear evidence that advertising
influences childrens preferences and behavior. Children may alter their brand
preferences as a consequence of advertising exposure, request the products they see
advertised and choose advertised products over others when given the opportunity to do
so (Goldberg and Gom 1974; Goldberg et al. 1978; Gom and Florsheim 1985; Gom and
Goldberg 1982; Robertson and Rossiter 1976; Roedder et al. 1983). Though children
grow increasingly skeptical of advertising as they mature, they may still be persuaded by


15
The first study was a qualitative investigation with both substantive and
methodological aims. This portion of the project was designed to develop a preliminary
understanding of how children perceive and evaluate ad-product interrelationships and
to assess the viability of an inductive approach with elementary school children. The
depth and breadth of childrens responses quickly put to rest any doubts about childrens
ability or willingness to participate in the research in a meaningful way. Findings from
the preliminary study served as input to the conceptual development and design of an
experimental investigation as well as a source of hypotheses for subsequent qualitative
inquiry.
The second study extends childrens advertising research by looking beyond
prepurchase activities to product use or consumption. Using advertisements specifically
intended for children and broadcast within the context of childrens programming, the
experiment examines the interaction of advertising and evidence. At a micro-theoretical
level, the experiment addresses whether and how advertisements may influence childrens
cognitive and affective responses in the context of product consumption. The
relationships among a number of variables previously neglected in the childrens research
literature were examined, including attitude toward the advertisement, entertainment,
brand perceptions and attitudes. Though the experimental design allowed for the testing
of key conceptual relationships, it was not particularly well suited for discovering new
or unanticipated phenomena or relationships of significance. The discovery-oriented
design of the preliminary study had shown that there was much to be learned by simply
allowing the children "to talk." This approach enables the researcher "to learn more; be


114
reconsideration and rediscovery in current advertising practice. Though research firms
have raised questions about the validity of ARF conclusions on methodological grounds,
the impact of "ad likability" remains a topic of considerable interest and debate (Miller
1992).
Among academic researchers, interest in the determinants and consequences of
consumers affective reactions to commercials is substantial. In particular, researchers
have focused investigation on the impact of consumers ad affect on other indicators of
advertising effectiveness. Within the last two decades, "attitude toward the ad" (Aad),
an affective construct reflecting a consumers favorable or unfavorable response to a
particular ad has assumed a prominent role in advertising theory (Mitchell and Olson
1981; Shimp 1981). Now widely recognized as an important mediator of advertisings
effects on brand attitudes and purchase intentions, Aad has been investigated in over sixty
articles in the marketing and consumer research literatures since 1981 (Brown and
Stayman 1992). Issues such as the determinants of consumers ad attitudes, the
conditions in which these attitudes have relatively strong effects, their role in determining
ad outcomes, and, more recently, Aads relationship to feeling responses have each been
the subject of substantial investigation (e.g., Burke and Edell 1989; Gardner 1985; Lutz
1985; MacKenzie, Lutz and Belch 1986; MacKenzie and Lutz 1989; Miniard, Bhatla and
Rose 1990). Though the contributions are many, never have the persuasive consequences
of childrens attitudes toward advertisements been explored. Further, very few studies
have focused on Aads capacity to influence brand beliefs and attitudes in a trial context
(Smith 1993; Wright and Lutz 1993).


122
the baseline against which subsequent trial based issues might be examined.
H5: When children receive brand information solely through advertising, Aad is
positively associated with brand attitude.
Given that Aad influences childrens perceptions and attitudes toward a brand in an
advertising context, the question arises as to whether it retains its mediating role when
children have the opportunity to gain direct experience with a product.
Traditionally, researchers have conceptualized Aad as a relatively transitory,
situationally bound attitudinal response, generated at the time of exposure and expected
to have its strongest impact within the exposure setting (Lutz 1985). However, recent
research has yielded seemingly conflicting evidence regarding a more enduring role for
these affective reactions within the persuasion process (e.g., Chattopadhyay and
Nedungadi 1992; Burke and Edell 1986). Under what conditions affective reactions to
advertisements impact subsequent consumer behavior is not yet well-understood. The
transformational advertising literature suggests that affect generated in response to an ad
may affect how a consumption experience is subsequently construed and evaluated (Puto
and Wells 1984; Wells 1986). The information response model, on the other hand,
seems to suggest that consumers affective reactions to an ad may be of little consequence
once a consumer has actually consumed a product. According to this model, trial based
beliefs are not only more salient than perceptions based solely on advertising, but also
held with greater confidence. As a consequence, they should play the primary role in
shaping brand attitudes (Marks and Kamins 1988; Smith and Swinyard 1982, 1983).
Research in the area of attitude-behavior relations also indicates that attitudes formed on
the basis of direct experience are more strongly held and more accessible than those


49
be (Aaker and Stayman 1992; Puto and Wells 1984). Alternatively, advertised claims
may be construed as hypotheses that consumers subsequently test out in the context of
using a product, shaping their interpretations and evaluations (Hoch and Ha 1986).
Irrespective of whether cognitive or affective explanations are sought, there is clear
evidence, at least among adult consumers, that advertisers have the ability to reach into
the consumption experience and influence how it is perceived and evaluated (Aaker and
Stayman 1992; Deighton 1984; Deighton and Schindler 1988; Hoch and Ha 1986; Levin
and Gaeth 1988; Marks and Kamins 1988; Olson and Dover 1979).
Whether, and to what extent, advertising actually affects product use depends on
the character of the consumption experience itself. When product performance is easily
and unambiguously judged, advertising is easily discounted. In this situation, adults are
unlikely to rely on advertising to direct the interpretive process (Hoch and Ha 1986).
However, there are many consumption occasions when the indicants of product
performance are neither obvious nor easily assessed. Typically, product quality is not
solely a function of a products concrete attributes but of more intangible, subjective
properties as well. Questions of product quality or value are often not unequivocally
resolved through product consumption. When a product experience is potentially
ambiguous or open to multiple interpretations, advertising may exert a significant
influence on consumers assessments of quality and enjoyment. Though adults recognize
that advertisements are partisan sources, they may develop tentative expectations on the
basis of ad claims that are difficult to verify directly (Deighton 1984). Many
commonplace product experiences are supportive of multiple interpretations. From soft


238
Now, I'm going to ask you some questions about the cereal (in the commercial )
Brand Familiarity
1.Do you remember ever tasting before (today)? YES NO NS
2.(If Yes) How many times would you say you've eaten
1 2-4 5 = +
Brand Attitude
1. "Let's use the yes/no cards again. (Read A)
Yes or No? Big Y/N or little y/n"
A.
I like Double Dip Crunch.
YES
yes ?
no
NO
B.
I think it is a good cereal.
YES
yes ?
no
NO
C.
I'd tell my friends about it.
YES
yes ?
no
NO
2. Star Scale Instructions: "I would like to know how many stars you think Double
Dip Crunch Cereal should get."
Five stars means you think is really great!.
Four like it's good but not great.
Three think is just so-so.
Two don't like it, it's bad but not terrible.
One don't like it at all, it's really terrible.
How many stars would you give Double Dip ?
5 4 3 2 1
3.Ladder scale: "Here is a picture of a ladder. At the top of the ladder is the very,
very best cereal you can think of. At the bottom of the ladder is the absolute
worst cereal that you can think of. On which rung of the ladder would you put
?"


41
represent the knowledge and beliefs of other people (Ackerman 1981; Pemer 1988).
However, they may encounter interpretive difficulty when someone breaks with
conversational convention through non-literal or figurative uses of language. Until
children are ten to eleven years-old, they tend to be rather literal in their interpretive
strategies. In situations where there is a lack of simple agreement between what is said
and what is meant, young children have difficulty not so much in recognizing, but in
reconciling the apparent discrepancy. Children tend to assume that people say what they
mean, so that the possibility that someone might employ puns, irony or pretense may not
occur to them (Winner 1988; Young 1990). Given the symbolic character of advertising
and the frequency of non-literal executions, the literal character of young childrens
comprehension strategies may have important consequences for how children reconcile
these images with the concrete day-to-day reality of the brand in a consumption context.
Though a fundamental shift in childrens processing strategies and awareness of
advertisings selling intent seems to occur at around seven or eight years of age, the
evolution in childrens interpretive strategies continues throughout the elementary school
years. While children as young as second grade (6 to 7 years of age) have the capacity
to recognize symbolic properties in consumer products, it is between fourth and sixth
grades (9 to 12 years) that children begin to suggest more symbolic interpretations of
marketing stimuli (Belk, Bahn and Mayer 1982; Belk, Mayer and Driscoll 1984). Rather
than simply reading ads as a series of events or incidents, children of this age group may
interpret message elements in terms of their symbolic properties, as reflective of cultural
meanings. While younger children may tend to focus on the perceptual qualities of an


208
Age-related differences were quite apparent in childrens reactions to the fruit
snack advertisements utilized in the first phase of the interviews. Virtually all of the
respondents, irrespective of age group, were attentive to the fanciful aspects of the fruit
snack commercial. Whether they liked the ad or not, the younger children looked at the
events depicted in the ad in literal terms. They concentrated on the fact that the
commercial was not real, because it is impossible for anyone to be flat.
Its like a fairy tale on the commercial. I mean, people cant really be thin. And
they cant just pop out of it like that. Thats not real. {212, M}
That the "flat execution" might have some higher-level connotation was not reflected in
their spontaneous impressions and reactions. They didnt seem to construct figurative
meanings and had difficulty responding to questions which directed them to do so. Issues
of fantasy and reality, truth and falsehood were judged in absolute terms, and on the
basis of literal reality.
The older children, on the other hand, seemed to play with the meaning of the
"flat execution." Not only did they recognize its metaphoric dimensions, but
spontaneously constructed interpretations of its likely meaning. For example, they
suggested that the execution was intended to convey (1) that the product makes kids feel
better when they are sad, unhappy or "down", (2) that the two to three dimensional
transformation suggests that the snack is like a soft drink and it fills kids up, (4) that
without soda flavors regular fruit snacks are boring like flat soda, (4) that sodalicious
creates excitement in kids lives and (6) that by consuming this brand you could increase
your popularity and standing among peers.


11
important insight into the advertising-consumption relationship and a useful counterpoint
from which to understand childrens reactions.
Current models of the advertising-consumption relationship assume that consumers
approach advertising with a certain amount of skepticism. The performance expectations
adults form as a consequence of advertising exposure are rather tentative because they
respond to advertisements as partisan sources of information. Adults both recognize and
act on the knowledge that advertising is inherently biased. Product claims are treated
merely as conjectures that may or may not prove to be accurate.
While this presumption of skepticism clearly holds for most adults, children are
much more likely to believe what they see in advertisements. Children enjoy
commercials and are often attracted to the products they see portrayed. Even as they
begin to acknowledge advertisers motives, children may not spontaneously apply what
they know while viewing (Brucks et al. 1988). Without a reminder to critically evaluate
the contents of a message while viewing, children tend to focus their energies on the
product and the captivating way it is portrayed. Though children become increasingly
skeptical of advertising during middle childhood, this skepticism is relatively fragile.
They may express rather negative attitudes about TV advertising that bear little
relationship to an advertisements actual influence on their attitudes or purchase
inclinations (Rossiter 1979). Difficulties may arise because children do not fully
understand how or why advertising works. Familiarity with the range of influence
strategies used by advertisers allows adults to take a more detached view of what they
see and hear. Children lack this experience and the critical eye it engenders. As a


54
relationships. However, neither explanation fully captures the influence of both. The
learning or hypothesis-testing model draws almost exclusively on cognitive concepts and
processes to conceptualize the interaction between advertising and product evidence.
According to this approach, advertising can exert substantial influence on what
consumers learn from their product experiences. Of primary interest, is the process
underlying advertisings impact on consumers beliefs and product evaluations. The
transformational approach, on the other hand, focuses on the ads capacity to create
affective associations that alter the consumption experience. It is the advertisements
ability to create, modify or intensify the feelings consumers experience while using the
product that has captured researcher attention and interest. While the transformational
approach emphasizes affective consequences, it seems to draw implicitly on the logic of
the hypothesis-testing model as well. A central tenet of the transformational model is
that advertising helps to direct consumers attention and interpretive strategies in the
context of product consumption (Wells 1986). That the ad helps the consumer to
interpret his(her) consumption related thoughts and feelings, is compatible with the
learning explanation offered by proponents of the hypothesis-testing model. Both of
these approaches provide a useful perspective on the relationship between advertising and
use experience. Neither approach is incompatible with the observation that
advertisements often evoke both cognitive and affective responses, particularly in the
realm of childrens advertising where brand information is typically conveyed through
the filter of lighthearted, creative and playful appeals.


269
Wallendorf, M. & E. J. Amould (1991), "We Gather Together: Consumption Rituals of
Thanksgiving Day," Journal of Consumer Research. 18 (June), 13-31.
Wallendorf, M. & R. W. Belk (1989), "Assessing Trustworthiness in Naturalistic
Consumer Research," in Interpretive Consumer Research, ed. E. C. Hirschman,
Provo, UT: Association for Consumer Research, 69-84.
Ward, S. (1972), "Childrens Reactions to Commercials," Journal of Advertising
Research. 12 (2), 37-41.
Ward, S. & D. B. Wackman (1972), "Childrens Purchase Influence Attempts and
Parental Yielding," Journal of Marketing Research. 9 (August), 316-319.
Ward, S., D. B. Wackman & E. Wartella (1977), How Children Learn to Buy: The
Development of Consumer Information-Processing Skills. Beverly Hills, CA:
Sage.
Wartella, E. (1984), "Cognitive and Affective Factors of TV Advertisings Influence on
Children," The Western Journal of Speech Communication. 48 (Spring), 171-183.
Wartella, E. (1980), "Individual Differences in Childrens Responses to Television
Advertising," in Children and the Faces of Television, eds. E. L. Palmer and A.
Dorr, New York, NY: Academic Press, 307-322.
Wartella, E. & L. Hunter (1983), "Children and the Formats of Television," in Children
and the Formal Features of Television, ed. M. Meyer, Munich: K.G. Saur, 144-
165.
Wartella, E., D. B. Wackman, S. Ward, J. Shamir & A. Alexander (1979), "The Young
Child as Consumer," in Children Communicating: Media and Development of
Thought. Speech and Understanding, ed. E. Wartella, Beverly Hills, CA: Sage,
251-282.
Watkins, B. (1985), "Television Viewing as a Dominant Activity of Childhood: A
Developmental Theory of Television Effects," Critical Studies in Mass
Communication. 2 (4), 323-337.
Weisskoff, R. (1985), "Current Trends in Childrens Advertising," Journal of
Advertising Research. 5 (6), RC12-RC14.
Wells, W. D. (1965), "Communicating with Children," Journal of Advertising Research.
5 (2), 2-14.


259
Goldberg, M. E. & G. J. Gom (1974), "Childrens Reactions to Television Advertising:
An Experimental Approach," Journal of Consumer Research, 1 (September),
69-75.
Goldberg, M. E. & G. J. Gom (1983), "Researching the Effects of Television
Advertising on Children: A Methodological Critique," in Learning from
Television Psychological and Educational Research, ed. M. J. Howe, New York,
NY: Academic Press, 125-151.
Goldberg, M. E., G. J. Gom & W. Gibson (1978), "TV Messages for Snack and
Breakfast Foods: Do They Influence Childrens Preferences?," Journal of
Consumer Research. 5 (September), 73-81.
Goode, D. A. (1986), "Kids, Culture and Innocents," Human Studies. 9 (1), 83-106.
Gom, G. J. & R. Florsheim (1985), "The Effects of Commercials for Adult Products on
Children," Journal of Consumer Research. 11 (March), 962-976.
Gom, G. J. & M. E. Goldberg (1982), "Behavioral Evidence of the Effects of Televised
Food Messages on Children," Journal of Consumer Research. 9 (September),
200-205.
Gom, G. J. & M. E. Goldberg (1977), "The Impact of Television Advertising on
Children from Low-Income Families," Journal of Consumer Research. 4
(September), 86-88.
Greenberg, B. S. & J. E. Brand (1993), "Television News and Advertising in the
Schools: The Channel One Controversy," Journal of Communication. 43
(Winter), 143-157.
Greenspan, S. I. (1981), The Clinical Interview of the Child. New York, NY:
McGraw-Hill Book Co.
Ha, Y. & S. J. Hoch (1989), "Ambiguity, Processing Strategy and Advertising-Evidence
Interactions," Journal of Consumer Research. 16 (December), 354-360.
Haley, R. I. & A. L. Baldinger (1991), "The ARF Copy Research Validity Project,"
Journal of Advertising Research. 31 (April/May), 11-32.
Harrigan, J. A. (1991), "Childrens Research: Where Its Been, Where It Is Going," in
Advances in Consumer Research. Vol. 18, eds. R. H. Holman and M. R.
Solomon, Provo, UT: Association for Consumer Research, 11-17.



186
level, childrens affective responses to an ad may influence their perceptions of a
subsequent consumption experience, making it more enjoyable, exciting or intriguing than
it might otherwise be. The link between the brand conveyed through the fanciful world
of advertising and its reality in the everyday world may be forged not so much on the
basis of specific expectations about performance but on a much more diffuse basis,
drawing extensively on the ads affective appeal as well as the brands overall perceived
value. At another level, childrens focus on advertisings creative properties has little
to do with the product being promoted. Children seem to consume ads much the way
they might consume a program. Ads are judged on their capacity to hold attention, the
novelty of the execution, the creativity of the idea and the social consequences (if any)
of the message. Contrived appeals are judged harshly as are actors performances. In
part, this approach to advertising reception may represent an end in and of itself. Ads
are simply a rich source of entertainment, aggravation or amusement. At the same time,
the children focused extensively on how specific ads were created and why they were
constructed in particular ways. They seemed to be trying to figure out advertisings
unique properties and strategies, in some sense grappling with the nature of the
communication itself. Focus on an ads creative elements may in part reflect childrens
deepening understanding of advertisings persuasive intent and character.
Representing diverse research traditions, the findings of both the preliminary
study and the experiment suggest that the information-centered perspective that has
guided research may neglect important aspects of childrens advertising reception.
Perhaps it is appropriate to view advertisings role in broader terms than as a purveyor


129
In prepurchase settings, childrens affect toward an ad thus has the capacity to enhance
or diminish childrens acceptance of message content, irrespective of age group.
Whether Aad retains its ability to shape brand perceptions when children also have the
benefit of trial experience will depend on the sequence in which the ad and the product
are encountered. When advertising precedes trial, Aad may still have a positive influence
on childrens receptivity to ad claims. Since Aad is formed prior to product trial in this
situation, there is little reason to expect that its influence on childrens acceptance of
brand claims would necessarily decline. Among the older children, the facilitative effect
of ad affect on persuasion may actually be enhanced in an ad-trial context. Whereas
purely ad based expectations are relatively weak among older children, having little
impact on indicants of persuasion like brand attitude, they may be more powerful when
reinforced through product trial. Unless the experience is clearly discrepant from what
the ad suggests, childrens positive reactions to the ad may lead to greater receptivity to
ad claims, which in turn are reinforced or confirmed through a favorable experience.
This rationale is similar to the hypothesis testing mechanism except that it suggests that
advertisings effect is affectively driven and, as such, may occur even when the
experience is presumably unambiguous. Soda is perceived to be fizzier and cereal
sweeter, as a consequence of advertising that is entertaining or funny.
H9: When older children are exposed to advertising prior to product trial, Aad is
positively associated with brand perceptions (Aad -* CogB), and these brand
perceptions in turn positively influence brand attitude (CogB -* AB).
While childrens affective reactions to an ad may play a role in shaping their brand
perceptions and attitudes when advertising precedes trial, these responses will have little


176
concerns of interest to the children. The second phase of the interview was quite loosely
structured, drawing more extensively on the consumption related events and personal
experiences that the children recounted. Appendix D contains a copy of the interview
schedule. Qualitative research interviews are neither strictly structured nor entirely non
directive but focused on particular themes of the respondents life-world (Kvale 1983).
The shape and tone of these conversations was cast largely by the children as they related
specific experiences they had had, both positive and negative, with heavily promoted
products.
The two-phased strategy offers the potential to attain a deeper understanding of
childrens subjective experiences with ads and products than pure phenomenological
interviews might allow. Replication of the ad and trial exposure contexts provides a
bridge from the experiment to the largely unstructured interview approach. It has the
potential to extend the experimental analysis by mirroring the stimulus context yet in a
much more fluid, open-ended response format. It is this facet of the interviews that
provides the most direct basis for further scrutiny of the experimental findings,
particularly those which depart from conventional wisdom. By incorporating concrete
stimuli, the interview strategy also provides the opportunity to learn more about how
childrens perceptions might shift as a function of whether they are exposed to a brand
through an advertisement, a consumption experience or both. The structure permits
systematic analysis not only across age groups but across situations children frequently
encounter. A basic operational strategy common to both grounded theory research and
other forms of naturalistic inquiry is to seek maximal variation in the phenomenon under


Ill
discount exaggerated ad claims, younger children may develop a somewhat inflated view
of the brand. If the brands actual performance is not obviously discrepant from the ad
claims, an assimilation effect is likely to occur (Marks and Kamins 1988). As a
consequence, children exposed to an ad/trial sequence should evaluate the product more
positively than those exposed to trial alone. Research on change in meaning also
suggests that early information may create an impression that influences the interpretation
of subsequent information (e.g., Beckwith and Lehmann 1975; Cooper 1981; Nisbett and
Wilson 1977).
H2b: Among younger children, exposure to an advertising-trial sequence has a
facilitative effect on measures of their total expectancy and brand attitudes,
relative to product trial alone.
Product trial as a frame on ad interpretation. While advertising may exert a
significant impact on childrens beliefs and attitudes when it precedes product trial, it
may have little impact on when it follows a consumption experience. As a precursor to
trial, the ad has the capacity to direct childrens attention to those attributes that reflect
most positively on the brand. In essence, the ad provides the child with suggestions
about how to think about and judge their experience with the product. In some sense,
the advertisement may act as an aid to the child, by providing a blueprint for evaluating
the brand. When, on the other hand, advertising follows trial it may have relatively little
impact on childrens brand perceptions. For young children, consumption experience is
not only the most readily available source of product information available but the easiest
source to comprehend and judge. Sensory data is easily interpreted, it is more salient
than an advertisement, and more likely to be readily recalled (Tybout and Scott 1983).


138
examined in the analysis. One of the difficulties in previous research on advertising-trial
interactions is that these effects have typically been examined in the context of a single
product category, confounding constructs such as ambiguity with product class. To
enhance the external validity of the findings, four ad/brand stimulus pairs were utilized
in this study (Lynch 1982). A latn square design was utilized so that the effect of the
stimulus replicates could be tested. No significant differences were anticipated across
advertisements or product categories.
Dependent Variables
The primary dependent variables in this study were brand perceptions, brand
attitudes, belief and attitude confidence. With the exception of scales to assess childrens
general attitudes about advertising or brand attitudes, few established measures exist
within the academic literature to examine childrens responses to marketing stimuli (e.g.,
Macklin and Machleit 1989; Rossiter 1977; Wells 1965). Constructs such as Aad, brand
related beliefs and confidence have not been measured within the context of childrens
advertising response. As a consequence, measures were developed and pretested for use
in this study. Given the potential difficulties inherent in developing valid and reliable
measures for use with young children, a number of preliminary steps were taken to
ensure that the measures were meaningful and easily understood by the children. Two
industry researchers were contacted who had extensive experience in designing
questionnaires for use with children between the ages of six and twelve. They sent
sample questionnaires and provided helpful critiques on early versions of the items
developed for this study. Drawing from both the psychology and education literatures,


CHAPTER 6
CONCLUSIONS AND FUTURE DIRECTIONS
Traditionally, researchers have adopted either experimental or survey methods to
investigate advertisings impact on childrens product preferences and behavior. This
investigation departed from that tradition on both substantive and methodological
grounds. Recognizing that products and their use are a focal point of consumer behavior,
this series of studies attempted to learn about how children construe these experiences
and the impact advertising might have in shaping their perceptions. Although the effects
of advertising on children has been the topic of extensive study, researchers have rarely
looked beyond the prepurchase context to the realm of purchase and consumption. Given
the sheer volume of these experiences and the relative ease with which they are
evaluated, it becomes easy to argue that product use represents the most valuable source
of marketplace information to the emergent consumer. It is from the childs perspective
that this research was initiated and conducted. Recognizing that children are not simply
unfinished adults and that they have a unique perspective of the marketplace, an "emic"
approach was adopted to capture their reactions and feelings. Though interpretive
approaches have gained acceptance within consumer research, they have not yet been
applied to understand childrens consumer issues. Concerns about childrens abilities to
articulate their thoughts may have created some apprehension among researchers, but the
willingness and skill evidenced by the children in studies one and three may help to
220


BIOGRAPHICAL SKETCH
Elizabeth Susan Moore-Shay was bom on March 25, 1957, in Norwood
Massachusetts. After graduating from Newtown High School, she attended Mount
Holyoke College, and received a Bachelor of Arts degree in psychology, graduating
magna cum laude in 1980. She then worked as a research assistant in the Department
of Psychology at the University of Massachusetts and as a teacher in the Fryeburg,
Maine, public schools. In September of 1981, she went to work for Carroll Reed Ski
Shops as a forecast analyst and was promoted to director of sales planning and
forecasting before leaving to return to graduate school in 1985. She enrolled at the
University of Florida where she pursued degrees in both the College of Education and
the College of Business Administration. In December 1989, she received a Master of
Education degree. After completing her doctoral studies under the direction of Dr.
Richard J. Lutz in the Department of Marketing, she will be a member of the business
administration faculty at the University of Illinois in Urbana-Champaign. Elizabeth is
a member of Phi Beta Kappa and Sigma Xi Scientific Research Society. She was
married in 1981 to Neil Frank Shay. Elizabeth and Neil have a daughter, Laura Jane,
bom in January 1988.
271


144
a grade by information source interaction was present indicating that the difference in
confidence observed between advertising and trial was greater among the older children
than among the younger age group (F=4.30, p<.0001). This pattern provides partial
support for HI and is consistent with the IIRM logic that beliefs and attitudes based on
direct product experience are perceived to be more credible than those based on
advertising.
Ad/trial versus trial. The second hypothesis suggested that while ad exposure
prior to product trial might be expected to influence younger childrens brand perceptions
and attitudes, older children would remain unaffected by the ad, judging the brand
instead, on the basis of their usage experience. This hypothesis was not supported. The
observed age related patterns were, in fact, reversed from those hypothesized on the basis
of extant theory. Consistent with previous findings, (e.g., Hoch and Ha 1986; Levin and
Gaeth 1988; Smith 1993; Wright and Lutz 1993), no reliable differences were observed
among the younger age group as a consequence of their exposure to an ad/trial sequence
relative to trial alone (F < 1, p >. 10). The younger children were unaffected by exposure
to the ad prior to a trial experience, relying instead on the trial experience as the basis
for their brand evaluation. While prior studies have attributed a similar result within an
adult population to the unambiguous nature of the product experience, it may be that to
a young child, the salience of a trial experience simply overwhelms any lingering effects
of the ad. To the extent that younger children judge the ad primarily on the basis of the
brands appeal, as suggested by the findings of study one, the ad may convey very little
beyond what the product itself reveals. While the ad may direct the younger childs
attention to particular attributes, unless the actual experience reveals something that is


218
interdependent, with ads serving primarily as conduits of brand information. Given this
orientation, the evident limited impact of commercial messages in trial settings makes a
great deal of sense. One of the contributions of this study to the overall project is the
insight it offers into the way younger children think about ads and products. Their point-
of-view offers a fascinating counterpoint to the interpretations of the older children,
whose approach to ad-consumption relations was not hypothesized at the outset of the
research project. Working from theory-based expectations initially, children between the
ages of 10 and 12 were expected to be quite skeptical of advertised claims and what they
presumed to suggest about the product. It was anticipated that with the benefit of
consumption experience children would carefully compare ad claims against performance
as a means of justifying their negative attitudes. However, the initial interviews quickly
put these ideas to rest, as the children were provided with the opportunity to tell their
story. From that study, a tentative perspective emerged suggesting that advertising was
perceived as entertainment and that the links between ads and product use are perceived
in very loose terms. These findings served both as input into the design of this study and
as a source of a priori conceptual themes. Among the older children, the concepts
identified in the preliminary study were again evident in this more in-depth investigation.
While entertainment remains a focal concept, it is embedded in childrens broader
perspective of advertising as a creative, cultural and corporate product. This perspective
is illuminated through the contrast provided by the younger age group. Its consistencies
across the two qualitative studies lend credibility to the interpretation. Childrens
responses in the experimental setting are also consistent with the interview data. While


96
of these issues, experimental methods are particularly well-suited for further testing and
refinement of emergent hypotheses. One of the primary advantages of a hybrid research
design is the opportunity it provides to capitalize on the unique strengths of individual
research methods in learning about a single substantive phenomenon. Qualitative study
allows the researcher to strip away (his)her own perspectives and those of the scholarly
community, to enter into a phenomenon from the perspective of those who live it.
Exposed to all the richness and complexity of these experiences, this mode of inquiry
directs the researcher to that which is relevant and compelling. In this case, it was the
affective dimensions of advertising response and how children draw upon them that began
to push investigation in a new and unanticipated direction. The initial study helped to
identify global patterns that might have otherwise escaped notice. Evidence emerged that
children were evaluating ads primarily in terms of their entertainment value rather than
as information sources about what a brand contains or how it works. Relatively weak
links between their reactions to ads and products were observed, calling into question
both theory and intuition. Findings from the initial study suggest that the link between
the brand as portrayed in advertising and its reality in the everyday world, may be forged
not on the basis of specific expectations about performance but on a much more diffuse
basis, drawing extensively on the ads affective appeal. However, very preliminary
evidence indicates that this pattern may differ across age groups. While older children
tended to draw extensively on executional elements in framing their response, the
younger children seemed to focus to a greater degree on the product and the validity of
the advertisements portrayal. Though these issues have not been addressed within a trial


147
ads influence was a function of the specific stimulus shown, evidence of its influence
was apparent across all stimulus pairs. Among the older children, exposure to an ad/trial
sequence led to different brand perceptions and attitudes than trial alone, irrespective of
the specific commercial execution. That ads may either enhance or detract from a childs
brand experience may simply reflect the reality of advertising. Not all professionally
developed commercials are equally effective, nor are the specific links between an ad and
the brand it represents uniformly apparent. From a more theoretical perspective,
research suggesting that familiarity leads to liking may also account for differences
observed within the stimulus set (Hawkins and Hoch 1992). More important, however,
is the basic finding that advertising appears to have the capacity to frame the
consumption experience of older children, even in circumstances where the experiential
evidence is clear or unambiguous. These findings suggest that it is the older, rather than
the younger child, who allows the ad to shape his(her) interpretations and evaluations of
the brand experience. While seemingly counterintuitive, both the results of the
preliminary study and recent research indicating that "cued" processors (6 to 10-year-
olds) do not necessarily draw on their cognitive defenses in specific viewing contexts
support this response pattern (Brucks et al. 1988; Roedder 1981). While children in this
age group certainly have the capacity to draw on their defenses, consider whether an ad
is credible or not, or think skeptically about the advertisers motives, they may not be
inclined to do so without an external reminder. The older childs sensitivity to multiple
levels of meaning and metaphorical capacity evident in the preliminary study also seem
to suggest that this age group may be more open to its suggestion in a trial context.



PAGE 1

.,'6f &2168037,21 +2: &+,/'5(1 3(5&(,9( 7+( 5(/$7,216+,36 %(7:((1 $'9(57,6(0(176 $1' 352'8&76 %\ (/,=$%(7+ 6 0225(6+$< $ ',66(57$7,21 35(6(17(' 72 7+( *5$'8$7( 6&+22/ 2) 7+( 81,9(56,7< 2) )/25,'$ ,1 3$57,$/ )8/),//0(17 2) 7+( 5(48,5(0(176 )25 7+( '(*5(( 2) '2&725 2) 3+,/2623+< 81,9(56,7< 2) )/25,'$

PAGE 2

7R 1HLO DQG /DXUD -DQH

PAGE 3

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

PAGE 4

7$%/( 2) &217(176 SDJH $&.12:/('*(0(176 LLL $%675$&7 YL &+$37(56 ,1752'8&7,21 7KH 3ULPDF\ RI 3URGXFW &RQVXPSWLRQ 7KH 1DWXUH RI &KLOGUHQfV $GYHUWLVLQJ 5HVHDUFK 3XUSRVH DQG 'LUHFWLRQ 5(9,(: 2) /,7(5$785( 7KH 3HUYDVLYH ,QIOXHQFH RI $GYHUWLVLQJ 3URGXFW &RQVXPSWLRQ $ 3ULPDU\ 6RXUFH RI 0HDQLQJ DQG ,QIOXHQFH 7UDQVODWLQJ 3URGXFW 0HDQLQJ )URP WKH 0XQGDQH WR WKH 0DJLFDO $ &DOO IRU D 0HDQLQJ%DVHG 3HUVSHFWLYH 7KH ,QWHUDFWLRQ RI $GYHUWLVLQJ DQG 3URGXFW 7ULDO 3UHYDLOLQJ 3DUDGLJPV DQG &KLOGUHQfV 5HDOLW\ 678'< 5HVHDUFK $SSURDFK 0HWKRG 5HVHDUFK )LQGLQJV 'LVFXVVLRQ &RQFOXVLRQV ,9

PAGE 5

678'< &RQFHSWXDO %DFNJURXQG DQG +\SRWKHVHV 0HWKRG $QDO\VLV DQG 5HVXOWV 'LVFXVVLRQ 1RWHV 678'< 7KH )XQFWLRQV RI 4XDOLWDWLYH ,QTXLU\ 0HWKRGRORJLFDO 3OXUDOLVP 2YHUYLHZ 0HWKRG 5HVHDUFK )LQGLQJV 'LVFXVVLRQ &21&/86,216 $1' )8785( ',5(&7,216 $33(1',&(6 $ 35(/,0,1$5< 678'< ,17(59,(: 6&+('8/( % 6$03/( (;3(5,0(17$/ 48(67,211$,5( & $' 7(;76 ,17(59,(: 6&+('8/( )25 678'< 5()(5(1&(6 %,2*5$3+,&$/ 6.(7&+ Y

PAGE 6

$EVWUDFW RI 'LVVHUWDWLRQ 3UHVHQWHG WR WKH *UDGXDWH 6FKRRO RI WKH 8QLYHUVLW\ RI )ORULGD LQ 3DUWLDO )XOILOOPHQW RI WKH 5HTXLUHPHQWV IRU WKH 'HJUHH RI 'RFWRU RI 3KLORVRSK\ .,'6f &2168037,21 +2: &+,/'5(1 3(5&(,9( 7+( 5(/$7,216+,36 %(7:((1 $'9(57,6(0(176 $1' 352'8&76 %\ (OL]DEHWK 6 0RRUH6KD\ $SULO &KDLUSHUVRQ 5LFKDUG /XW] 0DMRU 'HSDUWPHQW 0DUNHWLQJ 0XOWLSOH SHUVSHFWLYHV DQG PHWKRGV DUH XVHG WR LQYHVWLJDWH WKH UHODWLRQVKLSV FKLOGUHQ DJHV \HDUVf SHUFHLYH EHWZHHQ DGYHUWLVHPHQWV DQG WKHLU FRQVXPSWLRQ H[SHULHQFHV :KLOH DGYHUWLVLQJfV HIIHFWV RQ FKLOGUHQ KDYH EHHQ VWXGLHG H[WHQVLYHO\ UDUHO\ KDYH UHVHDUFKHUV FRQVLGHUHG WKH EURDGHU FRQWH[W LQ ZKLFK SURGXFWV DUH DOVR SXUFKDVHG DQG FRQVXPHG 3URGXFWV DQG WKHLU XVH DUH D IRFDO SRLQW RI FRQVXPHU EHKDYLRU DQG WKH PRVW UHDGLO\ DYDLODEOH VRXUFH RI PDUNHWSODFH LQIRUPDWLRQ WR \RXQJ FRQVXPHUV &RPELQLQJ ERWK H[SHULPHQWDWLRQ DQG GHSWK LQWHUYLHZV WKLV UHVHDUFK H[DPLQHV ZKHWKHU DGYHUWLVLQJ LQIOXHQFHV FKLOGUHQfV LQWHUSUHWDWLRQV RI WKHLU SURGXFW H[SHULHQFHV 7KH K\EULG UHVHDUFK GHVLJQ LQFRUSRUDWHV WKH SUHFLVLRQ DQG ULJRU RI D FDXVDO DQDO\VLV DV ZHOO DV WKH ULFK LQVLJKWV RI LQWHUSUHWLYH DSSURDFKHV 7KUHH VWXGLHV ZHUH FRQGXFWHG D SUHOLPLQDU\ SKHQRPHQRORJLFDO LQYHVWLJDWLRQ DQ H[SHULPHQWDO VWXG\ RI WKH LQWHUDFWLRQ EHWZHHQ YL

PAGE 7

DGYHUWLVLQJ DQG SURGXFW WULDO DQG DQ LQGHSWK TXDOLWDWLYH LQYHVWLJDWLRQ WKDW UHSOLFDWHV WKH EDVLF H[SHULPHQWDO IUDPHZRUN 7KH H[SHULPHQW H[DPLQHV WKH UHODWLRQVKLSV DPRQJ FKLOGUHQfV DIIHFWLYH UHDFWLRQV WR DGV EUDQG SHUFHSWLRQV DQG DWWLWXGHV ZLWKLQ D FRQVXPSWLRQ FRQWH[W 7KH TXDOLWDWLYH VWXGLHV IRFXV RQ WKH DGYHUWLVLQJFRQVXPSWLRQ UHODWLRQVKLS IURP WKH FKLOGfV SHUVSHFWLYH 'UDZLQJ IURP JURXQGHG WKHRU\ WKLV UHVHDUFK UHIOHFWV WKH YLHZ WKDW XQGHUVWDQGLQJ RI KXPDQ SKHQRPHQD PXVW EH JURXQGHG LQ WKH UHDOLW\ RI HYHQWV DQG VLWXDWLRQV DV WKH\ DUH VXEMHFWLYHO\ H[SHULHQFHG 7KH SUHOLPLQDU\ VWXG\ UHYHDOHG WKDW FKLOGUHQ IRFXV H[WHQVLYHO\ RQ WKH HQWHUWDLQPHQW YDOXH RI FRPPHUFLDO PHVVDJHV VRPHWLPHV DW WKH H[SHQVH RI WKH EUDQG DSSHDO 7KH FHQWUDOLW\ RI H[HFXWLRQDO GLPHQVLRQV LQ FKLOGUHQfV LQWHUSUHWDWLRQV RI DGYHUWLVLQJ ZDV PRVW HYLGHQW DPRQJ WKH ROGHU DJH JURXS WR \HDU ROGVf 7KH H[SHULPHQWDO UHVXOWV ZHUH FRQVLVWHQW ZLWK HPHUJHQW SDWWHUQV LQGLFDWLQJ WKDW DGYHUWLVLQJ GRHV KDYH WKH FDSDFLW\ WR IUDPH D FKLOGfV FRQVXPSWLRQ H[SHULHQFH WKRXJK DJHUHODWHG GLIIHUHQFHV ZHUH REVHUYHG ,W ZDV WKH ROGHU FKLOGUHQ ZKR DOORZHG WKHLU DIIHFWLYH UHDFWLRQV WR DGYHUWLVHPHQWV WR FRORU WKHLU SHUFHSWLRQV RI XVDJH H[SHULHQFH 5HLQIRUFLQJ WKH ILQGLQJV RI WKH ILUVW WZR VWXGLHV WKH LQGHSWK TXDOLWDWLYH VWXG\ UHYHDOHG WZR GLVWLQFW SHUVSHFWLYHV RQ DGYHUWLVLQJFRQVXPSWLRQ UHODWLRQV
PAGE 8

&+$37(5 ,1752'8&7,21 $GYHUWLVLQJ LV D SHUYDVLYH IDFWRU LQ WKH OLYHV RI PRVW $PHULFDQ FKLOGUHQ :LWKLQ WKH ODVW GHFDGH PDQXIDFWXUHUV KDYH GUDPDWLFDOO\ VWHSSHG XS WKHLU HIIRUWV WR UHDFK FKLOGUHQ WKURXJK QHZ DGYHUWLVLQJ PHGLD VRSKLVWLFDWHG SURGXFWLRQ WHFKQLTXHV DQG FUHDWLYH DSSHDOV 7HOHYLVLRQ FRPPHUFLDOV PRYLHV YLGHR JDPHV DQG VSHFLDOW\ PDJD]LQHV DOO FDUU\ D YDVW DQG H[FLWLQJ DUUD\ RI SHUVXDVLYH PHVVDJHV WDUJHWHG DW D \RXQJ DXGLHQFH 3HUHLUD f 7HOHYLVLRQ LV D SDUWLFXODUO\ DFFHVVLEOH DQG HIIHFWLYH PHGLXP IRU UHDFKLQJ FKLOGUHQ )RU PDQ\ WLPH VSHQW LQ IURQW RI WKH WHOHYLVLRQ PD\ HTXDO RU HYHQ H[FHHG WKH QXPEHU RI KRXUV VSHQW LQ VFKRRO HDFK ZHHN 5HFHQW HVWLPDWHV VXJJHVW WKDW FKLOGUHQ EHWZHHQ WKH DJHV RI DQG ZDWFK DERXW KRXUV RI WHOHYLVLRQ SHU ZHHN DQG DUH H[SRVHG WR DV PDQ\ DV FRPPHUFLDOV LQ D VLQJOH \HDU 5DMX DQG /RQLDO :HLVVNRII f &RQFHUQV DERXW FKLOGUHQfV DELOLW\ WR IXOO\ FRPSUHKHQG DQG HYDOXDWH DGYHUWLVHG PHVVDJHV KDV VWLPXODWHG VXEVWDQWLDO UHVHDUFK DQG KHDWHG GHEDWH DPRQJ VFKRODUV DQG SUDFWLWLRQHUV VLQFH WKH HDUO\ V 7KH FRQWURYHUV\ VXUURXQGLQJ FKLOGUHQfV UHVSRQVHV WR DGYHUWLVLQJ KDV DEVRUEHG WKH DWWHQWLRQ RI UHVHDUFKHUV IURP D QXPEHU RI DFDGHPLF GLVFLSOLQHV DQG SROLWLFDO RULHQWDWLRQV &ULWLFV DVVHUW WKDW DGYHUWLVLQJ WR FKLOGUHQ LV LQKHUHQWO\ XQIDLU EHFDXVH FKLOGUHQ ODFN WKH FRJQLWLYH VNLOOV DQG OLIH H[SHULHQFHV QHHGHG WR UHVLVW SHUVXDVLYH SURGXFW FODLPV 6XSSRUWHUV DUJXH RQ WKH RWKHU KDQG WKDW FKLOGUHQfV YXOQHUDELOLWLHV DUH RIWHQ RYHUVWDWHG DQG WKDW E\ SURYLGLQJ SURGXFW LQIRUPDWLRQ DGYHUWLVLQJ KHOSV ERWK SDUHQWV DQG FKLOGUHQ PDNH PRUH LQIRUPHG FKRLFHV

PAGE 9

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f $ ELEOLRJUDSK\ SXEOLVKHG RYHU D GHFDGH DJR OLVWHG DSSUR[LPDWHO\ HQWULHV RI ZKLFK RYHU ZHUH UHVHDUFK VWXGLHV DVVHVVLQJ WKH LPSDFW RI DGYHUWLVLQJ RQ FKLOGUHQfV FRQVXPHU DFWLYLWLHV 0HULQJRII f 7KRXJK UHVHDUFK DFWLYLW\ VORZHG GXULQJ WKH GHUHJXODWRU\ HUD RI WKH V D VPDOO JURXS RI UHVHDUFKHUV KDV FRQWLQXHG WR UDLVH LPSRUWDQW WKHRUHWLFDO DQG PHWKRGRORJLFDO LVVXHV 2I IXQGDPHQWDO LQWHUHVW WR ERWK UHVHDUFKHUV DQG SUDFWLWLRQHUV DOLNH LV XQGHUVWDQGLQJ WKH VSHFLILF QDWXUH RI DGYHUWLVLQJfV LQIOXHQFH RQ FKLOGUHQfV DWWLWXGHV DQG EHKDYLRU 7KH UHODWLYH HIIHFWLYHQHVV RI VSHFLILF WHFKQLTXHV RU VWUDWHJLHV XVHG LQ DGYHUWLVHPHQWV WDUJHWHG DW FKLOGUHQ KDV EHHQ H[DPLQHG DFURVV D YDULHW\ RI FRQWH[WV DQG ZLWK FKLOGUHQ RI YDU\LQJ GHYHORSPHQWDO VNLOOV RU DELOLWLHV 7KLV LV D UHVHDUFK DUHD WKDW VXEVXPHV D ZLGH YDULHW\ RI VXEVWDQWLYH LVVXHV DQG PHWKRGRORJLFDO FRQFHUQV 4XHVWLRQV VXFK DV f GR FKLOGUHQ GHVLUH WKH SURGXFWV WKH\ VHH DGYHUWLVHG" f DUH WKH\ PRWLYDWHG WR DVN WKHLU SDUHQWV IRU WKHP" DQG f DUH WKH\ PRUH OLNHO\ WR FKRRVH SURGXFWV WKH\ KDYH VHHQ DGYHUWLVHG WKDQ RWKHUV" KDYH JXLGHG D QXPEHU RI UHVHDUFK VWXGLHV RYHU WKH ODVW

PAGE 10

\HDUV &RPPRQ WR WKHVH LQYHVWLJDWLRQV LV WKH IRFXV RQ DGYHUWLVLQJfV UROH LQ WKH SURGXFW DFTXLVLWLRQ SURFHVV ,Q JHQHUDO WHUPV WKHUH FDQ EH OLWWOH GRXEW WKDW FKLOGUHQ DWWHQG WR DGV WU\ WR XQGHUVWDQG WKHP DQG DUH RIWHQ DWWUDFWHG WR WKH SURGXFWV WKH\ VHH GHSLFWHG 1RW VXUSULVLQJO\ FOHDU DJHUHODWHG SDWWHUQV KDYH EHHQ GHWHFWHG LQ WHUPV RI FKLOGUHQfV EHOLHI LQ RU DFFHSWDQFH RI DGYHUWLVHG FODLPV 5HODWLYH WR WKHLU \RXQJHU FRXQWHUSDUWV ROGHU FKLOGUHQ f WHQG WR EH PXFK PRUH VNHSWLFDO RI DGYHUWLVLQJ %HYHU 6PLWK %HQJHQ DQG -RKQVRQ 5REHUWVRQ DQG 5RVVLWHU 5RVVLWHU :DUG :DFNPDQ DQG :DUWHOOD f 7KH\ UHDGLO\ DFNQRZOHGJH WKDW DGYHUWLVLQJ GRHV QRW DOZD\V WHOO WKH WUXWK DQG DUH PRUH OLNHO\ WR H[SUHVV QHJDWLYH IHHOLQJV WRZDUG WKH LQVWLWXWLRQ RI DGYHUWLVLQJ %ODWW 6SHQFHU DQG :DUG %HYHU HW DO 5REHUWVRQ DQG 5RVVLWHU f +RZHYHU WKHVH NLQGV RI JHQHUDOL]HG LQGLFDWRUV PD\ RYHUVWDWH FKLOGUHQfV DFWXDO UHMHFWLRQ RI VSHFLILF DGYHUWLVHPHQWV DQG SHUVXDVLYH FODLPV $WNLQ *RP DQG *ROGEHUJ 5RVVLWHU f (YHQ D EURDG NQRZOHGJH EDVH DQG D JHQHUDOL]HG VNHSWLFLVP GR QRW LQVXUH LPPXQLW\ IURP ZHOOFUDIWHG DGYHUWLVHPHQWV 7KRXJK DV DGXOWV ZH UHFRJQL]H DGYHUWLVLQJfV SHUVXDVLYH FKDUDFWHU ZH DUH VWLOO GUDZQ WR FHUWDLQ SURGXFWV WKURXJK FRPPHUFLDO PHVVDJHV WKDW WRXFK RXU KHDUWV DQG PLQGV &KLOGUHQ DUH QR GLIIHUHQW ZKHQ DVNHG WKH\ PD\ H[SUHVV D PRUH DGXOWOLNH YLHZ RI DGYHUWLVLQJ WKDW EHDUV OLWWOH UHODWLRQVKLS WR DGYHUWLVLQJfV DFWXDO LQIOXHQFH RQ WKHLU UHVSRQVHV WR VSHFLILF SURGXFWV RU FRPPHUFLDO PHVVDJHV 7KRXJK \RXQJHU FKLOGUHQ WHQG WR EH DIIHFWHG PRUH VWURQJO\ E\ DGYHUWLVLQJ ROGHU FKLOGUHQ ZKR SUHVXPDEO\ KDYH WKH DELOLW\ WR GLVFRXQW DQ DGYHUWLVHUfV PHVVDJH PD\ QRW GR VR VSRQWDQHRXVO\ %UXFNV $UPVWURQJ DQG *ROGEHUJ f

PAGE 11

:KDW HPHUJHV IURP WKH UHVHDUFK OLWHUDWXUH LV D YLHZ RI FKLOGUHQ DQG WKHLU UHVSRQVHV WR DGYHUWLVLQJ WKDW LV VHHPLQJO\ FRQWUDGLFWRU\ 7KRXJK LW LV FOHDU WKDW E\ WKH WLPH FKLOGUHQ UHDFK WKH DJH RI RU WKH\ DUH ZHOO DZDUH RI DGYHUWLVLQJf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f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

PAGE 12

GHYHORS HYDOXDWLYH FULWHULD EDVHG RQ WKHLU SURGXFW H[SHULHQFHV DQG OHDUQ WR FRPSDUH SURGXFWV WR RQH DQRWKHU DQG WR WKH DGYHUWLVHPHQWV WKDW SURPRWH WKHP :KLOH WKHUH LV FRPSHOOLQJ HYLGHQFH WKDW D ZHOOFUDIWHG DGYHUWLVHPHQW FDQ SHUVXDGH FKLOGUHQ WKDW D SURGXFW LV GHVLUDEOH ZH NQRZ OLWWOH DERXW KRZ RU ZKHQ WKHVH SHUFHSWLRQV DUH DOWHUHG RQFH WKH SURGXFW OHDYHV WKH UHWDLOHUfV VKHOI *LYHQ WKDW D JRDO RI DGYHUWLVLQJ LV WR VWLPXODWH QRW RQO\ DQ LQLWLDO SXUFKDVH EXW DOVR UHSHDW SXUFKDVH EHKDYLRU WKH QHHG WR XQGHUVWDQG WKH LPSDFW RI FRQVXPSWLRQ RQ FKLOGUHQfV SURGXFW SHUFHSWLRQV DQG DWWLWXGHV VHHPV REYLRXV )URP WKH FKLOGfV SHUVSHFWLYH LW LV WKH EHQHILWV SURYLGHG E\ D SURGXFW WKDW DUH IRFDO 7KH SOHDVXUH GLVDSSRLQWPHQW XQGHUVWDQGLQJ DQG FRQIXVLRQ WKDW UHVXOW IURP SURGXFW H[SHULHQFHV DUH WKH EDVLV IRU PRUH HQGXULQJ EHOLHIV DQG DWWLWXGHV DERXW WKH PDUNHWSODFH DQG LWV RSHUDWLRQ +RZ FKLOGUHQ SHUFHLYH DQG HYDOXDWH WKH UHODWLRQVKLSV EHWZHHQ DGYHUWLVLQJ FODLPV DQG WKHLU FRQVXPSWLRQ H[SHULHQFHV LV DQ LVVXH WKDW WRXFKHV RQ WKH LQWHUHVWV RI PDUNHWHUV DV ZHOO DV SXEOLF SROLF\PDNHUV &RQFHUQV DERXW DGYHUWLVLQJfV FDSDFLW\ WR IRVWHU XQUHDOLVWLF H[SHFWDWLRQV RI SURGXFWV KDV ORQJ EHHQ DQ LVVXH DPRQJ FRQVXPHU SURWHFWLRQLVWV DV ZHOO DV WKH LQGXVWU\ UHSUHVHQWDWLYHV FKDUJHG ZLWK UHJXODWLQJ FKLOGUHQfV DGYHUWLVLQJ %RWK WKH &KLOGUHQfV $GYHUWLVLQJ 8QLW DQG WKH 1DWLRQDO $VVRFLDWLRQ RI %URDGFDVWHUV LQFOXGH VSHFLILF SURYLVLRQV LQ WKHLU JXLGHOLQHV GLVFRXUDJLQJ WKH XVH RI SRUWUD\DOV WKDW PLJKW H[SOLFLWO\ RU LPSOLFLWO\ IRVWHU XQUHDVRQDEOH H[SHFWDWLRQV RI SURGXFW TXDOLW\ RU SHUIRUPDQFH &KLOGUHQfV $GYHUWLVLQJ 5HYLHZ 8QLW 1DWLRQDO $VVRFLDWLRQ RI %URDGFDVWHUV f &OHDUO\ WKHVH FRGHV DUH EDVHG RQ WKH DVVXPSWLRQ WKDW DW OHDVW \RXQJ FKLOGUHQ KDYH GLIILFXOW\ UHFRJQL]LQJ DQG GLVFRXQWLQJ H[DJJHUDWLRQ LQ WKH FRQWH[W RI SHUVXDVLYH PHVVDJHV 7R ZKDW

PAGE 13

H[WHQW DGYHUWLVLQJ DFWXDOO\ HQJHQGHUV H[DJJHUDWHG H[SHFWDWLRQV WKDW DUH VXEVHTXHQWO\ GLVDSSRLQWHG LV XQNQRZQ 1HLWKHU KDYH UHVHDUFKHUV LQYHVWLJDWHG VLWXDWLRQV ZKHUH FKLOGUHQfV SURGXFW H[SHULHQFHV DFWXDOO\ H[FHHG WKHLU H[SHFWDWLRQV 7KRXJK WKH G\QDPLFV RI WKH DGYHUWLVLQJFRQVXPSWLRQ UHODWLRQVKLS KDYH QRW EHHQ H[DPLQHG HPSLULFDOO\ UHVHDUFKHUV QHYHUWKHOHVV KDYH DVVXPHG WKDW WKLV UHODWLRQVKLS KDV D VLJQLILFDQW LPSDFW RQ FKLOGUHQfV SHUFHSWLRQV DQG UHVSRQVLYHQHVV WR SHUVXDVLYH DWWHPSWV )RU H[DPSOH LW KDV EHHQ VXJJHVWHG WKDW XQWLO FKLOGUHQ DFWXDOO\ H[SHULHQFH GLVFUHSDQFLHV EHWZHHQ SURGXFWV DV DGYHUWLVHG DQG DV FRQVXPHG WKH\ DUH XQDEOH WR IXOO\ FRPSUHKHQG DGYHUWLVLQJfV SHUVXDVLYH LQWHQW 5REHUWVRQ DQG 5RVVLWHU f ,QFUHDVHG GLVWUXVW RU VNHSWLFLVP RI DGYHUWLVLQJ KDV DOVR EHHQ OLQNHG WR FKLOGUHQfV QHJDWLYH H[SHULHQFHV ZLWK KHDYLO\ SURPRWHG SURGXFWV :DUG f &ULWLFV RI DGYHUWLVLQJ KDYH VXJJHVWHG WKDW FRPPHUFLDOV PD\ SUHVHQW LQIRUPDWLRQ WKDW GLIIHUV IURP WKH FKLOGfV DFWXDO H[SHULHQFHV ZLWK WKRVH SURGXFWV FDXVLQJ FRQIXVLRQ DQG SRWHQWLDOO\ XQGHUPLQLQJ KLVKHUf WUXVW LQ H[WHUQDO VRXUFHV RI LQIRUPDWLRQ HJ )HOGPDQ DQG :ROI f &ROOHFWLYHO\ WKHVH DUJXPHQWV VXJJHVW WKDW KRZ FKLOGUHQ LQWHUSUHW DQG HYDOXDWH WKH UHODWLRQVKLS EHWZHHQ DGYHUWLVLQJ DQG WKHLU SURGXFW H[SHULHQFHV LV LPSRUWDQW QRW RQO\ LQ WKH FRQWH[W RI D VLQJOH SXUFKDVH GHFLVLRQ EXW DOVR LQ D PXFK ODUJHU RU ORQJWHUP VHQVH &KLOGUHQfV JHQHUDO DWWLWXGHV DERXW DGYHUWLVLQJ DV ZHOO DV WKHLU SHUFHSWLRQV RI KRZ WKH PDUNHWSODFH IXQFWLRQV PD\ EH LQIOXHQFHG E\ WKH PDQ\ H[SHULHQFHV WKH\ KDYH KDG ERWK JRRG DQG EDG ZLWK KHDYLO\ DGYHUWLVHG SURGXFWV :LWKLQ WKH UHVHDUFK OLWHUDWXUH RQ DGXOW FRQVXPHU EHKDYLRU WKHUH LV D JURZLQJ FRQVHQVXV WKDW DGYHUWLVLQJfV HIIHFWV DUH IHOW QRW RQO\ DW WKH WLPH RI H[SRVXUH EXW

PAGE 14

VXEVHTXHQWO\ ZKHQ WKH FRQVXPHU FRPHV LQWR FRQWDFW ZLWK D SURGXFW :KDW D FRQVXPHU GLVFRYHUV WKURXJK SURGXFW FRQVXPSWLRQ LV QRW D PHUH UHIOHFWLRQ RI REMHFWLYH UHDOLW\ EXW DQ LQWHUSUHWDWLRQ WKDW PD\ EH LQIOXHQFHG E\ WKH LPDJHV DQG ODQJXDJH RI DGYHUWLVLQJ 'HLJKWRQ +RFK DQG 'HLJKWRQ +RFK DQG +D 3XWR DQG :HOOV :HOOV f 0DQ\ HYHU\GD\ FRQVXPSWLRQ H[SHULHQFHV DUH RSHQ WR PXOWLSOH LQWHUSUHWDWLRQV )URP WKH FORWKHV ZH ZHDU WR WKH IRRG ZH HDW SURGXFW XVH LV ODGHQ ZLWK PHDQLQJ WKDW DFFUXHV IURP VRXUFHV EH\RQG LWV VWUXFWXUDO IHDWXUHV RU IRUP 0F&UDFNHQ f (YHQ WKH VLPSOH DFW RI HDWLQJ D ERZO RI FHUHDO PD\ EH VXEMHFW WR GLYHUVH LQWHUSUHWDWLRQV 7KH H[SHULHQFH LV VXIILFLHQWO\ EODQG DQG SRWHQWLDOO\ XQLQIRUPDWLYH HQRXJK WR VXSSRUW D YDULHW\ RI DVVHUWLRQV JOHDQHG IURP RWKHU VRXUFHV VXFK DV DGYHUWLVLQJ 'HLJKWRQ f ,Q WKHVH NLQGV RI VLWXDWLRQV DGYHUWLVHPHQWV KDYH WKH SRWHQWLDO WR DOWHU WKH H[SHULHQFH E\ VXJJHVWLQJ ZKDW IHDWXUHV VKRXOG EH QRWLFHG DQG UHPHPEHUHG 7KH\ PD\ SURYLGH FOXHV WKDW FRQVXPHUV XVH WR XQGHUVWDQG WKHLU IHHOLQJV DQG UHDFWLRQV $GYHUWLVHPHQWV VHHP WR KDYH WKH JUHDWHVW FDSDFLW\ WR UHDFK LQWR WKH SURGXFW H[SHULHQFH ZKHQ WKH\ DUH SODXVLEOH DQG DWWUDFWLYH \HW GLIILFXOW WR GLVSXWH GLUHFWO\ :HOOH[HFXWHG DGYHUWLVHPHQWV XVH VWULNLQJ LPDJHV DQG ODQJXDJH WR HQODUJH D SURGXFWfV PHDQLQJ DQG YDOXH $GYHUWLVLQJ FODLPV DUH IUHTXHQWO\ PRUH DIIHFWLYH WKDQ IDFWXDOO\ EDVHG 7KLV LV SDUWLFXODUO\ WUXH LQ WKH UHDOP RI FKLOGUHQfV DGYHUWLVLQJ ZKHUH IXQ H[FLWHPHQW DQG DGYHQWXUH DUH RYHUULGLQJ WKHPHV %DUFXV f +RZ WKHVH NLQGV RI DGYHUWLVHPHQWV PD\ LQIOXHQFH FKLOGUHQfV LQWHUSUHWDWLRQV RI WKHLU SURGXFW H[SHULHQFHV LV XQNQRZQ 5HVHDUFKHUV LQWHUHVWHG LQ WKH LQWHUDFWLRQ RI DGYHUWLVLQJ DQG HYLGHQFH KDYH FRQILQHG WKHLU HIIRUWV WR XQGHUVWDQGLQJ DGXOW UHVSRQVHV DQG SURFHVVLQJ VWUDWHJLHV

PAGE 15

7KH 1DWXUH RI &KLOGUHQfV $GYHUWLVLQJ 7R IXOO\ XQGHUVWDQG KRZ FKLOGUHQ SHUFHLYH WKH UHODWLRQVKLS EHWZHHQ WKH SURGXFWV WKH\ FRQVXPH DQG WKH FRPPHUFLDO PHVVDJHV WKDW SURPRWH WKHP UHTXLUHV DQ DSSUHFLDWLRQ IRU WKH VSHFLDO FKDUDFWHU RI FKLOGUHQfV DGYHUWLVLQJ DQG LWV SRWHQWLDO WR DIIHFW WKH LQWHUSUHWDWLRQ RI SURGXFW H[SHULHQFHV $GYHUWLVHPHQWV WDUJHWHG DW FKLOGUHQ DUH IUHTXHQWO\ DV HQFKDQWLQJ DQG FDSWLYDWLQJ DV WKH SURJUDPV LQ ZKLFK WKH\ DUH HPEHGGHG 7KHVH DGV XVH VSHFLDO HIIHFWV VRSKLVWLFDWHG DQLPDWLRQ DQG KXPRU WR HQWHUWDLQ DQG SLTXH FKLOGUHQfV LQWHUHVW &UHDWLYH YLVXDOV GHSLFW DFWLRQ DQG HYHQWV LQ D VWULNLQJ DQG PHPRUDEOH ZD\ &KLOGUHQfV DGV DUH UDUHO\ LQIRUPDWLRQDO LQ WKH VHQVH RI UDWLRQDO DSSHDOV EDVHG RQ SURGXFW IHDWXUHV %DUFXV f 2EMHFWLYH SURGXFW LQIRUPDWLRQ HPSKDVL]LQJ SURGXFW LQJUHGLHQWV RU PDWHULDOV HFRQRPLF YDOXH RU GHVLJQ TXDOLW\ LV UDUHO\ LQFOXGHG LQ WKHVH DGYHUWLVHPHQWV ,QVWHDG SHUVXDVLYH DSSHDOV WHQG WR IRFXV RQ WKH KHGRQLF DVSHFWV RI FRQVXPSWLRQ 0HUULPHQW DQG IXQ DUH WKH GRPLQDQW WKHPHV DFURVV SURGXFW FDWHJRULHV DQG VW\OLVWLF FRQYHQWLRQV )DQWDV\ LV RIWHQ XVHG WR FRQYH\ H[FLWHPHQW DQG DGYHQWXUH $QLPDWHG ILJXUHV LQWHUDFWLQJ ZLWK UHDO FKLOGUHQ P\VWHULRXV IOLJKWV RI IDQWDV\ P\WKLFDO NLQJGRPV RXWHUVSDFH EHLQJV DQG PDJLFDO WUDQVIRUPDWLRQV RI REMHFWV DUH ZLGHO\ XVHG WR SURPRWH FKLOGUHQfV SURGXFWV ,Q UHFHQW \HDUV SURJUDPOHQJWK FRPPHUFLDOV KRVWVHOOLQJ DQG RWKHU WHFKQLTXHV XVLQJ SURJUDP FKDUDFWHUV WR SURPRWH SURGXFWV KDYH HPHUJHG LQ UHVSRQVH WR D )HGHUDO &RPPXQLFDWLRQV &RPPLVVLRQ GHUHJXODWLRQ RUGHU 7KH SURPRWLRQ RI WR\V DQG RWKHU SURGXFWV DVVRFLDWHG ZLWK SURJUDP WKHPHV DQG FKDUDFWHUV KDV EHFRPH SDUW RI ZHOOFRRUGLQDWHG DQG YHU\ VXFFHVVIXO PDUNHWLQJ VWUDWHJLHV ,Q IRU H[DPSOH

PAGE 16

7HHQDJH 0XWDQW 1LQMD 7XUWOHV JHQHUDWHG DSSUR[LPDWHO\ PLOOLRQ LQ UHWDLO VDOHV IURP WKH DFWLRQ ILJXUHV DORQH 3HUHLUD f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fV DGYHUWLVHPHQWV KDYH EHFRPH PRUH HODERUDWH VRSKLVWLFDWHG DQG SHQHWUDWLQJ LQ UHFHQW \HDUV $GYHUWLVHUV UHO\ H[WHQVLYHO\ RQ WKH SRZHU RI FDSWLYDWLQJ YLVXDOV DQG VXEMHFWLYH FODLPV WR WRXFK WKH KHDUWV DQG PLQGV RI \RXQJ FRQVXPHUV ,W LV LQ WKH FRQWH[W RI WKHVH NLQGV RI SHUVXDVLYH PHVVDJHV WKDW FKLOGUHQ PXVW VRPHKRZ LQWHUSUHW DQG HYDOXDWH WKHLU SURGXFW H[SHULHQFHV +RZ FKLOGUHQ UHODWH ZKDW WKH\ VHH DQG KHDU LQ WKHVH DGYHUWLVHPHQWV WR WKHLU VXEVHTXHQW SURGXFW H[SHULHQFHV LV QRW ZHOOXQGHUVWRRG :LWKRXW WKH EHQHILW RI VXEVWDQWLDO PDUNHWSODFH H[SHULHQFH DQG PDWXUH SURFHVVLQJ VWUDWHJLHV WR JXLGH WKHP FKLOGUHQ VRPHKRZ PDQDJH WR PDNH VHQVH RI WKH HQWLFLQJ DUUD\ RI SHUVXDVLYH PHVVDJHV DQG SURGXFWV WKDW SHUPHDWH WKHLU HYHU\GD\ OLYHV 7R XQGHUVWDQG KRZ FKLOGUHQ LQWHUSUHW DQG HYDOXDWH WKHVH UHODWLRQVKLSV UHTXLUHV D VHQVLWLYLW\ QRW RQO\ WR FKLOGUHQfV FRJQLWLYH VNLOOV DQG OLPLWDWLRQV EXW DOVR WR WKHLU XQLTXH

PAGE 17

SHUVSHFWLYH RQ DGYHUWLVLQJ DQG LWV SODFH ZLWKLQ WKHLU OLYHV 5HVHDUFK VWUDWHJLHV DUH QHHGHG WKDW UHOLDEO\ DQG DFFXUDWHO\ UHIOHFW FKLOGUHQfV SDUWLFXODU QHHGV DQG SHUVSHFWLYHV ,Q PDQ\ VWXGLHV RI FKLOGUHQfV PHGLD UHFHSWLRQ DGXOW UHVSRQVHV RU H[SODQDWLRQV KDYH VHUYHG DV WKH H[SUHVVHG RU LPSOLHG VWDQGDUG IRU SHUIRUPDQFH $QGHUVRQ 'RUU f 5HVHDUFKHUV KDYH WDNHQ WKHLU RZQ LQWHUSUHWDWLRQV RI WHOHYLVHG FRQWHQW DV WKH VWDQGDUG DQG HYDOXDWHG FKLOGUHQfV UHVSRQVHV DJDLQVW WKDW DGXOW EDVHOLQH :LWK WKLV FULWHULRQ FKLOGUHQf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f VHDUFK RXW DQG PDQLSXODWH LQIRUPDWLRQ LQ RUGHU WR PDNH FKRLFHV DPRQJ JRRGV DQG VHUYLFHV f UHVSRQG WR DGYHUWLVLQJ DV D SDUWLVDQ VRXUFH DQG f WUHDW DGYHUWLVLQJ FODLPV DV SURYLVLRQDO K\SRWKHVHV WKDW DUH VXEVHTXHQWO\ XVHG WR HYDOXDWH SURGXFW H[SHULHQFHV (DFK RI WKHVH DVVXPSWLRQV KDV D GLUHFW EHDULQJ RQ WKH ZD\ WKH DGYHUWLVLQJFRQVXPSWLRQ UHODWLRQVKLS LV FRQFHSWXDOL]HG DQG PHDVXUHG 9LRODWLRQ RI WKHVH DVVXPSWLRQV PD\ VXJJHVW WKDW DOWHUQDWLYH DSSURDFKHV DUH QHHGHG WR XQGHUVWDQG FKLOGUHQfV XQLTXH DQG RIWHQ VXUSULVLQJ UHVSRQVHV 7KH PRGHO RI DGXOW SURFHVVLQJ WKDW KDV GHYHORSHG SURYLGHV ERWK

PAGE 18

LPSRUWDQW LQVLJKW LQWR WKH DGYHUWLVLQJFRQVXPSWLRQ UHODWLRQVKLS DQG D XVHIXO FRXQWHUSRLQW IURP ZKLFK WR XQGHUVWDQG FKLOGUHQf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f PRWLYHV FKLOGUHQ PD\ QRW VSRQWDQHRXVO\ DSSO\ ZKDW WKH\ NQRZ ZKLOH YLHZLQJ %UXFNV HW DO f :LWKRXW D UHPLQGHU WR FULWLFDOO\ HYDOXDWH WKH FRQWHQWV RI D PHVVDJH ZKLOH YLHZLQJ FKLOGUHQ WHQG WR IRFXV WKHLU HQHUJLHV RQ WKH SURGXFW DQG WKH FDSWLYDWLQJ ZD\ LW LV SRUWUD\HG 7KRXJK FKLOGUHQ EHFRPH LQFUHDVLQJO\ VNHSWLFDO RI DGYHUWLVLQJ GXULQJ PLGGOH FKLOGKRRG WKLV VNHSWLFLVP LV UHODWLYHO\ IUDJLOH 7KH\ PD\ H[SUHVV UDWKHU QHJDWLYH DWWLWXGHV DERXW 79 DGYHUWLVLQJ WKDW EHDU OLWWOH UHODWLRQVKLS WR DQ DGYHUWLVHPHQWfV DFWXDO LQIOXHQFH RQ WKHLU DWWLWXGHV RU SXUFKDVH LQFOLQDWLRQV 5RVVLWHU f 'LIILFXOWLHV PD\ DULVH EHFDXVH FKLOGUHQ GR QRW IXOO\ XQGHUVWDQG KRZ RU ZK\ DGYHUWLVLQJ ZRUNV )DPLOLDULW\ ZLWK WKH UDQJH RI LQIOXHQFH VWUDWHJLHV XVHG E\ DGYHUWLVHUV DOORZV DGXOWV WR WDNH D PRUH GHWDFKHG YLHZ RI ZKDW WKH\ VHH DQG KHDU &KLOGUHQ ODFN WKLV H[SHULHQFH DQG WKH FULWLFDO H\H LW HQJHQGHUV $V D

PAGE 19

UHVXOW WKH\ DUH PRUH HDVLO\ SHUVXDGHG E\ DGYHUWLVLQJ WHFKQLTXHV WKDW DUH UHDGLO\ GLVFRXQWHG E\ PRUH H[SHULHQFHG FRQVXPHUV :LWKRXW WKLV NQRZOHGJH WR JXLGH WKHP FKLOGUHQ PD\ ILQG LW PRUH GLIILFXOW WR GLIIHUHQWLDWH REYLRXVO\ WUXH DQG REYLRXVO\ IDOVH FODLPV IURP WKRVH RI D PRUH LQWHUPHGLDWH RU XQFHUWDLQ QDWXUH (PHUJLQJ IURP WKH UHVHDUFK OLWHUDWXUH LV D YLHZ RI WKH VFKRRO DJH FKLOG ZKR LV TXLWH FDSDEOH RI GLVFRXQWLQJ DQ DGYHUWLVHUfV PHVVDJH EXW PD\ QRW DOZD\V EH LQFOLQHG WR GR VR 7KRXJK WKLV PD\ EH WURXEOLQJ IURP D SROLF\ SHUVSHFWLYH LW LV QHLWKHU LOORJLFDO QRU SDUWLFXODUO\ VXUSULVLQJ $GYHUWLVHPHQWV RIIHU FKLOGUHQ DQ H[FLWLQJ DQG GD]]OLQJ DUUD\ RI SURGXFW DOWHUQDWLYHV :LWKRXW HFRQRPLF UHVSRQVLELOLW\ RU FRQFHUQ FKLOGUHQ DUH IUHH WR HQMR\ ZKDW WKH\ VHH EHIRUH WKHP )URP WKH FKLOGfV SHUVSHFWLYH HDFK QHZ WR\ FHUHDO RU VQDFN UHSUHVHQWV D IUHVK RSSRUWXQLW\ IRU SOHDVXUH RU DPXVHPHQW $GYHUWLVHUV WRXW WKHVH EHQHILWV ZLWK KXPRU DQG D VLQJXODU FKDUP :LWKRXW VSHFLILF LQVWUXFWLRQV RU UHPLQGHUV WR GLVFRXQW ZKDW WKH DGYHUWLVHU KDV WR VD\ FKLOGUHQ PD\ EH PRUH LQFOLQHG WR VLPSO\ VLW EDFN DQG HQMR\ WKH VSHFLDO HIIHFWV DQG IOLJKWV RI IDQWDV\ WKH\ VHH EHIRUH WKHP &RQFHUQV DERXW FKLOGUHQfV DELOLW\ DQG LQFOLQDWLRQ WR GLIIHUHQWLDWH DPRQJ DG FODLPV DQG GLVFRXQW WKHP DSSURSULDWHO\ DUH FULWLFDOO\ LPSRUWDQW LVVXHV LQ WHUPV RI FKLOGUHQfV DGYHUWLVLQJ UHVSRQVH &KLOGUHQfV JUHDWHU SURFOLYLW\ WR DFFHSW DGYHUWLVLQJ FODLPV PD\ KDYH LPSRUWDQW LPSOLFDWLRQV IRU KRZ FRQVXPSWLRQ H[SHULHQFHV DUH MXGJHG RU HYDOXDWHG :KDW PD\ EH UHJDUGHG DV PHUH VXSSRVLWLRQ E\ DQ DGXOW PD\ WDNH RQ WKH WUDSSLQJV RI IDFW WKURXJK WKH H\HV RI D \RXQJ DQG LQH[SHULHQFHG FRQVXPHU 8QGHU WKHVH FLUFXPVWDQFHV FRQVXPSWLRQ H[SHULHQFHV PD\ EH VKDSHG E\ DWWUDFWLYH \HW YDJXH SURPLVHV RI SHUIRUPDQFH 7KH NH\ WR XQGHUVWDQGLQJ FKLOGUHQfV UHVSRQVHV WR SURGXFWV DQG WKH

PAGE 20

DGYHUWLVHPHQWV WKDW SURPRWH WKHP UHVWV ZLWK WKH FKLOGUHQ WKHPVHOYHV 5DWKHU WKDQ PDSSLQJ WKHLU UHVSRQVHV RQWR DGXOW PRGHOV LW LV LPSRUWDQW WR ORRN DW WKHVH UHODWLRQVKLSV LQ WHUPV RI WKH VWUXFWXUH DQG XQLWV FKLOGUHQ SHUFHLYH 7KHUH LV PXFK WR EH OHDUQHG E\ DOORZLQJ FKLOGUHQ WR WHOO WKHLU VLGH RI WKH VWRU\ WKURXJK WKHLU RZQ ODQJXDJH DQG SRLQW RI YLHZ &OHDUO\ WKHUH LV D QHHG IRU UHVHDUFK LQWR WKH QDWXUH RI FKLOGUHQfV H[SHFWDWLRQV DQG KRZ WKH\ DUH EURXJKW LQWR SOD\ LQ WKH FRQWH[W RI FRQVXPSWLRQ H[SHULHQFHV 7R EH XVHIXO VXFK UHVHDUFK UHTXLUHV D VHQVLWLYLW\ WR WKH FKLOGf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fV DELOLW\ WR VHOHFW PDQLSXODWH DQG UHWULHYH LQIRUPDWLRQ FRQYH\HG WKURXJK DGYHUWLVLQJ HJ %UXFNV HW DO &RVWOH\ DQG %UXFNV 5RHGGHU 5RHGGHU 6WHPWKDO DQG &DOGHU :DUWHOOD HW DO f :LWKRXW DQ DSSUHFLDWLRQ IRU DQG VHQVLWLYLW\ WR WKHVH FRJQLWLYH PHFKDQLVPV RXU

PAGE 21

XQGHUVWDQGLQJ RI FKLOGUHQfV UHVSRQVHV ZRXOG FHUWDLQO\ EH OLPLWHG +RZHYHU FRJQLWLYH H[SODQDWLRQV DORQH DUH QRW DEOH WR FDSWXUH WKH UDQJH DQG FRPSOH[LW\ RI FKLOGUHQfV UHDFWLRQV WR DGYHUWLVHPHQWV DQG SURGXFWV 7KH EURDG SXUSRVH RI WKLV UHVHDUFK SURMHFW LV WR OHDUQ PRUH DERXW KRZ FKLOGUHQ SHUFHLYH WKH UHODWLRQVKLSV EHWZHHQ WKH DGYHUWLVHPHQWV WKH\ VHH DQG WKH SURGXFWV WKH\ FRQVXPH 7R XQGHUVWDQG IXOO\ KRZ DGYHUWLVLQJ DIIHFWV FKLOGUHQ UHTXLUHV JUHDWHU LQVLJKW LQWR KRZ WKH FRQVXPSWLRQ H[SHULHQFH LV DVVHVVHG DQG PDQDJHG &KLOGUHQfV DGYHUWLVLQJ UHVSRQVHV DUH HPEHGGHG ZLWKLQ D ODUJHU V\VWHP LQ ZKLFK SURGXFWV DUH DOVR SXUFKDVHG DQG FRQVXPHG ,W LV WKURXJK WULDO DQG H[SHULHQFH WKDW FKLOGUHQ KDYH WKH RSSRUWXQLW\ WR WHVW WKH YDOLGLW\ DQG UHOHYDQFH RI ZKDW DQ DGYHUWLVHU KDV VDLG 6WXG\LQJ FKLOGUHQfV UHDFWLRQV WR DGYHUWLVLQJ ZLWKLQ WKH FRQWH[W RI WKLV ODUJHU HPEHGGLQJ V\VWHP EULQJV WR OLJKW XQDQWLFLSDWHG IDFWRUV DQG UHODWLRQVKLSV &RQVXPHU UHVHDUFKHUV ZLWK ERWK WKHRUHWLFDO DQG VXEVWDQWLYH LQWHUHVWV KDYH VWUHVVHG WKH LPSRUWDQFH RI WU\LQJ WR LGHQWLI\ NH\ FRQWH[WXDO IDFWRUV DQG WKHLU RSHUDWLRQ ZLWKLQ ODUJHU HPEHGGLQJ V\VWHPV /XW] /\QFK f 1HHGHG DUH UHVHDUFK DSSURDFKHV WKDW KDYH WKH FDSDFLW\ WR DGGUHVV DGYHUWLVLQJ UHVSRQVH LVVXHV ZLWKLQ WKLV EURDGHU FRQWH[W 7R EHJLQ WR DGGUHVV WKHVH QHHGV WKLV UHVHDUFK SURMHFW LQFRUSRUDWHV ERWK H[SHULPHQWDO PHWKRGV DQG PRUH GLVFRYHU\RULHQWHG GHSWK LQWHUYLHZV WR XQGHUVWDQG WKH VXEVWDQWLYH LVVXHV WKDW GHILQH FKLOGUHQfV SHUFHSWLRQV RI WKH UHODWLRQVKLSV EHWZHHQ DGYHUWLVLQJ DQG WKHLU FRQVXPSWLRQ H[SHULHQFHV 2YHU WKH FRXUVH RI HLJKWHHQ PRQWKV DQG LQWHUYLHZV ZLWK DSSUR[LPDWHO\ FKLOGUHQ EHWZHHQ WKH DJHV RI DQG WKUHH VWXGLHV GHVLJQHG WR FRPSOHPHQW DQG HQULFK RQH DQRWKHU ZHUH FRQGXFWHG

PAGE 22

7KH ILUVW VWXG\ ZDV D TXDOLWDWLYH LQYHVWLJDWLRQ ZLWK ERWK VXEVWDQWLYH DQG PHWKRGRORJLFDO DLPV 7KLV SRUWLRQ RI WKH SURMHFW ZDV GHVLJQHG WR GHYHORS D SUHOLPLQDU\ XQGHUVWDQGLQJ RI KRZ FKLOGUHQ SHUFHLYH DQG HYDOXDWH DGSURGXFW LQWHUUHODWLRQVKLSV DQG WR DVVHVV WKH YLDELOLW\ RI DQ LQGXFWLYH DSSURDFK ZLWK HOHPHQWDU\ VFKRRO FKLOGUHQ 7KH GHSWK DQG EUHDGWK RI FKLOGUHQfV UHVSRQVHV TXLFNO\ SXW WR UHVW DQ\ GRXEWV DERXW FKLOGUHQfV DELOLW\ RU ZLOOLQJQHVV WR SDUWLFLSDWH LQ WKH UHVHDUFK LQ D PHDQLQJIXO ZD\ )LQGLQJV IURP WKH SUHOLPLQDU\ VWXG\ VHUYHG DV LQSXW WR WKH FRQFHSWXDO GHYHORSPHQW DQG GHVLJQ RI DQ H[SHULPHQWDO LQYHVWLJDWLRQ DV ZHOO DV D VRXUFH RI K\SRWKHVHV IRU VXEVHTXHQW TXDOLWDWLYH LQTXLU\ 7KH VHFRQG VWXG\ H[WHQGV FKLOGUHQfV DGYHUWLVLQJ UHVHDUFK E\ ORRNLQJ EH\RQG SUHSXUFKDVH DFWLYLWLHV WR SURGXFW XVH RU FRQVXPSWLRQ 8VLQJ DGYHUWLVHPHQWV VSHFLILFDOO\ LQWHQGHG IRU FKLOGUHQ DQG EURDGFDVW ZLWKLQ WKH FRQWH[W RI FKLOGUHQfV SURJUDPPLQJ WKH H[SHULPHQW H[DPLQHV WKH LQWHUDFWLRQ RI DGYHUWLVLQJ DQG HYLGHQFH $W D PLFURWKHRUHWLFDO OHYHO WKH H[SHULPHQW DGGUHVVHV ZKHWKHU DQG KRZ DGYHUWLVHPHQWV PD\ LQIOXHQFH FKLOGUHQfV FRJQLWLYH DQG DIIHFWLYH UHVSRQVHV LQ WKH FRQWH[W RI SURGXFW FRQVXPSWLRQ 7KH UHODWLRQVKLSV DPRQJ D QXPEHU RI YDULDEOHV SUHYLRXVO\ QHJOHFWHG LQ WKH FKLOGUHQf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

PAGE 23

VXUSULVHG WR ILQG RXW ZKDW RQH GRHV QRW DOUHDG\ H[SHFW SUHGLFW RU K\SRWKHVL]H 0DKUHU S f ,W LV SDUWLFXODUO\ ZHOO VXLWHG QRW RQO\ IRU DSSURDFKLQJ QHZ WRSLFV EXW WR JDLQ IUHVK VODQWV RQ SKHQRPHQD DERXW ZKLFK D JUHDW GHDO LV DOUHDG\ NQRZQ VXFK DV FKLOGUHQfV UHVSRQVHV WR DGYHUWLVLQJ 8WLOL]LQJ JURXQGHG WKHRU\ SHUVSHFWLYHV DQG DQDO\WLF VWUDWHJLHV WKH WKLUG VWXG\ UHSUHVHQWHG D UHWXUQ WR WKH ILHOG IRU D PRUH LQGHSWK TXDOLWDWLYH H[DPLQDWLRQ RI WKH LGHDV DQG K\SRWKHVHV WKDW KDG EHHQ VXJJHVWHG HDUOLHU 7KH WKLUG VWXG\ ZDV GHVLJQHG WR OHDUQ PRUH DERXW KRZ FKLOGUHQ WKLQN DERXW DGYHUWLVHPHQWV DQG SURGXFWV LQ WKH FRQWH[W RI WKHLU HYHU\GD\ OLYHV 'HSWK LQWHUYLHZV ZHUH XVHG WR OHDUQ DERXW FKLOGUHQf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f 7KRXJK LQWHUSUHWLYH PRGHV RI LQTXLU\ KDYH JDLQHG LQFUHDVHG DFFHSWDQFH DPRQJ FRQVXPHU UHVHDUFKHUV WKHVH DSSURDFKHV KDYH QRW EHHQ DSSOLHG WR FKLOGUHQfV UHVHDUFK LVVXHV :K\ WKLV LV WKH FDVH LV QRW HQWLUHO\ FOHDU 3HUKDSV LW LV GXH LQ SDUW WR WKH RIW FLWHG FRQFHUQ WKDW \RXQJ FKLOGUHQ GR QRW KDYH WKH DELOLW\ WR DQVZHU TXHVWLRQV DFFXUDWHO\

PAGE 24

EHFDXVH RI PHPRU\ DQG SHUFHSWXDO GHILFLWV
PAGE 25

5RMFHZLF] :DNVOHU f 'LVFRYHU\EDVHG UHVHDUFK PHWKRGV RIIHU WKH RSSRUWXQLW\ WR VWULS DZD\ DGXOWFHQWULF LQWHUSUHWDWLRQV RI FKLOGUHQfV FRQVXPHU DFWLYLWLHV 5DWKHU WKDQ WUDQVODWLQJ FKLOGUHQfV H[SHULHQFHV LQWR DGXOW FDWHJRULHV RU FRPPRQVHQVH YLHZV RI WKH ZRUOG WKLV DSSURDFK DWWHPSWV WR XQGHUVWDQG WKH FKLOGfV H[SHULHQFH DV LW LV 'LVFRYHU\RULHQWHG UHVHDUFK UHFRJQL]HV WKDW FKLOGUHQfV FRQVFLRXVQHVV GLIIHUV IURP DGXOWVf EXW YLHZV WKLV DV D SRVLWLYH SKHQRPHQRQ WR EH XQGHUVWRRG DQG UHVSHFWHG 7KH FKLOGfV UHDOP LV GHSLFWHG DV QDWXUDO HYHU\GD\ RU SKHQRPHQDO UDWKHU WKDQ VFLHQWLILF RU WKHRUHWLFDO 7KH TXDOLWDWLYH LQYHVWLJDWLRQ RIIHUV WKH RSSRUWXQLW\ WR YLHZ WKH DGYHUWLVLQJFRQVXPSWLRQ UHODWLRQVKLS WKURXJK WKH H\HV RI D FKLOG ,Q FRPELQDWLRQ ZLWK PRUH WUDGLWLRQDO H[SHULPHQWDO PHWKRGV D JUHDW GHDO FDQ EH OHDUQHG DERXW KRZ FKLOGUHQ HYDOXDWH ZKDW WKH\ FRQVXPH $ K\EULG UHVHDUFK GHVLJQ EULQJV WR EHDU WKH VWUHQJWKV RI PXOWLSOH DSSURDFKHV DQG SHUVSHFWLYHV /XW] f 7KH SRWHQWLDO FRQWULEXWLRQV RI VXFK D VWXG\ DUH ERWK VXEVWDQWLYH DQG PHWKRGRORJLFDO )URP D VXEVWDQWLYH SHUVSHFWLYH YHU\ OLWWOH LV NQRZQ DERXW SURGXFW XVH WKRXJK LW LV D FULWLFDO HOHPHQW RI WKH FRQVXPSWLRQ F\FOH 7KH LQYHVWLJDWLRQ LV GHVLJQHG WR SURYLGH VSHFLILF NQRZOHGJH DERXW KRZ FKLOGUHQ SHUFHLYH DQG HYDOXDWH WKH UHODWLRQVKLS EHWZHHQ WKH DGYHUWLVHPHQWV WKH\ VHH DQG WKH SURGXFWV WKH\ FRQVXPH 7KH ZD\V LQ ZKLFK DGYHUWLVHPHQWV PD\ SRWHQWLDOO\ DOWHU FKLOGUHQfV SURGXFW H[SHULHQFHV KDV LPSRUWDQW FRQVHTXHQFHV ERWK LQ DQ LPPHGLDWH VHQVH DQG LQ WHUPV RI DGYHUWLVLQJfV EURDGHU LPSDFW RQ FKLOGUHQ DQG WKHLU XQGHUVWDQGLQJ RI WKH PDUNHWSODFH 0HWKRGRORJLFDOO\ WKH LQYHVWLJDWLRQ UHSUHVHQWV RQH RI WKH ILUVW DWWHPSWV ZLWKLQ WKH FRQVXPHU OLWHUDWXUH WR DSSURDFK LVVXHV DIIHFWLQJ FKLOGUHQ IURP D SKHQRPHQRORJLFDO SHUVSHFWLYH 7KLV DSSURDFK RIIHUV WKH RSSRUWXQLW\ WR TXHVWLRQ DVVXPSWLRQV PDGH DERXW

PAGE 26

FKLOGUHQfV SHUFHSWLRQV RI WKH DGYHUWLVLQJFRQVXPSWLRQ UHODWLRQVKLS WKDW KDYH LPSOLFLWO\ JXLGHG SULRU WKLQNLQJ DQG DQDO\VLV %\ FRPELQLQJ H[SHULPHQWDO DQG SKHQRPHQRORJLFDO PHWKRGV ZLWKLQ D VLQJOH UHVHDUFK SURMHFW WKLV LQYHVWLJDWLRQ KDV WKH FDSDFLW\ WR FDSLWDOL]H RQ WKH VWUHQJWKV DQG PHULWV RI ERWK :KDW HPHUJHV LV D ULFKHU DQG PRUH GHWDLOHG XQGHUVWDQGLQJ RI D VLJQLILFDQW \HW OLWWOH XQGHUVWRRG IDFHW RI FKLOGUHQfV FRQVXPHU H[SHULHQFH

PAGE 27

&+$37(5 5(9,(: 2) /,7(5$785( )HZ FRQVXPHU LVVXHV LQ UHFHQW PHPRU\ KDYH VWLPXODWHG DV VSLULWHG DQG SURWUDFWHG D GLDORJXH DV WKH TXHVWLRQ RI KRZ DGYHUWLVLQJ DIIHFWV FKLOGUHQ (GXFDWRUV DFDGHPLF UHVHDUFKHUV UHJXODWRU\ DJHQFLHV SXEOLF SROLF\PDNHUV SXEOLF LQWHUHVW JURXSV EURDGFDVWHUV DQG DGYHUWLVHUV DQG WKHLU DG DJHQFLHV KDYH DOO FRQWULEXWHG WR WKH FRPSOH[ DQG RIWHQ ILHU\ GHEDWH DERXW WKH LPSDFW RI DGYHUWLVLQJ LQ FKLOGUHQfV OLYHV ,VVXHV RI VRFLDO DQG UHJXODWRU\ SROLF\ DUH DW WKH KHDUW RI WKLV FRQWURYHUV\ +XVWRQ :DWNLQV DQG .XQNHO f 7KRXJK YLUWXDOO\ DOO LQWHUHVWHG SDUWLHV DJUHH WKDW FKLOGUHQ FRQVWLWXWH D VSHFLDO DXGLHQFH ZLWK GLVWLQFW QHHGV DQG YXOQHUDELOLWLHV WKHUH LV VXEVWDQWLDO GLVDJUHHPHQW UHJDUGLQJ LVVXHV RI IDLUQHVV LQ DGYHUWLVLQJ WR FKLOGUHQ DQG LWV EURDGHU LPSDFW RQ WKH VRFLDOL]DWLRQ SURFHVV $UPVWURQJ DQG %UXFNV .LQVH\ .OLQH /LHEHUW DQG 6SUDINLQ f 'XULQJ WKH ODVW WZHQW\ \HDUV $PHULFDQV KDYH ZLWQHVVHG WKH ULVH DQG IDOO RI WKH )HGHUDO 7UDGH &RPPLVVLRQfV SURSRVDO WR EDQ FKLOGUHQfV WHOHYLVLRQ DGYHUWLVLQJ WKH DGYHQW RI SURJUDPOHQJWK FRPPHUFLDOV VXEVWDQWLDO IOXFWXDWLRQ LQ WKH QXPEHU RI FRPPHUFLDO PLQXWHV WKH )HGHUDO &RPPXQLFDWLRQV &RPPLVVLRQ DOORZV GXULQJ FKLOGUHQfV SURJUDPPLQJ DQG WKH ODWHVW LQQRYDWLRQ &KDQQHO 2QH &RQGU\ %HQFH DQG 6FKHLEH )HGHUDO 7UDGH &RPPLVVLRQ *UHHQEHUJ DQG %UDQG .XQNHO D E .XQNHO DQG :DWNLQV 0XHOOHU DQG :XOIHPH\HU f ,W LV ZLWKLQ WKLV VRFLDO DQG SROLWLFDO FRQWH[W WKDW UHVHDUFK TXHVWLRQV KDYH EHHQ IUDPHG PHWKRGV FKRVHQ DQG NQRZOHGJH

PAGE 28

DFFXPXODWHG 7KH QDWXUH DQG GHSWK RI RXU VFLHQWLILF LQVLJKW LQWR KRZ FKLOGUHQ UHVSRQG WR DGYHUWLVLQJ LV GHULYHG IURP WKH UHVHDUFK DJHQGD WKDW KDV EHHQ VKDSHG LQ VRPH PHDVXUH E\ WKLV EURDGHU VRFLDO FRQWH[W &RQFHUQV DERXW FKLOGUHQfV DELOLW\ WR FRPSUHKHQG DGYHUWLVLQJfV SHUVXDVLYH FKDUDFWHU HYDOXDWH VSHFLILF WHFKQLTXHV DQG VWUDWHJLHV DQG PDNH DSSURSULDWH SURGXFW FKRLFHV KDYH PRWLYDWHG WKH PDMRULW\ RI UHVHDUFK HIIRUWV VLQFH WKH HDUO\ V 7R DGGUHVV WKHVH LVVXHV GHYHORSPHQWDOVWDJH DQG LQIRUPDWLRQ SURFHVVLQJ PRGHOV KDYH EHHQ XWLOL]HG WR XQGHUVWDQG KRZ FKLOGUHQfV FRJQLWLYH VNLOOV LQ GHDOLQJ ZLWK DGYHUWLVHG LQIRUPDWLRQ HYROYH ZLWK DJH DQG DFFXPXODWHG H[SHULHQFH :LWKRXW TXHVWLRQ WKLV UHVHDUFK IRFXV LV ERWK LPSRUWDQW DQG QHFHVVDU\ RQ VRFLDO SROLF\ DV ZHOO DV HFRQRPLF JURXQGV +RZHYHU LW LV DOVR LPSRUWDQW WR UHFRJQL]H WKDW LW UHSUHVHQWV EXW D VLQJOH SHUVSHFWLYH )XQGDPHQWDO FRQFHUQV DERXW FKLOGUHQfV DELOLW\ WR FRSH ZLWK DGYHUWLVHG PHVVDJHV KDYH OHG WR D UDWKHU QDUURZO\ GHILQHG UHVHDUFK DJHQGD 5HVHDUFKHUV KDYH WHQGHG WR IRFXV RQ PDWWHUV RI SXEOLF SROLF\ WR WKH H[FOXVLRQ RI RWKHU LVVXHV DQG PRGHV RI WKLQNLQJ WKDW PD\ EH XVHIXO LQ IXUWKHULQJ RXU XQGHUVWDQGLQJ RI FKLOGUHQfV UHVSRQVLYHQHVV WR PDUNHWSODFH VWLPXOL 2WKHU SRWHQWLDOO\ LQWHUHVWLQJ TXHVWLRQV DERXW DGYHUWLVLQJ DQG LWV UROH ZLWKLQ FKLOGUHQfV OLYHV KDYH VLPSO\ QRW EHHQ SRVHG EHFDXVH WKH\ OLH RXWVLGH RXU WUDGLWLRQDO FRQVWUXDO RI WKH DLPV DQG PHWKRGV RI FKLOGUHQfV DGYHUWLVLQJ UHVHDUFK $W D YHU\ IXQGDPHQWDO OHYHO D UHVHDUFK DJHQGD LV D IXQFWLRQ RI WKH VRFLDO DQG SROLWLFDO FRQWH[W WKDW SURGXFHV LW $ =HLWJHLVW SUHYDLOV ZLWKLQ D UHVHDUFK FRPPXQLW\ WKDW WHQGV WR FRQVWUDLQ KRZ LVVXHV DUH FRQFHSWXDOL]HG DQG LQYHVWLJDWHG 7KLV LV SDUWLFXODUO\ WUXH LQ WKH FDVH RI

PAGE 29

FKLOGUHQfV DGYHUWLVLQJ ZKHUH DW LVVXH DUH GHHS FRQFHUQV DERXW IDLUQHVV DQG FXOWXUDO YDOXHV DV ZHOO DV DSSURSULDWH EXVLQHVV SUDFWLFH *XLGLQJ WKLV UHVHDUFK SURMHFW IURP LWV LQFHSWLRQ LV WKH QRWLRQ WKDW ZKLOH D JUHDW GHDO KDV EHHQ OHDUQHG DERXW FKLOGUHQfV DGYHUWLVLQJ UHVSRQVH RYHU WKH \HDUV WKH SUHYDLOLQJ SDUDGLJP LV OLPLWHG LQ LWV DELOLW\ WR FDSWXUH WKH IXOO UDQJH RI LVVXHV WKDW GHILQH DGYHUWLVLQJfV PHDQLQJ DQG SXUSRVH LQ FKLOGUHQfV OLYHV :LWKRXW GRXEW WUHPHQGRXV LQVLJKW LQWR WKH GHYHORSPHQW RI FKLOGUHQfV FRJQLWLYH VNLOOV DQG WKHLU GHSOR\PHQW GXULQJ DG SURFHVVLQJ KDV EHHQ JDLQHG +RZHYHU SUHYDLOLQJ PRGHV RI WKLQNLQJ KDYH WKH FDSDFLW\ WR FDSWXUH RQO\ WKH RXWOLQHV RI D PRUH FRPSOH[ DQG PXOWLKXHG SLFWXUH .XKQ f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fV PHDQLQJ LQ FKLOGUHQfV OLYHV :KDW DSSHDU WR EH EDVLF VXEVWDQWLYH TXHVWLRQV DERXW KRZ FKLOGUHQ PDNH VHQVH RI LQWHUSUHW DQG XVH DGV KDYH QRW EHHQ DVNHG EHFDXVH

PAGE 30

WKH\ OLH RXWVLGH WUDGLWLRQDO PRGHV RI WKLQNLQJ DQG FRPPXQLFDWLRQ DPRQJ UHVHDUFKHUV :LWK WKH FDYHDW ILUPO\ LQ PLQG WKDW D VLQJOH UHVHDUFK SURMHFW FDQ RQO\ EHJLQ WR GHPRQVWUDWH WKH YDOXH RI D EURDGHQHG FRQFHSWXDOL]DWLRQ WKLV LQYHVWLJDWLRQ IRFXVHV RQ SHUFHLYHG UHODWLRQVKLSV EHWZHHQ DGYHUWLVHPHQWV DQG SURGXFW FRQVXPSWLRQ 7KH DSSURDFK WDNHQ UHSUHVHQWV D GHSDUWXUH IURP WUDGLWLRQDO PRGHOV RQ WKUHH OHYHOV )LUVW LW ORRNV EH\RQG SUHSXUFKDVH LVVXHV ,W LV JURXQGHG XSRQ WKH VLPSOH DVVXPSWLRQ WKDW QHLWKHU WKH GHFLVLRQ SURFHVV QRU FKLOGUHQfV DWWHPSW WR FRQVWUXFW SURGXFW PHDQLQJ HQG DW WKH SRLQW RI SXUFKDVH &KLOGUHQfV SURGXFWUHODWHG WKRXJKWV DQG SHUFHSWLRQV GHULYH DV PXFK IURP WKHLU GLUHFW H[SHULHQFHV ZLWK FRQVXPSWLRQ REMHFWV DV IURP WKH DGYHUWLVHPHQWV GHVLJQHG WR SURPRWH WKHP 7R QHJOHFW WKLV YHU\ SRZHUIXO VRXUFH RI PDUNHWSODFH LQIRUPDWLRQ UHSUHVHQWV D WUHPHQGRXV RYHUVLJKW )URP D FKLOGfV SHUVSHFWLYH LW LV WKH SURGXFW DQG WKH IXQ H[FLWHPHQW RU GLVDSSRLQWPHQW LW RIIHUV WKDW XOWLPDWHO\ PDWWHUV 6HFRQG D PHDQLQJ EDVHG PRGHO RI DGYHUWLVLQJ LV XWLOL]HG WR JXLGH WKH UHVHDUFK SURFHVV 0F&UDFNHQ f 7KLV SHUVSHFWLYH H[SOLFLWO\ UHFRJQL]HV WKDW DGYHUWLVLQJ LV D UHIOHFWLRQ RI WKH FXOWXUH WKDW FUHDWHV LWV IRUP DQG FRQWHQW $Q DGYHUWLVHPHQW LV QRW D IL[HG RU QHXWUDO REMHFW EXW D NDOHLGRVFRSLF FXOWXUDO SURGXFW FRQWDLQLQJ GLIIHUHQW OD\HUV RI PHDQLQJ UDQJLQJ IURP WKH REYLRXV WR WKH FXOWXUDOO\ LQWHUSUHWHG :KHQ FKLOGUHQ UHVSRQG WR DGYHUWLVLQJ RU RWKHU W\SHV RI PDUNHWSODFH VWLPXOL WKH\ DUH UHVSRQGLQJ WR SURGXFWV RI D SDUWLFXODU HUD DQG VRFLDO FRQWH[W .OLQH :DWNLQV f 7KRXJKWV DQG IHHOLQJV DUH JHQHUDWHG DFFRUGLQJ WR WKHLU HPHUJLQJ XQGHUVWDQGLQJ RI FXOWXUDO FRQYHQWLRQV EHOLHIV DQG YDOXHV 7KH FKLOG LV QRW VLPSO\ H[WUDFWLQJ SURGXFW LQIRUPDWLRQ IURP DQ DGYHUWLVHPHQW WKDW VfKH WKHQ VWRUHV LQ PHPRU\ IRU XVH LQ VXEVHTXHQW GHFLVLRQV EXW LV DQ DFWLYH SDUWLFLSDQW LQ WKH

PAGE 31

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fV XQLTXH SHUVSHFWLYH RQ WKH DGYHUWLVLQJFRQVXPSWLRQ UHODWLRQVKLS 7KRXJK FKLOGUHQfV UHVSRQVHV OHJLWLPDWHO\ UHIOHFW WKH VLWXDWLRQV DQG REMHFWV WKDW WKH\ FRQIURQW LQ GDLO\ OLIH UHODWLYHO\ OLWWOH LV NQRZQ DERXW WKHLU XQLTXH SHUVSHFWLYH ,Q PDQ\ VWXGLHV RI FKLOGUHQfV PHGLD UHFHSWLRQ DGXOW UHVSRQVHV DUH XVHG DV WKH DVVHUWHG RU LPSOLHG VWDQGDUG RI SHUIRUPDQFH $QGHUVRQ $QGHUVRQ DQG $YHU\ %HYHU HWDO 'RUU 5RVVLWHU DQG 5REHUWVRQ f 5HVHDUFKHUV KDYH XWLOL]HG WKHLU RZQ LQWHUSUHWDWLRQV RI WHOHYLVHG FRQWHQW DV WKH VWDQGDUG DQG HYDOXDWHG FKLOGUHQfV UHVSRQVHV DJDLQVW LW :LWK WKLV FULWHULRQ FKLOGUHQfV SHUFHSWLRQV DUH LPSOLFLWO\ UHJDUGHG DV VRPH VRUW RI IODZHG DSSUR[LPDWLRQ WR WKH DGXOW PRGHO UDWKHU WKDQ D WUXH DQG YDOXDEOH SHUVSHFWLYH RQ WKH ZRUOG 7KLV UHVHDUFK LV EDVHG RQ WKH DVVXPSWLRQ WKDW FKLOGUHQfV UHDFWLRQV WR WKH VLWXDWLRQV DQG REMHFWV WKH\ FRQIURQW LQ GDLO\ OLIH DUH IDU PRUH FRPSOH[ WKDQ WKHRU\ RIWHQ JLYHV WKHP FUHGLW 'HQ]LQ f 8QWLO WKLV FRPSOH[LW\ LV UHFRJQL]HG DQG LQFRUSRUDWHG LQWR HPSLULFDO VWXGLHV RI

PAGE 32

FKLOGUHQfV FRQVXPHU EHKDYLRU RXU LPDJHV RI FRQVXPHU VRFLDOL]DWLRQ ZLOO UHPDLQ LQFRPSOHWH 7KH 3HUVXDVLYH ,QIOXHQFH RI $GYHUWLVLQJ 7KH LQYHVWLJDWLRQ RI DGYHUWLVLQJfV HIIHFWV RQ FKLOGUHQ KDV D UHODWLYHO\ ORQJ DQG ULFK WUDGLWLRQ ZLWKLQ FRQVXPHU UHVHDUFK $IWHU RYHU \HDUV RI UHVHDUFK WKH HPSLULFDO HYLGHQFH GLVWLQFWO\ VKRZV WKDW DGYHUWLVLQJ LQIOXHQFHV \RXQJ FKLOGUHQfV SURGXFW DZDUHQHVV SUHIHUHQFHV DQG EHKDYLRU ,W LV FOHDU WKDW FKLOGUHQ SD\ DWWHQWLRQ WR DGV GHOLJKW LQ WKH IOLJKWV RI IDQWDV\ DQG IXQ WKH\ GHSLFW DQG DUH RIWHQ DWWUDFWHG WR WKH SURGXFWV WKH\ SURPRWH 2I IXQGDPHQWDO LQWHUHVW WR UHVHDUFKHUV DQG PDUNHWLQJ SUDFWLWLRQHUV DOLNH LV XQGHUVWDQGLQJ WKH SUHFLVH QDWXUH RI WKLV LQIOXHQFH DQG WKH SURFHVVHV E\ ZKLFK LW RFFXUV 7KLV LV D UHVHDUFK DUHD WKDW LQFRUSRUDWHV DQ DUUD\ RI VSHFLILF VXEVWDQWLYH DQG WKHRUHWLFDO LVVXHV 0XFK RI WKH UHVHDUFK RQ FKLOGUHQfV UHVSRQVHV WR DGYHUWLVLQJ FDQ EH FDVW LQ WHUPV RI IRXU PDMRU DUHDV 7KHVH DUH f FKLOGUHQfV DWWHQWLRQ WR DGYHUWLVLQJ f FKLOGUHQfV FRPSUHKHQVLRQ RI FRPPHUFLDO PHVVDJHV f DGYHUWLVLQJfV SHUVXDVLYH LPSDFW RQ FKLOGUHQfV SURGXFW SUHIHUHQFHV DQG f WKH EHKDYLRUDO FRQVHTXHQFHV RI H[SRVXUH SDUWLFXODUO\ RQ FKRLFH DQG UHTXHVWV IRU DGYHUWLVHG SURGXFWV VHH $WNLQ 0F1HDO 5DMX DQG /RQLDO DQG :DUWHOOD IRU DOWHUQDWLYH FODVVLILFDWLRQ VFKHPHVf :LWKLQ WKLV EURDG FDWHJRUL]DWLRQ IDOO D QXPEHU RI VWXGLHV WKDW KDYH EHHQ GHVLJQHG WR WHVW WKH UHODWLYH HIIHFWLYHQHVV RI VSHFLILF WHFKQLTXHV RU VWUDWHJLHV XVHG LQ DGYHUWLVHPHQWV WDUJHWHG DW FKLOGUHQ )RU H[DPSOH WKH SHUVXDVLYH LPSDFW RI SURGXFW FKDUDFWHUV SUHPLXP RIIHUV GLVFODLPHUV DQG WKH W\SH RI FODLPV PDGH KDYH DOO EHHQ WKH VXEMHFW RI H[WHQVLYH UHVHDUFK VWXG\ HJ $GOHU HW DO f 2I SULPDU\ LQWHUHVW KHUH LV WKH UHVHDUFK WKDW IRFXVHV

PAGE 33

PRUH JHQHUDOO\ RQ DGYHUWLVLQJfV LPSDFW RQ WKH DWWLWXGHV DQG EHKDYLRU RI VFKRRODJH WR \HDUROGf FKLOGUHQ 7KLV ZRUN SURYLGHV WKH IRXQGDWLRQ QHFHVVDU\ WR EHJLQ WR FRQVLGHU KRZ DGYHUWLVLQJ PLJKW LQIOXHQFH FKLOGUHQfV LQWHUSUHWDWLRQV DQG HYDOXDWLRQV ZLWKLQ WKH EURDGHU FRQWH[W RI SURGXFW FRQVXPSWLRQ 5HVHDUFK RQ FKLOGUHQfV EHOLHIV LQ RU DFFHSWDQFH RI DGYHUWLVLQJ KDV EHHQ IRFXVHG DW WZR OHYHOV f WKHLU ZLOOLQJQHVV WR DFFHSW VSHFLILF FODLPV PDGH DERXW SURGXFWV DQG f WKHLU PRUH JHQHUDO DWWLWXGHV DERXW WKH WUXWKIXOQHVV RI DGYHUWLVLQJ $V PLJKW EH H[SHFWHG FOHDU DJHUHODWHG SDWWHUQV HPHUJH 2OGHU FKLOGUHQ WR \HDUROGVf WHQG WR EH PXFK PRUH VNHSWLFDO RI DGYHUWLVLQJ WKDQ WKHLU \RXQJHU FRXQWHUSDUWV %HYHU HW DO 5REHUWVRQ DQG 5RVVLWHU 5RVVLWHU :DUG HW DO f 7KH\ DUH TXLFN WR FRQFHGH WKDW DGYHUWLVLQJ GRHV QRW DOZD\V WHOO WKH WUXWK DQG IUHTXHQWO\ H[SUHVV UDWKHU QHJDWLYH DWWLWXGHV WRZDUG WKH LQVWLWXWLRQ RI DGYHUWLVLQJ LWVHOI %ODWW HW DO %HYHU HW DO 5REHUWVRQ DQG 5RVVLWHU f 8QGHUSLQQLQJ UHVHDUFK HIIRUW LQ WKLV DUHD LV WKH TXHVWLRQ RI ZKHQ FKLOGUHQ XQGHUVWDQG DGYHUWLVLQJfV SHUVXDVLYH LQWHQW DQG SURILW PRWLYH /RQJVWDQGLQJ FRQFHUQ DERXW \RXQJ FKLOGUHQfV IDLOXUH WR UHFRJQL]H WKH SHUVXDVLYH SXUSRVH WKDW LV LQWULQVLF WR FRPPHUFLDO DGYHUWLVLQJ OHG WR D QXPEHU RI UHVHDUFK LQYHVWLJDWLRQV GXULQJ WKH V DQG V HJ %ORVVHU DQG 5REHUWV 'RQRKXH +HQNH DQG 'RQRKXH 0DFNOLQ 5REHUWV 5REHUWVRQ DQG 5RVVLWHU :DUG HWDO f 7KRXJK WKH DJH DW ZKLFK FKLOGUHQ IXOO\ FRPSUHKHQG DGYHUWLVLQJfV SXUSRVH KDV QRW EHHQ HVWDEOLVKHG ZLWK FHUWDLQW\ WKHUH LV VXEVWDQWLDO HYLGHQFH LQGLFDWLQJ WKDW E\ RU \HDUVROG PRVW FKLOGUHQ KDYH DW OHDVW D SUHOLPLQDU\ XQGHUVWDQGLQJ 5REHUWV 5REHUWVRQ DQG 5RVVLWHU

PAGE 34

:DUG HW DO :DUWHOOD DQG +XQWHU f 7KH UHFRJQLWLRQ RI SHUVXDVLYH LQWHQW LV FRQVLGHUHG D EDVLF GHYHORSPHQWDO PLOHVWRQH E\ ERWK UHVHDUFKHUV DQG SROLF\PDNHUV 7UDGLWLRQDOO\ LW KDV EHHQ DVVXPHG WKDW RQFH FKLOGUHQ XQGHUVWDQG WKH SHUVXDVLYH SXUSRVH RI DGYHUWLVLQJ WKH\ EHFRPH PRUH VNHSWLFDO DQG DUH WKHQ FDSDEOH RI UHVLVWLQJ LWV DSSHDO %UXFNV $UPVWURQJ DQG *ROGEHUJ )HGHUDO 7UDGH &RPPLVVLRQ 5REHUWVRQ DQG 5RVVLWHU 5RVVLWHU DQG 5REHUWVRQ f :LWKRXW WKH UHFRJQLWLRQ WKDW DGYHUWLVLQJ LQWHQGV WR SHUVXDGH FKLOGUHQ DUH SUHVXPHG WR DFFHSW DGYHUWLVLQJ FODLPV DV WUXWKIXO UDWKHU WKDQ TXHVWLRQ WKHP DV DGXOWV RIWHQ GR
PAGE 35

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f +RZHYHU WKLV LV D JUDGXDO SURFHVV ,Q WKH HDUO\ VWDJHV FKLOGUHQ ZLOO RIWHQ EH LQIOXHQFHG E\ LPPHGLDWH HQJDJLQJ SURGXFW SUHVHQWDWLRQV DQG WHQG WR UHVSRQG DFFRUGLQJO\ &KLOGUHQ RI WKLV DJH JURXS \HDU ROGVf WHQG QRW WR WKLQN FULWLFDOO\ DERXW DGYHUWLVHPHQWV XQOHVV H[SOLFLWO\ HQFRXUDJHG WR GR VR 7KH\ DUH XQOLNHO\ WR JHQHUDWH FRXQWHUDUJXPHQWV VSRQWDQHRXVO\ LQ UHVSRQVH WR DQ DGYHUWLVHPHQW GXH WR WKHLU LQDELOLW\ WR f IRFXV DWWHQWLRQ RQ PHVVDJH DUJXPHQWV UDWKHU WKDQ SHULSKHUDO FRQWHQW DQG f UHWULHYH NQRZOHGJH UHOHYDQW WR WKH HYDOXDWLRQ RI WKHVH DUJXPHQWV ZLWKRXW VSHFLILF FXHV %UXFNV HW DO f )RU WKH FXHG SURFHVVRU WKH RUJDQL]HG UHWULHYDO DQG XVH RI DYDLODEOH LQIRUPDWLRQ LV SRVVLEOH RQO\ LQ WKH SUHVHQFH RI DSSURSULDWH FXHV 8QOHVV DGYHUWLVLQJ NQRZOHGJH LV H[SUHVVO\ DFWLYDWHG FKLOGUHQ WHQG QRW WR UHEXW DGYHUWLVHG FODLPV %UXFNV HW DO f 2I FRXUVH DGXOWV DUH DOVR VXVFHSWLEOH WR WKH SHUVXDVLYH SRZHU RI DQ DWWUDFWLYH SRUWUD\DO +RZHYHU WKHUH LV D FULWLFDO GLIIHUHQFH :KLOH DGXOWV PD\ FKRRVH WR VXVSHQG WKHLU GLVEHOLHI RQ RFFDVLRQ WKH\ KDYH WKH FDSDFLW\ WR PDQDJH WKHLU LQIRUPDWLRQ SURFHVVLQJ VWUDWHJLHV )RU FKLOGUHQ KRZHYHU HYHQ RQFH WKH\ NQRZ WKDW DGYHUWLVLQJ LV H[SUHVVO\ GHVLJQHG WR VHOO SURGXFWV DGYHUWLVLQJ

PAGE 36

PD\ VWLOO DIIHFW WKHLU HVWDEOLVKHG SUHIHUHQFHV EHFDXVH WKH\ ODFN WKH DELOLW\ WR FRQWURO WKH DOORFDWLRQ RI WKHLU FRJQLWLYH UHVRXUFHV 5RHGGHU 6WHPWKDO DQG &DOGHU f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f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f 8QHQFXPEHUHG E\ WKH UHDOLWLHV RI HFRQRPLF REOLJDWLRQ DQG ZLWK ELOOLRQ GROODUV WR VSHQG $PHULFDQ FKLOGUHQ PD\ KDYH OLWWOH LQWHUHVW LQ JHQHUDWLQJ FRXQWHUDUJXPHQWV LQ UHVSRQVH WR WKH IDQWDV\ DQG DPXVHPHQW WKDW FRPPHUFLDOV RIIHU 6RORPRQ f 7KH SUHVXPSWLRQ WKDW FKLOGUHQ YLHZ D VHOOLQJ PRWLYH DV LQKHUHQWO\ QHJDWLYH PD\ VLPSO\ EH LQDFFXUDWH ,W LV WKH DVVXPSWLRQ WKDW FKLOGUHQ YLHZ FRPPHUFLDO DLPV DV VRPHKRZ GXSOLFLWRXV WKDW XQGHUSLQV DGXOW H[SHFWDWLRQV WKDW FKLOGUHQ QRW RQO\

PAGE 37

VKRXOG EXW ZLOO HUHFW GHIHQVHV DJDLQVW DGYHUWLVHG PHVVDJHV RQFH WKH\ DFTXLUH WKH FDSDFLW\ WR GR VR +RZHYHU LW LV SHUIHFWO\ UHDVRQDEOH WKDW D FKLOG ZLOO EH IXOO\ DZDUH RI DQ DGYHUWLVHPHQWfV DLP DQG LQWHUSUHW LW DV VXFK ZLWKRXW DQ\ QHJDWLYH IHHOLQJ RU FRQQRWDWLRQ 7KHUH LV QR UHDVRQ ZK\ UHFRJQLWLRQ RI DGYHUWLVLQJfV SHUVXDVLYH SXUSRVH QHFHVVLWDWHV D GHFOLQH LQ D FKLOGfV UHVSRQVLYHQHVV WR VSHFLILF FRPPHUFLDO PHVVDJHV &KLOGUHQfV DZDUHQHVV RI SHUVXDVLYH LQWHQW LV DQ LPSRUWDQW LVVXH QRW RQO\ EHFDXVH RI LWV OLQN WR WKH DFTXLVLWLRQ RI FRJQLWLYH GHIHQVHV EXW EHFDXVH D FKLOGfV LQWHUSUHWDWLRQ RI D SDUWLFXODU DGYHUWLVHPHQW GHSHQGV RQ KLVKHUf XQGHUVWDQGLQJ RI WKH QDWXUH DQG IXQFWLRQ RI DGYHUWLVLQJ LQ JHQHUDO 8QOLNH RWKHU IRUPV RI PDVV FRPPXQLFDWLRQV D FKLOG HQFRXQWHUV DGYHUWLVLQJ WUDQVPLWV LWV VDOHV SOHD WKURXJK WKH V\PEROLVP RI LGHDOL]HG VHWWLQJV DQG VLWXDWLRQV 7R PDNH VHQVH RI WKHVH DSSHDOV D FKLOG OHDUQV WKDW DGV XVH GUDPDWL]HG HSLVRGHV FKDUDFWHUV DQG HPRWLRQV WR V\PEROL]H RU UHSUHVHQW UHDO VLWXDWLRQV 5REHUWVRQ DQG 5RVVLWHU f %HIRUH D FKLOG FDQ IXOO\ JUDVS WKH PHDQLQJ RI D FRPPHUFLDO Vf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

PAGE 38

LPDJHV 3DWHPDQ f +RZ FKLOGUHQ EULQJ WKLV NQRZOHGJH WR EHDU LQ WKH FRQWH[W RI YLHZLQJ LV QRW ZHOOXQGHUVWRRG ,W LV LPSRUWDQW WR ORRN EH\RQG WUDGLWLRQDO VFKHPHV XVHG WR FDWHJRUL]H FRJQLWLYH UHVSRQVHV 7KRXJK WKH TXHVWLRQV RI ZKHWKHU DQG ZKHQ FKLOGUHQ JHQHUDWH FRXQWHUDUJXPHQWV LV FULWLFDO WKHVH VFKHPHV GR QRW DGHTXDWHO\ FDSWXUH WKH GHSWK DQG FRPSOH[LW\ RI FKLOGUHQfV UHVSRQVH 8QWLO FRQFHSWXDO PRGHOV DUH ILUPO\ JURXQGHG LQ WKH UHDOLW\ RI FKLOGUHQfV H[SHULHQFHV DQG SHUVSHFWLYHV XQGHUVWDQGLQJ RI DGYHUWLVLQJfV SHUVXDVLYH SRZHU LV QHFHVVDULO\ OLPLWHG 5HVHDUFKHUV ZLWK DQ LQWHUHVW LQ DGYHUWLVLQJfV SHUVXDVLYH HIIHFWV KDYH VRXJKW EHKDYLRUDO DV ZHOO DV DWWLWXGLQDO HYLGHQFH RI LWV LQIOXHQFH 7ZR W\SHV RI EHKDYLRUDO YDULDEOHV KDYH EHHQ WKH IRFXV RI PXFK RI WKLV UHVHDUFK WKH IUHTXHQF\ RI FKLOGUHQfV SURGXFWUHODWHG UHTXHVWV DQG WKHLU FKRLFH EHKDYLRU LQ H[SHULPHQWDO VHWWLQJV &RUUHODWLRQDO PHDVXUHV KDYH EHHQ XVHG WR DVVHVV UHODWLRQVKLSV DPRQJ D FKLOGfV DJH H[SRVXUH WR DGYHUWLVLQJ DQG WKH IUHTXHQF\ RI SURGXFW UHTXHVWV WR SDUHQWV $OWKRXJK WKH ZHLJKW RI HYLGHQFH VHHPV WR VXJJHVW WKDW WKH IUHTXHQF\ RI FKLOGUHQfV SURGXFW UHTXHVWV GLPLQLVK ZLWK DJH WKH GDWD DUH VRPHZKDW GLIILFXOW WR LQWHUSUHW *DOVW DQG :KLWH 5REHUWVRQ DQG 5RVVLWHU 5REHUWVRQ DQG 5RVVLWHU 5RVVLWHU :DUG DQG :DFNPDQ f :KHQ SURGXFW FODVV GLIIHUHQFHV DUH FRQWUROOHG IRU WKH UHODWLRQVKLS EHFRPHV LQFUHDVLQJO\ PXUN\ 1RW VXUSULVLQJO\ UHTXHVWV IRU WR\V GHFOLQH ZLWK DJH ZKLOH UHTXHVWV IRU FORWKLQJ DQG ELF\FOHV LQFUHDVH ,VOHU 3RSSHU DQG :DUG :DUG DQG :DFNPDQ f 5HTXHVWV IRU KHDYLO\ DGYHUWLVHG SURGXFWV VXFK DV VQDFN IRRGV DQG VRGD WKDW DUH UHOHYDQW WR FKLOGUHQ RI DOO DJHV GR QRW DSSHDU WR GHFOLQH VLJQLILFDQWO\ DV D FKLOG PDWXUHV :DUG DQG :DFNPDQ f &ROOHFWLYHO\ WKH HYLGHQFH VHHPV WR VXJJHVW WKDW WKH IUHTXHQF\ RI

PAGE 39

FKLOGUHQfV DGYHUWLVLQJLQGXFHG UHTXHVWV WR SDUHQWV GHFOLQHV VOLJKWO\ ZLWK DJH :KHQ DJH LV FRQWUROOHG IRU FKLOGUHQ ZKR ZDWFK PRUH WHOHYLVLRQ DUH PRUH OLNHO\ WR PDNH SURGXFW UHTXHVWV WKDQ FKLOGUHQ ZKR VSHQG OHVV WLPH YLHZLQJ *ROGEHUJ 5REHUWVRQ DQG 5RVVLWHU f ,W VKRXOG EH QRWHG KRZHYHU WKDW WKHVH ILQGLQJV DUH EDVHG SULPDULO\ RQ JOREDO LQGLFDWRUV RI DGYHUWLVLQJ H[SRVXUH UDWKHU WKDQ PRUH GLIILFXOW WR LVRODWH OLQNDJHV EHWZHHQ VSHFLILF DGYHUWLVHPHQWV DQG VXEVHTXHQW SURGXFW UHTXHVWV 7KH LPSDFW RI DGYHUWLVLQJ H[SRVXUH RQ FKLOGUHQfV SURGXFW FKRLFHV KDV DOVR EHHQ LQYHVWLJDWHG LQ D YDULHW\ RI H[SHULPHQWDO VHWWLQJV 8QGHU FRQWUROOHG FLUFXPVWDQFHV D UHODWLYHO\ FRQVLVWHQW SDWWHUQ EHWZHHQ DGYHUWLVLQJ H[SRVXUH DQG SURGXFW FKRLFH HPHUJHV 7HOHYLVLRQ FRPPHUFLDOV FDQ DQG GR SHUVXDGH FKLOGUHQ WR VHOHFW WKH SURGXFWV WKH\ VHH DGYHUWLVHG 7KHVH UHVXOWV DSSHDU WR KROG DFURVV DJH JURXSV DQG LQ ERWK ODERUDWRU\ DQG ILHOG VHWWLQJV *ROGEHUJ *RP DQG *LEVRQ *RP DQG *ROGEHUJ 5HVQLN DQG 6WHP f 7KH LPSDFW RI DGYHUWLVLQJ H[SRVXUH RQ FKRLFH EHKDYLRU LV DSSDUHQWO\ QRW OLPLWHG WR WKH VSHFLILF SURGXFW DGYHUWLVHG EXW PD\ JHQHUDOL]H DFURVV SURGXFW FDWHJRULHV *ROGEHUJ HW DO f IRXQG IRU H[DPSOH WKDW H[SRVXUH WR FRPPHUFLDOV IRU KLJKO\ VXJDUHG VQDFNV DQG FHUHDOV OHG \RXQJ FKLOGUHQ WR \HDUROGVf WR FKRRVH WKHVH NLQGV RI VXJDUHG IRRGV PRUH UHDGLO\ WKDQ FKLOGUHQ ZKR KDG EHHQ H[SRVHG WR SURQXWULWLRQDO PHVVDJHV $ VLPLODU SDWWHUQ RI ILQGLQJV ZDV REVHUYHG E\ *RP DQG *ROGEHUJ f ZKR REVHUYHG FKLOGUHQfV VQDFN FKRLFHV \HDUROGVf RYHU D WZRZHHN SHULRG 7KRXJK WKHVH VWXGLHV KDYH IRFXVHG RQ \RXQJHU FKLOGUHQ \HDUROGVf WKHUH LV HYLGHQFH WKDW DGYHUWLVLQJ PD\ LQIOXHQFH WKH FKRLFHV RI ROGHU FKLOGUHQ DV ZHOO 5RHGGHU 6WHPWKDO DQG &DOGHU f IRXQG WKDW DV D FRQVHTXHQFH RI DGYHUWLVLQJ H[SRVXUH ROGHU FKLOGUHQ \HDUROGVf PDGH SURGXFW

PAGE 40

FKRLFHV WKDW ZHUH LQFRQVLVWHQW ZLWK WKHLU SUHH[LVWLQJ DWWLWXGHV SDUWLFXODUO\ ZKHQ WKH FKRLFH WDVN ZDV FRPSOH[ $GYHUWLVHPHQWV VHHPHG WR HQFRXUDJH FKLOGUHQ WR VHOHFW SURGXFWV WKH\ VDZ DGYHUWLVHG LQVWHDG RI SURGXFWV WKH\ JHQHUDOO\ SUHIHU EXW WKDW ZHUH QRW DGYHUWLVHG LQ WKH FRQWH[W RI WKH VWXG\ )RXUWK JUDGHUV \HDUROGVf LQ SDUWLFXODU WHQGHG WR FKRRVH DGYHUWLVHG SURGXFWV GHVSLWH PRUH IDYRUDEOH DWWLWXGHV WRZDUG RWKHU DOWHUQDWLYHV 7KH\ LJQRUHG WKHLU LQLWLDO SUHIHUHQFHV DQG IRFXVHG LQVWHDG RQ WKH LPPHGLDWH DG FRQWHQW LQ PDNLQJ WKHLU FKRLFHV 7KLUWHHQ \HDUROGV RQ WKH RWKHU KDQG UHPDLQHG IDLWKIXO WR WKHLU LQLWLDO SUHIHUHQFHV UHJDUGOHVV RI WKH DGYHUWLVHPHQW WKDW WKH\ KDG MXVW VHHQ :KLOH HLJKWK JUDGHUV \HDUROGVf DSSHDUHG WR FRQVLGHU WKHLU DWWLWXGHV WRZDUG HDFK SURGXFW DQG WKHQ VHOHFW WKH RQH WKH\ PRVW SUHIHUUHG UHJDUGOHVV RI DGYHUWLVLQJ IRXUWK JUDGHUV PDGH WKHLU FKRLFHV H[FOXVLYHO\ RQ WKH EDVLV RI WKHLU HYDOXDWLRQ RI WKH DGYHUWLVHG SURGXFW 7KH DGROHVFHQWV UHVRUWHG WR WKLV VWUDWHJ\ RQO\ ZKHQ WKH GHFLVLRQ WDVN ZDV FRPSOH[ LQYROYLQJ D ODUJH QXPEHU RI FKRLFH DOWHUQDWLYHV %RWK RI WKHVH DJH JURXSV SRVVHVV DW OHDVW D UXGLPHQWDU\ XQGHUVWDQGLQJ RI DGYHUWLVLQJfV SXUSRVH DQG WKH FRJQLWLYH GHIHQVHV LW SUHVXPDEO\ SURYLGHV 7KH FDXVDO OLQNV EHWZHHQ DGYHUWLVLQJ H[SRVXUH DQG FKLOGUHQfV SURGXFW FKRLFHV KDYH EHHQ ZHOOHVWDEOLVKHG XQGHU FRQWUROOHG FRQGLWLRQV 7KHVH HIIHFWV DUH PXFK PRUH GLIILFXOW WR VWXG\ DQG REVHUYH LQ WKH FRQWH[W RI D FKLOGfV HYHU\ GD\ OLIH 7KRXJK WKH JHQHUDOL]DELOLW\ RI WKHVH UHVXOWV LV DQ LVVXH WKH ILQGLQJV LQGLFDWH WKDW FKLOGUHQ FDQ EH LQIOXHQFHG QRW RQO\ WR SUHIHU DGYHUWLVHG SURGXFWV EXW WR VHHN WKHP RXW ZKHQ JLYHQ WKH RSSRUWXQLW\ WR GR VR

PAGE 41

3URGXFW &RQVXPSWLRQ $ 3ULPDU\ 6RXUFH RI 0HDQLQJ DQG ,QIOXHQFH *LYHQ WKH SROLF\ RULHQWDWLRQ WKDW XQGHUSLQV UHVHDUFK HIIRUW LQ WKLV DUHD LW LV QRW VXUSULVLQJ WKDW LQYHVWLJDWRUV KDYH IRFXVHG WKHLU DWWHQWLRQ RQ XQGHUVWDQGLQJ DGYHUWLVLQJfV DELOLW\ WR VKDSH FKLOGUHQfV SURGXFW SUHIHUHQFHV UHTXHVWV DQG FKRLFHV ,I DGYHUWLVHPHQWV KDYH WKH FDSDFLW\ WR LQIOXHQFH FKLOGUHQfV GHVLUH IRU SDUWLFXODU SURGXFWV WKHQ SROLF\PDNHUV KDYH DQ XQTXHVWLRQHG UHVSRQVLELOLW\ WR LQVXUH WKDW WKH FRQWHQWV RI WKHVH FRPPXQLFDWLRQV DUH IDLU JLYHQ WKH XQLTXH QDWXUH RI WKH WDUJHW DXGLHQFH %RWK WKH SURFHVVHV E\ ZKLFK DGYHUWLVLQJ DIIHFWV FKLOGUHQfV MXGJPHQWV DQG WKH SHUVXDVLYH WHFKQLTXHV WKDW DUH PRVW HIIHFWLYH DUH RI SULPDU\ LQWHUHVW ,PSOLFLWO\ LW LV DVVXPHG WKDW DGYHUWLVLQJ H[HUWV LWV SULPDU\ LQIOXHQFH SULRU WR D SXUFKDVH GHFLVLRQ DQG WKHUHIRUH LQYHVWLJDWLRQ WHQGV WR IRFXV RQ YDULDEOHV WKDW VRPHKRZ DIIHFW FKLOGUHQfV LQLWLDO SURGXFW SUHIHUHQFHV +RZHYHU ORQJn VWDQGLQJ FRQFHSWXDO PRGHOV RI FRQVXPHU GHFLVLRQ PDNLQJ UHFRJQL]H WKDW WKH SXUFKDVH SURFHVV HQGV QRW ZLWK FKRLFH EXW ZLWK SURGXFW FRQVXPSWLRQ XVH DQG HYDOXDWLRQ (QJHO .ROODW DQG %ODFNZHOO f )URP WKH FRQVXPHUf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

PAGE 42

IDQWDV\ DQG P\WKLFDO ILJXUHV WKDW WHQG WR GRPLQDWH FKLOGUHQfV DGYHUWLVLQJ :KHUH WKLV LQYHVWLJDWLRQ GHSDUWV IURP WUDGLWLRQDO PRGHOV RI FKLOGUHQfV DGYHUWLVLQJ UHVSRQVH LV ZLWK WKH H[SOLFLW UHFRJQLWLRQ WKDW SURGXFW FRQVXPSWLRQ SOD\V D FHQWUDO UROH LQ JXLGLQJ FKLOGUHQfV FRPSUHKHQVLRQ DQG LQWHUSUHWDWLRQ RI DGYHUWLVHPHQWV :KDW RFFXUV RQFH D SURGXFW OHDYHV D UHWDLOHUf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f &RQFHUQV DERXW KRZ EHVW WR DOORFDWH OLPLWHG LQFRPH DUH VLPSO\ QRW VDOLHQW QRU ZHOO XQGHUVWRRG XQWLO PXFK ODWHU :KLOH DGXOWV PD\ SRQGHU WKH RSSRUWXQLW\ FRVWV RI WKHLU GHFLVLRQV FKLOGUHQfV FRQVXPSWLRQ H[SHULHQFHV DUH FKDUDFWHUL]HG E\ DHVWKHWLF HQMR\PHQW SOD\IXO DFWLYLW\ DQG IXQ 3URGXFWV FDQ EH HYDOXDWHG DQG FRQVXPHG ZLWKRXW WKH DWWHQGDQW HFRQRPLF UHVSRQVLELOLW\ RU FRQFHUQ :KDW PD\ DSSHDU LQLWLDOO\ WR EH D VLPSOH LVVXH RI GHWHUPLQLQJ WKH YHULGLFDOLW\ RI DGYHUWLVLQJLQGXFHG H[SHFWDWLRQV WXUQV RXW WR KDYH PXFK EURDGHU LPSOLFDWLRQV IRU WKH

PAGE 43

FKLOGfV XQGHUVWDQGLQJ RI PDUNHWSODFH EHKDYLRU 2Q WKH RQH KDQG SURGXFW H[SHULHQFHV PD\ VHUYH DV D NLQG RI FRUUHFWLYH WR WKH W\SH RI H[DJJHUDWHG H[SHFWDWLRQV DGYHUWLVHPHQWV PD\ VRPHWLPHV IRVWHU $Q\ FRQIXVLRQ FUHDWHG E\ DQ DGYHUWLVHPHQW FDQ EH UHFWLILHG ZKHQ D FKLOG KDV WKH RSSRUWXQLW\ WR FRPSDUH DG FODLPV WR WKH REMHFWLYH UHDOLW\ UHSUHVHQWHG E\ WKH SURGXFW 2Q WKH RWKHU KDQG ZKHQ FKLOGUHQfV H[SHFWDWLRQV DUH UHDOLVWLF SURGXFW H[SHULHQFHV SURYLGH HYLGHQFH RI DGYHUWLVLQJfV UHOLDELOLW\ DV D VRXUFH RI LQIRUPDWLRQ DQG LGHDV ,Q HLWKHU FDVH WKH LPSOLFLW FRPSDULVRQ EHWZHHQ WKH SURGXFW DV DGYHUWLVHG DQG WKH SURGXFW DV H[SHULHQFHG SURYLGHV WKH IOHGJOLQJ FRQVXPHU ZLWK YDOXDEOH LQIRUPDWLRQ DERXW ZKDW DGYHUWLVLQJ LV DQG KRZ LW ZRUNV :KDW PD\ VHHP REYLRXV WR DGXOWV DERXW ZKDW DQG KRZ DGYHUWLVHUV FRPPXQLFDWH ZLWK FRQVXPHUV LV QRYHO LQIRUPDWLRQ WR FKLOGUHQ $GYHUWLVLQJ LV D FRPPXQLFDWLRQV JHQUH XQOLNH DQ\ RWKHU WKDW FKLOGUHQ FRPH LQ FRQWDFW ZLWK DQG WKH\ ZLOO DWWHPSW WR PDNH VHQVH RI LW /HDUQLQJ DERXW DGYHUWLVLQJ LWV XQLTXH FKDUDFWHULVWLFV DQG PRGHV RI H[SUHVVLRQ LV DQ LPSRUWDQW SDUW RI ZKDW FKLOGUHQ DUH GRLQJ LQ UHVSRQGLQJ WR DGV 2YHU WLPH WKH\ EHJLQ WR GHYHORS WDFLW NQRZOHGJH RU LQWXLWLYH WKHRULHV DERXW KRZ DGYHUWLVLQJ ZRUNV :ULJKW f 3URGXFW H[SHULHQFHV VHUYH DQ LPSRUWDQW UROH LQ WKLV SURFHVV QRW RQO\ DV D VRUW RI UHDOLW\ FKHFN EXW DV WKH EDVLV IRU OHDUQLQJ DERXW PDUNHWSODFH LQWHUDFWLRQ $OWKRXJK FKLOGUHQ FDQ OHDUQ D JUHDW GHDO WKURXJK DGYHUWLVLQJ DORQH LW LV WKH FRPSDULVRQ RI WKH DG WR WKH SURGXFW WKDW SURYLGHV WKH HYLGHQFH QHHGHG WR HYDOXDWH ZKDW WKH DGYHUWLVHU KDV VWDWHG RU LPSOLHG &KLOGUHQfV EURDGHU SHUFHSWLRQV RI PDUNHWHUV DQG PDUNHWLQJ DFWLYLW\ DUH JURXQGHG LQ WKH VLPSOH SOHDVXUHV RU GLVDSSRLQWPHQWV WKHVH H[SHULHQFHV \LHOG

PAGE 44

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fV KRXVH WKH EUDQG PD\ EH SDUW RI D FKLOGfV IDPLOLDU HYHU\GD\ ZRUOG 7KH EUDQG LV DFTXLUHG FRQVXPHG DQG GLVSRVHG RI WKURXJK WKH RUGLQDU\ FRXUVH RI GD\WRGD\ OLIH ,W H[LVWV LQ WKH UHDOP RI WKH FRPPRQSODFH RU FRQYHQWLRQDO $OWHUQDWLYHO\ FKLOGUHQ PD\ EH H[SRVHG WR D EUDQG WKURXJK WKH LPDJHU\ RI DQ DGYHUWLVHPHQW +HUH WKH EUDQG LV ORFDWHG LQ D ILJXUDWLYH RU V\PEROLF ZRUOG H[SOLFLWO\ IDVKLRQHG WR H[WHQG WKH EUDQGfV PHDQLQJ DQG DSSHDO 7KH DGYHUWLVHUfV WDVN LV WR WUDQVSRUW WKH EUDQG IURP WKH ZRUOG RI WKH PXQGDQH DQG IDPLOLDU WR WKH PRUH HSKHPHUDO V\PEROLF UHDOP
PAGE 45

RI WKH HYHU\GD\ WR D ZRUOG LPEXHG ZLWK DSSHDOLQJ VLJQV DQG V\PEROV 7KURXJK WKH DGYHUWLVHPHQW D EURDGHU FRQWH[W LV FUDIWHG IRU WKH EUDQG RQH WKDW QRW RQO\ SRVLWLRQV WKH EUDQG ZLWKLQ WKH PDUNHWSODFH EXW PLUURUV WKH GHVLUHV DQG LQWHUHVWV RI D \RXQJ DXGLHQFH 7KH DGYHUWLVHU PXVW QRW RQO\ VHOHFW GHVLUHG SURSHUWLHV IRU WKH SURGXFW DPRQJ D ZLGH UDQJH RI SRVVLELOLWLHV EXW VXFFHVVIXOO\ HYRNH LQWHQGHG FRQVXPHU UHDFWLRQ LQ WKH QDUURZ IUDPH RI DQ DGYHUWLVHPHQW $Q DGYHUWLVHPHQW LV QRW D QHXWUDO HQWLW\ EXW D IOXLG FXOWXUDO FRQVWUXFWLRQ 7KH SRWHQWLDO IRU PHDQLQJ UHVLGHV DW D QXPEHU RI OHYHOV IURP WKH REYLRXV WR WKH FXOWXUDOO\ LQWHUSUHWHG 0F&UDFNHQ f 7KH FRQWHQW RI SHUVXDVLYH DSSHDOV VKDSHV WKH PHDQLQJV EUDQGV XOWLPDWHO\ DFTXLUH $GYHUWLVLQJ LV RQH RI WKH SULPDU\ PHFKDQLVPV WKURXJK ZKLFK FXOWXUDO EHOLHIV DVVXPSWLRQV DQG YDOXHV DUH WUDQVIHUUHG WR FRQVXPHU JRRGV 0F&UDFNHQ f 7KH WUDQVLWLRQ IURP EUDQG LQ WKH ZRUOG WR EUDQG LQ WKH DG LV D FRPSOH[ SURFHVV QRW RQO\ IURP WKH DGYHUWLVHUfV SHUVSHFWLYH EXW IURP WKH UHFHLYHUfV SHUVSHFWLYH DV ZHOO +RZ FKLOGUHQ LQWHUSUHW RU SHUKDSV UHFRQFLOH WKHVH YDU\LQJ VRXUFHV RI EUDQG LQIRUPDWLRQ LV QHLWKHU FOHDU QRU QHFHVVDULO\ VLPSOH 7KH VHHPLQJO\ REMHFWLYH UHDOLW\ RI D FRQVXPSWLRQ H[SHULHQFH LV MX[WDSRVHG DJDLQVW WKH V\PEROLF H[SHULHQFH RI DQ DGYHUWLVHPHQW %RWK RI WKHVH H[SHULHQFHV KDYH WKH SRWHQWLDO WR VKDSH RU WUDQVIRUP WKH LQWHUSUHWDWLRQ RI WKH RWKHU 7KDW SURGXFW H[SHULHQFH PD\ DIIHFW D FKLOGfV VXEVHTXHQW UHVSRQVLYHQHVV DQG UHDFWLRQV WR DQ DGYHUWLVHPHQW PDNHV VHQVH LQWXLWLYHO\ 7KDW DQ DGYHUWLVHPHQW PD\ KDYH WKH FDSDFLW\ WR DOWHU D FKLOGfV LQWHUSUHWDWLRQV RI KLVKHUf FRQVXPSWLRQ H[SHULHQFH LV ERWK LQWULJXLQJ DQG SRWHQWLDOO\ GLVWXUELQJ +RFK DQG +D 3XWR DQG :HOOV f 5HVHDUFK WKDW DWWHPSWV WR FKDUDFWHUL]H WKH SURFHVV E\ ZKLFK

PAGE 46

FKLOGUHQ LQWHJUDWH DQG LQWHUQDOL]H WKHVH GLVSDUDWH PDUNHWSODFH VWLPXOL UHSUHVHQWV DQ LPSRUWDQW ILUVW VWHS WRZDUGV XQGHUVWDQGLQJ WKH OLNHO\ FRQVHTXHQFHV RI DGFRQVXPSWLRQ LQWHUDFWLRQV )URP WKH FKLOGfV SHUVSHFWLYH WKH WUDQVLWLRQ UHTXLUHV WKH FDSDFLW\ WR WUDQVODWH SURGXFW UHSUHVHQWDWLRQV EHWZHHQ GLVSDUDWH H[SHULHQWLDO DQG YLHZLQJ FRQWH[WV 7KH DGYHUWLVHU WDNHV WKH VLPSOH RU PXQGDQH DQG HQYHORSV LW ZLWK V\PEROLF SURSHUWLHV RU VLJQLILFDQFH 7R WKH H[WHQW WKDW WKH FRQVXPSWLRQ H[SHULHQFH UHSUHVHQWV D NLQG RI OLWHUDO UHDOLW\ WKH GHSLFWLRQ RI WKH EUDQG LQ WKH DG DSSHDUV WR UHTXLUH PRUH ILJXUDWLYHO\ EDVHG LQWHUSUHWLYH VWUDWHJLHV
PAGE 47

UHJDUGHG DV KDYLQJ VLPSO\ PDGH D PLVWDNH UDWKHU WKDQ KDYLQJ LQWHQWLRQDOO\ VHOHFWHG D QRQn OLWHUDO H[HFXWLRQ $V FKLOGUHQ HQWHU ODWH FKLOGKRRG RU HDUO\ DGROHVFHQFH DSSUR[LPDWHO\ \HDUVROGf WKHLU IDVFLQDWLRQ ZLWK DQG XVH RI ILJXUDWLYH ODQJXDJH VHHPV WR UHHPHUJH LQ D PRUH VRSKLVWLFDWHG IDVKLRQ :LQQHU f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fV XQGHUVWDQGLQJ RI WKH PHDQLQJ RI DGYHUWLVHG PHVVDJHV DOVR GHSHQGV RQ WKHLU FDSDFLW\ WR f GLVWLQJXLVK IDQWDV\ IURP UHDOLW\ f GLIIHUHQWLDWH EHWZHHQ OLWHUDO DQG QRQn OLWHUDO XVHV RI YLVXDO DQG YHUEDO PHVVDJH HOHPHQWV f UHFRJQL]H WKDW WKHUH LV ERWK D VRXUFH DQG DQ DXGLHQFH IRU WKH PHVVDJH ZKR KDYH GLVWLQFW SHUVSHFWLYHV DQG PRWLYHV DQG f UHFRJQL]H WKDW DGYHUWLVHPHQWV UHTXLUH GLIIHUHQW LQWHUSUHWLYH VWUDWHJLHV WKDQ HGXFDWLRQDO RU HQWHUWDLQPHQW RULHQWHG PHVVDJHV 5REHUWV 5REHUWVRQ DQG 5RVVLWHU
PAGE 48

UHSUHVHQW WKH NQRZOHGJH DQG EHOLHIV RI RWKHU SHRSOH $FNHUPDQ 3HPHU f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
PAGE 49

DGYHUWLVHPHQW RU WKHLU HPRWLRQDO UHDFWLRQV WR LW ROGHU FKLOGUHQ KDYH WKH FDSDFLW\ WR FRPPHQW RQ WKH DG DV D FXOWXUDO REMHFW 1R ORQJHU GUDZQ SULPDULO\ WR SHUFHSWXDO IHDWXUHV ROGHU FKLOGUHQ EHJLQ WR GLVWDQFH WKHPVHOYHV IURP WKH LPPHGLDWH PHVVDJH DQG WKLQN DERXW HYDOXDWH DQG MXGJH LW LQ D PRUH UHIOHFWLYH IDVKLRQ :DUG HW DO
PAGE 50

([WHQGLQJ ZKDW DUH LQLWLDOO\ VLPSOH FRQFHSWV RI VHOOLQJ LQWHQW DQG DGYHUWLVLQJ WHFKQLTXH D KRVW RI LQWHUSUHWLYH VNLOOV HPHUJH WKDW DOORZ ROGHU FKLOGUHQ WR FRQVWUXFW PHDQLQJ RQ D QXPEHU RI OHYHOV UDQJLQJ IURP WKH DUWLFXODWLRQ RI EDVLF IDFWV WR WKHLU FXOWXUDO VLJQLILFDQFH $ JUDGXDO VKLIW LQ FKLOGUHQfV SHUVSHFWLYHV HPHUJHV IURP D SRLQW RI YLHZ HPEHGGHG LQ WKH WH[WXDO IHDWXUHV RI DQ DG DQG WKH ZRUOG LW SRUWUD\V WR D PRUH GHWDFKHG SHUVSHFWLYH LQ ZKLFK WKH SHUFHLYHU EHJLQV WR VWHS RXWVLGH WKH DG WR WKLQN DERXW LW LQ D EURDGHU DQG PRUH FULWLFDO IDVKLRQ 'HVPRQG
PAGE 51

7KH\ UHO\ RQ WKHLU NQRZOHGJH RI DGYHUWLVHUVf LQIOXHQFH WDFWLFV WR HYDOXDWH DGYHUWLVLQJ FODLPV DQG DGDSW WKHLU SHUIRUPDQFH H[SHFWDWLRQV DFFRUGLQJO\ :KHQ DQ DGYHUWLVHUfV PHVVDJH FDQ EH HDVLO\ DQG LQH[SHQVLYHO\ YHULILHG EHIRUH SXUFKDVH DGXOWV DUH PRUH OLNHO\ WR DVVXPH WKDW ZKDW WKH DGYHUWLVHU VD\V LV WUXH 2Q WKH RWKHU KDQG ZKHQ SURGXFW FODLPV FDQ EH HYDOXDWHG RQO\ E\ SXUFKDVLQJ DQG XVLQJ D SURGXFW DGXOWV WHQG WR EH PXFK OHVV ZLOOLQJ WR EHOLHYH ZKDW WKH\ VHH DGYHUWLVHG )RUG 6PLWK DQG 6ZDV\ 6PLWK )RUG DQG 6ZDV\ f &ODLPV WKDW KDYH D KLJK SUREDELOLW\ RI WUXWK DUH GLIIHUHQWLDWHG IURP WKRVH RI D PRUH XQFHUWDLQ FKDUDFWHU DQG HYDOXDWHG RQ WKDW EDVLV &KLOGUHQ RQ WKH RWKHU KDQG PD\ QRW UHDGLO\ DSSUHFLDWH QRU EH FRQFHUQHG ZLWK WKH TXDOLW\ RI LQIRUPDWLRQ SURYLGHG E\ DGYHUWLVHUV 7KRXJK WKH\ PD\ DUWLFXODWH DGXOWOLNH DWWLWXGHV DERXW DGYHUWLVLQJ WKHVH JHQHUDOL]HG LQGLFDWRUV PD\ EHDU OLWWOH UHODWLRQVKLS WR KRZ WKH\ UHVSRQG WR VSHFLILF PHVVDJHV RU SHUVXDVLYH FODLPV :KHWKHU FKLOGUHQ MXGJH WKH YHUDFLW\ RI DG FODLPV UHFRJQL]LQJ WKH GLIIHUHQFH EHWZHHQ FODLPV WKDW DUH HDVLO\ YHULILHG DQG WKRVH WKDW DUH QRW LV QRW DV FOHDU 7KH TXHVWLRQ LV RQH RI SHUIRUPDQFH DV PXFK DV FDSDFLW\ &ODLPV WKDW DUH SODXVLEOH DQG DWWUDFWLYH \HW GLIILFXOW WR YHULI\ PD\ EH PRUH UHDGLO\ EHOLHYHG DQG FRQILUPHG WKURXJK D SOHDVDQW FRQVXPSWLRQ H[SHULHQFH $ &DOO IRU D 0HDQLQJ%DVHG 3HUVSHFWLYH &KLOGUHQfV DGYHUWLVLQJ UHVHDUFK FOHDUO\ KLJKOLJKWV WKH QHHG WR HPEHG XQGHUVWDQGLQJ LQ WKH FRQWH[W RI KRZ FKLOGUHQ RI YDULRXV DJHV FRPSUHKHQG DQG HYDOXDWH SHUVXDVLYH PHVVDJHV 7KHUH LV QR TXHVWLRQ WKDW FKLOGUHQfV DELOLW\ WR SURFHVV LQIRUPDWLRQ FRQYH\HG WKURXJK DGYHUWLVLQJ GLIIHUV DV D IXQFWLRQ RI WKHLU UHODWLYH H[SHULHQFH DQG FRJQLWLYH VRSKLVWLFDWLRQ 6HULRXV LQTXLU\ PXVW WDNH LQWR DFFRXQW FKLOGUHQfV HPHUJLQJ VNLOOV

PAGE 52

SURFOLYLWLHV DQG WKH FRQWLQJHQFLHV LQ ZKLFK WKH\ RSHUDWH 7KHRULHV RI FRJQLWLYH GHYHORSPHQW KDYH SURYLGHG XVHIXO IUDPHZRUNV IRU ERWK FRQFHSWXDOL]DWLRQ DQG HPSLULFDO HIIRUWV LQYHVWLJDWLQJ FKLOGUHQfV UHVSRQVHV WR DGYHUWLVLQJ 3DUDGLJPDWLFDOO\ DQ LQIRUPDWLRQFHQWHUHG \RXQJ FRQVXPHU LV DVVXPHG $GYHUWLVHPHQWV DUH YLHZHG SULPDULO\ DV SXUYH\RUV RI EUDQG LQIRUPDWLRQ $JHUHODWHG FKDQJHV LQ FKLOGUHQfV DELOLW\ WR VWRUH PDQLSXODWH DQG UHWULHYH LQIRUPDWLRQ DUH H[DPLQHG LQ WHUPV RI WKHLU LPSDFW RQ FKLOGUHQfV FRPSUHKHQVLRQ RI DGYHUWLVHG FODLPV DQG DWWLWXGHV WRZDUG WKH EUDQG SURPRWHG ,QVLJKWV JOHDQHG IURP WKHVH VWXGLHV SURYLGH WKH QHFHVVDU\ EDVLV IRU XQGHUVWDQGLQJ KRZ FKLOGUHQfV MXGJPHQWV DQG SURFHVVLQJ VWUDWHJLHV HYROYH +RZHYHU ZKLOH WKLV UHVHDUFK SURYLGHV GHSWK RI LQVLJKW LQWR WKH IXQFWLRQLQJ RI LQIRUPDWLRQ SURFHVVLQJ YDULDEOHV LW VDFULILFHV EUHDGWK RI LQVLJKW LQWR WKH EURDGHU FXOWXUDO DQG DIIHFWLYH FRQWH[W LQ ZKLFK FKLOGUHQ WKLQN DERXW DGYHUWLVHPHQWV DQG FRQVXPH SURGXFWV ,Q WKLV LQYHVWLJDWLRQ D PHDQLQJEDVHG PRGHO SURYLGHV WKH EDVLF IUDPHZRUN IRU H[DPLQDWLRQ RI FKLOGUHQfV SHUFHSWLRQV RI WKH DGYHUWLVLQJFRQVXPSWLRQ UHODWLRQVKLS ,QVLJKW LQWR KRZ FKLOGUHQ FRQVWUXH WKHVH UHODWLRQVKLSV LV VRXJKW ZLWKLQ WKH JHQHUDO FRQVWUDLQWV LPSRVHG E\ GHYHORSPHQWDO FDSDELOLWLHV IRU DFTXLULQJ UHWDLQLQJ DQG XWLOL]LQJ PDUNHWSODFH LQIRUPDWLRQ 7KH PHDQLQJEDVHG DSSURDFK IRFXVHG DW D EURDGHU OHYHO WKDQ LQIRUPDWLRQ SURFHVVLQJ DSSURDFKHV H[SUHVVO\ UHFRJQL]HV WKH FXOWXUDO FRQWH[W RI FRQVXPSWLRQ 0F&UDFNHQ :DWNLQV f ,QYHVWLJDWLRQ RI FRQVXPHU H[SHULHQFH RULJLQDWHV IURP WKH SRVLWLRQ WKDW LQGLYLGXDOV OLYH DQG FRQVXPH LQ D PHDQLQJIXOO\ FRQVWLWXWHG ZRUOG WKDW KDV EHHQ VWUXFWXUHG E\ WKH EHOLHIV DQG YDOXHV RI D FXOWXUH $GYHUWLVHPHQWV DQG FRQVXPHU JRRGV HDFK SOD\ D NH\ UROH LQ WKH WUDQVPLVVLRQ DQG

PAGE 53

H[SUHVVLRQ RI WKHVH FXOWXUDO QRUPV DQG YDOXHV 0F&UDFNHQ f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f ,W PDNHV DFFHVVLEOH WR FKLOGUHQ H[SUHVVLRQV RI WKH FXOWXUH LQ ZKLFK WKH\ DUH OHDUQLQJ WR OLYH DQG FRQWULEXWH $V DFWLYH SDUWLFLSDQWV LQ WKLV SURFHVV FKLOGUHQ OHDUQ DERXW WKH FRQWHQWV DQG UDQJH RI FXOWXUDO PHDQLQJ WKDW H[LVW LQ FRQVXPHU JRRGV 0F&UDFNHQ f 7KH SLFWXUH RI WKH ZRUOG DV FRQYH\HG WKURXJK DGYHUWLVLQJ VKDSHV RU LQIOXHQFHV WKH SLFWXUH RI WKH

PAGE 54

ZRUOG WKDW LV FRQVWUXFWHG WKURXJK FKLOGKRRG &KLOGUHQ DWWHQG WR DGYHUWLVLQJ LQ VHDUFK RI PHDQLQJ WKLQJV WKDW FDQ EH XVHG LQ WKH SURFHVV RI FRQVWUXFWLQJ HPHUJLQJ GHILQLWLRQV RI WKH VHOI WKH ODUJHU FRPPXQLW\ LQ ZKLFK WKH\ OLYH DQG WKH PDUNHWSODFH DUHQD 7KH\ VHDUFK QRW RQO\ IRU SURGXFW LQIRUPDWLRQ EXW IRU LQVLJKW LQWR ZKDW LW PHDQV WR EH D FKLOG DQG ZKDW D FKLOG EHFRPHV 5HVHDUFK JURXQGHG LQ D PHDQLQJEDVHG DSSURDFK H[SOLFLWO\ DGRSWV WKLV PRUH LQFOXVLYH SHUVSHFWLYH RQ FKLOGUHQf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fKH LQWHUSUHWV DQG HYDOXDWHV WKHVH H[SHULHQFHV LV D FRQVHTXHQFH RI WKH FXOWXUDO XQGHUVWDQGLQJ VfKH EULQJV WR EHDU DV ZHOO DV KHUKLVf LQIRUPDWLRQ SURFHVVLQJ FDSDELOLWLHV 0HDQLQJ LV FUHDWHG DQG FRQILUPHG WKURXJK WKH SURFHVV RI LQWHUSUHWDWLRQ GHILQLWLRQ DQG LQWHUDFWLRQ 5HLG DQG )UD]HU f :LWKRXW EHQHILW RI VXEVWDQWLDO PDUNHWSODFH H[SHULHQFH DQG IXOO\ PDWXUH SURFHVVLQJ VWUDWHJLHV FKLOGUHQ XQUDYHO VKDSH DQG FRQVWUXFW PHDQLQJIXO LQWHUSUHWDWLRQV RI WKHLU FRQVXPSWLRQ UHODWHG H[SHULHQFHV 7KRXJK WKHVH FRQVWUXFWLRQV PD\ VRPHWLPHV EHDU OLWWOH UHODWLRQVKLS WR DGXOW H[SODQDWLRQV WKH\ UHSUHVHQW D YDOLG GDWDEDVH IRU IXUWKHULQJ VFLHQWLILF LQVLJKW :KDW GR QRW VHHP WR H[LVW LQ DQ\ VXEVWDQWLDO ZD\ DUH LQYHVWLJDWLRQV GRFXPHQWLQJ KRZ FKLOGUHQfV QDWXUDO UHVSRQVHV WR

PAGE 55

PDUNHWSODFH VWLPXOL UHSUHVHQW D VXFFHVVIXO DGDSWDWLRQ WR WKH FRQGLWLRQ DQG HQYLURQPHQW RI EHLQJ D FKLOG 0LQLPDO GDWD RQ FKLOGUHQfV SHUVSHFWLYHV RI WKHLU FRQVXPHU H[SHULHQFHV LV DYDLODEOH D SHUVSHFWLYH WKDW RQO\ EHFRPHV DFFHVVLEOH LI UHVHDUFKHUV DUH ZLOOLQJ WR VXVSHQG EHOLHI LQ WUDGLWLRQDO QRWLRQV RI FKLOGUHQ DV LQ SURFHVV FRJQLWLYHO\ OLPLWHG DQG ODFNLQJ UHDO XQGHUVWDQGLQJ 0XFK OLNH DQ HWKQRFHQWULF ELDV LQ DQWKURSRORJLFDO VWXG\ WKH LQWHUSUHWDWLRQ RI FKLOGUHQf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fV SUHSXUFKDVH LPSDFW RQ FRQVXPHU EHKDYLRU WKHUH LV JURZLQJ FRQVHQVXV WKDW DGYHUWLVLQJfV HIIHFWV PD\ EH GHWHFWHG QRW RQO\ DW WKH WLPH RI H[SRVXUH EXW ODWHU LQ WKH FRQWH[W RI SURGXFW XVH $DNHU DQG 6WD\PDQ 'HLJKWRQ 'HLJKWRQ DQG 6FKLQGOHU +RFK DQG +D /HYLQ DQG *DHWK 0DUNV DQG .DPLQV 2OVRQ DQG 'RYHU 3XWR DQG +R\HU 3XWR DQG :HOOV f 7KRXJK FRQFHSWXDO SHUVSHFWLYHV DQG DLPV GLIIHU UHVHDUFKHUV DJUHH WKDW DQ DGYHUWLVHPHQW PD\ KHOS WR FXOWLYDWH DVVRFLDWLRQV ZLWK D SURGXFW H[SHULHQFH VR WKDW WKH H[SHULHQFH LV GLIIHUHQW WKDQ LW ZRXOG KDYH EHHQ ZLWKRXW H[SRVXUH WR WKH DG $GYHUWLVLQJ PD\ HQJHQGHU IHHOLQJV WKDW DUH OLQNHG WR WKH H[SHULHQFH RI XVLQJ WKH SURGXFW VR WKDW LW EHFRPHV PRUH IXQ H[FLWLQJ RU LQWULJXLQJ WKDQ LW ZRXOG RWKHUZLVH

PAGE 56

EH $DNHU DQG 6WD\PDQ 3XWR DQG :HOOV f $OWHUQDWLYHO\ DGYHUWLVHG FODLPV PD\ EH FRQVWUXHG DV K\SRWKHVHV WKDW FRQVXPHUV VXEVHTXHQWO\ WHVW RXW LQ WKH FRQWH[W RI XVLQJ D SURGXFW VKDSLQJ WKHLU LQWHUSUHWDWLRQV DQG HYDOXDWLRQV +RFK DQG +D f ,UUHVSHFWLYH RI ZKHWKHU FRJQLWLYH RU DIIHFWLYH H[SODQDWLRQV DUH VRXJKW WKHUH LV FOHDU HYLGHQFH DW OHDVW DPRQJ DGXOW FRQVXPHUV WKDW DGYHUWLVHUV KDYH WKH DELOLW\ WR UHDFK LQWR WKH FRQVXPSWLRQ H[SHULHQFH DQG LQIOXHQFH KRZ LW LV SHUFHLYHG DQG HYDOXDWHG $DNHU DQG 6WD\PDQ 'HLJKWRQ 'HLJKWRQ DQG 6FKLQGOHU +RFK DQG +D /HYLQ DQG *DHWK 0DUNV DQG .DPLQV 2OVRQ DQG 'RYHU f :KHWKHU DQG WR ZKDW H[WHQW DGYHUWLVLQJ DFWXDOO\ DIIHFWV SURGXFW XVH GHSHQGV RQ WKH FKDUDFWHU RI WKH FRQVXPSWLRQ H[SHULHQFH LWVHOI :KHQ SURGXFW SHUIRUPDQFH LV HDVLO\ DQG XQDPELJXRXVO\ MXGJHG DGYHUWLVLQJ LV HDVLO\ GLVFRXQWHG ,Q WKLV VLWXDWLRQ DGXOWV DUH XQOLNHO\ WR UHO\ RQ DGYHUWLVLQJ WR GLUHFW WKH LQWHUSUHWLYH SURFHVV +RFK DQG +D f +RZHYHU WKHUH DUH PDQ\ FRQVXPSWLRQ RFFDVLRQV ZKHQ WKH LQGLFDQWV RI SURGXFW SHUIRUPDQFH DUH QHLWKHU REYLRXV QRU HDVLO\ DVVHVVHG 7\SLFDOO\ SURGXFW TXDOLW\ LV QRW VROHO\ D IXQFWLRQ RI D SURGXFWfV FRQFUHWH DWWULEXWHV EXW RI PRUH LQWDQJLEOH VXEMHFWLYH SURSHUWLHV DV ZHOO 4XHVWLRQV RI SURGXFW TXDOLW\ RU YDOXH DUH RIWHQ QRW XQHTXLYRFDOO\ UHVROYHG WKURXJK SURGXFW FRQVXPSWLRQ :KHQ D SURGXFW H[SHULHQFH LV SRWHQWLDOO\ DPELJXRXV RU RSHQ WR PXOWLSOH LQWHUSUHWDWLRQV DGYHUWLVLQJ PD\ H[HUW D VLJQLILFDQW LQIOXHQFH RQ FRQVXPHUVf DVVHVVPHQWV RI TXDOLW\ DQG HQMR\PHQW 7KRXJK DGXOWV UHFRJQL]H WKDW DGYHUWLVHPHQWV DUH SDUWLVDQ VRXUFHV WKH\ PD\ GHYHORS WHQWDWLYH H[SHFWDWLRQV RQ WKH EDVLV RI DG FODLPV WKDW DUH GLIILFXOW WR YHULI\ GLUHFWO\ 'HLJKWRQ f 0DQ\ FRPPRQSODFH SURGXFW H[SHULHQFHV DUH VXSSRUWLYH RI PXOWLSOH LQWHUSUHWDWLRQV )URP VRIW

PAGE 57

GULQNV WR WKH ODWHVW LQ KLSKRS IDVKLRQV SURGXFW XVH LV ODGHQ ZLWK PHDQLQJ WKDW DFFUXHV IURP VRXUFHV EH\RQG LWV SK\VLFDO IRUP 0F&UDFNHQ f ,Q WKHVH W\SHV RI VLWXDWLRQV DGYHUWLVHPHQWV KDYH WKH FDSDFLW\ WR DOWHU WKH FRQVXPHUfV H[SHULHQFH E\ VXJJHVWLQJ ZKDW IHDWXUHV VKRXOG EH DWWHQGHG WR DQG UHPHPEHUHG 'HLJKWRQ f $GV PD\ RIIHU FOXHV WKDW FRQVXPHUV UHO\ RQ WR LQWHUSUHW WKHLU IHHOLQJV DQG SHUFHSWLRQV $V D UHODWLYHO\ QHZ DUHD RI LQTXLU\ UHVHDUFK LQYHVWLJDWLRQ LQWR WKH HIIHFWV RI DGYHUWLVLQJ RQ FRQVXPSWLRQ QDWXUDOO\ UHIOHFWV PDQ\ XQUHVROYHG FRQFHSWXDO DQG PHDVXUHPHQW LVVXHV 2QH RI WKH FOHDU FKDOOHQJHV LQ WKLV DUHD LV WR GHYHORS PHWKRGV WKDW HIIHFWLYHO\ FDSWXUH DGYHUWLVLQJfV H[SHULHQWLDO LQIOXHQFH 1HZ QRQWUDGLWLRQDO DSSURDFKHV DUH UHTXLUHG WR LVRODWH WKHVH HIIHFWV WKHLU FRQVHTXHQFHV DQG GHWHUPLQDQWV $DNHU DQG 6WD\PDQ 3XWR DQG :HOOV :HOOV f &RQWLQXHG FRQFHSWXDO FODULILFDWLRQ DQG UHILQHPHQW LV DOVR QHHGHG WR SURPRWH XQGHUVWDQGLQJ $PELJXLW\ VXUURXQGLQJ WKH SUHFLVH QDWXUH RI DGYHUWLVLQJfV LPSDFW RQ FRQVXPSWLRQ LV HYLGHQW LQ WKH WHUPV DQG PHWKRGV XVHG WR LQYHVWLJDWH WKLV WRSLF 'HLJKWRQ f 0RVW RI WKH UHVHDUFK LQYHVWLJDWLQJ WKH UHODWLRQVKLS EHWZHHQ DGYHUWLVLQJ DQG SURGXFW H[SHULHQFH FDQ EH LGHQWLILHG ZLWK RQH RI WZR FRQFHSWXDO DSSURDFKHV f WUDQVIRUPDWLRQDO DGYHUWLVLQJ RU f WKH H[SHULHQWLDO OHDUQLQJ RU K\SRWKHVLVWHVWLQJ DSSURDFK 7KRXJK WKH H[SODQDWRU\ EDVHV IRU WKHVH PRGHOV FOHDUO\ GLIIHU WKH\ UHWDLQ LPSRUWDQW FRPPRQDOLWLHV %RWK VXJJHVW WKDW DGYHUWLVLQJ FDQ LQIOXHQFH ZKDW FRQVXPHUV WKLQN DERXW LQ WKH FRQWH[W RI FRQVXPSWLRQ %RWK VHHP WR FDVW DGYHUWLVLQJfV SHUVXDVLYH SRZHU LQ WHUPV RI LWV DELOLW\ WR GLUHFW FRQVXPHU FRQFOXVLRQV RU LQIHUHQFH 'HLJKWRQ f %RWK VXJJHVW WKDW WKH FRQVXPSWLRQ H[SHULHQFH FKDQJHV DV D FRQVHTXHQFH RI

PAGE 58

DGYHUWLVLQJ H[SRVXUH 3UHFLVHO\ KRZ WKHVH FKDQJHV DUH K\SRWKHVL]HG WR RFFXU KRZHYHU GLIIHUV DFURVV WKH WZR DSSURDFKHV 7KH K\SRWKHVLVWHVWLQJ PRGHO DGRSWV DQ LQIRUPDWLRQFHQWHUHG RULHQWDWLRQ IRFXVLQJ RQ KRZ DGYHUWLVLQJ LQIOXHQFHV ZKDW FRQVXPHUV OHDUQ IURP WKHLU SURGXFW H[SHULHQFHV +RFK DQG +D f &ODLPV PDGH E\ DQ DGYHUWLVHU PD\ DIIHFW KRZ FRQVXPHUV MXGJH LQWHUSUHW DQG HYDOXDWH WKHLU SURGXFW H[SHULHQFHV $FFRUGLQJ WR WKLV PRGHO FRQVXPHUV WUHDW DGYHUWLVHG FODLPV DV WHQWDWLYH K\SRWKHVHV RU H[SHFWDWLRQV DERXW SURGXFW SHUIRUPDQFH )URP DQ DGXOWfV SHUVSHFWLYH DGYHUWLVHUV DUH YLHZHG DV SDUWLVDQ VRXUFHV ZKR ODFN IXOO FUHGLELOLW\ %HIRUH DGXOWV DUH ZLOOLQJ WR DFFHSW D FODLP PDGH E\ DQ DGYHUWLVHU WKH\ VHHN VRPH VRUW RI LQGHSHQGHQW HYLGHQFH RU FRUURERUDWLRQ (LWKHU SURGXFW FRQVXPSWLRQ RU D VHDUFK IRU DGGLWLRQDO LQIRUPDWLRQ SURYLGHV WKH RSSRUWXQLW\ WR WHVW D K\SRWKHVLV HQJHQGHUHG E\ DQ DGYHUWLVHPHQW +RZ WKH DGEDVHG LQIRUPDWLRQ DQG H[SHULHQWLDO HYLGHQFH DUH LQWHJUDWHG GHSHQGV RQ WKH FKDUDFWHULVWLFV RI WKH GHFLVLRQ HQYLURQPHQW DQG WKH FRQVXPHUfV FRPSHWHQFH ZLWKLQ LW +RFK DQG +D f 7KH K\SRWKHVLVWHVWLQJ PRGHO LPSOLFLWO\ DVVXPHV DQ H[SHULHQFHG LI QRW LQIDOOLEOH FRQVXPHU (YHQ DV DGXOWV SURFHVVLQJ PD\ EH GLVWRUWHG E\ FRQILUPDWRU\ ELDVHV DQG RYHUFRQILGHQFH 'HLJKWRQ +RFK DQG 'HLJKWRQ f 8QOHVV WKH FRQVXPSWLRQ H[SHULHQFH SURYLGHV XQDPELJXRXV HYLGHQFH DERXW SURGXFW TXDOLW\ DGXOWV WHQG WR FRQILUP WKHLU RULJLQDO H[SHFWDWLRQV +RFK DQG +D f %\ KHOSLQJ FRQVXPHUV WR PDNH VHQVH RI WKHLU SURGXFW H[SHULHQFHV DGYHUWLVLQJ FDQ LQIOXHQFH ZKDW FRQVXPHUV FRPH WR EHOLHYH DERXW WKH SURGXFWV WKH\ FRQVXPH 7KH WUDQVIRUPDWLRQDO PRGHO RQ WKH RWKHU KDQG IRFXVHV PRUH GLUHFWO\ RQ DGYHUWLVLQJfV DIIHFWLYH FRQVHTXHQFHV ,W VXJJHVWV WKDW DGYHUWLVLQJ FDQ VKDSH D

PAGE 59

FRQVXPSWLRQ H[SHULHQFH E\ LQH[WULFDEO\ DWWDFKLQJ IHHOLQJV DQG LPSUHVVLRQV WR D EUDQG VR WKDW WKH FRQVXPHUfV H[SHULHQFH LV IXQGDPHQWDOO\ GLIIHUHQW WKDQ LW ZRXOG KDYH EHHQ LQ WKH DEVHQFH RI DG H[SRVXUH 3XWR DQG :HOOV f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f 3HUVXDVLRQ LV D IXQFWLRQ RI WKH DXGLHQFHfV ZLOOLQJQHVV WR HQWHU LQWR WKH VWRU\ WR VXVSHQG GLVEHOLHI WHPSRUDULO\ DQG DOORZ WKH DGYHUWLVHU WR VHW WKH DJHQGD 7KH DGYHUWLVHPHQWfV SHUVXDVLYH SRZHU GHULYHV QRW IURP LWV DELOLW\ WR FKDQJH FRQVXPHUVf EHOLHIV GLUHFWO\ EXW LQ LWV FDSDFLW\ WR WHOO FRQVXPHUV ZKDW WR WKLQN RU IHHO LWV DELOLW\ WR IUDPH WKH FRQVXPSWLRQ H[SHULHQFH 'HLJKWRQ f :KHUH WKH FRQFHSW RI WUDQVIRUPDWLRQ VHHPV WR GHSDUW PRVW FOHDUO\ IURP WKH H[SHULHQWLDO OHDUQLQJ DSSURDFK LV LQ WKH IRUPHUfV H[SOLFLW LQFOXVLRQ RI DIIHFWLYH LQIOXHQFHV 3XWR DQG +R\HU 3XWR DQG :HOOV :HOOV f 1RW RQO\ FDQ DGYHUWLVLQJ LQIOXHQFH ZKDW FRQVXPHUV DWWHQG WR DQG ZKDW SURGXFW H[SHFWDWLRQV WKH\ PLJKW GHYHORS EXW ZKDW IHHOLQJV DUH HYRNHG LQ WKH FRQWH[W RI D FRQVXPSWLRQ H[SHULHQFH :KHQ UHVHDUFKHUV IRFXV RQ WUDQVIRUPDWLRQDO HIIHFWV LW LV WKH DGLQGXFHG IHHOLQJV EURXJKW IRUZDUG LQWR WKH XVDJH FRQWH[W WKDW DUH RI SULPDU\ LQWHUHVW

PAGE 60

7KLV HPSKDVLV RQ DGYHUWLVLQJfV HPRWLRQDO LPSDFW KDV OHG VRPH UHVHDUFKHUV WR HTXDWH LQFRUUHFWO\ DIIHFWEDVHG RU LPDJH DGYHUWLVLQJ ZLWK WKH WUDQVIRUPDWLRQDO FRQFHSW +RZHYHU WUDQVIRUPDWLRQDO HIIHFWV DUH QRW LQWULQVLF WR DQ DGYHUWLVHPHQW EXW DUH GHILQHG E\ FRQVXPHUVf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f 7KH NH\ LV WKH DGYHUWLVHPHQWfV FDSDFLW\ WR DOWHU WKH H[SHULHQFH ZKHWKHU WKH DSSHDO LV HPRWLRQDO LQIRUPDWLRQDO RU ERWK 7KH ILQGLQJ WKDW DGXOWV PD\ UHO\ RQ DGYHUWLVLQJ FODLPV WR LQWHUSUHW WKHLU SURGXFW H[SHULHQFHV LV VXUSULVLQJ DQG SHUKDSV HYHQ GLVFRQFHUWLQJ :KDW KDV EHHQ DVVXPHG WR EH EH\RQG WKH UHDOP RI PDUNHWLQJfV LQIOXHQFH PD\ RIWHQ EH ZHOO ZLWKLQ LWV UHDFKHV +RFK DQG 'HLJKWRQ f 0DUNHWLQJ PDQDJHUV VHHPLQJO\ KDYH WKH FDSDFLW\ WR UHDFK LQWR WKH FRQVXPSWLRQ H[SHULHQFH DQG DOWHU LWV PHDQLQJ DQG YDOXH &XUUHQW UHVHDUFK DSSURDFKHV KDYH SURYLGHG NH\ LQVLJKWV LQWR WKH VFRSH DQG FKDUDFWHU RI DGYHUWLVLQJfV LQIOXHQFH RQ FRQVXPHUVf LQWHUSUHWDWLRQV RI WKHLU SURGXFW H[SHULHQFHV 7KRXJK WKH SULPDU\ HPSKDVHV RI WKH WUDQVIRUPDWLRQDO DQG K\SRWKHVLVWHVWLQJ PRGHOV GLIIHU WKHVH DSSURDFKHV FOHDUO\ FRPSOHPHQW DQG HQKDQFH RQH DQRWKHU %RWK PRGHOV LPSOLFLWO\ UHFRJQL]H WKH LQWHUSOD\ RI DIIHFWLYH DQG FRJQLWLYH IDFWRUV LQ FRQVXPHUVf LQWHUSUHWDWLRQV RI DGYHUWLVLQJFRQVXPSWLRQ

PAGE 61

UHODWLRQVKLSV +RZHYHU QHLWKHU H[SODQDWLRQ IXOO\ FDSWXUHV WKH LQIOXHQFH RI ERWK 7KH OHDUQLQJ RU K\SRWKHVLVWHVWLQJ PRGHO GUDZV DOPRVW H[FOXVLYHO\ RQ FRJQLWLYH FRQFHSWV DQG SURFHVVHV WR FRQFHSWXDOL]H WKH LQWHUDFWLRQ EHWZHHQ DGYHUWLVLQJ DQG SURGXFW HYLGHQFH $FFRUGLQJ WR WKLV DSSURDFK DGYHUWLVLQJ FDQ H[HUW VXEVWDQWLDO LQIOXHQFH RQ ZKDW FRQVXPHUV OHDUQ IURP WKHLU SURGXFW H[SHULHQFHV 2I SULPDU\ LQWHUHVW LV WKH SURFHVV XQGHUO\LQJ DGYHUWLVLQJfV LPSDFW RQ FRQVXPHUVf EHOLHIV DQG SURGXFW HYDOXDWLRQV 7KH WUDQVIRUPDWLRQDO DSSURDFK RQ WKH RWKHU KDQG IRFXVHV RQ WKH DGfV FDSDFLW\ WR FUHDWH DIIHFWLYH DVVRFLDWLRQV WKDW DOWHU WKH FRQVXPSWLRQ H[SHULHQFH ,W LV WKH DGYHUWLVHPHQWfV DELOLW\ WR FUHDWH PRGLI\ RU LQWHQVLI\ WKH IHHOLQJV FRQVXPHUV H[SHULHQFH ZKLOH XVLQJ WKH SURGXFW WKDW KDV FDSWXUHG UHVHDUFKHU DWWHQWLRQ DQG LQWHUHVW :KLOH WKH WUDQVIRUPDWLRQDO DSSURDFK HPSKDVL]HV DIIHFWLYH FRQVHTXHQFHV LW VHHPV WR GUDZ LPSOLFLWO\ RQ WKH ORJLF RI WKH K\SRWKHVLVWHVWLQJ PRGHO DV ZHOO $ FHQWUDO WHQHW RI WKH WUDQVIRUPDWLRQDO PRGHO LV WKDW DGYHUWLVLQJ KHOSV WR GLUHFW FRQVXPHUVf DWWHQWLRQ DQG LQWHUSUHWLYH VWUDWHJLHV LQ WKH FRQWH[W RI SURGXFW FRQVXPSWLRQ :HOOV f 7KDW WKH DG KHOSV WKH FRQVXPHU WR LQWHUSUHW KLVKHUf FRQVXPSWLRQ UHODWHG WKRXJKWV DQG IHHOLQJV LV FRPSDWLEOH ZLWK WKH OHDUQLQJ H[SODQDWLRQ RIIHUHG E\ SURSRQHQWV RI WKH K\SRWKHVLVWHVWLQJ PRGHO %RWK RI WKHVH DSSURDFKHV SURYLGH D XVHIXO SHUVSHFWLYH RQ WKH UHODWLRQVKLS EHWZHHQ DGYHUWLVLQJ DQG XVH H[SHULHQFH 1HLWKHU DSSURDFK LV LQFRPSDWLEOH ZLWK WKH REVHUYDWLRQ WKDW DGYHUWLVHPHQWV RIWHQ HYRNH ERWK FRJQLWLYH DQG DIIHFWLYH UHVSRQVHV SDUWLFXODUO\ LQ WKH UHDOP RI FKLOGUHQfV DGYHUWLVLQJ ZKHUH EUDQG LQIRUPDWLRQ LV W\SLFDOO\ FRQYH\HG WKURXJK WKH ILOWHU RI OLJKWKHDUWHG FUHDWLYH DQG SOD\IXO DSSHDOV

PAGE 62

,W LV LQ WKH FRQWH[W RI FKLOGUHQfV DGYHUWLVHPHQWV SURGXFWV DQG FRPPRQ H[SHULHQFHV WKDW WKH XWLOLW\ RI WKHVH PRGHOV QRZ QHHGV WR EH DVVHVVHG (IIHFWLYH FKLOGUHQfV DGV XVH VWULNLQJ LPDJHU\ DQG ODQJXDJH WR HQODUJH D EUDQGfV PHDQLQJ DQG YDOXH 7R WUDQVSRUW D EUDQG IURP WKH UHDOP RI HYHU\GD\ OLIH WR D PRUH DWWUDFWLYH DQG V\PEROLF FRQWH[W FKLOGUHQfV DGYHUWLVHUV IUHTXHQWO\ UHO\ RQ IDQFLIXO DQG LPDJLQDWLYH H[HFXWLRQV $GYHUWLVHPHQWV PD\ KDYH WKH JUHDWHVW SRWHQWLDO WR DIIHFW D FKLOGfV SURGXFW H[SHULHQFH ZKHQ WKH\ DUH SODXVLEOH DQG HQJDJLQJ EXW HOXVLYH DQG GLIILFXOW WR GLVSXWH GLUHFWO\ 1RW RQO\ LV WKH SURGXFW H[SHULHQFH SRWHQWLDOO\ DPELJXRXV DV UHVHDUFKHUV KDYH VXJJHVWHG +D DQG +RFK +RFK DQG +D f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fW VLPSO\ EH DVVXPHG EXW PXVW UHH[DPLQHG LQ WKH FRQWH[W RI FKLOGUHQfV OLYHV 3UHYDLOLQJ 3DUDGLJPV DQG &KLOGUHQfV 5HDOLW\ 7KH WKHRUHWLFDO PRGHOV WKDW KDYH EHHQ GHYHORSHG WR VWXG\ WKH UHODWLRQVKLS EHWZHHQ DGYHUWLVLQJ DQG SURGXFW H[SHULHQFH HPERG\ VHYHUDO NH\ DVVXPSWLRQV DERXW KRZ DGXOWV UHVSRQG WR PDUNHWHUFRQWUROOHG VRXUFHV RI LQIRUPDWLRQ HJ 'HLJKWRQ +RFK DQG 'HLJKWRQ f :LWKLQ WKLV JHQHUDO IUDPHZRUN FRQVXPHUV DUH FKDUDFWHUL]HG DV VNLOOHG EXW SUDJPDWLF WKLQNHUV ZKR f VHDUFK IRU SURGXFW LQIRUPDWLRQ LQ RUGHU WR PDNH FKRLFHV

PAGE 63

DPRQJ FRQVXPHU JRRGV f W\SLFDOO\ UHVSRQG WR DGYHUWLVLQJ ZLWK VNHSWLFLVP EHFDXVH RI LWV LQKHUHQWO\ SDUWLVDQ FKDUDFWHU DQG f WUHDW DGYHUWLVHG FODLPV DV WHQWDWLYH H[SHFWDWLRQV WR EH DVVHVVHG WKURXJK DGGLWLRQDO LQIRUPDWLRQ VHDUFK RU SURGXFW H[SHULHQFH %HFDXVH WKHVH DVVXPSWLRQV XQGHUSLQ FXUUHQW FRQFHSWXDOL]DWLRQV RI WKH UHODWLRQVKLS EHWZHHQ DGYHUWLVLQJ DQG XVH H[SHULHQFH WKHLU YDOLGLW\ LQ WKH FRQWH[W RI FKLOGUHQfV UHVSRQVHV LV DQ LPSRUWDQW LVVXH /LNH FKLOGUHQfV DGYHUWLVLQJ UHVHDUFK FXUUHQW PRGHOV RI WKH DGYHUWLVLQJ FRQVXPSWLRQ UHODWLRQVKLS SUHVXPH WKDW DGV DUH HYDOXDWHG SULPDULO\ LQ WHUPV RI WKH LQIRUPDWLRQ WKH\ SURYLGH DERXW D SURGXFWf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f &KLOGUHQ RQ WKH RWKHU KDQG DUH PRUH OLNHO\ WR DFFHSW DG FODLPV DUH RIWHQ GUDZQ WR WKH SURGXFWV WKH\ VHH GHSLFWHG DQG WHQG QRW WR UHVSRQG VNHSWLFDOO\ XQOHVV UHPLQGHG WR GR VR $GOHU HW DO %UXFNV HW DO 5RHGGHU HW DO :DUG HW DO f :KHWKHU FKLOGUHQ WUHDW DGYHUWLVHG FODLPV DV SURYLVLRQDO K\SRWKHVHV WKDW DUH VXEVHTXHQWO\ XVHG WR HYDOXDWH WKH SURGXFWV WKH\ REWDLQ LV QRW FOHDU &RQFHSWXDO PRGHOV

PAGE 64

RI WKH DGYHUWLVLQJFRQVXPSWLRQ UHODWLRQVKLS VHHP WR DVVXPH WKDW E\ H[SRVLQJ FRQVXPHUV WR DGYHUWLVHG LQIRUPDWLRQ D VHW RI FOHDU H[SHFWDWLRQV DERXW D SURGXFW ZLOO EH IRUPHG 7KRXJK FKLOGUHQ EHWZHHQ WKH DJHV RI DQG KDYH WKH FRJQLWLYH FDSDFLW\ WR IRUP VSHFLILF H[SHFWDWLRQV DERXW SURGXFW SHUIRUPDQFH WKH SUHFLVH QDWXUH RI SURGXFW SHUIRUPDQFH FODLPV LV QRW DOZD\V REYLRXV LQ FKLOGUHQfV DGYHUWLVHPHQWV :KLOH LQIRUPDWLRQDO DGV LQWHQGHG IRU DGXOWV IUHTXHQWO\ SURYLGH DWWULEXWH LQIRUPDWLRQ LQ D FOHDU DQG FRQFLVH PDQQHU FKLOGUHQf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f ,QIRUPDWLRQDO DSSHDOV DUH WKRVH WKDW DWWHPSW WR HGXFDWH DQG SHUVXDGH WKURXJK FRQFUHWH ZHOOVXEVWDQWLDWHG SHUIRUPDQFH FODLPV ([SOLFLW EHQHILWV DUH SUHVHQWHG DQG ZKHQ HIIHFWLYH FRQVXPHUV DFFHSW RU EHOLHYH PHVVDJH DUJXPHQWV 7UDQVIRUPDWLRQDO DSSHDOV RQ WKH RWKHU KDQG UHO\ RQ VWRULHV GUDPD YLYLG H[DPSOHV DQG HPRWLRQ WR VKDSH SURGXFW PHDQLQJ DQG YDOXH 'HLJKWRQ HW DO :HOOV f :LWK WKHVH H[HFXWLRQDO VW\OHV WKH EUDQGfV DSSHDO PD\ EH ULFKHU PRUH DEVWUDFW DQG GLIILFXOW WR UHGXFH WR D VLQJOH WKHPH +HUH SHUVXDVLRQ LV QRW WKH UHVXOW RI VROLG DUJXPHQWDWLRQ EXW FRPSHOOLQJ H[DPSOH WKH FDSDFLW\ RI WKH DG WR GUDZ WKH FRQVXPHU LQWR WKH VLWXDWLRQ RU VWRU\ 'HLJKWRQ f

PAGE 65

,Q WKH UHDOP RI FKLOGUHQfV DGYHUWLVLQJ WUDQVIRUPDWLRQDO DSSHDOV DUH TXLWH FRPPRQ (YHQ WKH PRVW LQIRUPDWLRQ ODGHQ FRPPHUFLDOV WDUJHWHG DW FKLOGUHQ W\SLFDOO\ UHWDLQ WUDQVIRUPDWLRQDO SURSHUWLHV VR WKDW WKH GLVWLQFWLRQ LQ SUDFWLFH GRHV QRW UHIOHFW PXWXDOO\ H[FOXVLYH FDWHJRULHV %HFDXVH FKLOGUHQfV DGV IUHTXHQWO\ UHO\ RQ ZKLPV\ DQG WDOHV RI DGYHQWXUH WR SHUVXDGH WKH OLQN EHWZHHQ WKH PHVVDJH DQG VSHFLILF SHUIRUPDQFH GLPHQVLRQV PD\ QRW EH FOHDU :KHQ &DSfQ &UXQFK DQG KLV FUHZ WKURXJK JUHDW LQJHQXLW\ DQG HIIRUW UHVFXH WKH FUXQFKEHUULHV IURP WKHLU IRHV WKH VRJJLHV ZKDW H[SHFWDWLRQV DERXW WKH SURGXFW PLJKW D FKLOG EH OLNHO\ WR JHQHUDWH" &OHDUO\ WKHUH LV LQIRUPDWLRQ DERXW WKH FHUHDOfV FUXQFKLQHVV DQG LWV DELOLW\ WR UHPDLQ VR ZLWK WLPH EXW HYHQ WKLV VLPSOH LGHD KDV WR EH H[WUDFWHG IURP D QDUUDWLYH VWUXFWXUH WKDW HPEHGV QRWLRQV DERXW WKH WULXPSK RI ULJKW RYHU ZURQJ VNLOO RYHU LJQRUDQFH DQG WHDPZRUN LQ DQ DWWHPSW WR HQKDQFH WKH SURGXFWfV SHUFHLYHG YDOXH 7R WUDQVFHQG D FRPPRQSODFH HYHQW VXFK DV HDWLQJ D ERZO RI FHUHDO WKH DGYHUWLVHU FUHDWHV D ZRUOG RI H[FLWHPHQW DQG DGYHQWXUH 7KH EUDQG PD\ DFTXLUH DGGHG YDOXH DQG PHDQLQJ WKURXJK WKLV SURFHVV +RZHYHU WKH FRQVXPHUfV DELOLW\ WR WUDQVODWH DGYHUWLVHG FODLPV LQWR VSHFLILF K\SRWKHVHV DERXW SHUIRUPDQFH PD\ EH FRPSURPLVHG &KLOGUHQ PD\ EH OHVV OLNHO\ WKDQ DGXOWV WR JHQHUDWH FOHDU H[SHFWDWLRQV DERXW SURGXFW SHUIRUPDQFH QRW EHFDXVH WKH\ DUH FRJQLWLYHO\ LOOHTXLSSHG EXW EHFDXVH RI WKH ZD\ FKLOGUHQfV DGYHUWLVHPHQWV DUH GHVLJQHG DQG H[HFXWHG %RWK WKH GHYHORSPHQW RI UHOHYDQW K\SRWKHVHV E\ WKH \RXQJ YLHZHU DQG WKH WHVWLQJ RI WKHVH H[SHFWDWLRQV LQ D XVDJH FRQWH[W PD\ EH FRPSOLFDWHG E\ WKH FUHDWLYH VWUDWHJLHV FRPPRQO\ DGRSWHG E\ FKLOGUHQfV DGYHUWLVHUV 7KRXJK DW VRPH OHYHO WKH PHDQLQJ FUHDWLRQ SURFHVV UHTXLUHV WKDW FKLOGUHQ IRUJH OLQNV EHWZHHQ WKH DGYHUWLVHPHQW DQG WKH FRQVXPSWLRQ H[SHULHQFH WKHVH OLQNV PD\

PAGE 66

QRW QHFHVVDULO\ WDNH WKH IRUP RI K\SRWKHVHV %RWK WKH K\SRWKHVLVWHVWLQJ PRGHO DQG FKLOGUHQfV DGYHUWLVLQJ UHVHDUFK PRUH JHQHUDOO\ FOHDUO\ UHIOHFW DQ LQIRUPDWLRQRULHQWHG DSSURDFK WR VWXG\LQJ SHUVXDVLYH HIIHFWV ,PSOLFLW ZLWKLQ WKH UHVHDUFK OLWHUDWXUH LV WKH DVVXPSWLRQ WKDW FKLOGUHQ WKLQN DERXW DGYHUWLVHPHQWV SULPDULO\ LQ WHUPV RI WKH SURGXFW UHODWHG LQIRUPDWLRQ WKH\ SURYLGH 5HVHDUFKHUV KDYH VWXGLHG ZKHWKHU FKLOGUHQ XQGHUVWDQG DQG DUH SHUVXDGHG E\ DGYHUWLVHG FODLPV ZKLOH SD\LQJ UHODWLYHO\ OLWWOH DWWHQWLRQ WR KRZ FKLOGUHQ VSRQWDQHRXVO\ UHODWH WR WKH DGYHUWLVHPHQWV WKH\ HQFRXQWHU &KLOGUHQfV UHVSRQVHV WR DGYHUWLVLQJ PD\ EH JRYHUQHG E\ FRQWLQJHQFLHV WKDW KDYH OLWWOH WR GR ZLWK K\SRWKHVLVWHVWLQJ RU WKH YHULILFDWLRQ RI DG FODLPV 5DWKHU WKDQ WKLQNLQJ DERXW DGYHUWLVHPHQWV SXUHO\ LQ WHUPV RI WKHLU LQIRUPDWLRQ YDOXH FKLOGUHQ PD\ DOVR EH LQFOLQHG WR EDVH WKHLU UHVSRQVHV RQ DIIHFWLYH GLPHQVLRQV WKDW KDYH OLWWOH WR GR ZLWK SURGXFW FODLPV $Q DGfV FDSDFLW\ WR HOLFLW HPRWLRQ RU IHHOLQJ DPRQJ \RXQJ YLHZHUV FHUWDLQO\ SOD\V D PRUH LPSRUWDQW UROH LQ WKH SHUVXDVLRQ SURFHVV WKDQ WUDGLWLRQDO DSSURDFKHV WR VWXG\LQJ FKLOGUHQfV DGYHUWLVLQJ UHVSRQVH UHSUHVHQW :DUWHOOD f 7R WKH H[WHQW WKDW WUDQVIRUPDWLRQDO DGV DUH PRVW SHUVXDVLYH ZKHQ WKH\ FKDUP HQWHUWDLQ RU FDSWLYDWH DWWHQWLRQ DQ H[FOXVLYH UHOLDQFH RQ FRJQLWLYH FRQFHSWV DQG WKHRU\ PD\ SDLQW D UDWKHU QDUURZ SLFWXUH RI DGYHUWLVLQJfV LQIOXHQFH DQG PHDQLQJ LQ FKLOGUHQfV OLYHV :LWK LWV JUHDWHU HPSKDVLV RQ WKH DIIHFWLYH GLPHQVLRQV RI DG UHVSRQVH WKH WUDQVIRUPDWLRQDO PRGHO RIIHUV D SHUVSHFWLYH RQ WKH DGYHUWLVLQJFRQVXPSWLRQ UHODWLRQVKLS WKDW LV PRUH FORVHO\ DOLJQHG ZLWK WKH XQLTXH VW\OH DQG FKDUDFWHU RI FKLOGUHQfV DGYHUWLVLQJ +RZHYHU WKLV SDUDGLJP LV RI OHVV YDOXH LQ XQGHUVWDQGLQJ WKH DGFRQVXPSWLRQ UHODWLRQ LQ WHUPV RI LWV EURDGHU LPSOLFDWLRQV IRU FKLOGUHQfV XQGHUVWDQGLQJ RI WKH PDUNHWSODFH

PAGE 67

$OWHUQDWLYH DSSURDFKHV WKDW IRFXV DWWHQWLRQ DW D PRUH PRODU OHYHO DUH DOVR QHHGHG WR DGGUHVV EDVLF VXEVWDQWLYH TXHVWLRQV )URP D FKLOGfV SHUVSHFWLYH KRZ IRFDO DUH WKH OLQNV EHWZHHQ DGYHUWLVHPHQWV DQG FRQVXPSWLRQ" :KDW DUH WKH FDWHJRULHV RI PHDQLQJ WKDW FKLOGUHQ GUDZ XSRQ LQ WKLQNLQJ DERXW DGYHUWLVHPHQWV DQG WKHLU SURGXFW H[SHULHQFHV" +RZ DUH WKHVH FDWHJRULHV HPEHGGHG LQ FKLOGUHQfV ODUJHU FRQFHSWLRQV RI ZKDW DGYHUWLVLQJ LV DQG KRZ LW ZRUNV" 2QO\ WKURXJK DFNQRZOHGJLQJ WKH YDOLGLW\ RI FKLOGUHQfV SHUVSHFWLYHV FDQ WKHVH TXHVWLRQV EH DQVZHUHG %\ DOORZLQJ FKLOGUHQ WR WHOO WKHLU VLGH RI WKH VWRU\ WKURXJK WKHLU RZQ ODQJXDJH DQG SRLQW RI YLHZ UHDO LQVLJKW FDQ EH JDLQHG 5DWKHU WKDQ FRQVWUDLQLQJ LQYHVWLJDWLRQ WR DGXOWFHQWULF PRGHOV LW LV LPSRUWDQW WR DGRSW D PRUH LQFOXVLYH SHUVSHFWLYH RQH WKDW UHIOHFWV FKLOGUHQfV FDWHJRULHV FXOWXUH DQG H[SHULHQFH :LWKRXW GRXEW WKHUH LV QHHG IRU UHVHDUFK LQWR FKLOGUHQfV H[SHFWDWLRQV DQG WKHLU SRWHQWLDO LPSDFW RQ SURGXFW H[SHULHQFH +RZHYHU WR XQGHUVWDQG IXOO\ FKLOGUHQfV FRQVXPSWLRQ H[SHULHQFHV UHTXLUHV D EURDGHU UHVHDUFK DJHQGD RQH WKDW EHJLQV WR ORRN EH\RQG SROLF\ GULYHQ DSSOLFDWLRQV DQG UHIOHFWV DQ RSHQQHVV WR QHZ PHWKRGV DQG SHUVSHFWLYHV 'UDZLQJ RQ D PHDQLQJEDVHG PRGHO RI DGYHUWLVLQJ H[SHULHQFH WKLV VHW RI VWXGLHV GHSDUWV IURP WUDGLWLRQDO DSSURDFKHV WR FKLOGUHQfV DGYHUWLVLQJ UHVSRQVH ,QVLJKW LQWR KRZ FKLOGUHQ PDNH VHQVH RI WKH DGYHUWLVHPHQWV DQG WKH SURGXFWV WKH\ FRQVXPH LV VRXJKW ZLWKLQ WKH FRQVWUDLQWV LPSRVHG E\ WKHLU GHYHORSPHQWDO DELOLWLHV WR SURFHVV PDUNHWSODFH LQIRUPDWLRQ 8QWLO WKH YDOLGLW\ RI FKLOGUHQfV XQLTXH SHUVSHFWLYHV LV LQFRUSRUDWHG LQWR WKH WKHRULHV WKDW JXLGH HPSLULFDO UHVHDUFK RXU FROOHFWLYH LQVLJKW LQWR FKLOGUHQfV H[SHULHQFHV DQG WKH FRQVXPHU VRFLDOL]DWLRQ SURFHVV UHPDLQV LQFRPSOHWH

PAGE 68

&+$37(5 678'< 7KRXJK FKLOGUHQfV UHVSRQVHV WR DGYHUWLVLQJ KDYH EHHQ WKH IRFXV RI QXPHURXV UHVHDUFK LQYHVWLJDWLRQV UDUHO\ KDYH WKHVH LQYHVWLJDWLRQV H[SOLFLWO\ FRQVLGHUHG WKH EURDGHU FRQWH[W LQ ZKLFK SURGXFWV DUH DOVR SXUFKDVHG DQG FRQVXPHG ([DPLQLQJ FKLOGUHQfV UHDFWLRQV ZLWKLQ WKLV ODUJHU HPEHGGLQJ V\VWHP RSHQV WKH GRRU WR QHZ LQVLJKWV FRQFHSWV DQG UHODWLRQVKLSV $W WKH VDPH WLPH LW SRVHV QHZ FRQFHSWXDO DQG PHWKRGRORJLFDO FKDOOHQJHV 7KDW SURGXFW FRQVXPSWLRQ DIIHFWV KRZ FKLOGUHQ WKLQN DERXW DGYHUWLVHPHQWV LV REYLRXV KRZ EHVW WR VWXG\ WKH QDWXUH DQG VFRSH RI LWV LQIOXHQFH LV QRW QHDUO\ VR FOHDU :KDW OLWWOH UHVHDUFK LQYHVWLJDWLQJ DGYHUWLVLQJFRQVXPSWLRQ UHODWLRQVKLSV H[LVWV KDV IRFXVHG RQ DGXOW SRSXODWLRQV DQG SURFHVVLQJ VWUDWHJLHV HJ 'HLJKWRQ 'HLJKWRQ DQG 6FKLQGOHU +RFK DQG +D 3XWR DQG :HOOV f $GXOW VNLOOV DQG EUHDGWK RI H[SHULHQFH LV SUHVXPHG VHUYLQJ DV WKH EDVLV IRU FRQWLQXLQJ FRQFHSWXDOL]DWLRQ DQG PHDVXUHPHQW 6WLOO LQ LWV LQIDQF\ DV D UHVHDUFK DUHD VLJQLILFDQW PHWKRGRORJLFDO FKDOOHQJHV UHPDLQ SDUWLFXODUO\ ZLWK UHVSHFW WR DGYHUWLVHPHQWV ZLWK WUDQVIRUPDWLRQDO DLPV :HOOV f 7UDGLWLRQDO UHFDOO DQG DWWLWXGH PHDVXUHV PD\ QRW IXOO\ FDSWXUH DGYHUWLVLQJfV PRUH VXEWOH LPSDFW RQ FRQVXPHUVf SURGXFW H[SHULHQFHV 3XWR DQG :HOOV f 8QWLO QHZ UHVHDUFK WHFKQLTXHV DQG SURFHGXUHV HYROYH XQGHUVWDQGLQJ RI DGYHUWLVLQJfV FDSDFLW\ WR VKDSH D FRQVXPSWLRQ H[SHULHQFH LV QHFHVVDULO\ OLPLWHG 4XHVWLRQV DERXW KRZ WR DSSURDFK WKH VWXG\ RI DGYHUWLVLQJFRQVXPSWLRQ UHODWLRQVKLSV DUH PDJQLILHG FRQVLGHUDEO\ ZKHQ WKH FRQVXPHUV DUH FKLOGUHQ 1RW RQO\ DUH

PAGE 69

TXHVWLRQV DERXW PHDVXUHPHQW DW LVVXH EXW DW D PRUH IXQGDPHQWDO OHYHO WKH FRQFHSWXDO ILW RI FXUUHQW PRGHOV LQ WHUPV RI FKLOGUHQfV H[SHULHQFHV DQG DELOLWLHV DOVR ZDUUDQWV FDUHIXO UHIOHFWLRQ :KHWKHU WKH K\SRWKHVLVWHVWLQJ PRGHO ZKLFK SUHVXPHV D IXOO\ OLWHUDWH LQIRUPDWLRQFHQWHUHG FRQVXPHU LV UHOHYDQW WR KRZ FKLOGUHQ DWWDFK PHDQLQJ WR DGYHUWLVHPHQWV DQG SURGXFWV LV QRW FOHDU ,QWXLWLYHO\ WKLV DSSURDFK GHULYHG IURP D FRJQLWLYHO\ GULYHQ H[SODQDWRU\ IUDPHZRUN DQG WHVWHG LQ WKH FRQWH[W RI LQIRUPDWLRQDO DGYHUWLVLQJ GRHV QRW VHHP WR PLUURU HLWKHU FKLOGUHQfV SURFOLYLWLHV RU WKH DGV GHVLJQHG WR UHDFK D \RXQJ DXGLHQFH (YHQ WKH WUDQVIRUPDWLRQDO PRGHO ZKLFK H[SUHVVO\ FDOOV LQWR SOD\ DIIHFWLYH GLPHQVLRQV DQG D EURDGHU DUUD\ RI DGYHUWLVLQJ IRUPDWV KDV QRW EHHQ VXEMHFWHG WR HPSLULFDO WHVWLQJ DPRQJ HLWKHU DGXOW RU \RXWK SRSXODWLRQV (PSLULFDO H[DPLQDWLRQ RI WKH WUDQVIRUPDWLRQDO FRQFHSW KDV IRFXVHG H[FOXVLYHO\ RQ WKH PHDVXUHPHQW RI WKH FRQVWUXFW UDWKHU WKDQ LWV LPSDFW LQ MXGJPHQW RU FKRLFH FRQWH[WV HJ $DNHU DQG 6WD\PDQ 3XWR DQG +R\HU 3XWR DQG :HOOV f 7KH HOXVLYHQHVV RI DGYHUWLVLQJfV WUDQVIRUPDWLRQDO SURSHUWLHV DQG WKH LQDGHTXDF\ RI WUDGLWLRQDO UHVHDUFK PHWKRGV PD\ H[SODLQ ZK\ WKLV LQWULJXLQJ FRQFHSW UHPDLQV ODUJHO\ XQH[SORUHG $W WKLV MXQFWXUH H[LVWLQJ FRQFHSWXDOL]DWLRQV RI WKH LQWHUDFWLRQ EHWZHHQ DGYHUWLVLQJ DQG SURGXFW H[SHULHQFH FDQ EHVW EH FKDUDFWHUL]HG DV YHU\ XVHIXO EXW WHQWDWLYH WRROV IRU XQGHUVWDQGLQJ FKLOGUHQfV UHVSRQVHV :KHWKHU WKH\ PDS RQWR FKLOGUHQfV UHDOLW\ RU DUH VXIILFLHQWO\ EURDG HQRXJK WR FDSWXUH WKH UDQJH DQG FRPSOH[LW\ RI FKLOGUHQfV WKRXJKWV DQG IHHOLQJV LV DQ HPSLULFDO TXHVWLRQ RU PRUH DFFXUDWHO\ D VHULHV RI HPSLULFDO TXHVWLRQV 7KH OHJLWLPDF\ RI WKHVH FRQFHSWXDO IUDPHZRUNV LQ WKH UHDOP RI FKLOGUHQfV PHGLD H[SHULHQFH FDQ QRW VLPSO\ EH DVVXPHG 8QGHUVWDQGLQJ PXVW EH JURXQGHG LQ WKH UHDOLW\ RI FKLOGUHQfV

PAGE 70

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fV UHVHDUFK OHG WR WKH FKRLFH RI DQ LQGXFWLYH UHVHDUFK DSSURDFK IRFXVLQJ RQ WKH JHQHUDWLRQ RI FRQFHSWXDO FDWHJRULHV DQG UHODWLRQVKLSV 5DWKHU WKDQ EHJLQQLQJ ZLWK D WKHRU\ DQG DWWHPSWLQJ WR WHVW LW WKH UHVHDUFK EHJDQ ZLWK WKH VXEVWDQWLYH DUHD DQG ZKDW LV UHOHYDQW WR WKDW DUHD ZDV DOORZHG WR HPHUJH 'HQ]LQ .YDOH /LQFROQ DQG *XED 0F&UDFNHQ 7KRPSVRQ /RFDQGHU DQG 3ROOLR 6WUDXVV DQG &RUELQ f :LWKRXW LQVLJKW LQWR WKH SULPDU\ IDFWRUV WKDW PRWLYDWH DQG VKDSH FKLOGUHQfV PDUNHWSODFH SHUFHSWLRQV UHVHDUFKHUV PD\ UXQ WKH ULVN RI FUHDWLQJ DEVWUDFW UHSUHVHQWDWLRQV WKDW KDYH OLWWOH EDVLV LQ UHDOZRUOG HYHQWV :HOOV f 7KLV KD]DUG PD\ EH SDUWLFXODUO\

PAGE 71

HQWLFLQJ LQ GHYHORSPHQWDO UHVHDUFK VWXGLHV ZKHUH WKH WHPSWDWLRQ WR DGRSW DGXOWOLNH SHUIRUPDQFH VWDQGDUGV DERXQGV $QGHUVRQ 'RUU 5XVW DQG +\DWW f 7KRXJK FKLOGUHQ KDYH EHHQ WKH IRFXV RI QXPHURXV UHVHDUFK LQYHVWLJDWLRQV UDUHO\ KDYH WKH\ EHHQ DVNHG WR VKDUH WKHLU RZQ XQLTXH DFFRXQWV RI WKH FRPPHUFLDO HQYLURQPHQW :KHQ DVNHG WR GHVFULEH WKHLU H[SHULHQFHV WKHLU UHVSRQVHV DUH FRGHG LQWR WKHRUHWLFDOO\ GHULYHG GHYHORSPHQWDO FDWHJRULHV HVWDEOLVKHG SULRU WR GDWD FROOHFWLRQ HJ %HYHU HW DO 5RVVLWHU DQG 5REHUWVRQ :DUG HW DO f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fV DGYHUWLVLQJ LV HLWKHU SRZHUIXOO\ VHGXFWLYH RU VR XQLQVSLULQJ DV WR VLPSO\ EH LJQRUHG 7KRXJK WKHVH YLHZV RSSRVH RQH DQRWKHU ERWK UHIOHFW UHVHDUFKHU GULYHQ YLHZV RI KRZ FKLOGUHQ UHVSRQG WR DGYHUWLVLQJ 6R LQJUDLQHG DUH FRQYHQWLRQDO YLHZV RI FKLOGUHQ WKDW LW EHFRPHV GLIILFXOW WR VHW DVLGH ZKDW PD\ DPRXQW WR FXOWXUDO SUHVXPSWLRQV DQG ELDVHV 7KH LGHD WKDW FKLOGUHQfV SHUVSHFWLYHV PD\ GLIIHU DW OHDVW LQ SDUW EHFDXVH WKH ZRUOG WKH\ HQFRXQWHU LV SRSXODWHG E\ SHRSOH VLWXDWLRQV DQG REMHFWV ZLWK ZKLFK DGXOWV KDYH OLWWOH FRQWDFW LV UDUHO\ DFNQRZOHGJHG )URP WKLV ZRUOG WKH\ FRQVWUXFW D UHDOLW\ WKDW

PAGE 72

LV D UDWLRQDO RUGHUHG DQG RUJDQL]HG UHVSRQVH WR WKH FRQGLWLRQ RI EHLQJ D FKLOG )LQH DQG 6DQGVWURP *RRGH f 7KH QRWLRQ RI FRQVWUXFWHG UHDOLWLHV ZKLFK UHFRJQL]HV WKH FRQWULEXWLRQ RI WKH LQGLYLGXDO LQ FUHDWLQJ D PHDQLQJIXO YLHZ RI WKH ZRUOG LV D FHQWUDO SUHPLVH RI QDWXUDOLVWLF LQTXLU\ +LUVFKPDQ +XGVRQ DQG 2]DQQH .YDOH /LQFROQ DQG *XED 0RUJDQ DQG 6PLUFLFK 7KRPSVRQ HW DO f 2QWRORJLFDOO\ WKH FRQVWUXFWLYLVW SRVLWLRQ DVVHUWV WKDW UHDOLW\ LV FUHDWHG LQ WKH PLQGV RI LQGLYLGXDOV $W DOO VWDJHV RI WKH OLIHF\FOH SHRSOH DUH HQJDJHG LQ WKH FUHDWLRQ RI D PHDQLQJIXO YLHZ RI WKH ZRUOG DQG WKHLU UHODWLRQ WR LW 0F&UDFNHQ f 7KH PHDQLQJV GHULYHG IURP RU DVFULEHG WR REMHFWV HYHQWV RU PHGLD DUH QRW LQWULQVLF WR WKH WDQJLEOH HQWLWLHV WKHPVHOYHV EXW D SURGXFW RI WKH LQGLYLGXDOfV LQWHUSUHWDWLRQ 5HDOLW\ LV FRQVWUXFWHG E\ WKH SHUFHLYHU LQ RUGHU WR PDNH VHQVH RI RQHVHOI DQG WR RUJDQL]H D EHOLHI V\VWHP WKDW ZLOO VHUYH DV D JXLGH WR DFWLRQ 7KH DVVXPSWLRQ WKDW UHDOLW\ LV QRW REMHFWLYH EXW UDWKHU VXEMHFWLYHO\ GHILQHG KDV LPSRUWDQW FRQVHTXHQFHV IRU WKH GHVLJQ DQG FRQGXFW RI UHVHDUFK %HFDXVH HDFK LQGLYLGXDO YLHZV WKH ZRUOG IURP D XQLTXH YDQWDJH SRLQW XQGHUVWDQGLQJ RI KXPDQ SKHQRPHQD PXVW EH JURXQGHG LQ WKH UHDOLW\ RI KRZ HYHQWV DQG VLWXDWLRQV DUH VXEMHFWLYHO\ OLYHG RU H[SHULHQFHG 7KRPSVRQ HW DO f 5DWKHU WKDQ GLVFRXQWLQJ RU GLVUHJDUGLQJ FKLOGUHQfV VXEMHFWLYH SHUFHSWLRQV DQG H[SHULHQFHV WKHVH EHFRPH WKH FHQWUDO IRFXV RI VWXG\ +RZ FKLOGUHQ PDNH VHQVH RI WKHLU PDUNHWSODFH H[SHULHQFHV LV SDWWHUQHG E\ VRFLDOO\ RUJDQL]HG ZD\V RI SHUFHLYLQJ DQG DFWLQJ XSRQ WKH ZRUOG &KLOGUHQ RI D JLYHQ VRFLDO DQG KLVWRULFDO FRQWH[W KDYH D VHW RI LQWHUHVWV DQG HYHU\GD\ H[SHULHQFHV LQ FRPPRQ WKDW ERWK GLVWLQJXLVK DQG XQLWH WKHP 7KDW FKLOGUHQ FRQVWLWXWH D VSHFLDO DXGLHQFH DV D FRQVHTXHQFH

PAGE 73

RI WKHLU FRJQLWLYH OLPLWDWLRQV LV ZLGHO\ DFNQRZOHGJHG 7KDW FKLOGUHQ VKDUH ZKDW PLJKW EH FRQVLGHUHG D VHSDUDWH FXOWXUH UHSOHWH ZLWK QRUPV FRQYHQWLRQV DQG PHDQLQJ WKDW DOVR DIIHFWV WKHLU LQWHUSUHWDWLRQ RI DGYHUWLVHPHQWV LV D PRUH QRYHO FRQFHSW )LQH DQG 6DQGVWURP *RRGH
PAGE 74

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f 0HDQLQJV DUH FRQWDLQHG LQ WKH PHVVDJH DQG ZLWK WKH DFTXLVLWLRQ RI VXIILFLHQW GHFRGLQJ VNLOO DQG H[SHULHQFH ZLWK WKH JHQUH FKLOGUHQ HYHQWXDOO\ XQORFN WKH PHVVDJH KRXVHG ZLWKLQ 0HDQLQJV DUH LQWULQVLF WR WKH PHVVDJH DQG LQWHQGHG E\ WKH DGYHUWLVHU 5HVHDUFK TXHVWLRQV IRFXV RQ FKLOGUHQfV HPHUJLQJ DELOLW\ WR H[WUDFW NH\ PHVVDJH HOHPHQWV DQG WKHLU VXEVHTXHQW SHUVXDVLYH LPSDFW HJ /LHEHUW HW DO /LQQ GH %HQHGLFWV DQG 'HOXFFKL 0HULQJRII DQG /HVVHU 5RHGGHU HW DO :DUG f :LWKLQ WKH FKLOGUHQfV DGYHUWLVLQJ OLWHUDWXUH WKH REMHFWLYH RULHQWDWLRQ KDV ZLGH DSSHDO ERWK WKHRUHWLFDOO\ DQG SUDJPDWLFDOO\ 0HDVXUHPHQW SURFHGXUHV WKDW HVWDEOLVK FKLOGUHQfV DFFXUDF\ RU LQDFFXUDF\ LQ GHFRGLQJ DGYHUWLVLQJ PHVVDJHV DUH TXLWH XVHIXO LQ JUDSSOLQJ ZLWK WUDGLWLRQDO DUHDV RI FRQFHUQ DQG LQWHUHVW 2EMHFWLYH PHDVXUHV HDVLO\ GHYHORSHG DQG DGPLQLVWHUHG FDQ EH XVHG WR PDUN DQG VXEVHTXHQWO\ SUHGLFW NH\ GHYHORSPHQWDO WUDQVLWLRQV &RQFHUQV DERXW PLVFRPSUHKHQVLRQ DV ZHOO DV LVVXHV RI IDLUQHVV FDQ EH UHVROYHG DQG WKH LQGLYLGXDO OHYHO LPSDFW RI VSHFLILF UHJXODWRU\ SURSRVDOV FDQ EH DVVHVVHG +RZHYHU WKLV SHUVSHFWLYH WHQGV WR GLVUHJDUG UHFHLYHUEDVHG PHDQLQJV 7KH FKLOGfV SRLQW RI YLHZ RU VXEMHFWLYH H[SHULHQFH LV ORVW H[FHSW ZKHUH LW KDSSHQV WR FRLQFLGH ZLWK WKH UHVHDUFKHUfV &ORVHHQGHG TXHVWLRQV

PAGE 75

DERXW DG FODLPV DQG UHFDOO PHDVXUHV OHDYH OLWWOH URRP IRU UHVSRQGHQW SHUFHSWLRQV RU UHDFWLRQ :KDW FRQVWLWXWHV DQ DSSURSULDWH UHVSRQVH LV GHWHUPLQHG D SULRUL E\ UHVHDUFKHUV ZKR DGRSW WKHLU RZQ LQWHUSUHWDWLRQV RI DG FRQWHQW DV WKH EDVHOLQH DQG HYDOXDWH FKLOGUHQfV UHVSRQVHV DJDLQVW LW ,Q FRQWUDVW WKH VXEMHFWLYH RULHQWDWLRQ WR DGYHUWLVLQJ UHFHSWLRQ UHFRJQL]HV WKDW FKLOGUHQ DFWLYHO\ DQG VHOHFWLYHO\ LPSRVH PHDQLQJV WR XQGHUVWDQG PRUH FRPSOHWHO\ WKHLU ZRUOG DQG WKHPVHOYHV 7KHVH PHDQLQJV DUH QRW IXOO\ ERXQGHG E\ WKH WH[W RI DQ DGYHUWLVHPHQW EXW DUH QHJRWLDWHG WKURXJK WKH OHQV RI WKH FKLOGfV SULRU H[SHULHQFH ERWK SHUVRQDO DQG FXOWXUDO -HQVHQ 0F&UDFNHQ 0LFN DQG %XKO f $FFRUGLQJ WR UHDGHU UHVSRQVH RU UHFHSWLRQ WKHRU\ PHDQLQJ LV QRW DQ LPPXWDEOH SURSHUW\ RI D WH[W EXW WKH SURGXFW RI WKH WH[W VWUXFWXUH DQG WKH LQGLYLGXDO LQWHUDFWLQJ ZLWKLQ D VSHFLILF LQWHUSUHWLYH FRQWH[W $OOHQ f :KHQ D FKLOG YLHZV D WHOHYLVLRQ FRPPHUFLDO WKH H[SOLFLW PHVVDJH FRQWHQWV VHUYH DV D NLQG RI EOXHSULQW WR VWUXFWXUH XQGHUVWDQGLQJ EXW WH[W LV E\ QDWXUH LQFRPSOHWH &RKHUHQW LQWHUSUHWDWLRQ UHVWV RQ WKH FKLOGfV FDSDFLW\ WR GUDZ XSRQ KLVKHUf XQLTXH H[SHULHQFHV DQG EDFNJURXQG NQRZOHGJH WR ILOO LQ JDSV OHIW YDFDQW E\ WKH WH[W &ROOLQV f :LWKLQ WKH ERXQGDULHV HVWDEOLVKHG E\ KLVfKHU OHYHO RI FRJQLWLYH VRSKLVWLFDWLRQ WKH \RXQJ YLHZHU LQIHUV FRQFHSWV LQWHQWLRQV DFWLRQV WR PDNH VHQVH RI HYHQ VLPSOH QDUUDWLYH PHVVDJHV $QGHUVRQ DQG 3HDUVRQ 'XUNLQ )ORRG 7UDEDVVR f 'HULYHG IURP WKH H[SOLFLW FRQWHQWV RI D PHVVDJH WKHVH LQIHUUHG UHODWLRQV PD\ UDQJH IURP YHU\ VLPSOH VWUDLJKWIRUZDUG FRQQHFWLRQV QHHGHG WR HVWDEOLVK FRKHUHQFH WR SHUVRQDOL]HG HODERUDWLRQV WKDW GUDZ XSRQ WKH UHFHLYHUfV VHOI

PAGE 76

NQRZOHGJH DQG H[SHULHQFH $OED DQG +XWFKLQVRQ 0LFN f $FFRUGLQJ WR WKLV SHUVSHFWLYH LW LV WKH FKLOG ZKR LV WKH ILQDO DUELWHU RI DGYHUWLVLQJ PHDQLQJV 4XDOLWDWLYH LQTXLU\ LV SDUWLFXODUO\ ZHOO VXLWHG IRU GLVFHUQLQJ WKH FDWHJRULHV FRQVXPHUV XVH WR LQWHUSUHW VSHFLILF PHGLD DQG FRQVXPSWLRQ H[SHULHQFHV -HQVHQ /DQQRQ DQG &RRSHU 0F4XDUULH DQG 0LFN 0LFN DQG %XKO f &RQVXPHU UHVHDUFKHUV KDYH WXUQHG WR TXDOLWDWLYH PRGHV RI LQTXLU\ WR VWXG\ D ZLGH UDQJH RI FRQVXPHU LVVXHV DQG SKHQRPHQD 'UDZLQJ RQ HWKQRJUDSKLF VHPLRWLF DQG SKHQRPHQRORJLFDO WUDGLWLRQV WKHVH UHVHDUFK HIIRUWV KDYH KHOSHG WR EURDGHQ WKH VFRSH RI FRQVXPHU UHVHDUFK DQG SURYLGH LQVLJKW LQWR VXEVWDQWLYH FRQVXPHU EHKDYLRU WRSLFV HJ %HON 6KHUU\ DQG :DOOHQGRUI +LOO DQG 6WDPH\ 0F4XDUULH DQG 0LFN 2f*XLQQ DQG )DEHU :DOOHQGRUI DQG $PRXOG f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fV SHUFHSWLRQV RI WKHLU HYHU\GD\ ZRUOG $Q LQWHUYLHZ PHWKRGRORJ\ RIIHUV WKH RSSRUWXQLW\ WR JDLQ LQVLJKW LQWR WKH FKLOGfV VXEMHFWLYH H[SHULHQFH RI DGYHUWLVHPHQWV DQG WKH SURGXFWV WKH\ SURPRWH ,W PD\ UHSUHVHQW WKH RQO\ PHDQV IRU DWWDLQLQJ WKLV W\SH RI XQGHUVWDQGLQJ +XJKHV 7DPPLYDDUD DQG (QULJKW f :LWKLQ WKH FRQVXPHU OLWHUDWXUH

PAGE 77

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f )RU PDQ\ \HDUV RSHQHQGHG LQWHUYLHZV KDYH EHHQ ZLGHO\ XVHG ZLWK VFKRRODJHG FKLOGUHQ E\ HGXFDWRUV DQG SV\FKRORJLVWV IRU ERWK FOLQLFDO DQG UHVHDUFK SXUSRVHV %DUNHU %LHUPDQ DQG 6FKZDUW] *DUEDULQR DQG 6WRWW *UHHQVSDQ +XJKHV 3DUNHU 7DPPLYDDUD DQG (QULJKW f 7KH GHSWK DQG EUHDGWK RI FKLOGUHQfV UHVSRQVHV TXLFNO\ SXW WR UHVW DQ\ FRQFHUQV DERXW WKHLU DELOLW\ DQG ZLOOLQJQHVV WR SDUWLFLSDWH LQ WKH UHVHDUFK LQ D PHDQLQJIXO ZD\ 7ZHQW\WZR FKLOGUHQ EHWZHHQ WKH DJHV RI VHYHQ DQG HOHYHQ ZHUH LQWHUYLHZHG 5HIOHFWLQJ DQ HPLF DSSURDFK WKH LQWHUYLHZV ZHUH ORRVHO\ VWUXFWXUHG RSHQHQGHG DQG GHVLJQHG WR GLVFRYHU VLJQLILFDQW PHDQLQJV IURP WKH SHUVSHFWLYH RI WKH FKLOGUHQ )OH[LEOH LQ QDWXUH WKH LQWHUYLHZV HQFRXUDJHG FKLOGUHQ WR UHFRXQW WKHLU RZQ SURGXFWUHODWHG H[SHULHQFHV :LWK IHZ

PAGE 78

H[FHSWLRQV WKH FKLOGUHQ UHDGLO\ GHVFULEHG D YDULHW\ RI H[SHULHQFHV ERWK JRRG DQG EDG ZLWK KHDYLO\ SURPRWHG SURGXFWV 6SHFLILF DGV DQG SURGXFWV ZHUH DOVR LQWURGXFHG LQWR WKH LQWHUYLHZ SURFHVV WR HQKDQFH XQGHUVWDQGLQJ RI WKH PHDQLQJ FUHDWLRQ SURFHVV 7KH SULPDU\ GDWD IRU WKH VWXG\ ZHUH WKH YHUEDWLP WUDQVFULSWV RI WKHVH LQWHUYLHZV ,W LV IURP WKHVH WUDQVFULSWV WKDW FRQFHSWXDO UHODWLRQVKLSV DUH VXJJHVWHG )LQGLQJV IURP WKLV VWXG\ VHUYHG DV LQSXW WR WKH FRQFHSWXDO GHYHORSPHQW DQG GHVLJQ RI WKH H[SHULPHQWDO LQYHVWLJDWLRQ DV ZHOO DV D VRXUFH RI D SULRUL WKHPHV IRU VXEVHTXHQW TXDOLWDWLYH LQTXLU\ 5HVHDUFK 3URFHVV (PHUJHQW GHVLJQ ,Q WKLV LQLWLDO LQYHVWLJDWLRQ WKH UHVHDUFK GHVLJQ ZDV DOORZHG WR HPHUJH RU XQIROG UDWKHU WKDQ FRQVWUXFWHG D SULRUL *LYHQ WKH H[LVWHQFH RI PXOWLSOH UHDOLWLHV LW LV LQFRQFHLYDEOH WKDW HQRXJK FRXOG EH NQRZQ DKHDG RI WLPH DERXW FKLOGUHQfV VXEMHFWLYH H[SHULHQFHV WR GHVLJQ WKH UHVHDUFK ZHOO /LQFROQ DQG *XED *ODVHU DQG 6WUDXVV 6WUDXVV DQG &RUELQ f $ GHVLJQ HPDQDWLQJ IURP WKH LQYHVWLJDWRUfV SHUVSHFWLYH ZRXOG KDYH VHULRXVO\ FRPSURPLVHG WKH RYHUDOO LQWHQW RI WKH UHVHDUFK LQTXLU\ ,Q WKHVH HDUO\ SKDVHV WKH LQDELOLW\ WR SUHGLFW KRZ FKLOGUHQ ZRXOG UHVSRQG DQG WKH VXEVWDQWLYH LVVXHV WKDW ZRXOG HPHUJH FOHDUO\ FDOOHG IRU DQ RSHQHQGHG UHVHDUFK DSSURDFK /LQFROQ DQG *XED f :KHQ WKH UHVHDUFK GHVLJQ LV HPHUJHQW VXEVHTXHQW PHWKRGRORJLFDO VWHSV DUH EDVHG RQ WKRVH WKDW SUHFHGH WKHP 'DWD FROOHFWLRQ DQG DQDO\VLV DUH QRW VHSDUDWH EXW LQWHUUHODWHG SURFHVVHV &RUELQ DQG 6WUDXVV *ODVHU DQG 6WUDXVV 6WUDXVV f (DFK LQWHUYLHZ WDNHV LQWR DFFRXQW DOO WKDW KDV EHHQ OHDUQHG EHIRUH DQG XVHV LW WR GLUHFW VXFFHHGLQJ REVHUYDWLRQV DQG LQWHUYLHZV 6DOLHQW TXHVWLRQV SURYLVLRQDO K\SRWKHVHV DQG JDSV DUH LGHQWLILHG DQG SXUVXHG DV WKH UHVHDUFK SURJUHVVHV

PAGE 79

7KH V\VWHPDWLF DQG VHTXHQWLDO QDWXUH RI GDWD FROOHFWLRQ DQG DQDO\VLV DOORZV WKH UHVHDUFKHU WR FDSWXUH DOO SRWHQWLDOO\ UHOHYDQW DVSHFWV RI WKH SKHQRPHQRQ ZKLOH GLVFDUGLQJ WKRVH WKDW DUH QRW UHSHDWHGO\ SUHVHQW LQ WKH GDWD *ODVHU DQG 6WUDXVV &RUELQ DQG 6WUDXVV f $V WKH LQTXLU\ SURFHHGV WKH GHVLJQ EHFRPHV PRUH IRFXVHG DV VDOLHQW FRQFHSWV EHJLQ WR HPHUJH K\SRWKHVHV GHYHORS DQG WKHRU\ EHJLQV WR EH JURXQGHG LQ WKH GDWD REWDLQHG )LHOG QRWHV 7KURXJKRXW WKH VWXG\ GHWDLOHG ILHOG QRWHV ZHUH ZULWWHQ VXPPDUL]LQJ WKH SURJUHVV DQG FRQGXFW RI WKH UHVHDUFK 7KHVH ILHOG QRWHV DUH RI WKUHH W\SHV DGGLWLRQDO GDWD PHWKRGRORJLFDO LVVXHV DQG DQDO\WLF PHPRV 'HWDLOHG DUH LQLWLDO WKHRUHWLFDO DVVXPSWLRQV WKH SURMHFWf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

PAGE 80

VFKRRO DFWLYLWLHV 7KLV IDPLOLDULW\ HQFRXUDJHG WKHLU SDUWLFLSDWLRQ DQG FDQGRU ZKLOH SURYLGLQJ YDOXDEOH EDFNJURXQG NQRZOHGJH IRU LQWHUSUHWLQJ WKH LQWHUYLHZ GDWD $ SXUSRVLYH UDWKHU WKDQ D UHSUHVHQWDWLYH VDPSOLQJ SURFHGXUH ZDV XVHG LQ NHHSLQJ ZLWK WKH DLP RI PD[LPL]LQJ SKHQRPHQRORJLFDO LQVLJKW UDWKHU WKDQ IDFLOLWDWLQJ JHQHUDOL]DWLRQ DFURVV SHRSOH &RUELQ DQG 6WUDXVV /LQFROQ DQG *XED 6WUDXVV DQG &RUELQ f :LWKLQ WKH JURXQGHG WKHRU\ IUDPHZRUN LW LV WKH UHSUHVHQWDWLYHQHVV RI FRQFHSWV QRW RI SHUVRQV WKDW LV FULWLFDO 6LQFH WKH XOWLPDWH DLP LV WR EXLOG D WKHRUHWLFDO DFFRXQW WKDW VSHFLILHV WKH QDWXUH RI DGFRQVXPSWLRQ UHODWLRQVKLSV LWV IRUPV DQG FRQVHTXHQFHV VDPSOHV DUH GUDZQ ZKLFK ZLOO EHVW LOOXPLQDWH WKLV UHODWLRQVKLS *ODVHU DQG 6WUDXVV 6WUDXVV DQG &RUELQ f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f KRZHYHU DV SDWWHUQV EHJDQ WR XQIROG LW EHFDPH FOHDU WKDW FRPSDUDWLYH GDWD ZDV QHHGHG WR EHJLQ WR GHILQH WKH OLPLWV RI WKH HPHUJLQJ H[SODQDWLRQ 0DNLQJ FRPSDULVRQV KHOSV WKH UHVHDUFKHU WR JXDUG

PAGE 81

DJDLQVW ELDV E\ FKDOOHQJLQJ SURYLVLRQDO FRQFHSWV ZLWK QHZ GDWD $ EDVLF RSHUDWLRQDO VWUDWHJ\ FRPPRQ WR ERWK JURXQGHG WKHRU\ UHVHDUFK DQG RWKHU IRUPV RI QDWXUDOLVWLF LQTXLU\ LV WR VHHN V\VWHPDWLFDOO\ WKH ZLGHVW YDULDWLRQ LQ WKH SKHQRPHQRQ XQGHU LQYHVWLJDWLRQ 7KURXJK FDUHIXO RQJRLQJ FRPSDULVRQ DQG WKH GHOLEHUDWH VHDUFK IRU QHJDWLYH FDVH H[DPSOHV WKH FRQVLVWHQF\ RI SURYLVLRQDO FRQFHSWV LV DVVHVVHG *ODVHU DQG 6WUDXVV /LQFROQ DQG *XED 6WUDXVV DQG &RUELQ f *UHDWHU SUHFLVLRQ LV DFKLHYHG DV FRPSDULVRQV ZDUUDQW WKH VXEGLYLVLRQ RU HOLPLQDWLRQ RI RULJLQDO FRQFHSWV &RQFHSWV DQG FDWHJRULHV PXVW HDUQ WKHLU ZD\ LQWR WKH HPHUJLQJ H[SODQDWLRQ WKURXJK UHSHDWHG REVHUYDWLRQ DQG GHPRQVWUDWLRQ RI WKHLU UHODWLRQVKLS WR WKH SKHQRPHQD LQ TXHVWLRQ ,Q WKLV VWXG\ LQVLJKW LQWR WKH H[SHULHQFHV RI WKH \RXQJHU FKLOGUHQ ZDV LQLWLDOO\ VRXJKW DV SDUW RI WKH UHVHDUFKHUfV REOLJDWLRQ WR VHHN QHJDWLYH LQVWDQFHV RU GDWD WKDW ZRXOG EH PRVW OLNHO\ WR GLVFRQILUP WKH HYROYLQJ WKHRU\ :DOOHQGRUI DQG %HON f 7KRXJK DJHUHODWHG GLIIHUHQFHV EHJDQ WR HPHUJH HYHQ ZLWK VXFK D VPDOO VDPSOH VL]H WKH DYDLODEOH HYLGHQFH LQ WKLV VWXG\ SURYLGHV OLWWOH PRUH WKDQ D VXJJHVWLRQ RI KRZ WKHVH GLIIHUHQFHV PLJKW EH PDQLIHVWHG 7KH LQWHUYLHZV UDQJHG IURP WR PLQXWHV GHSHQGLQJ RQ WKH FKLOGf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

PAGE 82

VWUXFWXUHG VR DV WR SHUPLW OLQHV RI LQTXLU\ WKDW DOORZHG WKH FKLOGfV SHUVSHFWLYH WR HPHUJH VHH $SSHQGL[ $ IRU D FRS\ RI WKH LQWHUYLHZ VFKHGXOHf 7KLV W\SH RI LQWHUYLHZLQJ KDV EHHQ DGRSWHG VXFFHVVIXOO\ LQ PDQ\ VWXGLHV ZLWK DGXOWV EXW KDV UDUHO\ EHHQ XVHG WR VWXG\ FKLOGUHQfV PHGLD UHFHSWLRQ :KHQ FKLOGUHQfV DGYHUWLVLQJ UHVHDUFKHUV KDYH DGRSWHG DQ RSHQHQGHG LQWHUYLHZ IRUPDW WKH\ KDYH WHQGHG WR DSSO\ SUHGHWHUPLQHG FRGLQJ VFKHPHV RU WKHRUHWLFDO PRGHOV WKDW PDVN FKLOGUHQfV VXEVWDQWLYH LQWHUSUHWDWLRQV DQG FRQFOXVLRQV HJ %HYHU HW DO 5RVVLWHU DQG 5REHUWVRQ :DUG HW DO f $GXOW PRGHOV RI WKLQNLQJ PD\ LQIOXHQFH WKH VXEVWDQWLYH FRQFOXVLRQV WKDW DUH GUDZQ DERXW FKLOGUHQfV DVVLPLODWLRQ DQG XVH RI FRPPHUFLDO FRQWHQW ,Q PDQ\ VWXGLHV RI FKLOGUHQfV FRPSUHKHQVLRQ RI WHOHYLVLRQ WKH H[SUHVVHG RU LPSOLHG FULWHULRQ IRU XQGHUVWDQGLQJ LV WKH DGXOW H[SODQDWLRQ RU WKH IRUPDO OLWHUDWH PHDQLQJ RI D PHVVDJH WKDW IXOO\ VRFLDOL]HG PHPEHUV RI D VRFLHW\ PLJKW RIIHU 5HVHDUFKHUV KDYH RIWHQ XVHG WKHLU RZQ LQWHUSUHWDWLRQ RI WHOHYLVHG FRQWHQW DV D VWDQGDUG DQG HYDOXDWHG FKLOGUHQfV SHUFHSWLRQV DJDLQVW LW $QGHUVRQ 'RUU f 8QGHU WKHVH FLUFXPVWDQFHV LW LV QRW VXUSULVLQJ WKDW FKLOGUHQ IUHTXHQWO\ IDLO WR XQGHUVWDQG DQ DGYHUWLVHPHQW WKH ZD\ DQ DGXOW PLJKW :LWK WKLV DV WKH EDVHOLQH FKLOGUHQfV LQWHUSUHWDWLRQV LPSOLFLWO\ UHSUHVHQW D IODZHG DSSUR[LPDWLRQ WR WKH UHDGLQJ DQ DGXOW PLJKW SURYLGH UDWKHU WKDQ DQ HTXDOO\ YDOLG SRLQW RI YLHZ $ ORRVHO\ VWUXFWXUHG GLDORJXH SHUPLWV H[SORUDWLRQ RI KRZ FKLOGUHQ SHUFHLYH DGYHUWLVHPHQWV UHIOHFW RQ WKHP DQG UHODWH WKHLU FRQWHQWV WR WKHLU RZQ FRQVXPSWLRQ H[SHULHQFHV LGHDV DQG NQRZOHGJH 'DWD DQDO\VLV 5HVHDUFK FRQFOXVLRQV DUH EDVHG RQ WKH YHUEDWLP WUDQVFULSWV RI WKHVH GHSWK LQWHUYLHZV 7KHVH WUDQVFULSWV DUH WKH GDWD IURP ZKLFK FRQFHSWXDO

PAGE 83

UHODWLRQVKLSV DUH GLVFRYHUHG FODULILHG DQG SURYLVLRQDOO\ YHULILHG 7KH XOWLPDWH REMHFWLYH LV WKH GHYHORSPHQW RI DQ LQGXFWLYHO\ GHULYHG VXEVWDQWLYH WKHRU\ JURXQGHG LQ WKH UHDOLW\ RI FKLOGUHQfV H[SHULHQFHV ZLWK DGV DQG SURGXFWV 7KH UHVHDUFK ILQGLQJV FRQVWLWXWH D ULFK WLJKWO\ ZRYHQ H[SODQDWRU\ WKHRU\ RI WKH SKHQRPHQD XQGHU LQYHVWLJDWLRQ UDWKHU WKDQ D VHW RI ORRVHO\ UHODWHG WKHPHV *ODVHU DQG 6WUDXVV 6WUDXVV DQG &RUELQ f 6\VWHPDWLF DQDO\VLV WHFKQLTXHV DQG SURFHGXUHV JLYH WKH UHVHDUFK SURFHVV WKH SUHFLVLRQ DQG ULJRU QHFHVVDU\ WR HVWDEOLVK WKH WUXVWZRUWKLQHVV RI WKH ILQGLQJV /LQFROQ DQG *XED :DOOHQGRUI DQG %HON f &RGLQJ LV WKH IXQGDPHQWDO DQDO\WLF SURFHVV LQ JURXQGHG WKHRU\ UHVHDUFK &RUELQ DQG 6WUDXVV 6WUDXVV 6WUDXVV DQG &RUELQ f 7KHUH DUH WKUHH PDMRU W\SHV f RSHQ FRGLQJ f D[LDO FRGLQJ DQG f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

PAGE 84

$V WKH ILUVW SKDVH RI WKH UHVHDUFK SURFHVV WKH ILQGLQJV RI WKLV SUHOLPLQDU\ VWXG\ UHSUHVHQW SURYLVLRQDO FRQFHSWV DQG FDWHJRULHV UDWKHU WKDQ D IXOO\ DUWLFXODWHG JURXQGHG WKHRU\ 7KH SULPDU\ REMHFWLYH RI WKH LQLWLDO VHW RI LQWHUYLHZV ZDV WR OHDUQ ZKDW ZDV UHOHYDQW DQG LUUHOHYDQW VLJQLILFDQW DQG WULYLDO LQ WKH UHDOP RI FKLOGUHQf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fV SHUVSHFWLYH FKLOGUHQfV DGYHUWLVHPHQWV VHHP WR EH ILOOHG ZLWK PHVVDJHV DERXW IULHQGVKLS DFFHSWDQFH VRFLDO VWDWXV DQG IDPLO\ UHODWLRQVKLSV 3DUW RI WKH LQLWLDO IRFXV ZDV WR XQGHUVWDQG KRZ FKLOGUHQ UHVSRQG WR WKHVH NLQGV RI WKHPHV LQ FRPPHUFLDO PHVVDJHV (DUO\ LQWHUYLHZV TXLFNO\ UHYHDOHG WKDW WKHVH VRUWV RI V\PEROLF HOHPHQWV ZHUH QRW QHFHVVDULO\ IRFDO LQ FKLOGUHQf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

PAGE 85

D FRPPXQLFDWLRQV JHQUH &KLOGUHQ QDWXUDOO\ WU\ WR PDNH VHQVH RI WKH ZRUOG DURXQG WKHP DQG DGYHUWLVLQJ LV YHU\ PXFK D SDUW RI WKHLU HYHU\GD\ OLYHV %\ WKH WLPH WKH\ UHDFK WKH DJH RI RU PRVW $PHULFDQ FKLOGUHQ KDYH VHHQ WHQV RI WKRXVDQGV RI FRPPHUFLDOV (YLGHQFH RI WKLV H[SRVXUH ZDV DSSDUHQW DOPRVW LPPHGLDWHO\ 0RVW RI WKH FKLOGUHQ LQWHUYLHZHG ZHUH ZHOODZDUH RI WKH FRQWHQW RI UHFHQWO\ EURDGFDVW FKLOGUHQfV FRPPHUFLDOV :LWK OLWWOH LQYLWDWLRQ WKH\ VDQJ MLQJOHV SDQWRPLPHG PLPLFNHG GDQFH VWHSV GHVFULEHG LQ GHWDLO SDUWLFXODU DGYHUWLVHPHQWV RU HYHQ WKH HYROXWLRQ RI HQWLUH DG FDPSDLJQV 7KUHH FRQVHFXWLYH VWUDWHJLHV IRU WKH XVH RI FRQFUHWH SURSV RU VWLPXOL ZHUH DGRSWHG LQ WKLV VHW RI SUHOLPLQDU\ LQWHUYLHZV f DGYHUWLVHPHQWV DORQH f DGYHUWLVHPHQWV IROORZHG E\ SURGXFW VDPSOHV DQG f SURGXFW VDPSOHV IROORZHG E\ DGYHUWLVHPHQWV ,Q HDFK RI WKHVH FDVHV WKH VWLPXOL ZHUH XVHG SULPDULO\ DV WRROV WR HQFRXUDJH FKLOGUHQ WR GUDZ XSRQ WKHLU RZQ H[SHULHQFHV ZLWK DGV DQG SURGXFWV UDWKHU WKDQ DV DQ HQG LQ DQG RI WKHPVHOYHV 7KHVH SDUWLFXODU DSSURDFKHV DURVH DV D FRQVHTXHQFH RI WKH QDWXUH DQG VXEVWDQWLYH FRQWHQW RI WKH FKLOGUHQfV UHVSRQVHV LQ HDUO\ LQWHUYLHZ VHVVLRQV &DUHIXO VWHSV ZHUH WDNHQ WKURXJKRXW WKH UHVHDUFK SURFHVV WR HQVXUH WKDW WKH LQWHUYLHZV UHPDLQHG RSHQ DQG UHIOHFWLYH RI WKH FKLOGfV SHUVSHFWLYH UDWKHU WKDQ EHLQJ GLUHFWHG E\ WKH UHVHDUFKHU WKURXJK WKH LQWHUYLHZ VWUXFWXUH 7KH HYROXWLRQ RI WKH LQWHUYLHZ VWUDWHJ\ ZDV GRFXPHQWHG LQ H[WHQVLYH ILHOG QRWHV NHSW WKURXJKRXW WKH UHVHDUFK SURMHFW ,QLWLDOO\ FKLOGUHQ ZHUH VKRZQ DGYHUWLVHPHQWV DQG DVNHG WR GHVFULEH ZKDW WKH\ QRWLFHG OLNHG GLVOLNHG DQG DQ\ RWKHU UHDFWLRQV WKH\ PLJKW KDYH 7KLV DSSURDFK SURPSWHG D UDQJH RI UHVSRQVHV IRFXVLQJ RQ WKH IRUP DQG FRQWHQW RI WKH DGV DV ZHOO DV WKHLU SHUFHLYHG UHOLDELOLW\ 7KHVH HDUO\ LQWHUYLHZV SURYLGHG D ORJLFDO WUDQVLWLRQ SRLQW IURP

PAGE 86

WKH WUDGLWLRQDO UHVHDUFK IRFXV RQ SUHSXUFKDVH LVVXHV ,QFRUSRUDWLQJ DFWXDO FRPPHUFLDOV ZLWKLQ WKH LQWHUYLHZV SURYLGHV D YHU\ GLIIHUHQW SDWWHUQ RI UHVSRQVH WKDQ WKDW REWDLQHG E\ DVNLQJ FKLOGUHQ WR WDON DERXW DGYHUWLVLQJ LQ D PRUH DEVWUDFW VHQVH D VWUDWHJ\ WKDW KDV RIWHQ EHHQ HPSOR\HG LQ UHVHDUFK ZLWK FKLOGUHQ HJ %HYHU HW DO 5RVVLWHU DQG 5REHUWVRQ :DUG HW DO f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fV SHUFHSWLRQV RI DGYHUWLVLQJ 2QH RI WKH WKLQJV WKDW ZDV LPPHGLDWHO\ VWULNLQJ LQ WKH ILUVW LQWHUYLHZV ZDV WKDW FKLOGUHQf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fV FDSDFLW\ WR DPXVH RU HQWHUWDLQ %\ DVNLQJ FKLOGUHQ WR YLHZ DQG WKHQ WHOO PH ZKDW

PAGE 87

\RX WKLQN DERXW VSHFLILF DGYHUWLVHPHQWV WKH\ DUH HVVHQWLDOO\ LQYLWHG WR FULWLTXH WKH DGV RQ ZKDWHYHU GLPHQVLRQV WKH\ GHHP PRVW UHOHYDQW 7R WKH H[WHQW WKDW WKLV LQWHUYLHZ VWUDWHJ\ VRPHKRZ GLUHFWV WKH FKLOGfV IRFXV WR FUHDWLYH DVSHFWV RI WKH FRPPHUFLDO WKLV DSSURDFK PD\ KDYH LQVSLUHG FKLOGUHQ WR DVVXPH WKH UROH RI DUW FULWLF 7R WKH H[WHQW WKDW WKLV LV WUXH D PRUH H[SOLFLW IRFXV ZLWKLQ WKH LQWHUYLHZV RQ WKH QDWXUH RI WKH UHODWLRQVKLS EHWZHHQ DGV DQG SURGXFWV PLJKW EH H[SHFWHG WR GHIOHFW DWWHQWLRQ DZD\ IURP WKH DGf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fV SULRU H[SHULHQFHV ERWK DV FRQVXPHUV DQG VKRSSHUV %DVHG RQ ERWK FKLOGUHQfV DGYHUWLVLQJ UHVHDUFK DQG HDUO\ VWXGLHV RI DGYHUWLVLQJWULDO LQWHUDFWLRQV LW ZDV DQWLFLSDWHG WKDW FKLOGUHQfV UHDFWLRQV WR VSHFLILF EUDQGV ZRXOG EH DIIHFWHG E\ KDYLQJ VHHQ DGYHUWLVHPHQWV IRU WKHP HJ *ROGEHUJ *RP DQG *LEVRQ *RP DQG *ROGEHUJ +RFK DQG +D 0DUNV DQG .DPLQV 5REHUWVRQ DQG 5RVVLWHU 5RHGGHU HW DO 6PLWK f 7KRXJK LW ZDVQfW FOHDU KRZ WKLV LQIOXHQFH PLJKW PDQLIHVW LWVHOI LW VHHPHG UHDVRQDEOH WR DVVXPH WKDW FKLOGUHQ ZRXOG

PAGE 88

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fV VSHFLILF IHDWXUHV RU EHQHILWV DV GHSLFWHG LQ WKH DG 7KHLU UHDFWLRQV WR WKH EUDQGV RQ WKH RWKHU KDQG ZHUH GRPLQDWHG E\ VHQVRU\ FKDUDFWHULVWLFV VXFK DV WDVWH WH[WXUH VPHOO DQG DSSHDUDQFH :KDW VHHPHG WR HPHUJH ZDV D SLFWXUH RI FKLOGUHQfV UHDFWLRQV WR DGYHUWLVHPHQWV WKDW KDG OLWWOH WR GR ZLWK ZKDW WKH\ IHOW DQG EHOLHYHG DERXW WKH SURGXFWV WKH\ FRQVXPHG ,W EHJDQ WR VHHP DV WKRXJK FKLOGUHQ YLHZ WKH SURGXFWV DQG WKH DGYHUWLVHPHQWV WKDW SURPRWH WKHP DV TXDVLLQGHSHQGHQW HQWLWLHV 7KLV SDWWHUQ RI ILQGLQJV VHHPV WR FRQIOLFW ZLWK ERWK LQWXLWLRQ DQG SUHYLRXV UHVHDUFK ILQGLQJV %RWK H[SHULPHQWDO DQG VXUYH\ UHVHDUFK SURYLGHV FOHDU HYLGHQFH WKDW DGYHUWLVLQJ LQIOXHQFHV FKLOGUHQfV SUHIHUHQFHV DQG EHKDYLRU &KLOGUHQ PD\ DOWHU WKHLU EUDQG SUHIHUHQFHV DV D FRQVHTXHQFH RI DGYHUWLVLQJ H[SRVXUH UHTXHVW WKH SURGXFWV WKH\ VHH DGYHUWLVHG DQG FKRRVH DGYHUWLVHG SURGXFWV RYHU RWKHUV ZKHQ JLYHQ WKH RSSRUWXQLW\ WR GR VR *ROGEHUJ DQG *RP *ROGEHUJ HW DO *RP DQG )ORUVKHLP *RP DQG *ROGEHUJ 5REHUWVRQ DQG 5RVVLWHU 5RHGGHU HW DO f 7KRXJK FKLOGUHQ JURZ LQFUHDVLQJO\ VNHSWLFDO RI DGYHUWLVLQJ DV WKH\ PDWXUH WKH\ PD\ VWLOO EH SHUVXDGHG E\

PAGE 89

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fV SHUFHSWLRQV DQG UHVSRQVLYHQHVV WR SHUVXDVLYH DWWHPSWV )RU H[DPSOH LW KDV EHHQ VXJJHVWHG WKDW XQWLO FKLOGUHQ DFWXDOO\ H[SHULHQFH GLVFUHSDQFLHV EHWZHHQ SURGXFWV DV DGYHUWLVHG DQG WKH SURGXFWV WKH\ REWDLQ WKH\ DUH XQDEOH WR IXOO\ FRPSUHKHQG DGYHUWLVLQJfV SHUVXDVLYH LQWHQW 5REHUWVRQ DQG 5RVVL WHU f ,I DV WKH UHVHDUFK FRPPXQLW\ KDV DVVXPHG FKLOGUHQ VSRQWDQHRXVO\ FRPSDUH WKHLU SURGXFW H[SHULHQFHV WR WKH LPDJHV FRQYH\HG E\ DGYHUWLVLQJ LW LV VXUSULVLQJ WKDW PRUH RI WKHVH GLUHFW FRPSDULVRQV ZHUH QRW HYLGHQW LQ WKH LQWHUYLHZV 2Q WKH RQH KDQG LW PLJKW EH DUJXHG WKDW WKHVH DUH LPSOLFLW FRPSDULVRQV WKDW VRPHKRZ VLPSO\ KDYHQfW EHHQ RU FDQfW EH DUWLFXODWHG LQ DQ LQWHUYLHZ IRUPDW 7KRXJK WKLV HYHQWXDOLW\ FDQfW EH UXOHG RXW HQWLUHO\ D YDULHW\ RI TXHVWLRQLQJ VWUDWHJLHV KDYH EHHQ HPSOR\HG WR JHW DW WKHVH UHODWLRQVKLSV )XUWKHU WKH FKLOGUHQ KDYH EHHQ DEOH WR DUWLFXODWH WKHLU RSLQLRQV DQG IHHOLQJV RQ RWKHU HTXDOO\ GLIILFXOW LVVXHV 3HUKDSV WKH PRUH OLNHO\ H[SODQDWLRQ LV WKDW WKHVH FRPSDULVRQV DUH QHLWKHU FRPSOH[ QRU VSHFLILF &KLOGUHQ KDYH H[SHFWDWLRQV DERXW WKH SURGXFWV WKH\ VHH DGYHUWLVHG EXW WKH\ DUH VLPSOH DQG RIWHQ WHQWDWLYH ,Q UHDOO\ OLVWHQLQJ WR ZKDW WKH FKLOGUHQ

PAGE 90

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fV DGYHUWLVLQJ DQG WKH WKRXVDQGV RI FRPPHUFLDOV FKLOGUHQ FRPH LQ FRQWDFW ZLWK KLV UHDFWLRQ PDNHV D JUHDW GHDO RI VHQVH ,QGXVWU\ UHVHDUFK VXJJHVWV WKDW \RXQJ FKLOGUHQ XQGHUVWDQG SURGXFWV DV HQWLWLHV WHQGLQJ QRW WR IRFXV RQ VSHFLILF DWWULEXWHV 5XVW f 3URGXFW TXDOLW\ LV QRW SHUFHLYHG LQ D GLPHQVLRQDO IDVKLRQ HLWKHU D SURGXFW KDV LW RU LW GRHVQfW 7KLV SHUVSHFWLYH PD\ EH GXH LQ SDUW WR WKH ZD\ DGYHUWLVHUV FRPPXQLFDWH ZLWK FKLOGUHQ $GYHUWLVHPHQWV WDUJHWHG WR FKLOGUHQ DUH IUHTXHQWO\ HQWHUWDLQLQJ DQG GHOLJKWIXO \HW FRQWDLQ OLWWOH PRUH WKDQ YDJXH DQG VXEMHFWLYH SURPLVHV RI SHUIRUPDQFH 0DQ\ RI WKH FODLPV PDGH DUH DV VLPSOH DV LW WDVWHV JRRG LW KDV KRQH\ LW ZLOO PDNH \RX VWURQJ HYHU\ERG\ ZDQWV LW \RXfOO GR DQ\WKLQJ WR JHW LW RU HDWLQJ LV DQ DGYHQWXUH H[SUHVVHG LQ DQ\ QXPEHU RI HQWHUWDLQLQJ DQG FDSWLYDWLQJ ZD\V ,W ZRXOG EH GLIILFXOW JLYHQ WKH FRQWHQW RI WKHVH DGV WR GHYHORS YHU\ ILQHJUDLQHG H[SHFWDWLRQV DERXW D SDUWLFXODU EUDQG 6R LQ WKDW VHQVH LW LV QRW VXUSULVLQJ WKDW FKLOGUHQ KDYH GLIILFXOW\ UHODWLQJ WKHLU XQGHUVWDQGLQJ RI D FRPPHUFLDO WR WKHLU FRQVXPSWLRQ H[SHULHQFH 7KH H[SHULHQFH RI WU\LQJ D SURGXFW LV GRPLQDWHG E\

PAGE 91

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fV DIIHFWLYH DSSHDO DV ZHOO DV WKH EUDQGf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fV DGYHUWLVLQJ UHVSRQVH PD\ QRW IXOO\ FDSWXUH WKLV SRVVLELOLW\ 'RPLQDWHG E\ LVVXHV LQYROYLQJ FKLOGUHQfV FRJQLWLYH DELOLWLHV DQG OLPLWDWLRQV LW IDLOV WR FRQVLGHU FKLOGUHQfV EURDGHU LQWHUHVWV PRWLYHV DQG WKH HYHU\GD\ ZRUOG LQ ZKLFK DGYHUWLVHPHQWV DUH HQFRXQWHUHG

PAGE 92

(PHUJLQJ IURP WKH LQLWLDO LQWHUYLHZV LV D SHUVSHFWLYH RI DGYHUWLVLQJ WKDW KLJKOLJKWV LWV UROH DV DQ HQWHUWDLQPHQW YHKLFOH DV ZHOO DV D VRXUFH RI EUDQG FRPPXQLFDWLRQV 7KRXJK DW EHVW SUHOLPLQDU\ WKH HYLGHQFH GRHV VXJJHVW WKDW FKLOGUHQfV UHDFWLRQV WR FRPPHUFLDOV HQFRPSDVV D ULFK PXOWLGLPHQVLRQDO DUUD\ RI IRUP DQG FRQWHQW GLPHQVLRQV WKDW DUH RQO\ WDQJHQWLDOO\ UHODWHG WR WKH EUDQG DGYHUWLVHG 7KH ROGHU FKLOGUHQ LQ SDUWLFXODU WDONHG H[WHQVLYHO\ DERXW WKH FUHDWLYH PHUJLQJ RI IDQWDV\ DQG UHDOLW\ ZLWKLQ VSHFLILF DGYHUWLVHPHQWV WKH SUHGLFWDELOLW\ RI DFWRUVf SRUWUD\DOV VSHFLILF IHDWXUHV WKDW PDNH D FRPPHUFLDO IXQQ\ RU QRW DQG VSHFLILF VWUDWHJLHV XVHG WR DWWUDFW YLHZHU DWWHQWLRQ DQG LQWHUHVW :KDW WKH LPSOLFDWLRQV RI WKLV ILQGLQJ DUH DQG ZKHWKHU LW ZLOO FRQWLQXH WR KROG DV PRUH LQWHUYLHZV DUH FRQGXFWHG UHPDLQV DQ RSHQ TXHVWLRQ 7KRXJK UHVHDUFKHUV FOHDUO\ UHFRJQL]H WKDW FKLOGUHQ DUH HQWHUWDLQHG E\ FRPPHUFLDOV WKLV IDFW VHHPV WR KDYH OLWWOH EHDULQJ RQ KRZ FKLOGUHQf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f $V PDMRU FRQFHSWV DQG FDWHJRULHV DUH GHYHORSHG WKH\ DUH LPPHGLDWHO\ FKDOOHQJHG 1HJDWLYH LQVWDQFHV DUH VRXJKW DQG DGGLWLRQDO GDWD DUH FROOHFWHG )RU H[DPSOH DV WKH HQWHUWDLQPHQW GLPHQVLRQV RI DGYHUWLVLQJ VXUIDFHG LQ WKH LQWHUYLHZV

PAGE 93

D VHDUFK IRU QHJDWLYH RU TXDOLI\LQJ HYLGHQFH EHJDQ 2Q D VXEVWDQWLYH OHYHO TXHVWLRQV ZHUH VKLIWHG WR WKLQNLQJ DERXW FLUFXPVWDQFHV ZKHQ H[HFXWLRQDO HOHPHQWV PLJKW EH OHVV IRFDO )URP D PHWKRGRORJLFDO SHUVSHFWLYH WKH LQWHUYLHZ VWUXFWXUH ZDV DOWHUHG LQ RUGHU WR PLQLPL]H DQ\ GLUHFWLYH LQIOXHQFH RI WKH VWUXFWXUH LWVHOI 5DWKHU WKDQ EHJLQQLQJ WKH LQWHUYLHZV WDONLQJ DERXW DGYHUWLVLQJ WKH LQWHUYLHZV ZHUH LQVWHDG RULHQWHG DURXQG FKLOGUHQfV H[SHULHQFHV ZLWK SURGXFWV WKHLU OLNHV GLVOLNHV DQG SHUFHLYHG LQYROYHPHQW LQ VKRSSLQJ 6KLIWLQJ WKH IRFXV DZD\ IURP DGYHUWLVLQJ WR FRQVXPSWLRQ ZDV GHVLJQHG WR LOOXPLQDWH KRZ WKHVH NLQGV RI SURGXFWV ILW LQWR FKLOGUHQfV OLYHV 7R EHJLQ WKH LQWHUYLHZV FKLOGUHQ ZHUH DVNHG DERXW ZKDW WKH\ OLNH WR HDW IRU EUHDNIDVW )URP WKLV YHU\ VLPSOH TXHVWLRQ D YDULHW\ RI WRSLFV ZHUH UDLVHG UDQJLQJ IURP WKHLU IHHOLQJV DERXW EDG SURGXFW H[SHULHQFHV WR WKH LPSDFW RI SHHUV VLEOLQJV DQG DGYHUWLVLQJ RQ ZKDW WKH\ NQRZ DQG OLNH 7KH\ WDONHG DERXW WKHLU EUDQG SUHIHUHQFHV DQG OR\DOWLHV KRZ WKH\ OHDUQHG DERXW QHZ SURGXFWV ZK\ WKH\ OLNHG EUDQG QDPH SURGXFWV PRUH WKDQ JHQHULFV DV ZHOO WKHLU RZQ DQG RWKHUVf FULWHULD IRU FKRRVLQJ SDUWLFXODU EUDQGV 7KH\ WDONHG DERXW XVLQJ EUDQG QDPHV DV D FXH WR TXDOLW\ KRZ SUHPLXPV PLJKW EH XVHG WR SURPRWH VDJJLQJ VDOHV OR\DOW\ WR VSHFLILF EUDQGV DQG VWRUH SUHIHUHQFHV :LWK WKH VKLIW LQ IRFXV IDPLO\ PHPEHUV ZHUH PHQWLRQHG PRUH RIWHQ 7KH FKLOGUHQ ZHUH ZHOO DZDUH RI WKHLU VLEOLQJVf DQG SDUHQWVf SUHIHUHQFHV DV ZHOO DV WKHLU FULWHULD IRU FKRRVLQJ SDUWLFXODU EUDQGV 7KH\ UHDGLO\ WRRN IDPLO\ PHPEHUV LQWR DFFRXQW LQ GHVFULELQJ ZKDW WKH\ OLNH DQG ZK\ :LWKLQ WKLV JURXS WKHUH ZDV D JUHDW GHDO RI YDULDWLRQ LQ WHUPV RI WKHLU OHYHO RI SDUWLFLSDWLRQ LQ WKH IDPLO\ VKRSSLQJ DQG GHFLVLRQ PDNLQJ ,Q D IHZ FDVHV FKLOGUHQ ZHUH DFWLYH SDUWLFLSDQWV LQ YLUWXDOO\ DOO VKRSSLQJ H[SHGLWLRQV 2QH IRXUWK JUDGHU GHVFULEHG KRZ

PAGE 94

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fV LPSDFW DW VRPH SRLQW GXULQJ WKH FRQYHUVDWLRQ 7KRXJK FRQVXPSWLRQ WHQGV WR EH YLHZHG DV WKH PRVW LPSRUWDQW VRXUFH RI LQIRUPDWLRQ DERXW IUHTXHQWO\ SXUFKDVHG SDFNDJHG JRRGV IDPLO\ PHPEHUV IULHQGV DQG DGYHUWLVHPHQWV ZHUH UHDGLO\ PHQWLRQHG ,Q WKHVH LQWHUYLHZV DGYHUWLVLQJ ZDV YLHZHG PRUH FULWLFDOO\ 7KRXJK WKH SDUWLFLSDQWV GLVFXVVHG WKLQJV WKDW WKH\ WKRXJKW ZHUH IXQQ\ RU HQWHUWDLQLQJ DERXW DGYHUWLVHPHQWV WKH\ WHQGHG WR IRFXV DV ZHOO RQ DGYHUWLVLQJfV FDSDFLW\ WR WULFN RU IRRO SHRSOH 3HUKDSV WKLQNLQJ DERXW WKHLU SURGXFW SUHIHUHQFHV ILUVW HVWDEOLVKHV D GLIIHUHQW PLQG VHW D ORJLFDO RU UDWLRQDO \RXQJ FRQVXPHU ,Q WKHLU LQWHUSUHWDWLRQV RI DGV WKH FKLOGUHQ VHHPHG WR WKLQN PRUH DERXW WKH EUDQG DQG ZKDW LV VDLG DERXW LW WKDQ LWV FDSDFLW\ WR HQWHUWDLQ RU LWV VW\OLVWLF IHDWXUHV ,Q

PAGE 95

WKHVH GLVFXVVLRQV WKH IRUPDW RI WKH FRPPHUFLDO HJ WHFKQLFDO VRSKLVWLFDWLRQ DQLPDWLRQ PXVLF FDPHUD DQJOHVf SOD\HG OHVV SURPLQHQW D UROH ,QVWHDG PRUH DWWHQWLRQ ZDV SDLG WR ZKHWKHU WKH FRPPHUFLDO GLG DQ HIIHFWLYH MRE RI SRUWUD\LQJ D SURGXFW DFFXUDWHO\ 7KH\ PDGH JOREDO FRPSDULVRQV EHWZHHQ WKH TXDOLW\ RI WKH SURGXFW EDVHG RQ WKHLU RZQ H[SHULHQFHV DQG FODLPV PDGH DERXW LW LQ DQ DG )RU H[DPSOH FRPPHQWV VXFK DV 7KH\ VD\ LWfV VR SHUIHFW EXW ,fYH WULHG LW DQG LW WDVWHV \XFN\ ZHUH FRPPRQ 6R ZKLOH WKH\ GLG GLUHFWO\ FRPSDUH WKH FRPPHUFLDO WR WKH SURGXFW WKHVH FRPSDULVRQV WHQGHG QRW WR EH LQ WHUPV RI VSHFLILF DWWULEXWHV EXW PRUH LQ WHUPV RI WKHLU RYHUDOO HYDOXDWLRQV $V WKH LQWHUYLHZ VWUDWHJ\ HYROYHG WKH UHODWLYH LPSRUWDQFH DQG DWWHQWLRQ SDLG WR SDUWLFXODU OLQHV RI TXHVWLRQLQJ VKLIWHG *LYHQ WKH IRFXV RQ DGYHUWLVLQJfV HQWHUWDLQPHQW YDOXH HYLGHQW LQ WKH LQLWLDO GDWD VXEVHTXHQW LQWHUYLHZV ZHUH GHVLJQHG WR SUREH WKH PHDQLQJ DQG OLPLWV RI WKHVH ILQGLQJV 7KH XVH RI FRQFUHWH SURSV SURYHG WR EH D YDOXDEOH WRRO LQ HQFRXUDJLQJ FKLOGUHQ WR GUDZ XSRQ WKHLU RZQ H[SHULHQFHV ZLWK DGV DQG SURGXFWV :KLOH DGYHUWLVLQJf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

PAGE 96

LQWHUYLHZV VXJJHVWHG WKH QHHG IRU FRQWLQXHG FRPSDULVRQ DQG FRQWUDVW %DVHG RQ WKHVH SUHOLPLQDU\ LQWHUYLHZV WKHUH DSSHDUV WR EH JUHDW GLYHUVLW\ DPRQJ WKH \RXQJHU FKLOGUHQ PDNLQJ DQ\ FRQFOXVLRQV UHODWLYH WR WKH ROGHU JURXS SUREOHPDWLF +RZHYHU WKHVH DJH UHODWHG GLIIHUHQFHV SURPLVH WR EH TXLWH LQWHUHVWLQJ DQG ZRUWK\ RI IXUWKHU LQYHVWLJDWLRQ 7KH \RXQJHU FKLOGUHQ FOHDUO\ UHFRJQL]H DGYHUWLVLQJf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fW SURYLGH PXFK LQ WKH ZD\ RI SURGXFW LQIRUPDWLRQ 7KH\ DFFXUDWHO\ UHFRJQL]H WKDW NLGVf FRPPHUFLDOV KDYH WKH FDSDFLW\ WR HQWHUWDLQ ERUH RU DPXVH WKHP ZKLOH VD\LQJ OLWWOH DERXW WKH SURGXFW RU LWV IHDWXUHV 7KH\

PAGE 97

NQRZ WKDW FRPPHUFLDOV H[DJJHUDWH SURGXFW SHUIRUPDQFH DQG FDQ UHDGLO\ LGHQWLI\ SXIIHU\ LQ WKH FRQWH[W RI DQ DG 7KH\ NQRZ WKDW FHUHDO FDQf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f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fV XQLTXH FRPPXQLFDWLYH IRUP 7KH\ PD\ GHFLGH WKDW WKH\ PLJKW OLNH WR WU\ D SURGXFW RQ WKH EDVLV RI DQ DG ZLWKRXW KDYLQJ DQ\ UHDO VSHFLILF H[SHFWDWLRQV :KLOH VRPH RI WKH FKLOGUHQ VHHP WR EH ERWKHUHG E\ DGYHUWLVLQJfV SRWHQWLDO WR GHFHLYH RWKHUV DSSHDU WR EH PXFK OHVV FRQFHUQHG ,W LV DV LI LW LV VR REYLRXV WR WKHP WKDW FRPPHUFLDOV DUHQfW UHDO WKDW WKH\ ILQG LW GLIILFXOW WR EHOLHYH WKDW DQ\RQH ZRXOG DFFHSW

PAGE 98

WKHP DV WUXWK +RZHYHU WKH\ DUH JHQHUDOO\ TXLFN WR SRLQW RXW WKDW WKH\ KDYH KDG WR OHDUQ RQ WKHLU RZQ DERXW KRZ DGYHUWLVLQJ ZRUNV DQG WKDW \RXQJHU FKLOGUHQ PLJKW HDVLO\ EH IRROHG 7KRXJK DOO RI WKH ROGHU FKLOGUHQ HYDOXDWHG DGYHUWLVLQJ LQ WHUPV RI LWV HQWHUWDLQPHQW YDOXH VRPH RI WKHP ZHUH TXLFN WR GHVFULEH ZKDW WKH\ SHUFHLYHG WR EH DGYHUWLVHUVf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

PAGE 99

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fV H[SHFWDWLRQV PDNHV WKH LVVXH RI WUXWK D FRPSOH[ RQH :KHQ SURGXFW H[SHULHQFHV DUH QHJDWLYH DGV PD\ EH SHUFHLYHG DV OLHV RU VLPSO\ PLVWDNHV 2QH VHFRQG JUDGHU H[SODLQHG WKDW D FHUHDO FRPSDQ\ ZDV XQDZDUH WKDW LWV SURGXFW ZDV EDG EHFDXVH QR RQH ZKR ZRUNHG WKHUH KDG HYHU WDVWHG LW :KDW WKLV H[DPSOH LOOXVWUDWHV LV WKDW HYHQ ZKHQ DQ DG GRHVQfW PHVK ZLWK H[SHULHQFH LW GRHVQfW QHFHVVDULO\ PHDQ WKDW FKLOGUHQ ZLOO DVVXPH GHOLEHUDWH GHFHSWLRQ 7KH GHYHORSPHQWDO OLWHUDWXUH LQGLFDWHV WKDW WKH FDSDFLW\ WR LQIHU VRPHRQH HOVHfV PRWLYHV

PAGE 100

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fW PDNH \RX PRUH VWURQJ RU SRZHUIXO DV LW SURPLVHV WR GR 7KH \RXQJHU FKLOGUHQ RQ WKH RWKHU KDQG DUH PXFK OHVV OLNHO\ WR JR EH\RQG DQ LQLWLDO JOREDO DVVHVVPHQW RI WUXWK 7KRXJK DGYHUWLVHPHQWV DUH QRW DOZD\V WUXH IURP WKH FKLOGf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

PAGE 101

FKDUDFWHUL]HG DV LQFLGHQWDO RU SHULSKHUDO FRQWHQW E\ UHVHDUFKHUV HQWHUWDLQPHQW LQ DGYHUWLVLQJ LV D IRFDO LVVXH DPRQJ WKH FRQVXPHUV RI WKHVH FRPPXQLFDWLRQV 7KH LQIRUPDQWV LQ WKLV VWXG\ VHUYH DV DQ LPSRUWDQW UHPLQGHU WKDW WKH SHUVSHFWLYHV RI D \RXQJ FRQVXPHU PD\ QRW QHFHVVDULO\ FRQIRUP WR ZKDW DQ DGXOW UHVHDUFKHU PLJKW H[SHFW RU FRQVLGHU $PRQJ WKLV JURXS DGYHUWLVLQJ LV DW OHDVW DV PXFK D IRUP RI HQWHUWDLQPHQW DV D VRXUFH RI EUDQG LQIRUPDWLRQ :KLOH WKHVH LQWHUYLHZV SURYLGH LQLWLDO LQVLJKW LQWR WKH PHDQLQJ V\VWHPV FKLOGUHQ GUDZ XSRQ LQ WKLQNLQJ DERXW DGV DQG SURGXFWV WKLV VWXG\ LV JHQHUDWLYH UDWKHU WKDQ FRQFOXVLYH &RQFHSWXDO OLQNDJHV EHWZHHQ WKH QRWLRQ RI HQWHUWDLQPHQW DULVLQJ LQ WKLV VWXG\ DQG H[WHQVLYH UHVHDUFK RQ WKH DWWLWXGH WRZDUG WKH DG FRQVWUXFW ZLWKLQ DGXOW SRSXODWLRQV DUH H[DPLQHG LQ VWXG\ WZR LQ WKH FRQWH[W RI D FDXVDO GHVLJQ $V D SUHFXUVRU WR WKDW VWXG\ WKHVH LQWHUYLHZV KDYH LGHQWLILHG WKH FHQWUDO UROH FKLOGUHQfV DIIHFWLYH UHVSRQVHV VHHP WR SOD\ LQ WKHLU SHUFHSWLRQV RI DGSURGXFW UHODWLRQV :KLOH OLPLWHG LQ VFRSH WKLV VWXG\ KLJKOLJKWV WKH YDOXH RI FRQVLGHULQJ FKLOGUHQfV XQLTXH SHUVSHFWLYHV LQ WKH GHVLJQ DQG FRQGXFW RI FRQVXPHU UHVHDUFK

PAGE 102

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fV UHVSRQVHV LQ WKH LQLWLDO VWXG\ (YLGHQW LQ FKLOGUHQf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fV DGYHUWLVLQJ UHVSRQVH WKH UROH RI H[HFXWLRQDO IDFWRUV LQ VKDSLQJ WKH UHVSRQVHV RI GLIIHUHQW DJH JURXSV WKH PHDQLQJ RI HQWHUWDLQPHQW SHU VH DV ZHOO DV WKH PHGLDWLQJ SURSHUWLHV RI SURGXFW WULDO HPHUJHG DV GLUHFWLRQV IRU FRQWLQXLQJ LQYHVWLJDWLRQ DQG DQDO\VLV :KLOH D VLQJOH LQYHVWLJDWLRQ FDQ QRW DGGUHVV DOO

PAGE 103

RI WKHVH LVVXHV H[SHULPHQWDO PHWKRGV DUH SDUWLFXODUO\ ZHOOVXLWHG IRU IXUWKHU WHVWLQJ DQG UHILQHPHQW RI HPHUJHQW K\SRWKHVHV 2QH RI WKH SULPDU\ DGYDQWDJHV RI D K\EULG UHVHDUFK GHVLJQ LV WKH RSSRUWXQLW\ LW SURYLGHV WR FDSLWDOL]H RQ WKH XQLTXH VWUHQJWKV RI LQGLYLGXDO UHVHDUFK PHWKRGV LQ OHDUQLQJ DERXW D VLQJOH VXEVWDQWLYH SKHQRPHQRQ 4XDOLWDWLYH VWXG\ DOORZV WKH UHVHDUFKHU WR VWULS DZD\ KLVf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fV DIIHFWLYH DSSHDO +RZHYHU YHU\ SUHOLPLQDU\ HYLGHQFH LQGLFDWHV WKDW WKLV SDWWHUQ PD\ GLIIHU DFURVV DJH JURXSV :KLOH ROGHU FKLOGUHQ WHQGHG WR GUDZ H[WHQVLYHO\ RQ H[HFXWLRQDO HOHPHQWV LQ IUDPLQJ WKHLU UHVSRQVH WKH \RXQJHU FKLOGUHQ VHHPHG WR IRFXV WR D JUHDWHU GHJUHH RQ WKH SURGXFW DQG WKH YDOLGLW\ RI WKH DGYHUWLVHPHQWfV SRUWUD\DO 7KRXJK WKHVH LVVXHV KDYH QRW EHHQ DGGUHVVHG ZLWKLQ D WULDO

PAGE 104

FRQWH[W WKLV SDWWHUQ LQWURGXFHV LQFRQVLVWHQFLHV LQWR FXUUHQW FRQFHSWXDOL]DWLRQV RI FKLOGUHQfV DGYHUWLVLQJ UHVSRQVH :KLOH WKH ILQGLQJV RI WKH SUHOLPLQDU\ VWXG\ VXJJHVW WKDW WKH UHODWLRQVKLS EHWZHHQ DGV DQG SURGXFW FRQVXPSWLRQ PD\ EH WHQXRXV H[SHULPHQWDWLRQ SURYLGHV WKH RSSRUWXQLW\ WR LVRODWH DQG WHVW LPSRUWDQW FDXVDO UHODWLRQVKLSV 7KH H[SHULPHQWDO LQYHVWLJDWLRQ ZDV GHVLJQHG WR H[DPLQH WKH SUHFLVH QDWXUH DQG VWUHQJWK RI WKH OLQNDJHV EHWZHHQ FKLOGUHQfV DIIHFWLYH UHDFWLRQV WR DGV EUDQG SHUFHSWLRQV DQG DWWLWXGHV ZLWKLQ WKH FRQWH[W RI SURGXFW FRQVXPSWLRQ 'HVSLWH ORQJ VWDQGLQJ LQWHUHVW LQ WKH QDWXUH DQG HIIHFWV RI FRQVXPHUVf DIIHFWLYH UHDFWLRQV WR FRPPHUFLDO VWLPXOL ZLWKLQ FRQVXPHU UHVHDUFK WKHVH LVVXHV KDYH UHFHLYHG OLWWOH DWWHQWLRQ LQ WKH FRQFHSWXDOL]DWLRQ DQG PHDVXUHPHQW RI FKLOGUHQfV UHVSRQVHV WR DGYHUWLVLQJ :LWKLQ FRQVXPHU UHVHDUFK WKHUH LV D ORQJ DQG ZHOOHVWDEOLVKHG VWUHDP RI UHVHDUFK DGGUHVVLQJ LVVXHV VXFK DV WKH GHWHUPLQDQWV DQG LPSDFW RI FRQVXPHUVf DG DWWLWXGHV WKH UROH RI HPRWLRQ RU IHHOLQJV LQ SHUVXDVLRQ DQG WKH FRQVHTXHQFHV RI SHULSKHUDO DG SURFHVVLQJ HJ %DWUD DQG 5D\ %XUNH DQG (GHOO /XW] /XW] 0DF.HQ]LH DQG %HOFK 0LWFKHOO DQG 2OVRQ 0DF.HQ]LH DQG /XW] 0DF.HQ]LH /XW] DQG %HOFK 6KLPS f 'HVSLWH WKLV KLVWRU\ WUDGLWLRQDO DSSURDFKHV WR WKH VWXG\ RI FKLOGUHQfV DGYHUWLVLQJ UHVSRQVH PDNH WKH LPSOLFLW DVVXPSWLRQ WKDW FRJQLWLYH IDFWRUV DGHTXDWHO\ FDSWXUH WKH PHDQLQJIXO DVSHFWV RI KRZ FKLOGUHQ SURFHVV DGYHUWLVHPHQWV &KLOGUHQfV DIIHFWLYH UHDFWLRQV WR DGYHUWLVHPHQWV WHQG WR EH LJQRUHG RU SHUFHLYHG DV LQFRQVHTXHQWLDO :DUWHOOD f +RZHYHU LW KDV EHFRPH LQFUHDVLQJO\ FOHDU WKDW WKH FRJQLWLYH DQG DIIHFWLYH GLPHQVLRQV RI SHUVXDVLRQ IRU DGXOWV DUH LQWHUUHODWHG UDWKHU WKDQ GLVFUHWH %XUNH DQG (GHOO (GHOO DQG %XUNH 0DF.HQ]LH HW DO f

PAGE 105

%RWK SUDJPDWLF DQG FRQFHSWXDO FRQVLGHUDWLRQV VXJJHVW WKDW WKH UHODWLRQVKLS EHWZHHQ FKLOGUHQfV FRJQLWLYH DQG DIIHFWLYH UHDFWLRQV WR DGYHUWLVHPHQWV ZDUUDQWV FDUHIXO VWXG\ &RQFHSWXDOO\ DGYHUWLVLQJ UHVSRQVH SDWWHUQV REVHUYHG LQ DGXOW SRSXODWLRQV FDQ QRW EH H[WUDSRODWHG WR D \RXQJ DXGLHQFH XQLTXHO\ HQJDJHG LQ OHDUQLQJ DERXW ZKDW DGYHUWLVLQJ LV DQG KRZ LW ZRUNV 0RGHOV RI DGXOWVf DGYHUWLVLQJ UHVSRQVH GR QRW LQFRUSRUDWH WKH GHYHORSPHQWDO FRQVWUXFWV QHHGHG WR H[SODLQ UHVSRQVH YDULDWLRQ DPRQJ DJH JURXSV :KLOH WKHVH WKHRULHV SURYLGH WKH FULWLFDO IRXQGDWLRQ IRU IXUWKHU VWXG\ WKH\ ZHUH QHLWKHU GHVLJQHG QRU LQWHQGHG IRU H[DPLQLQJ DGYHUWLVLQJ HIIHFWV DPRQJ FKLOGUHQ )XUWKHU WKRXJK H[WHQVLYH UHVHDUFK HIIRUW KDV EHHQ IRFXVHG RQ WKH QDWXUH DQG HIIHFWV RI FRQVXPHUVf DWWLWXGHV WRZDUGV DGYHUWLVHPHQWV WKH LPSDFW RI HQWHUWDLQPHQW SHU VH KDV UHFHLYHG VFDQW DWWHQWLRQ 5HVHDUFK ZLWKLQ WKH YLHZHU UHVSRQVH SURILOH 953f WUDGLWLRQ DVVHVVHV FRQVXPHUVf DIIHFWLYH UHDFWLRQV WR DGV RQ D VHW RI PXOWLGLPHQVLRQDO GHVFULSWLYH UDWLQJ VFDOHV /DVWRYLFND 6FKOLQJHU f ,Q WKHVH LQYHVWLJDWLRQV HQWHUWDLQPHQW HPHUJHV DV D VWDEOH DQDO\WLFDOO\GHULYHG XQGHUO\LQJ IDFWRU +RZHYHU LWV UHODWLRQVKLS WR RWKHU PHDVXUHV RI DGYHUWLVLQJ HIIHFWLYHQHVV KDV QRW EHHQ DGGUHVVHG V\VWHPDWLFDOO\ 7KH HPHUJHQFH RI HQWHUWDLQPHQW DV D FHQWUDO FRQFHSWXDO WKHPH LQ WKH SUHOLPLQDU\ VWXG\ VXJJHVWV WKDW WKLV FRQVWUXFW PD\ EH DQ LPSRUWDQW H[SODQDWRU\ IDFWRU LQ WKH UHDOP RI FKLOGUHQfV DGYHUWLVLQJ UHVSRQVH $GV ZHUH DVVHVVHG QRW VLPSO\ LQ WHUPV RI WKHLU OLNDELOLW\ EXW WKHLU HQWHUWDLQPHQW YDOXH $PRQJ WKH ROGHU FKLOGUHQ WKHVH MXGJPHQWV ZHUH UHODWLYHO\ VRSKLVWLFDWHG IUHTXHQWO\ GUDZLQJ RQ D QXPEHU RI IRUP DQG FRQWHQW GLPHQVLRQV 7KH FRPSOH[LW\ DQG GHWDLO WKDW FKDUDFWHUL]HG FKLOGUHQfV FRPPHQWV VHHPV WR VXJJHVW WKDW DOWHUQDWLYH PRGHOV RI WKH SHUVXDVLRQ SURFHVV EHDU FRQVLGHUDWLRQ ,W PD\ EH WKDW DQ

PAGE 106

HQWHUWDLQLQJ H[HFXWLRQ HQKDQFHV SHUVXDVLRQ WKURXJK LWV DELOLW\ WR FDSWXUH DWWHQWLRQ DQG HQKDQFH EUDQG UHFDOO WKHUHE\ IDFLOLWDWLQJ HQWU\ LQWR WKH FKLOGfV HYRNHG VHW LUUHVSHFWLYH RI DQ\ EUDQGVSHFLILF H[SHFWDWLRQV )URP D PRUH SUDJPDWLF SHUVSHFWLYH D VSHFLDO HPSKDVLV RQ FKLOGUHQfV DIIHFWLYH UHVSRQVHV LV ZDUUDQWHG GXH WR WKH IUHTXHQF\ RI HPRWLRQDO RU LPDJHEDVHG DSSHDOV LQ DGYHUWLVLQJ WDUJHWHG DW D \RXQJ DXGLHQFH &KLOGUHQ KDYH EHFRPH DQ LQFUHDVLQJO\ LPSRUWDQW PDUNHW VHJPHQW LQ WHUPV RI DEVROXWH VL]H VSHQGLQJ SRZHU DQG SXUFKDVH LQIOXHQFH 0F1HDO f 7KHLU UHFHSWLYLW\ WR SURPRWLRQDO HIIRUWV LV RI GLUHFW LQWHUHVW WR DGYHUWLVLQJ SURIHVVLRQDOV SXEOLF SROLF\ PDNHUV PDQXIDFWXUHUV DQG DFDGHPLF UHVHDUFKHUV 7KH SXUSRVH RI WKLV VWXG\ ZDV WR H[DPLQH KRZ DGYHUWLVLQJ PD\ DIIHFW FKLOGUHQfV LQWHUSUHWDWLRQV DQG SHUIRUPDQFH HYDOXDWLRQV ZKHQ FRPELQHG ZLWK GLUHFW EUDQG H[SHULHQFH 8VLQJ SURGXFWV DQG DGYHUWLVHPHQWV VSHFLILFDOO\ GHVLJQHG IRU DQG PDUNHWHG WR FKLOGUHQ WKLV VWXG\ LQYHVWLJDWHV KRZ FKLOGUHQ DVVLPLODWH LQIRUPDWLRQ JOHDQHG IURP WKHLU FRQVXPSWLRQ H[SHULHQFHV DQG DGYHUWLVLQJ ,Q DGGLWLRQ WKH UHODWLRQVKLSV DPRQJ FKLOGUHQfV DIIHFWLYH UHDFWLRQV WR FRPPHUFLDOV EUDQG EHOLHIV DQG DWWLWXGHV DUH H[SORUHG LQ WKH FRQWH[W RI SUHWULDO DGYHUWLVLQJ DV ZHOO DV VLWXDWLRQV ZKHUH WKH FKLOG KDV KDG WKH EHQHILW RI GLUHFW H[SHULHQFH ZLWK WKH EUDQG 7KLV LQYHVWLJDWLRQ H[WHQGV H[SHULPHQWDO UHVHDUFK RQ FKLOGUHQfV UHVSRQVHV WR DGYHUWLVLQJ E\ f IRFXVLQJ RQ WKH SRWHQWLDO LPSDFW RI SURGXFW H[SHULHQFH DQG f LQFRUSRUDWLQJ DIIHFWLYH DV ZHOO DV FRJQLWLYH UHVSRQVH YDULDEOHV :KLOH UHVHDUFK RQ DGYHUWLVLQJWULDO LQWHUDFWLRQV KDV VXJJHVWHG WKDW DGYHUWLVLQJ LQIOXHQFHV DGXOWVf VXEVHTXHQW

PAGE 107

SURGXFW H[SHULHQFHV RQO\ ZKHQ WKH H[SHULHQFH LV QRYHO RU DPELJXRXV WKHVH FRQGLWLRQV PD\ QRW KROG DPRQJ FKLOGUHQ +RFK DQG +D f :LWKRXW WKH FRJQLWLYH VRSKLVWLFDWLRQ DQG JHQHUDOL]HG VNHSWLFLVP WKDW JXLGHV DGXOW SURFHVVLQJ LW LV DQWLFLSDWHG WKDW DGYHUWLVLQJ PD\ LQIOXHQFH FKLOGUHQfV HYDOXDWLRQV RI WKHLU SURGXFW H[SHULHQFHV HYHQ ZKHQ WKRVH H[SHULHQFHV SURYLGH XQDPELJXRXV HYLGHQFH DERXW SURGXFW TXDOLW\ &RQFHSWXDO %DFNJURXQG DQG +\SRWKHVHV %H\RQG WKH ERUGHUV RI FKLOGUHQfV DGYHUWLVLQJ UHVHDUFK WKHUH DUH D QXPEHU RI UHVHDUFK OLWHUDWXUHV WKDW FDQ EH EURXJKW WR EHDU LQ XQGHUVWDQGLQJ WKH LQWHUUHODWHG HIIHFWV RI DGYHUWLVLQJ DQG SURGXFW H[SHULHQFH RQ FRQVXPHUVf EUDQG UHVSRQVHV ,Q DGGLWLRQ WR WKH WUDQVIRUPDWLRQDO DGYHUWLVLQJ DQG K\SRWKHVLVWHVWLQJ PRGHOV UHVHDUFK RQ WKH QDWXUH DQG LPSDFW RI FRQVXPHUVf DG DWWLWXGHV LV SDUWLFXODUO\ UHOHYDQW IRU H[DPLQLQJ FKLOGUHQfV DIIHFWLYH UHVSRQVHV WR DGV DQG UHODWLRQVKLSV DPRQJ NH\ LQGLFDWRUV RI DGYHUWLVLQJ HIIHFWLYHQHVV 7KLV VWUHDP RI UHVHDUFK SURYLGHV WKH WKHRUHWLFDO EDVLV IRU H[DPLQLQJ ZKHWKHU FKLOGUHQfV OLNLQJ IRU DQ DG DQG LWV SHUFHLYHG HQWHUWDLQPHQW YDOXH SOD\ D VLJQLILFDQW UROH LQ VKDSLQJ WKHLU EUDQG DWWLWXGHV ZLWKLQ D FRQVXPSWLRQ FRQWH[W $ VHFRQG DQG SHUKDSV PRUH EDVLF LVVXH LQYROYHV ZKHWKHU FKLOGUHQ LQWHJUDWH WKHLU LQWHUSUHWDWLRQ RI FRPPHUFLDO FODLPV ZLWK WKHLU H[SHULHQWLDOO\ EDVHG LPSUHVVLRQV ZKHQ WKH\ MXGJH D EUDQGfV SHUIRUPDQFH ,Q UHFHQW \HDUV WKHUH KDV EHHQ LQFUHDVHG LQWHUHVW LQ XQGHUVWDQGLQJ KRZ DGXOW FRQVXPHUV LQFRUSRUDWH LQIRUPDWLRQ IURP DGYHUWLVLQJ DQG SURGXFW H[SHULHQFH LQ IRUPLQJ EUDQG DWWLWXGHV DQG SXUFKDVH LQWHQWLRQV HJ 0DUNV DQG .DPLQV 6PLWK 6PLWK DQG 6ZLQ\DUG :ULJKW DQG /XW] f :KLOH FRQVLVWHQW ZLWK WKH K\SRWKHVLVWHVWLQJ PRGHO LQWURGXFHG E\ +RFK DQG +D f WKLV OLWHUDWXUH

PAGE 108

GUDZV RQ DWWLWXGH UDWKHU WKDQ LQIRUPDWLRQ SURFHVVLQJ WKHRU\ WR H[SODLQ WKH GLIIHUHQWLDO FUHGLELOLW\ RI LQIRUPDWLRQ REWDLQHG WKURXJK DGYHUWLVLQJ YHUVXV SURGXFW WULDO 7KLV UHVHDUFK SURYLGHV D XVHIXO VWDUWLQJ SRLQW IRU WKLQNLQJ DERXW WKH GLIIHUHQWLDO UROHV DGYHUWLVLQJ DQG SURGXFW H[SHULHQFH PD\ SOD\ LQ VKDSLQJ FKLOGUHQfV EUDQG UHODWHG EHOLHIV DQG DWWLWXGHV 7KH (IIHFWV RI $GYHUWLVLQJ DQG 3URGXFW 7ULDO RQ %UDQG 3HUFHSWLRQV DQG $WWLWXGHV ,Q UHFHQW \HDUV PDUNHWLQJ DQG FRQVXPHU UHVHDUFKHUV KDYH IRFXVHG LQFUHDVHG DWWHQWLRQ RQ WKH LQWHUDFWLRQ RI DGYHUWLVLQJ DQG SURGXFW XVH LQ VKDSLQJ FRQVXPHUVf EUDQG SHUFHSWLRQV DQG DWWLWXGHV HJ 'HLJKWRQ +RFK DQG 'HLJKWRQ +RFK DQG +D 0DUNV DQG .DPLQV :ULJKW DQG /XW] f 7KRXJK WKH HIIHFWV RI WKH DGYHUWLVLQJH[SHULHQFH LQWHUDFWLRQ KDYH ORQJ EHHQ RI LQWHUHVW ZLWKLQ WKH FRQVXPHU VDWLVIDFWLRQ OLWHUDWXUH HJ 2OVRQ DQG 'RYHU 2OLYHU f LW LV RQO\ UHFHQWO\ WKDW UHVHDUFKHUV KDYH FRQVLGHUHG WKH LVVXH RI KRZ FRQVXPHUV GUDZ RQ WKHVH VRXUFHV LQ OHDUQLQJ DERXW WKH PDUNHWSODFH HJ +RFK DQG 'HLJKWRQ +RFK DQG +D f $GYHUWLVLQJ YHUVXV SURGXFW WULDO 2QH RI WKH SULPDU\ FRQFHSWXDO IRXQGDWLRQV IRU UHFHQW UHVHDUFK RQ DGWULDO UHODWLRQVKLSV LV WKH LQWHJUDWHG LQIRUPDWLRQ UHVSRQVH PRGHO ,,50f SURSRVHG E\ 6PLWK DQG 6ZLQ\DUG f 7KLV PRGHO FRPSDUHV FRQVXPHU UHVSRQVH WR DGYHUWLVLQJ DQG SURGXFW H[SHULHQFH DQG VXJJHVWV WKDW LQ PRVW FDVHV DGYHUWLVLQJ H[SRVXUH FUHDWHV RQO\ WHQWDWLYH RU ZHDNO\ KHOG EUDQGUHODWHG EHOLHIV DQG DWWLWXGHV )URP DQ DGXOWfV SHUVSHFWLYH DGYHUWLVLQJ LV XQGHUVWRRG WR EH D SDUWLVDQ VRXUFH RI LQIRUPDWLRQ ([SHULHQWLDO HYLGHQFH RQ WKH RWKHU KDQG LV SUHVXPHG WR UHIOHFW REMHFWLYH UHDOLW\ $FFRUGLQJ WR WKH PRGHO FRQVXPHUV ERWK UHFRJQL]H WKDW WKH DGYHUWLVHU SUHVHQWV

PAGE 109

D ELDVHG FDVH DQG DFW XSRQ WKLV NQRZOHGJH E\ GLVFRXQWLQJ DG FODLPV $V D FRQVHTXHQFH WKH\ IRUP ORZHU RUGHU RU WHQWDWLYHO\ KHOG EHOLHIV DQG DWWLWXGHV DERXW WKH EUDQGfV FKDUDFWHULVWLFV DQG SHUIRUPDQFH ,Q FRQWUDVW FRQVXPHUV ZKR KDYH GLUHFW H[SHULHQFH ZLWK WKH EUDQG IRUP PXFK VWURQJHU FRQILGHQWO\ KHOG EUDQGUHODWHG EHOLHIV DQG DWWLWXGHV 7KHVH KLJKHU RUGHU UHVSRQVHV DUH EDVHG RQ WKH HQKDQFHG FUHGLELOLW\ RU WUXVWZRUWKLQHVV RI MXGJPHQWV EDVHG RQ SHUVRQDO H[SHULHQFH :KLOH DQ DG PD\ EH VXVSHFW UDUHO\ GR FRQVXPHUV TXHVWLRQ WKH YDOLGLW\ RI WKHLU RZQ H[SHULHQFHV 7KH ,,50 VXJJHVWV WKDW ZKHQ D EUDQGfV LPSRUWDQW IHDWXUHV FDQ EH DVVHVVHG WULDO EDVHG EHOLHIV DQG HYDOXDWLRQV ZLOO GRPLQDWH WKRVH JOHDQHG WKURXJK DGYHUWLVLQJ H[SRVXUH :KHQ WKH FUHGLELOLW\ RI LQIRUPDWLRQ LQ WKH HQYLURQPHQW YDULHV FRQVXPHUVf VSHFLILF H[SHFWDWLRQV DERXW D EUDQGfV SHUIRUPDQFH DUH D IXQFWLRQ QRW RQO\ RI WKH VWUHQJWK RI WKHLU EHOLHIV EXW RI WKHLU FRQILGHQFH LQ WKRVH EHOLHIV DV ZHOO 6PLWK DQG 6ZLQ\DUG f :ULJKW DQG /XW] f KDYH H[WHQGHG WKH ,,50 PRGHO E\ GLIIHUHQWLDWLQJ EHWZHHQ VHDUFK DQG H[SHULHQFH DWWULEXWHV LQ WKHLU DQDO\VLV RI DGWULDO UHODWLRQVKLSV ([SHULHQFH DWWULEXWHV DUH WKRVH IHDWXUHV RI D EUDQG WKDW FDQ RQO\ EH GHWHFWHG WKURXJK FRQVXPSWLRQ HJ IODYRU WH[WXUH VPHOOf 6HDUFK DWWULEXWHV RQ WKH RWKHU KDQG DUH WKRVH FKDUDFWHULVWLFV WKDW FDQ HDVLO\ EH DVVHVVHG SULRU WR SXUFKDVH HJ SULFH VL]H LQJUHGLHQWVf 7KLV LV D SDUWLFXODUO\ LPSRUWDQW GLVWLQFWLRQ WR FRQVLGHU LQ WKH GRPDLQ RI IUHTXHQWO\ SXUFKDVHG SDFNDJHG JRRGV ZKHUH H[SHULHQFH DWWULEXWHV PD\ GRPLQDWH :LWKLQ WKLV GRPDLQ :ULJKW DQG /XW] f KDYH VKRZQ WKDW SURGXFW WULDO OHDGV WR FRQILGHQWO\ KHOG EHOLHIV DERXW D EUDQGfV H[SHULHQWLDO SURSHUWLHV ZKLOH KDYLQJ OLWWOH LPSDFW RQ FRQVXPHUVf SHUFHSWLRQV RI LWV SHUIRUPDQFH RQ VHDUFK GLPHQVLRQV 7KHLU ILQGLQJV DOVR

PAGE 110

VXJJHVW WKDW SURGXFW WULDO PD\ GRPLQDWH DGYHUWLVLQJfV LQIOXHQFH LQ VKDSLQJ FRQVXPHUVf SHUFHSWLRQV DERXW D EUDQGf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fV DGYHUWLVLQJ OLWHUDWXUH ZRXOG VXJJHVW WKDW ROGHU FKLOGUHQ DUH PXFK PRUH FULWLFDO RI DGYHUWLVLQJ WKDQ WKHLU \RXQJHU FRXQWHUSDUWV %HYHU HW DO %ODWW HW DO 5RVVLWHU DQG 5REHUWVRQ :DUG :DUG HW DO f *LYHQ WKH VNHSWLFLVP DSSDUHQW DPRQJ ROGHU FKLOGUHQ WKH\ DUH OLNHO\ WR UHDGLO\ GLVWLQJXLVK EHWZHHQ WKH FUHGLELOLW\ RI DGYHUWLVHG LQIRUPDWLRQ DQG WKDW REWDLQHG WKURXJK GLUHFW SURGXFW H[SHULHQFH :KLOH WKH DG PD\ SURGXFH ZHDN WHQWDWLYHO\ KHOG H[SHFWDWLRQV DERXW WKH EUDQG SURGXFW XVH ZLOO UHVXOW LQ VWURQJHU PRUH FRQILGHQWO\ KHOG EHOLHIV DQG DWWLWXGHV UHSOLFDWLQJ WKH ILQGLQJV REVHUYHG DPRQJ DGXOW FRQVXPHUV 0DUNV DQG .DPLQV 6PLWK DQG 6ZLQ\DUG :ULJKW DQG /XW] f +RZHYHU \RXQJHU FKLOGUHQ PD\ QRW PDNH WKH GLVWLQFWLRQ EHWZHHQ DGYHUWLVLQJ DQG H[SHULHQWLDO HYLGHQFH VR UHDGLO\ 7KRXJK WKHLU H[SHULHQFHV FOHDUO\ SURYLGH SHUWLQHQW HYLGHQFH

PAGE 111

UHJDUGLQJ SURGXFW TXDOLW\ DGYHUWLVHPHQWV DUH QRW QHFHVVDULO\ WUHDWHG DV LQKHUHQWO\ XQWUXVWZRUWK\ RU XQLQIRUPDWLYH 7KH ,,50 VXJJHVWV WKDW LQ PRVW FDVHV DGYHUWLVLQJ H[SRVXUH FUHDWHV ORZHU RUGHU EHOLHIV DERXW EUDQG EHQHILWV DV D FRQVHTXHQFH RI FRQVXPHUVf LQFOLQDWLRQ WR GLVFRXQW FRPPHUFLDO FODLPV 6PLWK DQG 6ZLQ\DUG f 7KHUH LV OLWWOH HYLGHQFH WR VXJJHVW KRZHYHU WKDW \RXQJ FKLOGUHQ DUH SDUWLFXODUO\ FULWLFDO RI DG FODLPV $PRQJ WKLV JURXS DGV PD\ VLPSO\ UHSUHVHQW DQ DOWHUQDWLYH VRXUFH RI EUDQG LQIRUPDWLRQ UDWKHU WKDQ D OHVVHU RU OHVV WUXVWZRUWK\ VRXUFH WKDQ WKH SURGXFW LWVHOI :KLOH FKLOGUHQ PD\ UHO\ KHDYLO\ RQ WKHLU GLUHFW H[SHULHQFHV LQ IRUPLQJ WKHLU EUDQG SUHIHUHQFHV WKLV GRHV QRW QHFHVVLWDWH WKDW DGYHUWLVHG LQIRUPDWLRQ EH GLVFRXQWHG +OD 2OGHU FKLOGUHQfV \HDUROGVf EUDQG UHODWHG EHOLHIV DQG DWWLWXGHV DUH PRUH FRQILGHQWO\ KHOG ZKHQ IRUPHG RQ WKH EDVLV RI SURGXFW WULDO WKDQ RQ WKH EDVLV RI DGYHUWLVLQJ H[SRVXUH +OE $PRQJ \RXQJHU FKLOGUHQ \HDUROGVf EHOLHI DQG DWWLWXGH FRQILGHQFH VFRUHV DUH QRW VLJQLILFDQWO\ GLIIHUHQW ZKHQ IRUPHG RQ WKH EDVLV RI SURGXFW WULDO WKDQ ZKHQ IRUPHG RQ WKH EDVLV RI DGYHUWLVLQJ H[SRVXUH ,Q DGGLWLRQ WR WKH LVVXH RI DGYHUWLVLQJ YHUVXV SURGXFW WULDO WKHUH DUH D QXPEHU RI LQWHUHVWLQJ TXHVWLRQV LQYROYLQJ WKH FRPELQHG LPSDFW RI DGYHUWLVLQJ DQG H[SHULHQFH RQ FKLOGUHQfV EUDQG UHODWHG UHVSRQVHV 2QH RI WKH FHQWUDO LVVXHV ZLWKLQ WKLV DUHD KDV FHQWHUHG RQ DGYHUWLVLQJfV FDSDFLW\ WR IUDPH WKH LQWHUSUHWDWLRQ RI VXEVHTXHQW EUDQG H[SHULHQFH 'HLJKWRQ +RFK DQG +D /HYLQ DQG *DHWK 0DUNV DQG .DPLQV 3XWR DQG :HOOV f $G DV D IUDPH RQ SURGXFW H[SHULHQFH ,I ROGHU FKLOGUHQfV EUDQG UHODWHG EHOLHIV DUH UHODWLYHO\ WHQWDWLYH DQG ZHDNO\ KHOG ZKHQ EDVHG RQ DGYHUWLVLQJ H[SRVXUH WKH TXHVWLRQ EHFRPHV RQH RI GHWHUPLQLQJ ZKHWKHU WKHVH H[SHFWDWLRQV H[HUW DQ\ LPSDFW RQ SHUVXDVLRQ

PAGE 112

ZKHQ WKH FKLOG KDV WKH EHQHILW RI GLUHFW H[SHULHQFH ZLWK D EUDQG ,Q WKH GHFLVLRQ PDNLQJ OLWHUDWXUH PRUH JHQHUDOO\ HYLGHQFH RI IUDPLQJ HIIHFWV ZLWKLQ D SUHSXUFKDVH FRQWH[W LV FRQVLGHUDEOH 5HVHDUFKHUV KDYH VKRZQ WKDW DGV RU EUDQG ODEHOV FDQ IUDPH KRZ FRQVXPHUV SHUFHLYH DQG HYDOXDWH VXEVHTXHQW SURGXFW LQIRUPDWLRQ HJ $OOLVRQ DQG 8KO 0DF.HQ]LH DQG /XW] :ULJKW DQG 5LS f ,Q D WULDO FRQWH[W WKRXJK DGEDVHG EHOLHIV DUH ZHDN D IUDPLQJ HIIHFW PD\ RFFXU ZKHUHE\ DGYHUWLVLQJ GLUHFWV WKH FRQVXPHUfV DWWHQWLRQ WR VSHFLILF DQG SUHVXPDEO\ IDYRUDEOH EUDQG DWWULEXWHV GXULQJ WKH XVH RFFDVLRQ /HYLQ DQG *DHWK f :ULJKW DQG /XW] f KDYH VKRZQ IRU H[DPSOH WKDW DGYHUWLVLQJ H[SRVXUH SULRU WR SURGXFW XVH VKLIWV FRQVXPHUVf DWWHQWLRQ WRZDUG WKH EUDQGfV H[SHULHQWLDO SURSHUWLHV +RFK DQG +D f SURSRVHG WKDW EHOLHIV IRUPHG RQ WKH EDVLV RI DGYHUWLVLQJ H[SRVXUH KDYH WKH FDSDFLW\ WR IUDPH WKH LQWHUSUHWDWLRQ RI D SURGXFW H[SHULHQFH WKURXJK D K\SRWKHVLVWHVWLQJ PHFKDQLVP %DVHG RQ H[SRVXUH WR DQ DG FRQVXPHUV IRUP WHQWDWLYH EHOLHIV RU K\SRWKHVHV DERXW D EUDQG WKDW WKH\ VXEVHTXHQWO\ WHQG WR FRQILUP WKURXJK SURGXFW WULDO 'HLJKWRQ +RFK DQG +D /HYLQ DQG *DHWK f :KLOH WKH SURFHVVHV DUH QRW DV ZHOO XQGHUVWRRG WUDQVIRUPDWLRQDO DGYHUWLVLQJ UHVHDUFKHUV DOVR DUJXH WKDW DGYHUWLVLQJ PD\ VKDSH WKH LQWHUSUHWDWLRQ RI D FRQVXPSWLRQ H[SHULHQFH WKURXJK PRUH DIIHFWLYH PHDQV 3XWR DQG :HOOV f 7KH H[SHULHQFH RI XVLQJ WKH EUDQG LV WUDQVIRUPHG PDGH PRUH HQMR\DEOH RU H[FLWLQJ DV D FRQVHTXHQFH RI UHSHDWHG DGYHUWLVLQJ H[SRVXUH )URP WKLV SHUVSHFWLYH FODVVLFDO FRQGLWLRQLQJ PD\ RIIHU WKH PRVW XVHIXO SHUVSHFWLYH IRU XQGHUVWDQGLQJ XQGHUO\LQJ UHVSRQVH SURFHVVHV :KLOH WKHRU\ UHYHDOV D QXPEHU RI PHFKDQLVPV WKURXJK ZKLFK IUDPLQJ HIIHFWV PLJKW DULVH HPSLULFDO LQYHVWLJDWLRQ KDV LGHQWLILHG NH\ FRQWH[WXDO FRQVWUDLQWV

PAGE 113

$PRQJ DQ DGXOW SRSXODWLRQ IUDPLQJ HIIHFWV VHHP WR RFFXU SULPDULO\ LQ RQH RI WKUHH FLUFXPVWDQFHV f ZKHQ WKH WULDO H[SHULHQFH LV DPELJXRXV RU RSHQ WR PXOWLSOH LQWHUSUHWDWLRQV +RFK DQG +D f f ZKHQ WKH FRQVXPHU ODFNV WKH PRWLYDWLRQ RU UHTXLVLWH NQRZOHGJH WR DVVHVV EUDQG SHUIRUPDQFH +RFK DQG 'HLJKWRQ f RU f ZKHQ WKH LQIRUPDWLRQ JOHDQHG IURP DGYHUWLVLQJ LV LQFRQVLVWHQW ZLWK WKDW DFTXLUHG WKURXJK SURGXFW WULDO 0DUNV DQG .DPLQV 2OVRQ DQG 'RYHU 6PLWK f $FFRUGLQJ WR WKH K\SRWKHVLVWHVWLQJ PRGHO ZKHQ H[SHULHQWLDO HYLGHQFH LV XQDPELJXRXV DQG KHQFH GLDJQRVWLF DGYHUWLVLQJ KDV OLWWOH LQFUHPHQWDO LPSDFW RQ FRQVXPHUVf EHOLHIV DQG DWWLWXGHV :KDWHYHU LPSDFW DGYHUWLVLQJ PLJKW KDYH RQ WKH LQWHUSUHWDWLRQ RI SURGXFW H[SHULHQFH LV VZDPSHG E\ XQDPELJXRXV H[SHULHQWLDO HYLGHQFH ,W LV RQO\ ZKHQ WKH FRQVXPHU KDV GLIILFXOW\ MXGJLQJ WKH H[SHULHQFH WKDW WKH DG GHULYHG LQIRUPDWLRQ PLJKW EH GUDZQ XSRQ WR KHOS PDNH VHQVH RI WKH H[SHULHQFH 6XEVHTXHQW UHVHDUFK KDV WHQGHG WR VXSSRUW WKLV FRQFOXVLRQ /HYLQ DQG *DHWK :ULJKW DQG /XW] f 'UDZLQJ RQ ERWK WKH ,,50 PRGHO DQG LQIRUPDWLRQ LQWHJUDWLRQ WKHRU\ 6PLWK f SURSRVHG WKDW DGYHUWLVLQJf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

PAGE 114

DQG FRQVHTXHQWO\ JLYHQ OLWWOH ZHLJKW ZKHQ FRQVXPHUV GHYHORS WKHLU RYHUDOO LPSUHVVLRQV RI WKH EUDQG 6PLWK f UHSRUWHG ILQGLQJV FRQVLVWHQW ZLWK WKLV K\SRWKHVLV :KHQ WKH DG DQG WKH WULDO H[SHULHQFH ZHUH FRQVLVWHQWO\ IDYRUDEOH FRQVXPHUV H[SRVHG WR DQ DGWULDO VHTXHQFH DQG WKRVH H[SRVHG WR WULDO DORQH GLG QRW GLIIHU ZLWK UHVSHFW WR WKHLU EUDQG UHODWHG EHOLHIV RU H[SHFWDWLRQV 2QO\ ZKHQ DQ REYLRXV GLVFUHSDQF\ H[LVWHG EHWZHHQ DG FODLPV DQG WKH EUDQGfV DFWXDO SHUIRUPDQFH GLG DGYHUWLVLQJ KDYH D VLJQLILFDQW LPSDFW RQ FRQVXPHUVf SHUFHSWLRQV 2OVRQ DQG 'RYHU f H[DPLQHG WKLV LVVXH LQ WKH FRQWH[W RI WKH H[SHFWDQF\GLVFRQILUPDWLRQ SDUDGLJP DQG DOVR IRXQG WKDW ORZHU RUGHU EHOLHIV IRUPHG E\ DGYHUWLVLQJ FDQ LQIOXHQFH VXEVHTXHQW H[SHULHQFHEDVHG SURGXFW SHUFHSWLRQV ZKHQ WKH WULDO H[SHULHQFH DQG DG DUH REYLRXVO\ LQFRQVLVWHQW ZLWK RQH DQRWKHU ,Q D FORVHO\ UHODWHG VWXG\ 0DUNV DQG .DPLQV f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f LQWHUSUHWDWLRQ RI WKHLU SURGXFW H[SHULHQFHV H[FHSW ZKHQ WKH H[SHULHQFH LV GLIILFXOW WR MXGJH RU ZKHQ WKH SURGXFW LV VXEVWDQWLDOO\ GLIIHUHQW WKDQ WKH DG SRUWUD\DO 2WKHUZLVH H[SHULHQWLDO HYLGHQFH LV PRUH WUXVWZRUWK\ VDOLHQW DQG GLDJQRVWLF RI SURGXFW TXDOLW\ WKDQ DGYHUWLVHG LQIRUPDWLRQ $V D FRQVHTXHQFH EHOLHIV IRUPHG RQ WKH EDVLV RI

PAGE 115

DGYHUWLVLQJ DUH OLNHO\ WR H[HUW OLWWOH LQIOXHQFH RQ FRQVXPHUVf LQWHUSUHWDWLRQV RU HYDOXDWLRQV +RZHYHU LW LV LPSRUWDQW WR UHFRJQL]H WKDW WKHVH LVVXHV KDYH EHHQ FRQFHSWXDOL]HG ZLWKLQ DQ LQIRUPDWLRQ FHQWHUHG SHUVSHFWLYH RI ZKDW DGYHUWLVLQJ LV DQG KRZ FRQVXPHUV UHVSRQG WR LW 7KH GLPLQLVKHG LQIOXHQFH RI DGYHUWLVLQJ LQ D WULDO FRQWH[W LV SUHGLFDWHG RQ LWV UHODWLYHO\ ORZ FUHGLELOLW\ DV D VRXUFH RI LQVLJKW DERXW EUDQG SHUIRUPDQFH )URP WKLV SHUVSHFWLYH DGYHUWLVLQJfV UROH LV GHILQHG SXUHO\ LQ WHUPV RI LWV FDSDFLW\ WR FRQYH\ EUDQG LQIRUPDWLRQ 7KDW DGYHUWLVLQJ PD\ LQIOXHQFH WKH FRQVXPSWLRQ FRQWH[W WKURXJK PRUH DIIHFWLYH PHDQV WKDW KDYH OLWWOH WR GR ZLWK VSHFLILF SHUIRUPDQFH FODLPV LV QRW FDSWXUHG E\ WKHVH PRGHOV 7KH ,,50 LV EDVHG RQ D PRGHO RI DWWLWXGH WKDW SUHVXPHV DIIHFW LV GHULYHG IURP FRJQLWLYH FRPSRQHQWV VSHFLILFDOO\ EHOLHIV DQG EHOLHI FRQILGHQFH 7KH K\SRWKHVLVn WHVWLQJ SDUDGLJP GUDZV RQ LQIRUPDWLRQ SURFHVVLQJ FRQFHSWV VXFK DV FRQILUPDWRU\ ELDVHV WR FRQFHSWXDOL]H DGYHUWLVLQJfV LPSDFW 2QO\ WKH WUDQVIRUPDWLRQDO DGYHUWLVLQJ SDUDGLJP H[SUHVVO\ LQFRUSRUDWHV DIIHFWLYH HOHPHQWV EXW XQGHUO\LQJ SURFHVVHV UHPDLQ ODUJHO\ XQVSHFLILHG DQG XQWHVWHG :LWKRXW VSHFLILFDOO\ H[DPLQLQJ ERWK WKH DIIHFWLYH DQG FRJQLWLYH LPSDFWV RI DGYHUWLVLQJ LW PD\ EH SUHPDWXUH WR FRQFOXGH WKDW DGYHUWLVLQJ H[HUWV OLWWOH LQIOXHQFH LQ D FRQVXPSWLRQ FRQWH[W ,Q WKH UHDOP RI FKLOGUHQfV UHVSRQVHV WR DGV DQG SURGXFWV ERWK WKH SURFOLYLW\ WR DFFHSW DG FODLPV DQG WKH DELOLW\ WR LQWHJUDWH PXOWLSOH LQIRUPDWLRQ VRXUFHV DFURVV DJH JURXSV EHDU FRQVLGHUDWLRQ 5HODWLYH WR WKH \RXQJHU FKLOGUHQ ROGHU FKLOGUHQ DUH PXFK PRUH OLNHO\ WR UHFRJQL]H WKH GLIIHUHQWLDO FUHGLELOLW\ RI LQIRUPDWLRQ JOHDQHG WKURXJK GLUHFW SURGXFW H[SHULHQFH YHUVXV DGYHUWLVLQJ 7R WKH H[WHQW WKDW FKLOGUHQ IRFXV SULPDULO\ RQ EUDQG UHODWHG FODLPV LQ DQ DGYHUWLVHPHQW ROGHU FKLOGUHQ DUH PRUH OLNHO\ WR EH VNHSWLFDO

PAGE 116

RI WKH FODLPV DQG EDVH WKHLU MXGJPHQWV RQ UHDGLO\ DYDLODEOH H[SHULHQWLDO HYLGHQFH 0XFK OLNH DGXOWV ZKHQ D SURGXFW H[SHULHQFH SURYLGHV XQDPELJXRXV LQIRUPDWLRQ DGYHUWLVLQJ KDV OLWWOH LPSDFW RQ ROGHU FKLOGUHQf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fV DIIHFWLYH UHVSRQVHV WR DGV KDYH OLWWOH LPSDFW ZKHQ SURGXFW TXDOLW\ LV HDVLO\ DVVHVVHG WKURXJK SURGXFW WULDO 6HFRQG LW DVVXPHV WKDW FKLOGUHQ HYDOXDWH DGV SULPDULO\ LQ WHUPV RI WKH LQIRUPDWLRQ WKH\ SURYLGH DERXW WKH EUDQG DQG WKDW ROGHU FKLOGUHQ DUH OLNHO\ WR YLHZ DGV FULWLFDOO\ ZLWKLQ WKH H[SRVXUH VHWWLQJ +RZHYHU ZKLOH ROGHU FKLOGUHQ UHFRJQL]H WKH GLIIHUHQWLDO FUHGLELOLW\ RI DG YHUVXV WULDO EDVHG LQIRUPDWLRQ WKH\ PD\ QRW GUDZ XSRQ WKHLU NQRZOHGJH RI DGYHUWLVLQJfV SXUSRVH ZLWKRXW D UHPLQGHU WR GR VR %UXFNV HW DO f $OVR VXJJHVWLYH DUH WKH ILQGLQJV RI WKH SUHOLPLQDU\ VWXG\ ZKLFK UHYHDOHG WKDW ROGHU FKLOGUHQ UHDG DG PHVVDJHV LQ WHUPV RI WKHLU HQWHUWDLQPHQW YDOXH DFFXUDF\ XQGHUO\LQJ REMHFWLYHV DQG FUHDWLYH VWUDWHJ\ UDWKHU WKDQ VLPSO\ DV D VHW RI EUDQG FODLPV 3ODXVLELOLW\ HQWHUV WKH ROGHU FKLOGfV MXGJPHQW SHUKDSV FUHDWLQJ DQ HQKDQFHG VHQVLWLYLW\ WR WKH DG PHVVDJH UHODWLYH WR \RXQJHU FKLOGUHQ 6R ZKLOH WKH OLWHUDWXUH RQ DGYHUWLVLQJWULDO LQWHUDFWLRQV LQGLFDWHV WKDW DGYHUWLVLQJ LV OLNHO\ WR H[HUW OLWWOH LQIOXHQFH LQ D WULDO FRQWH[W WKH ILQGLQJV RI WKH SUHOLPLQDU\ VWXG\ DV ZHOO DV UHFHQW

PAGE 117

UHVHDUFK RQ FKLOGUHQfV FRJQLWLYH UHVSRQVHV VHHP WR VXJJHVW WKDW DQ DOWHUQDWLYH SDWWHUQ LQ ZKLFK DGYHUWLVLQJ GRHV H[HUW LQIOXHQFH LV SRVVLEOH HYHQ DPRQJ WKH ROGHU FKLOGUHQ $PRQJ WKH \RXQJHU DJH JURXS LW LV LPSRUWDQW WR FRQVLGHU ZKHWKHU WKH\ HYHQ KDYH WKH FDSDFLW\ WR LQWHJUDWH DG DQG WULDO EDVHG LQIRUPDWLRQ ,QIRUPDWLRQ LQWHJUDWLRQ WKHRU\ KDV EHHQ DSSOLHG WR D QXPEHU RI LVVXHV ZLWKLQ GHYHORSPHQWDO SV\FKRORJ\ LQFOXGLQJ FKLOGUHQfV SHUFHSWXDO MXGJPHQWV HJ QXPHULFDO TXDQWLW\f PRUDO MXGJPHQWV SHUFHSWLRQV RI JURXSV DQG VRFLDO DWWULEXWLRQ $QGHUVRQ f 2QH RI WKH JHQHUDO ILQGLQJV RI WKLV ZRUN LV WKDW \RXQJ FKLOGUHQ EHORZ DJH f FRQVLVWHQWO\ FRPELQH VWLPXOXV GLPHQVLRQV DFFRUGLQJ WR UXOHV VXFK DV DYHUDJLQJ DQG DGGLQJ 7KLV UHVHDUFK LQGLFDWHV WKDW HYHQ WKH \RXQJHU FKLOGUHQ \HDUROGVf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fV DGYHUWLVLQJ LW LV RIWHQ WKH DG FODLPV UDWKHU WKDQ WKH H[SHULHQFH WKDW LV RSHQ WR PXOWLSOH LQWHUSUHWDWLRQV $G FODLPV DUH RIWHQ FDVW LQ WHUPV RI EURDG UHODWLYHO\ YDJXH DVVHUWLRQV WKDW FDQ HDVLO\ EH FRQILUPHG WKURXJK WULDO 7R WKH H[WHQW WKDW WKH DG SRUWUD\V WKH EUDQG LQ WKH EHVW SRVVLEOH OLJKW FKLOGUHQ PD\ EH SUHGLVSRVHG WR LQWHUSUHW WKH H[SHULHQWLDO HYLGHQFH IDYRUDEO\ :LWKRXW WKH VNHSWLFLVP WR

PAGE 118

,OO GLVFRXQW H[DJJHUDWHG DG FODLPV \RXQJHU FKLOGUHQ PD\ GHYHORS D VRPHZKDW LQIODWHG YLHZ RI WKH EUDQG ,I WKH EUDQGfV DFWXDO SHUIRUPDQFH LV QRW REYLRXVO\ GLVFUHSDQW IURP WKH DG FODLPV DQ DVVLPLODWLRQ HIIHFW LV OLNHO\ WR RFFXU 0DUNV DQG .DPLQV f $V D FRQVHTXHQFH FKLOGUHQ H[SRVHG WR DQ DGWULDO VHTXHQFH VKRXOG HYDOXDWH WKH SURGXFW PRUH SRVLWLYHO\ WKDQ WKRVH H[SRVHG WR WULDO DORQH 5HVHDUFK RQ FKDQJH LQ PHDQLQJ DOVR VXJJHVWV WKDW HDUO\ LQIRUPDWLRQ PD\ FUHDWH DQ LPSUHVVLRQ WKDW LQIOXHQFHV WKH LQWHUSUHWDWLRQ RI VXEVHTXHQW LQIRUPDWLRQ HJ %HFNZLWK DQG /HKPDQQ &RRSHU 1LVEHWW DQG :LOVRQ f +E $PRQJ \RXQJHU FKLOGUHQ H[SRVXUH WR DQ DGYHUWLVLQJWULDO VHTXHQFH KDV D IDFLOLWDWLYH HIIHFW RQ PHDVXUHV RI WKHLU WRWDO H[SHFWDQF\ DQG EUDQG DWWLWXGHV UHODWLYH WR SURGXFW WULDO DORQH 3URGXFW WULDO DV D IUDPH RQ DG LQWHUSUHWDWLRQ :KLOH DGYHUWLVLQJ PD\ H[HUW D VLJQLILFDQW LPSDFW RQ FKLOGUHQfV EHOLHIV DQG DWWLWXGHV ZKHQ LW SUHFHGHV SURGXFW WULDO LW PD\ KDYH OLWWOH LPSDFW RQ ZKHQ LW IROORZV D FRQVXPSWLRQ H[SHULHQFH $V D SUHFXUVRU WR WULDO WKH DG KDV WKH FDSDFLW\ WR GLUHFW FKLOGUHQfV DWWHQWLRQ WR WKRVH DWWULEXWHV WKDW UHIOHFW PRVW SRVLWLYHO\ RQ WKH EUDQG ,Q HVVHQFH WKH DG SURYLGHV WKH FKLOG ZLWK VXJJHVWLRQV DERXW KRZ WR WKLQN DERXW DQG MXGJH WKHLU H[SHULHQFH ZLWK WKH SURGXFW ,Q VRPH VHQVH WKH DGYHUWLVHPHQW PD\ DFW DV DQ DLG WR WKH FKLOG E\ SURYLGLQJ D EOXHSULQW IRU HYDOXDWLQJ WKH EUDQG :KHQ RQ WKH RWKHU KDQG DGYHUWLVLQJ IROORZV WULDO LW PD\ KDYH UHODWLYHO\ OLWWOH LPSDFW RQ FKLOGUHQfV EUDQG SHUFHSWLRQV )RU \RXQJ FKLOGUHQ FRQVXPSWLRQ H[SHULHQFH LV QRW RQO\ WKH PRVW UHDGLO\ DYDLODEOH VRXUFH RI SURGXFW LQIRUPDWLRQ DYDLODEOH EXW WKH HDVLHVW VRXUFH WR FRPSUHKHQG DQG MXGJH 6HQVRU\ GDWD LV HDVLO\ LQWHUSUHWHG LW LV PRUH VDOLHQW WKDQ DQ DGYHUWLVHPHQW DQG PRUH OLNHO\ WR EH UHDGLO\ UHFDOOHG 7\ERXW DQG 6FRWW f

PAGE 119

&KLOGUHQ FDQ HDVLO\ MXGJH WKHLU H[SHULHQFH DFFRUGLQJ WR WKHLU RZQ SHUKDSV VLPSOH DQG LGLRV\QFUDWLF FULWHULD :KHQ WKH\ VXEVHTXHQWO\ HQFRXQWHU DQ DG WKH\ PD\ KDYH OLWWOH LQFHQWLYH WR UHDVVHVV ZKDW DUH OLNHO\ WR EH FRQILGHQWO\ KHOG SHUFHSWLRQV DERXW WKH EUDQG :KLOH WKH DG PD\ IDFLOLWDWH WKH HYDOXDWLYH SURFHVV ZKHQ LW SUHFHGHV WULDO LW PD\ DFWXDOO\ FRPSOLFDWH PDWWHUV ZKHQ LW IROORZV WULDO 7R WKH H[WHQW WKDW WKH FKLOG HYDOXDWHV WKH SURGXFW DFFRUGLQJ WR KLVKHUf FULWHULD WKH DG PD\ LQWURGXFH IHDWXUHV WKDW KDYH QRW \HW EHHQ FRQVLGHUHG 5DWKHU WKDQ UHLQWHUSUHWLQJ ZKDW VfKH EHOLHYHV EDVHG RQ WKH WULDO H[SHULHQFH VSHFLILF FODLPV ZLWKLQ WKH DG PD\ EH FRQVLGHUHG LQ D PRUH FXUVRU\ IDVKLRQ WKDQ WKH\ DUH LQ D W\SLFDO SUHSXUFKDVH FRQWH[W 7KH JUHDWHU VDOLHQFH RI VHQVRU\ MXGJPHQWV PD\ VLPSO\ RYHUVKDGRZ DGYHUWLVHG FODLPV 8QOHVV WKH H[SHULHQFH LV REYLRXVO\ GLVFUHSDQW IURP WKH DG SRUWUD\DO LQ ZKLFK FDVH FRXQWHUDUJXPHQWV PLJKW EH VWLPXODWHG WKH DG PD\ UHFHLYH UHODWLYHO\ OLWWOH DWWHQWLRQ RU ZHLJKW LQ WKH FKLOGfV SURGXFW HYDOXDWLRQV $ VLPLODU SDWWHUQ KDV EHHQ UHSRUWHG DPRQJ DGXOW FRQVXPHUV WKRXJK WKH FRQFHSWXDO IRXQGDWLRQ KDV UHVWHG SULPDULO\ RQ WKH GLIIHUHQWLDO FUHGLELOLW\ RI DGYHUWLVHPHQWV DQG SURGXFW WULDO UDWKHU WKDQ WKH JUHDWHU VDOLHQFH DQG HDVH RI LQWHUSUHWLQJ WKH SURGXFW H[SHULHQFH $FFRUGLQJ WR WKH ,,50 RQFH D FRQVXPHU KDV DFTXLUHG GLUHFW H[SHULHQFH ZLWK D EUDQG LW LV GLIILFXOW IRU DGYHUWLVLQJ WR DOWHU KLVKHUf SHUFHSWLRQV %DVHG RQ SHUVRQDO H[SHULHQFH ZLWK D EUDQG DGXOW FRQVXPHUV WHQG WR IRUP FRQILGHQWO\ KHOG EHOLHIV WKDW DUH UHVLVWDQW WR FKDQJH 0DUNV DQG .DPLQV f 6LQFH DGYHUWLVLQJ UHVXOWV LQ RQO\ ORZHURUGHU EHOLHIV LW LV XQOLNHO\ WR GLVORGJH KLJKHURUGHU EUDQG SHUFHSWLRQV EDVHG RQ WUXVWZRUWK\ VHQVRU\ GDWD 7\ERXW DQG 6FRWW f (YHQ DGXOWV WHQG WR GUDZ KHDYLO\ RQ WKHLU RZQ VHQVRU\ EDVHG HYDOXDWLRQV LQ IRUPLQJ DWWLWXGHV DERXW SURGXFWV 3ULPDF\ HIIHFWV REVHUYHG LQ D YDULHW\

PAGE 120

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fV EUDQGUHODWHG EHOLHIV DQG DWWLWXGHV DQG KRZ WKLV UROH PLJKW FKDQJH ZKHQ FKLOGUHQ KDYH GLUHFW H[SHULHQFH ZLWK D EUDQG ,I DGYHUWLVLQJ GRHV KDYH WKH FDSDFLW\ WR IUDPH WKH FKLOGfV FRQVXPSWLRQ H[SHULHQFH UHVHDUFK RQ FRQVXPHUVf DWWLWXGH WRZDUG WKH DGYHUWLVHPHQW $DGf LV XVHIXO LQ VXJJHVWLQJ D PRUH DIIHFWLYH URXWH ZKHUHE\ WKHVH HIIHFWV PLJKW RFFXU $WWLWXGH WRZDUG WKH DG $GYHUWLVLQJ UHVHDUFKHUV ZLWK ERWK WKHRUHWLFDO DQG DSSOLHG RULHQWDWLRQV KDYH D ORQJ VWDQGLQJ LQWHUHVW LQ XQGHUVWDQGLQJ WKH LPSDFW RI FRQVXPHUVf DIIHFWLYH UHDFWLRQV WR DGYHUWLVHPHQWV RQ SHUVXDVLRQ $PRQJ LQGXVWU\ UHVHDUFKHUV UHVHDUFK ILQGLQJV IURP WKH $GYHUWLVLQJ 5HVHDUFK )RXQGDWLRQ $5)f FRS\ WHVWLQJ SURMHFW KDYH JHQHUDWHG VXEVWDQWLDO GHEDWH UHJDUGLQJ WKH YDOLGLW\ RI FRQVXPHUVf JHQHUDO OLNLQJ IRU DQ DG DV D PHDVXUH RI LWV HIIHFWLYHQHVV +DOH\ DQG %DOGLQJHU 0LOOHU f ,Q WKH $5) VWXG\ FRQVXPHUVf RYHUDOO UHDFWLRQ WR D FRPPHUFLDO RU ZKHWKHU WKH\ OLNHG WKH VSRW ZDV LGHQWLILHG DV WKH EHVW VLQJOH SUHGLFWRU RI DGYHUWLVLQJ HIIHFWLYHQHVV 1HLWKHU SHUVXDVLRQ QRU UHFDOO WUDGLWLRQDO PHDVXUHV RI DG VXFFHVV ZHUH KLJKO\ FRUUHODWHG ZLWK OLNDELOLW\ 7KLV UHVXOW VHHPV WR VXJJHVW WKDW WKH XWLOLW\ RI OLNDELOLW\ PHDVXUHV PD\ EHDU

PAGE 121

UHFRQVLGHUDWLRQ DQG UHGLVFRYHU\ LQ FXUUHQW DGYHUWLVLQJ SUDFWLFH 7KRXJK UHVHDUFK ILUPV KDYH UDLVHG TXHVWLRQV DERXW WKH YDOLGLW\ RI $5) FRQFOXVLRQV RQ PHWKRGRORJLFDO JURXQGV WKH LPSDFW RI DG OLNDELOLW\ UHPDLQV D WRSLF RI FRQVLGHUDEOH LQWHUHVW DQG GHEDWH 0LOOHU f $PRQJ DFDGHPLF UHVHDUFKHUV LQWHUHVW LQ WKH GHWHUPLQDQWV DQG FRQVHTXHQFHV RI FRQVXPHUVf DIIHFWLYH UHDFWLRQV WR FRPPHUFLDOV LV VXEVWDQWLDO ,Q SDUWLFXODU UHVHDUFKHUV KDYH IRFXVHG LQYHVWLJDWLRQ RQ WKH LPSDFW RI FRQVXPHUVf DG DIIHFW RQ RWKHU LQGLFDWRUV RI DGYHUWLVLQJ HIIHFWLYHQHVV :LWKLQ WKH ODVW WZR GHFDGHV DWWLWXGH WRZDUG WKH DG $DGf DQ DIIHFWLYH FRQVWUXFW UHIOHFWLQJ D FRQVXPHUfV IDYRUDEOH RU XQIDYRUDEOH UHVSRQVH WR D SDUWLFXODU DG KDV DVVXPHG D SURPLQHQW UROH LQ DGYHUWLVLQJ WKHRU\ 0LWFKHOO DQG 2OVRQ 6KLPS f 1RZ ZLGHO\ UHFRJQL]HG DV DQ LPSRUWDQW PHGLDWRU RI DGYHUWLVLQJfV HIIHFWV RQ EUDQG DWWLWXGHV DQG SXUFKDVH LQWHQWLRQV $DG KDV EHHQ LQYHVWLJDWHG LQ RYHU VL[W\ DUWLFOHV LQ WKH PDUNHWLQJ DQG FRQVXPHU UHVHDUFK OLWHUDWXUHV VLQFH %URZQ DQG 6WD\PDQ f ,VVXHV VXFK DV WKH GHWHUPLQDQWV RI FRQVXPHUVf DG DWWLWXGHV WKH FRQGLWLRQV LQ ZKLFK WKHVH DWWLWXGHV KDYH UHODWLYHO\ VWURQJ HIIHFWV WKHLU UROH LQ GHWHUPLQLQJ DG RXWFRPHV DQG PRUH UHFHQWO\ $DGfV UHODWLRQVKLS WR IHHOLQJ UHVSRQVHV KDYH HDFK EHHQ WKH VXEMHFW RI VXEVWDQWLDO LQYHVWLJDWLRQ HJ %XUNH DQG (GHOO *DUGQHU /XW] 0DF.HQ]LH /XW] DQG %HOFK 0DF.HQ]LH DQG /XW] 0LQLDUG %KDWOD DQG 5RVH f 7KRXJK WKH FRQWULEXWLRQV DUH PDQ\ QHYHU KDYH WKH SHUVXDVLYH FRQVHTXHQFHV RI FKLOGUHQfV DWWLWXGHV WRZDUG DGYHUWLVHPHQWV EHHQ H[SORUHG )XUWKHU YHU\ IHZ VWXGLHV KDYH IRFXVHG RQ $DGfV FDSDFLW\ WR LQIOXHQFH EUDQG EHOLHIV DQG DWWLWXGHV LQ D WULDO FRQWH[W 6PLWK :ULJKW DQG /XW] f

PAGE 122

7KH $DG FRQVWUXFW LV D JHQHUDO DWWLWXGLQDO UHVSRQVH GHILQHG KHUH DV D SUHGLVSRVLWLRQ WR UHVSRQG LQ D IDYRUDEOH RU XQIDYRUDEOH PDQQHU WR D SDUWLFXODU DGYHUWLVLQJ VWLPXOXV GXULQJ D SDUWLFXODU H[SRVXUH RFFDVLRQ /XW] f 7KLV FRQFHSWXDO GHILQLWLRQ YLHZV $DG DV DQ DIIHFWLYH RU HYDOXDWLYH UHVSRQVH WR D FRPPHUFLDO VWLPXOXV UDWKHU WKDQ D FRJQLWLYH RU EHKDYLRUDO UHVSRQVH /XW] 0DF.HQ]LH DQG /XW] 0DF.HQ]LH /XW] DQG %HOFK f :LWKLQ WKLV FRQFHSWXDOL]DWLRQ GLVWLQFWLRQV EHWZHHQ FRQVXPHUVf HYDOXDWLYH UHDFWLRQV WR DQ DGYHUWLVLQJ VWLPXOXV DQG SXUHO\ DIIHFWLYH UHVSRQVHV VXFK DV IHHOLQJV DUH WUHDWHG DV DQWHFHGHQWV UDWKHU WKDQ LQGLFDQWV RI WKH PRUH JHQHUDO $DG FRQVWUXFW %DWUD DQG 5D\ (GHOO DQG %XUNH 0DGGHQ $OOHQ DQG 7ZLEOH f 7KLV GHILQLWLRQ DOVR GLIIHUHQWLDWHV EHWZHHQ YLHZHUVf JHQHUDO DWWLWXGHV DERXW DGYHUWLVLQJ DQG WKHLU UHVSRQVHV WR D VSHFLILF DGYHUWLVHPHQW DW WKH SRLQW RI H[SRVXUH 5DUHO\ KDYH WKH LPSOLFDWLRQV RI WKLV GLVWLQFWLRQ EHHQ FRQVLGHUHG LQ LQYHVWLJDWLRQV RI FKLOGUHQfV DGYHUWLVLQJ UHVSRQVH &KLOGUHQfV EURDGHU DWWLWXGHV DERXW DGYHUWLVLQJ DUH LPSOLFLWO\ DVVXPHG WR EH D JRRG SUHGLFWRU RI WKHLU VLWXDWLRQVSHFLILF UHVSRQVHV +RZHYHU ERWK UHFHQW UHVHDUFK %UXFNV HW DO f DQG WKH ILQGLQJV IURP WKH SUHOLPLQDU\ VWXG\ UHSRUWHG KHUH LQGLFDWH WKDW WKH QDWXUH RI FKLOGUHQfV UHVSRQVHV VKLIW GHSHQGLQJ RQ ZKHWKHU WKH\ DUH WDONLQJ DERXW DGYHUWLVLQJ LQ JHQHUDO RU UHVSRQGLQJ WR D SDUWLFXODU FRPPHUFLDO PHVVDJH :KLOH $DG PD\ H[HUW LWV VWURQJHVW LQIOXHQFH RQ RWKHU UHVSRQVH YDULDEOHV DW WKH WLPH RI DG H[SRVXUH LWV HIIHFWV RQ FRQVXPHU EHKDYLRU PD\ QRW EH SXUHO\ WUDQVLWRU\ /XW] f 7KHVH DWWLWXGHV PD\ SHUVLVW RYHU WLPH LQIOXHQFLQJ FRQVXPHUVf EUDQG HYDOXDWLRQV HYHQ LQ WKH FRQWH[W RI GLUHFW H[SHULHQFH ZLWK WKH SURGXFW %XUNH DQG (GHOO 6PLWK f

PAGE 123

7KH GXDO PHGLDWLRQ PRGHO 2QH RI WKH PRVW SURPLQHQW GLUHFWLRQV LQ UHFHQW UHVHDUFK RQ $DG KDV IRFXVHG RQ WHVWLQJ WKH FDXVDO UHODWLRQVKLSV DPRQJ $DG DQG RWKHU PHDVXUHV RI DGYHUWLVLQJ HIIHFWLYHQHVV LQFOXGLQJ EUDQG FRJQLWLRQV EUDQG DWWLWXGH DQG SXUFKDVH LQWHQWLRQV )RXU DOWHUQDWLYH PRGHOV RI $DGfV PHGLDWLQJ UROH RQ EUDQG DWWLWXGHV DQG SXUFKDVH LQWHQWLRQV ZHUH ILUVW SURSRVHG DQG WHVWHG E\ /XW] 0DF.HQ]LH DQG %HOFK f DQG 0DF.HQ]LH /XW] DQG %HOFK f 7KLV LQLWLDO ZRUN SURYLGHG VXSSRUW IRU RQH RI WKH PRGHOV WKH GXDO PHGLDWLRQ K\SRWKHVLV ZKLFK KDV VXEVHTXHQWO\ SURYHQ UREXVW WR IDFWRUV VXFK DV FRQVXPHUVf OHYHO RI LQYROYHPHQW DQG SURFHVVLQJ REMHFWLYHV *DUGQHU +RPHU f ,Q D UHFHQW PHWDDQDO\WLF WHVW RI WKH GXDO PHGLDWLRQ PRGHO %URZQ DQG 6WD\ PDQ f UHSRUWHG VWURQJ VXSSRUW IRU WKH RYHUDOO PRGHO )LYH FRQVWUXFWV IRUP WKH EDVLV RI WKH GXDO PHGLDWLRQ PRGHO f DG FRJQLWLRQV &RJ$$'f FRQVXPHUVf SHUFHSWLRQV RI WKH DGYHUWLVLQJ VWLPXOXV LQFOXGLQJ H[HFXWLRQDO IDFWRUV f EUDQG FRJQLWLRQV &RJ%f FRQVXPHUVf SHUFHSWLRQV RI WKH EUDQG DGYHUWLVHG f DWWLWXGH WRZDUG WKH DG $DGf FRQVXPHUVf DIIHFWLYH DQG HYDOXDWLYH UHDFWLRQV WR WKH DG f EUDQG DWWLWXGH $%f FRQVXPHUVf DIIHFWLYH UHDFWLRQV WR WKH EUDQG DQG f SXUFKDVH LQWHQWLRQV ,Jf FRQVXPHUVf SHUFHSWLRQV RI WKH OLNHOLKRRG WKDW WKH\ ZLOO SXUFKDVH WKH EUDQG LQ WKH IXWXUH /XW] 0DF.HQ]LH DQG %HOFK f )LJXUH GHSLFWV WKH K\SRWKHVL]HG OLQNDJHV DPRQJ WKHVH FRQVWUXFWV 0DF.HQ]LH HW DO f 2I SDUWLFXODU LQWHUHVW LQ WKH FRQWH[W RI WKLV VWXG\ DUH WKUHH VWUXFWXUDO UHODWLRQVKLSV $DG r‘ $% $DG r &RJ% DQG &RJ% r! $Ef 7KHVH UHODWLRQVKLSV SURYLGH WKH EDVLV IRU H[DPLQLQJ ZKHWKHU DQG KRZ $DGfV UROH VKLIWV ZKHQ FKLOGUHQ DUH H[SRVHG WR EUDQG LQIRUPDWLRQ WKURXJK SURGXFW WULDO DV ZHOO DV DGYHUWLVHPHQWV

PAGE 124

)LJXUH 7KH 'XDO 0HGLDWLRQ 0RGHO RI $GYHUWLVLQJ 5HVSRQVH 0DFNHQ]LH /XW] DQG %HOFK f

PAGE 125

,Q D SUHWULDO FRQWH[W WKH GXDO PHGLDWLRQ PRGHO SRVLWV ERWK D GLUHFW HIIHFW RI $DG RQ EUDQG DWWLWXGH DV ZHOO DV DQ LQGLUHFW HIIHFW YLD EUDQG FRJQLWLRQV 7KH GLUHFW HIIHFW LV D RQHZD\ FDXVDO IORZ IURP $DG WR $% WKURXJK ZKLFK DIIHFW JHQHUDWHG E\ DQ DG LV WUDQVIHUUHG GLUHFWO\ WR WKH DGYHUWLVHG EUDQG $DG PD\ DOVR LQIOXHQFH EUDQG DWWLWXGH WKURXJK D PRUH LQGLUHFW WZRVWHS PHFKDQLVP f $DG r &RJ% DQG f &RJ% r $%f $FFRUGLQJ WR WKH PRGHO WKH ILUVW VWHS RFFXUV EHFDXVH FRQVXPHUVf DIIHFWLYH UHDFWLRQV WR DQ DG PD\ IRVWHU PHVVDJH DFFHSWDQFH 7KH PRUH SRVLWLYHO\ FRQVXPHUV IHHO DERXW WKH DG WKH PRUH UHFHSWLYH WKH\ DUH WR LWV FRQWHQW 7KH VHFRQG VWHS &RJ% r $%f LV EDVHG RQ WKH WUDGLWLRQDO KLHUDUFK\RIHIIHFWV IUDPHZRUN ZKHUHE\ EUDQG DWWLWXGHV DUH GHWHUPLQHG E\ EUDQG EHOLHIV (YLGHQFH IRU WKH LQGLUHFW SDWK KDV EHHQ PL[HG :KLOH D QXPEHU RI VWXGLHV KDYH UHSRUWHG VXSSRUW IRU WKH ILUVW $DG r &RJ%f VWHS +RPHU 0DF.HQ]LH HW DO 0DF.HQ]LH DQG /XW] 0LQLDUG %KDWOD DQG 5RVH f VXSSRUW IRU WKH VLJQLILFDQFH RI WKH VHFRQG VWHS LV PL[HG :HDN OLQNV EHWZHHQ FRQVXPHUVf EUDQG FRJQLWLRQV DQG DWWLWXGHV &RJ% r‘ $Ef PD\ EH DFFRXQWHG IRU LQ SDUW E\ FRQVXPHUVf DGRSWLRQ RI D SHULSKHUDO SURFHVVLQJ VWUDWHJ\ ZKHUHE\ H[HFXWLRQDO IDFWRUV UHFHLYH GLVSURSRUWLRQDWH DWWHQWLRQ 0DF.HQ]LH HW DO 0DF.HQ]LH DQG /XW] f 7KH ILQGLQJV IURP D UHFHQW PHWDDQDO\VLV RI $DGfV HIIHFWV VXJJHVW WKDW EUDQG FRJQLWLRQV GR KDYH D VLJQLILFDQW \HW QRW FRQVLGHUDEOH LQIOXHQFH RQ EUDQG DWWLWXGHV LQ D SUHSXUFKDVH VHWWLQJ %URZQ DQG 6WD\PDQ f 7KH VWUHQJWK RI WKLV OLQNDJH FDQ EH H[SHFWHG WR LQFUHDVH VXEVWDQWLDOO\ ZKHQ H[DPLQHG LQ WKH FRQWH[W RI SURGXFW WULDO ,Q WKLV VWXG\ D VOLJKWO\ PRGLILHG YHUVLRQ RI WKH GXDO PHGLDWLRQ PRGHO ZDV XVHG WR H[DPLQH FKLOGUHQfV UHVSRQVHV ,Q DGGLWLRQ WR WKH WKUHH EDVLF FRQVWUXFWV RXWOLQHG DERYH

PAGE 126

WKH PRGHO ZDV H[SDQGHG WR LQFOXGH WKUHH VHFRQGDU\ FRQVWUXFWV SULRU EUDQG DWWLWXGH 3$Ef HQWHUWDLQPHQW (QWHUWDLQf DQG DG LQIRUPDWLRQ $G ,QIRf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f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f +HUH DQ DWWHPSW LV PDGH WR VHSDUDWH FKLOGUHQfV SHUFHSWLRQV RI D FRPPHUFLDOfV HQWHUWDLQPHQW YDOXH IURP WKHLU DVVHVVPHQWV RI WKH DGfV XWLOLW\ DV D VRXUFH RI EUDQG LQIRUPDWLRQ :KLOH HQWHUWDLQPHQW ZDV H[SHFWHG WR EH D VWURQJ SUHGLFWRU RI FKLOGUHQfV RYHUDOO DWWLWXGH WRZDUG WKH DG SHUFHSWLRQV RI DQ DGfV LQIRUPDWLRQ YDOXH PLJKW EH H[SHFWHG WR LQIOXHQFH ERWK DG DWWLWXGHV DQG SHUFHSWLRQV RI WKH EUDQG LWVHOI $PRQJ DGXOW FRQVXPHUV $DG KDV EHHQ VKRZQ WR EH DQ LPSRUWDQW PHGLDWRU RI DGYHUWLVLQJ UHVSRQVH LQ D YDULHW\ RI UHVHDUFK FRQWH[WV 5HVHDUFKHUV KDYH VKRZQ WKDW $DG

PAGE 127

)LJXUH 0RGLILHG 6SHFLILFDWLRQ RI 'XDO 0HGLDWLRQ 0RGHO

PAGE 128

LV D PHGLDWLQJ LQIOXHQFH RI DGYHUWLVLQJfV HIIHFWV RQ FRQVXPHUVf EUDQG DWWLWXGH ZKHQ WKH\ f GLUHFW DWWHQWLRQ WR HLWKHU WKH FRQWHQW RI D PHVVDJH RU LWV H[HFXWLRQ 0LQLDUG HW DO f f HQJDJH LQ FHQWUDO RU SHULSKHUDO SURFHVVLQJ *DUGQHU f f SRVVHVV SURGXFW NQRZOHGJH RU ODFN H[SHUWLVH +RPHU f f DUH LQYROYHG RQ HLWKHU D FRJQLWLYH RU DIIHFWLYH EDVLV 3DUN DQG
PAGE 129

WKH EDVHOLQH DJDLQVW ZKLFK VXEVHTXHQW WULDO EDVHG LVVXHV PLJKW EH H[DPLQHG + :KHQ FKLOGUHQ UHFHLYH EUDQG LQIRUPDWLRQ VROHO\ WKURXJK DGYHUWLVLQJ $DG LV SRVLWLYHO\ DVVRFLDWHG ZLWK EUDQG DWWLWXGH *LYHQ WKDW $DG LQIOXHQFHV FKLOGUHQfV SHUFHSWLRQV DQG DWWLWXGHV WRZDUG D EUDQG LQ DQ DGYHUWLVLQJ FRQWH[W WKH TXHVWLRQ DULVHV DV WR ZKHWKHU LW UHWDLQV LWV PHGLDWLQJ UROH ZKHQ FKLOGUHQ KDYH WKH RSSRUWXQLW\ WR JDLQ GLUHFW H[SHULHQFH ZLWK D SURGXFW 7UDGLWLRQDOO\ UHVHDUFKHUV KDYH FRQFHSWXDOL]HG $DG DV D UHODWLYHO\ WUDQVLWRU\ VLWXDWLRQDOO\ ERXQG DWWLWXGLQDO UHVSRQVH JHQHUDWHG DW WKH WLPH RI H[SRVXUH DQG H[SHFWHG WR KDYH LWV VWURQJHVW LPSDFW ZLWKLQ WKH H[SRVXUH VHWWLQJ /XW] f +RZHYHU UHFHQW UHVHDUFK KDV \LHOGHG VHHPLQJO\ FRQIOLFWLQJ HYLGHQFH UHJDUGLQJ D PRUH HQGXULQJ UROH IRU WKHVH DIIHFWLYH UHDFWLRQV ZLWKLQ WKH SHUVXDVLRQ SURFHVV HJ &KDWWRSDGK\D\ DQG 1HGXQJDGL %XUNH DQG (GHOO f 8QGHU ZKDW FRQGLWLRQV DIIHFWLYH UHDFWLRQV WR DGYHUWLVHPHQWV LPSDFW VXEVHTXHQW FRQVXPHU EHKDYLRU LV QRW \HW ZHOOXQGHUVWRRG 7KH WUDQVIRUPDWLRQDO DGYHUWLVLQJ OLWHUDWXUH VXJJHVWV WKDW DIIHFW JHQHUDWHG LQ UHVSRQVH WR DQ DG PD\ DIIHFW KRZ D FRQVXPSWLRQ H[SHULHQFH LV VXEVHTXHQWO\ FRQVWUXHG DQG HYDOXDWHG 3XWR DQG :HOOV :HOOV f 7KH LQIRUPDWLRQ UHVSRQVH PRGHO RQ WKH RWKHU KDQG VHHPV WR VXJJHVW WKDW FRQVXPHUVf DIIHFWLYH UHDFWLRQV WR DQ DG PD\ EH RI OLWWOH FRQVHTXHQFH RQFH D FRQVXPHU KDV DFWXDOO\ FRQVXPHG D SURGXFW $FFRUGLQJ WR WKLV PRGHO WULDO EDVHG EHOLHIV DUH QRW RQO\ PRUH VDOLHQW WKDQ SHUFHSWLRQV EDVHG VROHO\ RQ DGYHUWLVLQJ EXW DOVR KHOG ZLWK JUHDWHU FRQILGHQFH $V D FRQVHTXHQFH WKH\ VKRXOG SOD\ WKH SULPDU\ UROH LQ VKDSLQJ EUDQG DWWLWXGHV 0DUNV DQG .DPLQV 6PLWK DQG 6ZLQ\DUG f 5HVHDUFK LQ WKH DUHD RI DWWLWXGHEHKDYLRU UHODWLRQV DOVR LQGLFDWHV WKDW DWWLWXGHV IRUPHG RQ WKH EDVLV RI GLUHFW H[SHULHQFH DUH PRUH VWURQJO\ KHOG DQG PRUH DFFHVVLEOH WKDQ WKRVH

PAGE 130

IRUPHG RQ WKH EDVLV RI LQGLUHFW H[SHULHQFH HJ DGYHUWLVLQJf DORQH )D]LR f 7KRXJK WKH UROH RI $DG LQ DGWULDO LQWHUDFWLRQV ZDV QRW VSHFLILFDOO\ DGGUHVVHG E\ HLWKHU +RFK DQG +D f RU /HYLQ DQG *DHWK f ERWK VHHP WR VXJJHVW WKDW ZKHQ D SURGXFW H[SHULHQFH LV XQDPELJXRXV LW VZDPSV WKH HIIHFWV RI DGYHUWLVLQJ &ROOHFWLYHO\ WKH HYLGHQFH FOHDUO\ VXJJHVWV WKDW $DG SOD\V D GLPLQLVKHG UROH ZLWKLQ D WULDO VHWWLQJ 6PLWK f RIIHUV HPSLULFDO VXSSRUW IRU WKLV SURSRVLWLRQ LQ WKH FRQWH[W RI D QHZ XQIDPLOLDU DGYHUWLVHPHQW DQG EUDQG &XUUHQW WKHRU\ VXJJHVWLQJ D OLPLWHG UROH IRU $DG ZLWKLQ D WULDO VHWWLQJ UHVWV RQ DVVXPSWLRQV WKDW PD\ QRW KROG LQ WKH FRQWH[W RI FKLOGUHQfV DGYHUWLVLQJ UHVSRQVH )LUVW WKH OLWHUDWXUH VHHPV WR UHO\ RQ D FHQWUDO SURFHVVLQJ SHUVSHFWLYH RQ WKH RULJLQV RI $DG WR WKH H[FOXVLRQ RI PRUH SHULSKHUDO PHFKDQLVPV /XW] f :KLOH UHVHDUFKHUV KDYH VKRZQ WKDW $DGfV DQWHFHGHQWV DUH ERWK FRJQLWLYH DQG DIIHFWLYH WKH WKHRUHWLFDO UDWLRQDOH IRU $DGfV GLPLQLVKHG UROH LV EDVHG SULPDULO\ RQ FRJQLWLYH GLPHQVLRQV PRVW QRWDEO\ DG FUHGLELOLW\ +RZHYHU WR WKH H[WHQW WKDW $DG LV UHIOHFWLYH RI FRQVXPHUVf UHVSRQVHV WR H[HFXWLRQDO HOHPHQWV LW LV QRW FOHDU WKDW SURGXFW WULDO QHFHVVDULO\ EOXQWV LWV HIIHFW 7KHRUHWLFDO DUJXPHQWV LQ VXSSRUW RI D GLPLQLVKHG UROH IRU $DG LPSOLFLWO\ SUHVXPH D ZHDN RU XQFRPSHOOLQJ H[HFXWLRQ :LWK WKH H[FHSWLRQ RI 6PLWK f DQG :ULJKW DQG /XW] f WKHUH LV OLWWOH GLUHFW HPSLULFDO HYLGHQFH WKDW DVVHVVHV ZKHWKHU $DG UHWDLQV LWV PHGLDWLQJ UROH LQ WKH FRQWH[W RI FRQVXPSWLRQ :KLOH LQFRUSRUDWLQJ DIIHFWLYH GLPHQVLRQV EURDGHQV FXUUHQW PRGHOV RI DGWULDO UHODWLRQVKLSV QHLWKHU RI WKHVH VWXGLHV PD\ IXOO\ FDSWXUH WKH LQIOXHQFH rI $DG SDUWLFXODUO\ WKRVH GLPHQVLRQV WKDW GHULYH IURP WKH H[HFXWLRQDO HOHPHQWV RI WKH DG

PAGE 131

%RWK XWLOL]HG UHODWLYHO\ SDOOLG H[SHULPHQWHU FUHDWHG SULQW DGV WR DVVHVV $DGfV LPSDFW RQ FRQVXPHUVf EHOLHIV DQG DWWLWXGHV 7R WKH H[WHQW WKDW $DG LV GHWHUPLQHG E\ FRQVXPHUVf FRJQLWLYH HYDOXDWLRQV RI PHVVDJH FODLPV 3DUN DQG
PAGE 132

RQWR WKH SURGXFW H[SHULHQFH LWVHOI
PAGE 133

LQIOXHQFH RQ ROGHU FKLOGUHQfV EUDQG DWWLWXGHV LQ D SUHSXUFKDVH VHWWLQJ LW LV OLNHO\ WR KDYH OLWWOH LPSDFW LQ WKH FRQWH[W RI SURGXFW WULDO +D :KHQ \RXQJHU FKLOGUHQ DUH H[SRVHG WR DGYHUWLVLQJ SULRU WR SURGXFW WULDO $DGfV DELOLW\ WR PHGLDWH DGYHUWLVLQJfV HIIHFWV RQ $% GRHV QRW GLIIHU IURP LWV LPSDFW LQ DQ DGRQO\ VHWWLQJ +E :KHQ ROGHU FKLOGUHQ DUH H[SRVHG WR DGYHUWLVLQJ SULRU WR SURGXFW WULDO $DGfV DELOLW\ WR PHGLDWH DGYHUWLVLQJfV HIIHFWV RQ $% LV UHGXFHG UHODWLYH WR LWV LPSDFW LQ DQ DGRQO\ VHWWLQJ :KHQ WULDO SUHFHGHV DGYHUWLVLQJ $DG PD\ EH H[SHFWHG WR KDYH OLWWOH LPSDFW RQ FKLOGUHQfV EUDQG SHUFHSWLRQV RU DWWLWXGHV LUUHVSHFWLYH RI DJH JURXS ,Q WKLV VLWXDWLRQ WKH WULDO H[SHULHQFH ZLOO GLUHFW FKLOGUHQf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f DUH QRW DVVRFLDWHG ZLWK WKHLU EUDQG DWWLWXGHV LUUHVSHFWLYH RI DJH JURXS ,QGLUHFW HIIHFWV RI $3 RQ EUDQG SHUFHSWLRQV DQG DWWLWXGHV :KLOH WKH GLUHFW LQIOXHQFH RI $DG RQ EUDQG DWWLWXGH KDV EHHQ ZHOOGRFXPHQWHG LQ D SUHSXUFKDVH FRQWH[W VXSSRUW IRU LWV LQGLUHFW HIIHFW YLD EUDQG SHUFHSWLRQV KDV EHHQ PL[HG +RPHU 0DF.HQ]LH DQG /XW] 0DF.HQ]LH HW DO f 7KH ILUVW VWDJH RI WKH LQGLUHFW SURFHVV $DG r &RJ%f KDV UHFHLYHG VWURQJ HPSLULFDO VXSSRUW LQGLFDWLQJ WKDW FRQVXPHUVf DIIHFWLYH UHDFWLRQV WR DQ DG DLG PHVVDJH DFFHSWDQFH 7KH PRUH SRVLWLYHO\ FRQVXPHUV IHHO

PAGE 134

DERXW WKH DG WKH PRUH UHFHSWLYH WKH\ DUH WR FODLPV DERXW SHUIRUPDQFH 7KH VHFRQG VWDJH RI WKH LQGLUHFW SURFHVV &RJ% r $%f LV EDVHG RQ WKH WUDGLWLRQDO DVVXPSWLRQ WKDW EUDQG EHOLHIV GHWHUPLQH EUDQG DWWLWXGHV 7KRXJK WKLV VWDJH RIWHQ IDLOV WR UHDFK VLJQLILFDQFH LQ LQGLYLGXDO VWXGLHV WKH ILQGLQJV RI D UHFHQW PHWDDQDO\VLV LQGLFDWH WKDW EUDQG SHUFHSWLRQV GR KDYH D VLJQLILFDQW WKRXJK VPDOO LQIOXHQFH RQ EUDQG DWWLWXGHV LQ SUHSXUFKDVH VHWWLQJV %URZQ DQG 6WD\PDQ f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fV

PAGE 135

EUDQG SHUFHSWLRQV $DG r &RJ%f UHSOLFDWLQJ SUHYLRXV ILQGLQJV DPRQJ DGXOW SRSXODWLRQV $IIHFW JHQHUDWHG E\ DQ DGYHUWLVHPHQW LQIOXHQFHV WKH IDYRUDELOLW\ RI FKLOGUHQfV FRJQLWLYH UHDFWLRQV WR WKH EUDQG +RZHYHU WKH EUDQG SHUFHSWLRQV FKLOGUHQ IRUP LQ UHVSRQVH WR WKH DG PD\ EH UHODWLYHO\ ZHDN VROLGLI\LQJ RQO\ DIWHU SURGXFW WULDO 1RW RQO\ DUH WKH FODLPV QRW SHUFHLYHG WR EH KLJKO\ FUHGLEOH VR WKDW OLQNV WR WKH EUDQG DUH WHQXRXV EXW LW PD\ EH WKDW WKH ROGHU FKLOGUHQ WHQG WR UHVSRQG WR WKH DG LQ WHUPV RI LWV HQWHUWDLQPHQW YDOXH UDWKHU WKDQ SXUHO\ DV EUDQG LQIRUPDWLRQ 7KLV UHDVRQLQJ LV FRQVLVWHQW ZLWK *DUGQHU f ZKR IRXQG WKDW EHOLHIV ZHUH D VWURQJHU SUHGLFWRU RI EUDQG DWWLWXGH XQGHU D fEUDQGf WKDQ D fQRQn EUDQGf VHW 6R ZKLOH $DG PD\ EH VWURQJO\ DVVRFLDWHG ZLWK EUDQG SHUFHSWLRQV WKHVH ZHDN H[SHFWDWLRQV PD\ KDYH OLWWOH FDXVDO LPSDFW RQ EUDQG DWWLWXGH LQ DQ DGRQO\ VHWWLQJ +D :KHQ ROGHU FKLOGUHQ UHFHLYH LQIRUPDWLRQ IURP DGYHUWLVLQJ $DG LV SRVLWLYHO\ DVVRFLDWHG ZLWK EUDQG SHUFHSWLRQV $DG r‘ &RJ%f EXW WKHVH SHUFHSWLRQV DUH LQGHSHQGHQW RI EUDQG DWWLWXGH &RJ% $%f $PRQJ \RXQJHU FKLOGUHQ D VLPLODU UHVSRQVH SDWWHUQ FDQ EH H[SHFWHG EHWZHHQ DG DIIHFW DQG EUDQG SHUFHSWLRQV )DYRUDEOH UHDFWLRQV WR WKH DG DUH OLNHO\ WR H[HUW D SRVLWLYH LQIOXHQFH RQ FKLOGUHQf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f§ &RJ%f DQG WKHVH EUDQG SHUFHSWLRQV SRVLWLYHO\ LQIOXHQFH EUDQG DWWLWXGH &RJ% r $%f

PAGE 136

,Q SUHSXUFKDVH VHWWLQJV FKLOGUHQfV DIIHFW WRZDUG DQ DG WKXV KDV WKH FDSDFLW\ WR HQKDQFH RU GLPLQLVK FKLOGUHQfV DFFHSWDQFH RI PHVVDJH FRQWHQW LUUHVSHFWLYH RI DJH JURXS :KHWKHU $DG UHWDLQV LWV DELOLW\ WR VKDSH EUDQG SHUFHSWLRQV ZKHQ FKLOGUHQ DOVR KDYH WKH EHQHILW RI WULDO H[SHULHQFH ZLOO GHSHQG RQ WKH VHTXHQFH LQ ZKLFK WKH DG DQG WKH SURGXFW DUH HQFRXQWHUHG :KHQ DGYHUWLVLQJ SUHFHGHV WULDO $DG PD\ VWLOO KDYH D SRVLWLYH LQIOXHQFH RQ FKLOGUHQfV UHFHSWLYLW\ WR DG FODLPV 6LQFH $DG LV IRUPHG SULRU WR SURGXFW WULDO LQ WKLV VLWXDWLRQ WKHUH LV OLWWOH UHDVRQ WR H[SHFW WKDW LWV LQIOXHQFH RQ FKLOGUHQfV DFFHSWDQFH RI EUDQG FODLPV ZRXOG QHFHVVDULO\ GHFOLQH $PRQJ WKH ROGHU FKLOGUHQ WKH IDFLOLWDWLYH HIIHFW RI DG DIIHFW RQ SHUVXDVLRQ PD\ DFWXDOO\ EH HQKDQFHG LQ DQ DGWULDO FRQWH[W :KHUHDV SXUHO\ DG EDVHG H[SHFWDWLRQV DUH UHODWLYHO\ ZHDN DPRQJ ROGHU FKLOGUHQ KDYLQJ OLWWOH LPSDFW RQ LQGLFDQWV RI SHUVXDVLRQ OLNH EUDQG DWWLWXGH WKH\ PD\ EH PRUH SRZHUIXO ZKHQ UHLQIRUFHG WKURXJK SURGXFW WULDO 8QOHVV WKH H[SHULHQFH LV FOHDUO\ GLVFUHSDQW IURP ZKDW WKH DG VXJJHVWV FKLOGUHQfV SRVLWLYH UHDFWLRQV WR WKH DG PD\ OHDG WR JUHDWHU UHFHSWLYLW\ WR DG FODLPV ZKLFK LQ WXUQ DUH UHLQIRUFHG RU FRQILUPHG WKURXJK D IDYRUDEOH H[SHULHQFH 7KLV UDWLRQDOH LV VLPLODU WR WKH K\SRWKHVLV WHVWLQJ PHFKDQLVP H[FHSW WKDW LW VXJJHVWV WKDW DGYHUWLVLQJfV HIIHFW LV DIIHFWLYHO\ GULYHQ DQG DV VXFK PD\ RFFXU HYHQ ZKHQ WKH H[SHULHQFH LV SUHVXPDEO\ XQDPELJXRXV 6RGD LV SHUFHLYHG WR EH IL]]LHU DQG FHUHDO VZHHWHU DV D FRQVHTXHQFH RI DGYHUWLVLQJ WKDW LV HQWHUWDLQLQJ RU IXQQ\ + :KHQ ROGHU FKLOGUHQ DUH H[SRVHG WR DGYHUWLVLQJ SULRU WR SURGXFW WULDO $DG LV SRVLWLYHO\ DVVRFLDWHG ZLWK EUDQG SHUFHSWLRQV $DG rf &RJ%f DQG WKHVH EUDQG SHUFHSWLRQV LQ WXUQ SRVLWLYHO\ LQIOXHQFH EUDQG DWWLWXGH &RJ% rf $%f :KLOH FKLOGUHQfV DIIHFWLYH UHDFWLRQV WR DQ DG PD\ SOD\ D UROH LQ VKDSLQJ WKHLU EUDQG SHUFHSWLRQV DQG DWWLWXGHV ZKHQ DGYHUWLVLQJ SUHFHGHV WULDO WKHVH UHVSRQVHV ZLOO KDYH OLWWOH

PAGE 137

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fV FDSDFLW\ WR LQIOXHQFH EUDQG SHUFHSWLRQV :KLOH WKH UHODWLRQVKLS EHWZHHQ $DG DQG EUDQG SHUFHSWLRQV LV OLNHO\ WR EH TXLWH ZHDN EHOLHIV IRUPHG RQ WKH EDVLV RI WULDO H[SHULHQFH DUH H[SHFWHG WR EH D VWURQJ SUHGLFWRU RI EUDQG DWWLWXGH :KHQ FKLOGUHQ KDYH GLUHFW H[SHULHQFH ZLWK WKH EUDQGfV VDOLHQW IHDWXUHV UHVXOWLQJ EHOLHIV DUH VWURQJO\ KHOG SURYLGLQJ D SRWHQWLDOO\ SRZHUIXO EDVLV IRU DWWLWXGH IRUPDWLRQ + :KHQ FKLOGUHQ DUH H[SRVHG WR DGYHUWLVLQJ IROORZLQJ SURGXFW WULDO DG DIIHFW KDV OLWWOH LPSDFW RQ WKH IRUPDWLRQ RI EUDQG EHOLHIV $DG f§ &RJ%f EXW WULDO EDVHG EHOLHIV DUH SRVLWLYHO\ DVVRFLDWHG ZLWK EUDQG DWWLWXGH &RJ% r‘ $%f )LJXUH JUDSKLFDOO\ GHSLFWV K\SRWKHVL]HG UHODWLRQVKLSV DPRQJ NH\ YDULDEOHV RI LQWHUHVW IRU HDFK H[SHULPHQWDO FRQGLWLLRQV %ODFN DUURZV GHQRWH UHODWLRQVKLSV K\SRWKHVL]HG WR EH VWDWLVWLFDOO\ VLJQLILFDQW 0HWKRG 'HVLJQ DQG 6XEMHFWV $ [ PL[HG H[SHULPHQWDO GHVLJQ ZDV XVHG WR H[DPLQH WKH MRLQW HIIHFWV RI DGYHUWLVLQJ DQG SURGXFW WULDO RQ FKLOGUHQfV FRJQLWLYH DQG DIIHFWLYH UHVSRQVHV 7ZR DJH JURXSV VHFRQG WR \HDUVROGf DQG ILIWK WR \HDUVROGf JUDGHUV SDUWLFLSDWHG LQ

PAGE 138

QG *UDGH K\SRWKHVL]HGf WK *UDGH K\SRWKHVL]HGf )LJXUH +\SRWKHVL]HG 5HODWLRQVKLSV $PRQJ $G $IIHFW %UDQG 3HUFHSWLRQV DQG $WWLLWXGHV

PAGE 139

WKH VWXG\ 7KH FRQWHQW RI EUDQG UHODWHG LQIRUPDWLRQ WKHVH FKLOGUHQ ZHUH H[SRVHG WR ZDV PDQLSXODWHG RQ D ZLWKLQ VXEMHFWV EDVLV %\ PDQLSXODWLQJ WKH VRXUFH RI LQIRUPDWLRQ DQG WKH VHTXHQFH RI H[SRVXUH IRXU H[SHULPHQWDO FRQGLWLRQV ZHUH FUHDWHG f DG RQO\ f WULDO RQO\ f DG IROORZHG E\ WULDO DQG f WULDO IROORZHG E\ DG (DFK RI WKH FKLOGUHQ SDUWLFLSDWHG LQ IRXU H[SHULPHQWDO VHVVLRQV FRQGXFWHG RYHU D ILYH ZHHN SHULRG $ WRWDO RI VHYHQW\WZR FKLOGUHQ SDUWLFLSDWHG UHFUXLWHG IURP SXEOLF HOHPHQWDU\ VFKRROV UHIOHFWLQJ GLYHUVH VRFLRHFRQRPLF DQG HWKQLF EDFNJURXQGV 7ZR DJH JURXSV VHFRQG JUDGHUV PHDQ DJH \HDUVf DQG ILIWK JUDGHUV PHDQ DJH \HDUVf ZHUH HTXDOO\ UHSUHVHQWHG LQ WKH VWXG\ 3UHYLRXV UHVHDUFK LQGLFDWHV WKDW WKHVH DJH JURXSV VKDUH JHQHUDO SUHIHUHQFHV IRU FRPPHUFLDO FRQWHQW \HW GLIIHU ERWK LQ WHUPV RI WKHLU JHQHUDO UHVSRQVLYHQHVV WR DGYHUWLVLQJ DQG LQ WKHLU XQGHUVWDQGLQJ RI SHUVXDVLYH PHVVDJHV 0F1HDO 5RHGGHU :DUG HW DO :HOOV f +RZHYHU HYHQ WKH \RXQJHU FKLOGUHQ KDYH WKH FDSDELOLW\ RI JHQHUDWLQJ WKH VLPSOH LQIHUHQFHV UHTXLUHG WR XQGHUVWDQG DQG HYDOXDWH DGYHUWLVHG FODLPV 3URFHGXUH (DFK VXEMHFW SDUWLFLSDWHG LQ IRXU H[SHULPHQWDO VHVVLRQV FRQGXFWHG RYHU D ILYH ZHHN SHULRG $OO VHVVLRQV ZHUH KHOG DW WKH VFKRRO VLWHV DQG FDUULHG RXW RQ DQ LQGLYLGXDO EDVLV 2Q WKH ILUVW GD\ WKH FKLOG ZDV LQWURGXFHG WR WKH H[SHULPHQWHU E\ KLVKHUf WHDFKHU $IWHU HVWDEOLVKLQJ D UDSSRUW ZLWK WKH FKLOG WKH LQWHUYLHZHU WKHQ HVFRUWHG WKH FKLOG WR D SULYDWH RIILFH DW WKH UHDU RI WKH VFKRRO OLEUDU\ 7R EHJLQ FKLOGUHQ ZHUH JLYHQ WKH IROORZLQJ EULHI LQVWUXFWLRQV ,fP WDONLQJ WR NLGV OLNH \RX LQ QGWK JUDGHf WR ILQG RXW ZKDW \RX WKLQN DERXW WKH GLIIHUHQW NLQGV RI FRPPHUFLDOV DQG SURGXFWV WKDW \RX VHH RQ 79 GRQfW ZRUN IRU WKH SHRSOH WKDW PDNH WKHVH SURGXFWV RU FRPPHUFLDOV VR LW ZRQfW ERWKHU PH LI \RX GRQfW OLNH VRPHWKLQJ 7KLV LVQfW OLNH VFKRRO ZRUN WKHUH DUH QR ULJKW

PAGE 140

RU ZURQJ DQVZHUV MXVW ZDQW WR NQRZ ZKDW \RX WKLQN 7R GR WKLV ZH DUH JRLQJ WR SOD\ VRPH JDPHV )RU WKH ILUVW JDPH ,fP JRLQJ WR DVN \RX KRZ PXFK \RX OLNH GLIIHUHQW IRRGV E\ XVLQJ WKLV VHW RI VWDPSV )ROORZLQJ WKLV WKH LQWHUYLHZHU VKRZHG WKH FKLOG DQ LQN SDG DQG VHW RI ILYH VWDPSV ZLWK FDUWRRQ VPLOH\IURZQLQJ IDFHV LPSULQWHG RQ WKHP VLPLODU WR WKRVH WUDGLWLRQDOO\ XVHG LQ PDUNHWLQJ UHVHDUFK ZLWK FKLOGUHQ HJ 1HHODQNDYLO 2f%ULHQ DQG 7DVKMLDQ 5RHGGHU HW DO :HOOV f 7KH VSHFLILF PHDQLQJ IRU HDFK RI WKH VWDPSV ZDV H[SODLQHG LOOXVWUDWHG DQG WKH FKLOG ZDV JLYHQ WKH RSSRUWXQLW\ WR WU\ HDFK RQH $SSHQGL[ % FRQWDLQV D VDPSOH TXHVWLRQQDLUH DQG VSHFLILF LQVWUXFWLRQV IRU DOO VFDOHV XVHG LQ WKH VWXG\f 7KHQ WKH FKLOG ZDV DVNHG WR UDWH D WRWDO RI WZHQW\ EUDQGV RQ WKLV VFDOH DV HDFK RI WKH SDFNDJH IURQWV ZHUH GLVSOD\HG VHTXHQWLDOO\ E\ WKH H[SHULPHQWHU 7KHVH LQLWLDO EUDQG DWWLWXGH PHDVXUHV ZHUH FROOHFWHG IRU D JURXS RI FKLOGUHQf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f ZLWK WHQ VHFRQGV RI EODFN LQ EHWZHHQ $IWHU WKH ILUVW H[SRVXUH WKH FKLOG ZDV WROG 7KLV LV WKH FRPPHUFLDO UHDOO\ ZDQWHG WR WDON WR \RX DERXW ,I LWfV RND\ ZLWK \RX ZH DUH JRLQJ WR ZDWFK LW RQH PRUH WLPH ,Q WKH WULDO FRQGLWLRQ WKH FKLOG ZDV SURYLGHG ZLWK WKH WDUJHW EUDQG LQ LWV RULJLQDO SDFNDJLQJf DQG JLYHQ IRXU PLQXWHV WR VDPSOH LW 6XEMHFWV LQ WKH WZR DGSOXVWULDO FRQGLWLRQV WKHQ UHFHLYHG HLWKHU

PAGE 141

D SURGXFW VDPSOH RU H[SRVXUH WR WKH WDUJHW FRPPHUFLDO ZKLFKHYHU WKH\ KDG QRW \HW UHFHLYHG 'XULQJ SUHVHQWDWLRQ RI WKH VWLPXOXV PDWHULDOV WKH FKLOGfV IDFLDO H[SUHVVLRQV DQG VSRQWDQHRXV FRPPHQWV ZHUH UHFRUGHG E\ WKH H[SHULPHQWHU $IWHU DOO VWLPXOXV PDWHULDOV ZHUH SUHVHQWHG GHSHQGHQW PHDVXUHV ZHUH FROOHFWHG LQ WKH IROORZLQJ RUGHU LUUHVSHFWLYH RI H[SHULPHQWDO FRQGLWLRQ f SULRU DG H[SRVXUH f $DG f DG SHUFHSWLRQV f EUDQG IDPLOLDULW\ f EUDQG DWWLWXGH DQG FRQILGHQFH PHDVXUHV f EUDQG SHUFHSWLRQV HYDOXDWLRQV DQG FRQILGHQFH f SURGXFW VDWLVIDFWLRQ DQG f EUDQG DWWLWXGH IRU ILOOHU EUDQGV 2QFH WKHVH PHDVXUHV ZHUH FRPSOHWHG WKH FKLOG ZDV WKDQNHG DQG HVFRUWHG EDFN WR KLVKHUf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b RI WHOHYLVLRQ DGYHUWLVHPHQWV WDUJHWHG IRU FKLOGUHQ SURPRWH VQDFNV FHUHDOV SUHVZHHWHQHG GULQNV RU FDQG\ 7KRXJK D YDULHW\ RI DSSHDOV DUH XVHG WR SURPRWH FKLOGUHQfV SURGXFWV LQIRUPDWLRQDO DSSHDOV VWUHVVLQJ LQJUHGLHQWV RU QXWULWLRQDO EHQHILWV DUH UHODWLYHO\ UDUH 0RUH FRPPRQ DUH DGYHUWLVHPHQWV WKDW UHO\ RQ LQGLUHFW DSSHDOV WR SV\FKRORJLFDO VWDWHV DVVRFLDWLRQV ZLWK HVWDEOLVKHG YDOXHV

PAGE 142

RU XQVXSSRUWHG DVVHUWLRQV DERXW SURGXFW TXDOLW\ %DUFXV f $GYHUWLVHPHQWV IRU IRRG SURGXFWV IUHTXHQWO\ FRQWDLQ FODLPV DERXW D SURGXFWfV WH[WXUH RU FRPSRVLWLRQ HJ GRHVQfW JHW VRJJ\ FUHDP\FUXQFK\ VXJDU\ VZHHWf $SSUR[LPDWHO\ b RI WKHVH FRPPHUFLDOV DOVR FRQWDLQ FODLPV WKDW UHSUHVHQW RSLQLRQV DERXW SURGXFW TXDOLW\ WKDW DUH KLJKO\ VXEMHFWLYH DQG GLIILFXOW WR YHULI\ HJ WKH JUHDW $PHULFDQ FKRFRODWH EDU WDVWH DGYHQWXUHV IXQ DQG ZDFN\f 7KHVH DGYHUWLVLQJ FODLPV DUH KLJKO\ DWWUDFWLYH SODXVLEOH \HW GLIILFXOW WR GLVSXWH GLUHFWO\ ,Q WKH FRQWH[W RI FKLOGUHQfV DGYHUWLVLQJ LW LV RIWHQ WKH DG UDWKHU WKDQ WKH SURGXFW H[SHULHQFH WKDW LV YDJXH RU DPELJXRXV ,QGHSHQGHQW 9DULDEOHV $JH &RQFHSWXDOO\ WKH WZR DJH JURXSV VHOHFWHG FDSWXUH LPSRUWDQW GHYHORSPHQWV LQ FKLOGUHQfV SURFHVVLQJ DQG RI DGYHUWLVLQJ W\SLFDOO\ RFFXUULQJ EHWZHHQ WKH DJHV RI DQG 5RHGGHU f &KLOGUHQ LQ WKLV DJH UDQJH DUH OLNHO\ WR GLIIHU LQ WKHLU XQGHUVWDQGLQJ RI SHUVXDVLYH LQWHQW LQIRUPDWLRQ SURFHVVLQJ RI FRPPHUFLDO PHVVDJHV DQG DWWLWXGHV DERXW DGYHUWLVLQJ HJ $GOHU HW DO 5DMX DQG /RQLDO 5REHUWVRQ DQG 5RVVLWHU 5RHGGHU :DUG HW DO
PAGE 143

WKRXJKWV IHHOLQJV DQG UHDFWLRQV *RP DQG *ROGEHUJ f 7KLV DJH JURXS KDV DOVR KDG H[WHQVLYH H[SHULHQFH ZLWK WKH W\SHV RI DGV DQG SURGXFWV VHOHFWHG IRU VWXG\ HJ VQDFN IRRGV SUHVZHHWHQHG FHUHDOV FDQG\f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f SURJUDP FKDUDFWHUV DFWLQJ DV HQGRUVHUV HJ )UHG )OLQWVWRQH %XJV %XQQ\f DQG EUDQGV WKDW UHTXLUHG FRRNLQJ RU DGGLWLRQDO SUHSDUDWLRQ HJ .LGVf &XLVLQH IUR]HQ HQWUHHV (JJR IUR]HQ ZDIIOHVf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

PAGE 144

WKH UHPDLQLQJ DGV ZHUH VKRZQ WR HLJKWHHQ IRXUWK JUDGH FKLOGUHQ ZKR ZHUH DVNHG WR UDWH ERWK WKH FRPPHUFLDO DQG WKH EUDQG RQ D QXPEHU RI GLPHQVLRQV LQFOXGLQJ IDPLOLDULW\ OLNLQJ FRPSUHKHQVLELOLW\ DQG SULRU H[SHULHQFH 7KH ILQDO IRXU DGV ZHUH VHOHFWHG RQ WKH EDVLV RI WKH IROORZLQJ FULWHULD f FKLOGUHQfV SULRU GLUHFW H[SHULHQFH ZLWK WKH DGYHUWLVHG EUDQG ZDV ORZ f PXOWLSOH SURGXFW FDWHJRULHV ZHUH UHSUHVHQWHG ZLWKLQ WKH VHW f YDULDWLRQ H[LVWHG DPRQJ WKH FKLOGUHQ LQ WHUPV RI WKHLU DWWLWXGHV WRZDUG WKH VSHFLILF DGV DQG EUDQGV SURPRWHG DQG f WKH DGV DV D VHW UHIOHFWHG WKH FRQWLQXXP IRXQG LQ FKLOGUHQfV DGV LQ WHUPV RI TXDQWLW\ RI WKH LQIRUPDWLRQ SURYLGHG 7R PHHW WKHVH FULWHULD PDUNHW OHDGHUV IRU ZKRP H[SHULHQFH LV YLUWXDOO\ XQLYHUVDO ZHUH HOLPLQDWHG HDUO\ LQ WKH SURFHVV HJ &KHHULRV &KLSV $KR\f 7KH DGEUDQG SDLUV XOWLPDWHO\ VHOHFWHG IRU LQFOXVLRQ ZHUH f .HHEOHU 3L]]DULD &KLSV f 6RGDOLFLRXV )UXLW 6QDFNV f 6PDUWLHV &KRFRODWH &DQG\ LPSRUWHG IURP &DQDGDf DQG f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f 6WLPXOXV VHW 7R DVVHVV WKH JHQHUDOL]DELOLW\ RI UHVSRQVH SDWWHUQV DFURVV SURGXFW FDWHJRULHV DQG DGYHUWLVHPHQWV DQ DGGLWLRQDO IRXU OHYHO ZLWKLQ VXEMHFWV IDFWRU ZDV

PAGE 145

H[DPLQHG LQ WKH DQDO\VLV 2QH RI WKH GLIILFXOWLHV LQ SUHYLRXV UHVHDUFK RQ DGYHUWLVLQJWULDO LQWHUDFWLRQV LV WKDW WKHVH HIIHFWV KDYH W\SLFDOO\ EHHQ H[DPLQHG LQ WKH FRQWH[W RI D VLQJOH SURGXFW FDWHJRU\ FRQIRXQGLQJ FRQVWUXFWV VXFK DV DPELJXLW\ ZLWK SURGXFW FODVV 7R HQKDQFH WKH H[WHUQDO YDOLGLW\ RI WKH ILQGLQJV IRXU DGEUDQG VWLPXOXV SDLUV ZHUH XWLOL]HG LQ WKLV VWXG\ /\QFK f $ ODWQ VTXDUH GHVLJQ ZDV XWLOL]HG VR WKDW WKH HIIHFW RI WKH VWLPXOXV UHSOLFDWHV FRXOG EH WHVWHG 1R VLJQLILFDQW GLIIHUHQFHV ZHUH DQWLFLSDWHG DFURVV DGYHUWLVHPHQWV RU SURGXFW FDWHJRULHV 'HSHQGHQW 9DULDEOHV 7KH SULPDU\ GHSHQGHQW YDULDEOHV LQ WKLV VWXG\ ZHUH EUDQG SHUFHSWLRQV EUDQG DWWLWXGHV EHOLHI DQG DWWLWXGH FRQILGHQFH :LWK WKH H[FHSWLRQ RI VFDOHV WR DVVHVV FKLOGUHQfV JHQHUDO DWWLWXGHV DERXW DGYHUWLVLQJ RU EUDQG DWWLWXGHV IHZ HVWDEOLVKHG PHDVXUHV H[LVW ZLWKLQ WKH DFDGHPLF OLWHUDWXUH WR H[DPLQH FKLOGUHQfV UHVSRQVHV WR PDUNHWLQJ VWLPXOL HJ 0DFNOLQ DQG 0DFKOHLW 5RVVLWHU :HOOV f &RQVWUXFWV VXFK DV $DG EUDQG UHODWHG EHOLHIV DQG FRQILGHQFH KDYH QRW EHHQ PHDVXUHG ZLWKLQ WKH FRQWH[W RI FKLOGUHQf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

PAGE 146

DQ H[WHQVLYH UHYLHZ RI DWWLWXGH DQG EHOLHI PHDVXUHV XVHG LQ UHVHDUFK ZLWK FKLOGUHQ ZDV DOVR FRQGXFWHG 7KLV VHDUFK ZDV GHVLJQHG WR OHDUQ DERXW KRZ SV\FKRPHWULF VFDOHV IRU FKLOGUHQ DUH FRQVWUXFWHG DQG DGPLQLVWHUHG 6WXGLHV LQYHVWLJDWLQJ D ZLGH UDQJH RI WRSLFV ZHUH FRQVXOWHG LQFOXGLQJ EXW QRW OLPLWHG WR FKLOGUHQfV DWWLWXGHV DERXW UHDGLQJ VHOIn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f &KLOGUHQ ZHUH WKHQ DVNHG WR PDWFK WKLV VWHP WR RQH RI IRXU RSWLRQV UDQJLQJ IURP UHDOO\ EHOLHYH WR GRQf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fV DWWLWXGHV WRZDUG WKH EUDQGV ZHUH PHDVXUHG LQLWLDOO\ XVLQJ ILYHSRLQW IDFLDO VFDOHV DV VXJJHVWHG E\ :HOOV f DQG PRGLILHG E\ 5RHGGHU HW DO f )RU WKH VHFRQG DGPLQLVWUDWLRQ RI WKH EUDQG DWWLWXGH PHDVXUH D ILYHSRLQW VWDU

PAGE 147

VFDOH FRPPRQO\ XVHG LQ LQGXVWU\ UHVHDUFK ZDV XWLOL]HG LQ FRPELQDWLRQ ZLWK WZR OLNHUW LWHPV DVVHVVLQJ WKH EUDQG RQ OLNHGLVOLNH DQG JRRGEDG GLPHQVLRQV &RHIILFLHQW DOSKD ZDV XVHG WR DVVHVV WKH LQWHUQDO FRQVLVWHQF\ RI WKHVH LWHPV D f 5HOLDELOLW\ HVWLPDWHV ZHUH UHPDUNDEO\ FRQVLVWHQW DFURVV DJH JURXSV IRU WKH PHDVXUHV XVHG LQ WKLV VWXG\ $V D FRQVHTXHQFH DOSKD YDOXHV DUH UHSRUWHG IRU WKH WRWDO VDPSOH H[FHSW ZKHUH DJHUHODWHG GLIIHUHQFHV ZHUH HYLGHQW %HOLHI DQG DWWLWXGH FRQILGHQFH 7KHUH ZHUH QR HVWDEOLVKHG PHDVXUHV IRU FKLOGUHQfV EHOLHI DQG DWWLWXGH FRQILGHQFH ZLWKLQ WKH FRQVXPHU OLWHUDWXUH $PRQJ DGXOWV FRQILGHQFH LV W\SLFDOO\ PHDVXUHG E\ DVNLQJ FRQVXPHUV KRZ FHUWDLQ WKH\ DUH RI WKHLU EHOLHI RU DWWLWXGLQDO MXGJPHQWV RQ VHYHQSRLQW VFDOHV UDQJLQJ IURP H[WUHPHO\ XQFHUWDLQ WR H[WUHPHO\ FHUWDLQ 0DUNV DQG .DPLQV 6PLWK 6PLWK DQG 6ZLQ\DUG f 7KLV W\SH RI PHDVXUH LV IDU WRR FRPSOH[ IRU FKLOGUHQ WR LQWHUSUHW VXFFHVVIXOO\ ,QVWHDG D PHDVXUHPHQW DSSURDFK GHYHORSHG E\ *LQRVDU DQG 7URSH f DQG PRGLILHG IRU XVH ZLWK FKLOGUHQ ZDV DGRSWHG ,Q WKHLU VWXG\ DGXOW VXEMHFWV LQGLFDWHG WKHLU FRQILGHQFH LQ D VHULHV RI SUREDELOLW\ MXGJPHQWV RQ D VHYHQSRLQW UDWLQJ VFDOH DQFKRUHG E\ 0\ DQVZHU LV D JXHVV WR DP FRPSOHWHO\ FRQILGHQW LQ P\ DQVZHU 8VLQJ WKH VHQWHQFH VWULS DSSURDFK RXWOLQHG DERYH D IRXUSRLQW VFDOH ZDV FUHDWHG UDQJLQJ IURP UHDOO\ UHDOO\ WKLQN VR WR UHDOO\ MXVW JXHVVHG 7KH RYHUDOO EHOLHI FRQILGHQFH VFRUH ZDV VXPPHG DFURVV LQGLYLGXDO DWWULEXWHV $WWLWXGH WRZDUG WKH DG )RXU TXHVWLRQV WDSSLQJ WKH IROORZLQJ GLPHQVLRQV ZHUH XVHG WR DVVHVV FKLOGUHQfV DG DWWLWXGHV OLNLQJ H[FLWHPHQW IHHOLQJV ZKLOH YLHZLQJ DQG JRRGEDG 8VLQJ ERWK SLFWRULDO FXHV DQG YHUEDO ODEHOV PDWWHG RQ ODUJH FDUGERDUG VWULSV

PAGE 148

VXEMHFWV ZHUH DVNHG WR SRLQW WR WKH PRVW DSSURSULDWH UHVSRQVH 7KHLU UHVSRQVHV WR WKHVH IRXU TXHVWLRQV ZHUH VXPPHG WR REWDLQ DQ RYHUDOO DWWLWXGH VFRUH D f $G SHUFHSWLRQV DQG DWWLWXGHV DERXW DGYHUWLVLQJ &KLOGUHQfV JHQHUDO DWWLWXGHV DERXW DGYHUWLVLQJ ZHUH PHDVXUHG XVLQJ D VOLJKWO\ PRGLILHG YHUVLRQ RI 5RVVLWHUfV f VFDOH 7KLV IRXU SRLQW \HVQR VFDOH DOORZV VXEMHFWV WR FKRRVH EHWZHHQ WZR OHYHOV RI DIILUPDWLRQ DQG WZR OHYHOV RI QHJDWLRQ ,Q WKLV VWXG\ D TXHVWLRQ PDUN QHXWUDO FDWHJRU\ ZDV DGGHG WR DVFHUWDLQ WKH OHYHO RI XQFHUWDLQW\ SUHVHQW DPRQJ WKLV JURXS 6LQFH WKH VFDOH KDG EHHQ XVHG RQO\ RQFH ZLWK FKLOGUHQ DV \RXQJ DV VHFRQG JUDGH 5LHFNHQ DQG 6DPOL f DOO LWHPV ZHUH YHUEDOO\ DGPLQLVWHUHG WR ERWK DJH JURXSV ,Q WKLV VWXG\ WKH DOSKD YDOXH ZDV IRU WKH ILIWK JUDGH VDPSOH DQG IRU WKH VHFRQG JUDGH VDPSOH 7KRXJK UHVHDUFKHUV KDYH UHSRUWHG VRPH HPSLULFDO GLIILFXOWLHV ZLWK WKH XQLGLPHQVLRQDOLW\ RI WKH VFDOH 0DFNOLQ f LW KDV EHHQ VKRZQ WR FDSWXUH PHDQLQJIXO GLIIHUHQFHV ZLWKLQ WKH WDUJHW SRSXODWLRQ HJ %HDUGHQ 7HHO DQG :ULJKW f 7R PHDVXUH DG SHUFHSWLRQV D VHULHV RI LWHPV GHULYHG IURP %DUOLQJ DQG )XOODJHU f DQG 6FKOLQJHU f ZHUH XVHG WR GHYHORS PHDVXUHV IRU HQWHUWDLQPHQW DQG DG LQIRUPDWLRQ &KLOGUHQfV DG SHUFHSWLRQV ZHUH PHDVXUHG RQ ILYHSRLQW \HVQR VFDOHV VLPLODU WR WKRVH HPSOR\HG E\ 5RHGGHU 6WHPWKDO DQG &DOGHU f DQG 5RVVLWHU f &URQEDFKfV DOSKD ZDV D IRU DG LQIRUPDWLRQ DQG D IRU HQWHUWDLQPHQW $OO VFDOHG LWHPV ZHUH YHUEDOO\ DGPLQLVWHUHG WR HDFK SDUWLFLSDQW WR HOLPLQDWH SRWHQWLDO GLIILFXOWLHV WKDW PLJKW KDYH DULVHQ DV D FRQVHTXHQFH RI GLIIHULQJ OLWHUDF\ OHYHOV

PAGE 149

$QDO\VLV DQG 5HVXOWV 7R DVVHVV WKH YDOLGLW\ RI WKH H[SHFWDWLRQ WKDW WKH ROGHU FKLOGUHQ ZHUH PRUH JHQHUDOO\ VNHSWLFDO DERXW DGYHUWLVLQJ WKDQ WKH \RXQJHU FKLOGUHQ VXEMHFWVf VFRUHV RQ 5RVVLWHUfV f DWWLWXGH WRZDUG WHOHYLVLRQ FRPPHUFLDOV VFDOH ZHUH FRPSDUHG $V DQWLFLSDWHG WKH ROGHU FKLOGUHQ GLG UHSRUW PRUH QHJDWLYH DWWLWXGHV WKDQ WKH \RXQJHU FKLOGUHQ ;QG ;WK W S f &RQVLVWHQW ZLWK SULRU HYLGHQFH WKHVH ILQGLQJV UHSUHVHQW DQ LPSRUWDQW EDFNGURS IRU FRQVLGHULQJ FKLOGUHQfV PRUH VLWXDWLRQ VSHFLILF UHDFWLRQV (IIHFWV RI $GYHUWLVLQJ DQG 3URGXFW 7ULDO RQ %UDQG 3HUFHSWLRQV DQG $WWLWXGHV 7KH DQDO\VLV RI YDULDQFH PRGHO $129$f ZDV XVHG WR WHVW SODQQHG FRPSDULVRQV DVVRFLDWHG ZLWK WKH ILUVW WKUHH K\SRWKHVHV $GYHUWLVLQJ YHUVXV SURGXFW WULDO 7KH ILUVW K\SRWKHVLV VXJJHVWV WKDW ROGHU FKLOGUHQf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f +RZHYHU

PAGE 150

7DEOH $GYHUWLVLQJ YHUVXV 7ULDO $129$ 5HVXOWV %(/,() %(/,() &21),'(1&( &21),'(1&( $' 21/< 75,$/ 21/< ) ) 3 rr(6 ) 3 (6 ) 3 (6 r ,1)250$7,21 [ *5$'( ,17(5$&7,21 ,) 3 f $ rr ())(&7 6,=( &$/&8/$7,21 t!f

PAGE 151

D JUDGH E\ LQIRUPDWLRQ VRXUFH LQWHUDFWLRQ ZDV SUHVHQW LQGLFDWLQJ WKDW WKH GLIIHUHQFH LQ FRQILGHQFH REVHUYHG EHWZHHQ DGYHUWLVLQJ DQG WULDO ZDV JUHDWHU DPRQJ WKH ROGHU FKLOGUHQ WKDQ DPRQJ WKH \RXQJHU DJH JURXS ) Sf 7KLV SDWWHUQ SURYLGHV SDUWLDO VXSSRUW IRU +, DQG LV FRQVLVWHQW ZLWK WKH ,,50 ORJLF WKDW EHOLHIV DQG DWWLWXGHV EDVHG RQ GLUHFW SURGXFW H[SHULHQFH DUH SHUFHLYHG WR EH PRUH FUHGLEOH WKDQ WKRVH EDVHG RQ DGYHUWLVLQJ $GWULDO YHUVXV WULDO 7KH VHFRQG K\SRWKHVLV VXJJHVWHG WKDW ZKLOH DG H[SRVXUH SULRU WR SURGXFW WULDO PLJKW EH H[SHFWHG WR LQIOXHQFH \RXQJHU FKLOGUHQfV EUDQG SHUFHSWLRQV DQG DWWLWXGHV ROGHU FKLOGUHQ ZRXOG UHPDLQ XQDIIHFWHG E\ WKH DG MXGJLQJ WKH EUDQG LQVWHDG RQ WKH EDVLV RI WKHLU XVDJH H[SHULHQFH 7KLV K\SRWKHVLV ZDV QRW VXSSRUWHG 7KH REVHUYHG DJH UHODWHG SDWWHUQV ZHUH LQ IDFW UHYHUVHG IURP WKRVH K\SRWKHVL]HG RQ WKH EDVLV RI H[WDQW WKHRU\ &RQVLVWHQW ZLWK SUHYLRXV ILQGLQJV HJ +RFK DQG +D /HYLQ DQG *DHWK 6PLWK :ULJKW DQG /XW] f QR UHOLDEOH GLIIHUHQFHV ZHUH REVHUYHG DPRQJ WKH \RXQJHU DJH JURXS DV D FRQVHTXHQFH RI WKHLU H[SRVXUH WR DQ DGWULDO VHTXHQFH UHODWLYH WR WULDO DORQH ) S f 7KH \RXQJHU FKLOGUHQ ZHUH XQDIIHFWHG E\ H[SRVXUH WR WKH DG SULRU WR D WULDO H[SHULHQFH UHO\LQJ LQVWHDG RQ WKH WULDO H[SHULHQFH DV WKH EDVLV IRU WKHLU EUDQG HYDOXDWLRQ :KLOH SULRU VWXGLHV KDYH DWWULEXWHG D VLPLODU UHVXOW ZLWKLQ DQ DGXOW SRSXODWLRQ WR WKH XQDPELJXRXV QDWXUH RI WKH SURGXFW H[SHULHQFH LW PD\ EH WKDW WR D \RXQJ FKLOG WKH VDOLHQFH RI D WULDO H[SHULHQFH VLPSO\ RYHUZKHOPV DQ\ OLQJHULQJ HIIHFWV RI WKH DG 7R WKH H[WHQW WKDW \RXQJHU FKLOGUHQ MXGJH WKH DG SULPDULO\ RQ WKH EDVLV RI WKH EUDQGfV DSSHDO DV VXJJHVWHG E\ WKH ILQGLQJV RI VWXG\ RQH WKH DG PD\ FRQYH\ YHU\ OLWWOH EH\RQG ZKDW WKH SURGXFW LWVHOI UHYHDOV :KLOH WKH DG PD\ GLUHFW WKH \RXQJHU FKLOGfV DWWHQWLRQ WR SDUWLFXODU DWWULEXWHV XQOHVV WKH DFWXDO H[SHULHQFH UHYHDOV VRPHWKLQJ WKDW LV

PAGE 152

REYLRXVO\ GLVFUHSDQW IURP WKH DG WKH DG PD\ TXLFNO\ UHFHGH LQWR WKH EDFNJURXQG UHODWLYH WR WKH PRUH VDOLHQW VHQVRU\ EDVHG LPSUHVVLRQV GHULYHG IURP FRQVXPLQJ WKH SURGXFW 7KRXJK \RXQJ FKLOGUHQ PD\ EH SHUVXDGHG E\ FRPPHUFLDOV DVN WKHLU SDUHQWV WR EX\ WKH EUDQGV WKH\ VHH DGYHUWLVHG DQG FKRRVH WKHVH SURGXFWV RYHU QRQDGYHUWLVHG EUDQGV HJ *ROGEHUJ HW DO *RP DQG *ROGEHUJ ,VOHU HW DO :DUG HW DO f WKH DGV VHHP WR UHWDLQ OLWWOH LQIOXHQFH RYHU \RXQJ FKLOGUHQfV LQWHUSUHWDWLRQV RU EUDQG HYDOXDWLRQV LQ D FRQVXPSWLRQ FRQWH[W $ YHU\ GLIIHUHQW SDWWHUQ ZDV REVHUYHG DPRQJ WKH ROGHU FKLOGUHQ 7KH VHFRQG K\SRWKHVLV VXJJHVWHG WKDW DG H[SRVXUH SULRU WR SURGXFW WULDO ZRXOG KDYH OLWWOH LPSDFW RQ ROGHU FKLOGUHQfV EUDQG SHUFHSWLRQV DQG DWWLWXGHV DV D FRQVHTXHQFH RI LWV UHODWLYHO\ ORZ FUHGLELOLW\ DQG WKH DYDLODELOLW\ RI UHOHYDQW VHQVRU\EDVHG H[SHULHQWLDO HYLGHQFH &RQWUDU\ WR H[SHFWDWLRQV FKLOGUHQfV UHVSRQVHV LQ DQ DGWULDO VHTXHQFH ZHUH VLJQLILFDQWO\ GLIIHUHQW WKDQ WKRVH EDVHG H[FOXVLYHO\ RQ WULDO H[SHULHQFH +RZHYHU DQ LQWHUDFWLRQ EHWZHHQ VWLPXOXV VHW DQG H[SHULPHQWDO FRQGLWLRQ ZDV SUHVHQW LQGLFDWLQJ WKDW WKH GLUHFWLRQ RI WKH DGfV LQIOXHQFH ZDV GHSHQGHQW RQ WKH VSHFLILF DGYHUWLVHPHQW XQGHU FRQVLGHUDWLRQ VHH 7DEOH f ([SRVXUH WR HLWKHU WKH FHUHDO RU VQDFN FKLS DG SULRU WR SURGXFW WULDO KDG D SRVLWLYH LQIOXHQFH RQ FKLOGUHQfV EUDQG SHUFHSWLRQV DQG DWWLWXGH %HOLHIV ) S %UDQG $WWLWXGH ) Sf 3RVWKRF DQDO\VHV UHYHDOHG WKDW WKHVH SDUWLFXODU DGV ZHUH ERWK PRUH IDPLOLDU FKLVTXDUH S f DQG PRUH ZHOO OLNHG ([SRVXUH WR HLWKHU WKH FDQG\ RU IUXLW VQDFN DG SULRU WR SURGXFW WULDO RQ WKH RWKHU KDQG OHG WR PRUH QHJDWLYH SHUFHSWLRQV DQG DWWLWXGHV WRZDUG WKH EUDQG WKDQ WULDO DORQH ) S %UDQG $WWLWXGH ) Sf 6R ZKLOH WKH GLUHFWLRQ RI WKH

PAGE 153

7DEOH 7KH ,QWHUDFWLRQ RI $GYHUWLVLQJ DQG 3URGXFW 7ULDO $129$ 5HVXOWV $'75,$/ YV 75,$/ 21/< %(/,() 727$/ (;3(&7$1&< $E 6(&21' *5$'( $'75,$/ 75,$/ 21/< ) ) ) ),)7+ *5$'( )$0,/,$5/,.(' f $'6 $'75,$/ 75,$/ 21/< ) ) ) 3 3 3 (6 (6 (6 129(/',6/,.(' $'6 $'75,$/ 75,$/ 21/< ) ) ) 3 3 3 (6 (6 (6 %HOLHI &RQILGHQFH $7 7 ) $E &RQILGHQFH $7 7 ) $'75,$/ Z 75,$/$' %(/,() 727$/ (;3(&7$1&< $E 6(&21' *5$'( $'75,$/ 75,$/$' ) ) ) ),)7+ *5$'( n‘ )$0,/,$5/,.(' ,'6 $'75,$/ 75,$/$' ) ) ) 3 f§ f§ (6 f§ f§ 129(/',6/,.(' $'6 $'75,$/ 75,$/$' ) ) ) 3 3 3 (6 (6 (6 $E &RQILGHQFH $7 7$ ) S (6 %HOLHI &RQILGHQFH $7 7$ ) S (6 %HOLHI &RQILGHQFH

PAGE 154

DGfV LQIOXHQFH ZDV D IXQFWLRQ RI WKH VSHFLILF VWLPXOXV VKRZQ HYLGHQFH RI LWV LQIOXHQFH ZDV DSSDUHQW DFURVV DOO VWLPXOXV SDLUV $PRQJ WKH ROGHU FKLOGUHQ H[SRVXUH WR DQ DGWULDO VHTXHQFH OHG WR GLIIHUHQW EUDQG SHUFHSWLRQV DQG DWWLWXGHV WKDQ WULDO DORQH LUUHVSHFWLYH RI WKH VSHFLILF FRPPHUFLDO H[HFXWLRQ 7KDW DGV PD\ HLWKHU HQKDQFH RU GHWUDFW IURP D FKLOGfV EUDQG H[SHULHQFH PD\ VLPSO\ UHIOHFW WKH UHDOLW\ RI DGYHUWLVLQJ 1RW DOO SURIHVVLRQDOO\ GHYHORSHG FRPPHUFLDOV DUH HTXDOO\ HIIHFWLYH QRU DUH WKH VSHFLILF OLQNV EHWZHHQ DQ DG DQG WKH EUDQG LW UHSUHVHQWV XQLIRUPO\ DSSDUHQW )URP D PRUH WKHRUHWLFDO SHUVSHFWLYH UHVHDUFK VXJJHVWLQJ WKDW IDPLOLDULW\ OHDGV WR OLNLQJ PD\ DOVR DFFRXQW IRU GLIIHUHQFHV REVHUYHG ZLWKLQ WKH VWLPXOXV VHW +DZNLQV DQG +RFK f 0RUH LPSRUWDQW KRZHYHU LV WKH EDVLF ILQGLQJ WKDW DGYHUWLVLQJ DSSHDUV WR KDYH WKH FDSDFLW\ WR IUDPH WKH FRQVXPSWLRQ H[SHULHQFH RI ROGHU FKLOGUHQ HYHQ LQ FLUFXPVWDQFHV ZKHUH WKH H[SHULHQWLDO HYLGHQFH LV FOHDU RU XQDPELJXRXV 7KHVH ILQGLQJV VXJJHVW WKDW LW LV WKH ROGHU UDWKHU WKDQ WKH \RXQJHU FKLOG ZKR DOORZV WKH DG WR VKDSH KLVKHUf LQWHUSUHWDWLRQV DQG HYDOXDWLRQV RI WKH EUDQG H[SHULHQFH :KLOH VHHPLQJO\ FRXQWHULQWXLWLYH ERWK WKH UHVXOWV RI WKH SUHOLPLQDU\ VWXG\ DQG UHFHQW UHVHDUFK LQGLFDWLQJ WKDW FXHG SURFHVVRUV WR \HDU ROGVf GR QRW QHFHVVDULO\ GUDZ RQ WKHLU FRJQLWLYH GHIHQVHV LQ VSHFLILF YLHZLQJ FRQWH[WV VXSSRUW WKLV UHVSRQVH SDWWHUQ %UXFNV HW DO 5RHGGHU f :KLOH FKLOGUHQ LQ WKLV DJH JURXS FHUWDLQO\ KDYH WKH FDSDFLW\ WR GUDZ RQ WKHLU GHIHQVHV FRQVLGHU ZKHWKHU DQ DG LV FUHGLEOH RU QRW RU WKLQN VNHSWLFDOO\ DERXW WKH DGYHUWLVHUfV PRWLYHV WKH\ PD\ QRW EH LQFOLQHG WR GR VR ZLWKRXW DQ H[WHUQDO UHPLQGHU 7KH ROGHU FKLOGfV VHQVLWLYLW\ WR PXOWLSOH OHYHOV RI PHDQLQJ DQG PHWDSKRULFDO FDSDFLW\ HYLGHQW LQ WKH SUHOLPLQDU\ VWXG\ DOVR VHHP WR VXJJHVW WKDW WKLV DJH JURXS PD\ EH PRUH RSHQ WR LWV VXJJHVWLRQ LQ D WULDO FRQWH[W

PAGE 155

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f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fV SHUFHSWLRQV DQG DWWLWXGHV $FFRUGLQJ WR WKLV VFHQDULR WKH REVHUYHG GLIIHUHQFHV PLJKW EH GXH WR WKH SURYLVLRQ RI PRUH LQIRUPDWLRQ UDWKHU WKDQ WKH VHTXHQFH LQ ZKLFK WKH DG DQG WKH SURGXFW DUH HQFRXQWHUHG +RZHYHU ZKHQ WKH TXDQWLW\ RI LQIRUPDWLRQ ZDV FRQWUROOHG IRU VHTXHQFH HIIHFWV ZHUH REVHUYHG RQ FKLOGUHQfV EHOLHI OHYHOV IRU ERWK QRYHO DQG IDPLOLDU SURGXFWV 1RYHO ) S )DPLOLDU ) S f 'LIIHUHQFHV LQ WRWDO H[SHFWDQF\ DQG EUDQG DWWLWXGH ZHUH DOVR REVHUYHG IRU WKH QRYHO EUDQGV ([SHFWDQF\ ) S %UDQG $WWLWXGH ) Sf 7KHVH ILQGLQJV LQGLFDWH WKDW EH\RQG WKH TXDQWLW\ RI LQIRUPDWLRQ SURYLGHG WKH RUGHU LQ

PAGE 156

ZKLFK FKLOGUHQ DUH H[SRVHG WR WKH DG DQG WKH WULDO H[SHULHQFH XOWLPDWHO\ DIIHFWV WKHLU EUDQG SHUFHSWLRQV DQG DWWLWXGHV VHH 7DEOH f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f :KHQ DG H[SRVXUH IROORZHG WULDO H[SHULHQFH LW KDG D SRVLWLYH LQIOXHQFH RQ FKLOGUHQfV VSHFLILF EUDQGUHODWHG SHUFHSWLRQV ) S f EXW GLG QRW DIIHFW WKHLU RYHUDOO EUDQG DWWLWXGHV ) f 7KHVH ILQGLQJV LQGLFDWH WKDW DGYHUWLVLQJ PD\ KDYH WKH FDSDFLW\ WR LQIOXHQFH FKLOGUHQfV VSHFLILF EHOLHIV DERXW D EUDQG HYHQ DIWHU SURGXFW WULDO 3HUKDSV H[SRVXUH WR WKH DG IROORZLQJ WULDO UHLQIRUFHV D SRVLWLYH FRQVXPSWLRQ H[SHULHQFH 1R DJH GLIIHUHQFHV RU VWLPXOXV LQWHUDFWLRQV ZHUH SUHVHQW 5HODWLRQVKLSV DPRQJ $G $IIHFW %UDQG 3HUFHSWLRQV DQG $WWLWXGHV +\SRWKHVHV WKURXJK H[DPLQH WKH UHODWLRQVKLSV EHWZHHQ FKLOGUHQfV DIIHFWLYH UHVSRQVHV WR DGYHUWLVLQJ DQG WKHLU EUDQG SHUFHSWLRQV DQG DWWLWXGHV 7KHVH K\SRWKHVHV ZHUH WHVWHG XVLQJ SDWK DQDO\VLV ZKLFK LV EDVLFDOO\ FRQFHUQHG ZLWK HVWLPDWLQJ WKH PDJQLWXGH RI WKH OLQNDJHV EHWZHHQ YDULDEOHV DQG XVLQJ WKHVH HVWLPDWHV WR SURYLGH LQIRUPDWLRQ DERXW XQGHUO\LQJ FDXVDO SURFHVVHV 6LQFH WKH H[SHULPHQWDO FHOO VL]H ZDV WRR VPDOO WR XVH /,65(/ %ROOHQ f RUGLQDU\ OHDVW VTXDUHV UHJUHVVLRQ ZDV XWLOL]HG WR REWDLQ WKH SDWK FRHIILFLHQWV DQ DSSURSULDWH HVWLPDWLRQ SURFHGXUH ZKHQ WKH VSHFLILHG

PAGE 157

7DEOH 7ULDO$G YHUVXV 7ULDO $129$ 5HVXOWV 727$/ %(/,() (;3(&7$1&< $E 75,$/$' 75,$/ ) ) S )

PAGE 158

FDXVDO PRGHO LV UHFXUVLYH $VKHU f 2/6 UHJUHVVLRQ SURYLGHV JRRG HVWLPDWHV RI WKH SDUDPHWHUV SURYLGLQJ UHJUHVVLRQ DVVXPSWLRQV DUH PHW SDUWLFXODUO\ WKH UHTXLUHPHQW WKDW WKH UHVLGXDO YDULDEOH LQ D VWUXFWXUDO HTXDWLRQ LV XQFRUUHODWHG ZLWK WKH H[SODQDWRU\ YDULDEOHV LQ WKDW HTXDWLRQ 7KH UHODWLRQVKLSV LQ WKH PRGLILHG GXDO PHGLDWLRQ PRGHO FDQ EH VSHFLILHG DV D VHULHV RI UHJUHVVLRQ HTXDWLRQV ZLWK JUDGH UHSUHVHQWHG DV D GXPP\ YDULDEOH $$G D M$G,QIR (QW M3$% *UDGH M$G,QIR}*UDGHf "(QWr*UDGHf 3$%r*UDGHf H &RJ% r 6J$GOQIR MJ$$' *UDGH $G,QIRr*UDGHf Q$$'}*UDGHf H $E D K ALADG K AX&RJD ,3$E *UDGH L$$'*UDGHf &RJ%r*UDGHf OJ3$%}*UDGHf H ZKHUH $$G DWWLWXGH WRZDUG WKH DG &RJ% SHUFHSWLRQV RI WKH EUDQG $E EUDQG DWWLWXGH *UDGH VHFRQG RU ILIWK JUDGH SDE SULRU EUDQG DWWLWXGH $GOQIR SHUFHSWLRQV RI DGfV LQIRUPDWLYHQHVV (QW f§ SHUFHSWLRQV RI DGfV HQWHUWDLQPHQW YDOXH H HUURU WHUP :LWK WKHVH HTXDWLRQV LW LV SRVVLEOH WR WHVW ZKHWKHU WKH VLJQLILFDQFH RI WKH SDWKV LQ WKH PRGHO FKDQJH ZKHQ FKLOGUHQ RI GLIIHUHQW DJH JURXSV DUH H[SRVHG WR DGYHUWLVLQJ RU D FRPELQDWLRQ RI DGYHUWLVLQJ DQG SURGXFW WULDO 3DWK FRHIILFLHQWV ZHUH HVWLPDWHG IRU HDFK RI WKH WKUHH FHOOV LQFRUSRUDWLQJ DG H[SRVXUH XVLQJ WUDGLWLRQDO UHJUHVVLRQ WHFKQLTXHV 'LIIHUHQFHV EHWZHHQ DJH JURXSV LQ WKH VWUHQJWK RI PRGHO UHODWLRQVKLSV ZHUH LQGLFDWHG E\

PAGE 159

WKH VLJQLILFDQFH RI LQWHUDFWLRQ WHUPV )RU H[DPSOH D VLJQLILFDQW FRHIILFLHQW IRU WKH $$'r*UDGHf WHUP f LQ WKH DG RQO\ FHOO LQGLFDWHV D VLJQLILFDQW FKDQJH LQ WKH LPSDFW RI $DG RQ $E EHWZHHQ VHFRQG DQG ILIWK JUDGH FKLOGUHQ 7KH UHVXOWV RI WKHVH DQDO\VHV DUH GHSLFWHG LQ )LJXUH ZKLFK OLVWV XQVWDQGDUGL]HG SDUDPHWHU HVWLPDWHV %ODFN DUURZV GHQRWH VWDWLVWLFDOO\ VLJQLILFDQW UHODWLRQV DW S :KLWH DUURZV UHSUHVHQW QRQVLJQLILFDQW UHODWLRQV 7WHVWV IRU ZLWKLQ JURXS GLIIHUHQFHV EHWZHHQ DG RQO\ DQG DG SOXV WULDO FHOOV ZHUH FRQGXFWHG E\ LQFRUSRUDWLQJ DSSURSULDWH FRYDULDQFH HVWLPDWHV LQ WKH HUURU WHUP 7KH ZLWKLQ VXEMHFWV FRPSDULVRQV VXIIHUHG IURP ORZ SRZHU GXH WR UHODWLYHO\ VPDOO VDPSOHV SHU DJH JURXS 'LUHFW HIIHFWV RI $3 RQ $3 +\SRWKHVLV IRXU SUHGLFWV WKDW FKLOGUHQfV SULRU EUDQG DWWLWXGHV ZRXOG KDYH OLWWOH LPSDFW RQ FXUUHQW EUDQG DWWLWXGHV H[FHSW LQ DQ DG RQO\ VHWWLQJ $V VKRZQ LQ )LJXUH WKH EHWD FRHIILFLHQW IRU WKH 3$% WHUP ZDV VLJQLILFDQW LQ WKH DG RQO\ FRQGLWLRQ IRU ERWK VHFRQG DQG ILIWK JUDGHUV )ROORZXS ZLWKLQ JURXS DQDO\VHV DPRQJ WKH ILIWK JUDGHUV UHYHDOHG WKDW WKH LQIOXHQFH RI SULRU EUDQG DWWLWXGHV 3$%f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r $%f LQ DQ DG RQO\ VHWWLQJ $V DQWLFLSDWHG $DG PHGLDWHV DGYHUWLVLQJfV LQIOXHQFH RQ $% LQ D

PAGE 160

QG *UDGH REVHUYHGf WK *UDGH REVHUYHGf L )LJXUH 3DWK $QDO\VLV 5HVXOWV 8QVWDQGDUGL]HG 3DUDPHWHU (VWLPDWHV $VWHULVNV LQGLFDWH PDUJLQDOO\ VLJQLILFDQW YDOXHV S f Df 2EVHUYHG 5HODWLRQVKLSV QG YV WK *UDGH

PAGE 161

QG *UDGH QG *UDGH K\SRWKHVL]HGf REVHUYHGf )LJXUH &RQWLQXHG 3DWK $QDO\VLV 5HVXOWV Ef +\SRWKHVL]HG YHUVXV 2EVHUYHG 5HODWLRQVKLSV QG *UDGH

PAGE 162

WK *UDGH WK *UDGH K\SRWKHVL]HGf REVHUYHGf )LJXUH &RQWLQXHG 3DWK $QDO\VLV 5HVXOWV Ff +\SRWKHVL]HG YHUVXV 2EVHUYHG 5HODWLRQVKLSV WK *UDGH

PAGE 163

SUHSXUFKDVH FRQWH[W UHSOLFDWLQJ SUHYLRXV ILQGLQJV DQG H[WHQGLQJ WKHP WR D \RXQJ DXGLHQFH 7KLV UHODWLRQVKLS ZDV VLJQLILFDQW DFURVV DJH JURXSV :KLOH FKLOGUHQfV DIIHFWLYH UHVSRQVHV WR DGV ZHUH H[SHFWHG WR PHGLDWH DGYHUWLVLQJfV LQIOXHQFH RQ EUDQG DWWLWXGH LQ D SUHSXUFKDVH FRQWH[W +D DQG + SUHGLFWHG WKDW $DGfV LQIOXHQFH ZRXOG GHFOLQH ZKHQ FKLOGUHQ DOVR KDG WKH EHQHILW RI SURGXFW WULDO SDUWLFXODUO\ DPRQJ WKH ROGHU DJH JURXS ,W ZDV H[SHFWHG WKDW ROGHU FKLOGUHQ ZRXOG EDVH WKHLU EUDQG DWWLWXGHV SULPDULO\ RQ SHUFHSWLRQV GHULYHG IURP SURGXFW WULDO ZLWK OLWWOH HYLGHQW LPSDFW RI WKH DGfV DIIHFWLYH SURSHUWLHV &RQWUDU\ WR H[SHFWDWLRQV $DG FRQWLQXHG WR KDYH D GLUHFW LQIOXHQFH RQ $% HYHQ ZKHQ WKH ROGHU FKLOGUHQ KDG FRQVXPSWLRQ H[SHULHQFH $PRQJ WKH \RXQJHU FKLOGUHQ RQ WKH RWKHU KDQG VXSSRUW IRU + ZKLFK SUHGLFWHG D UHGXFWLRQ LQ $DGfV LQIOXHQFH ZKHQ WULDO SUHFHGHV DG H[SRVXUH ZDV HYLGHQW $ VLJQLILFDQW GHFOLQH LQ $DGfV LQIOXHQFH ZDV REVHUYHG EHWZHHQ WKH DG RQO\ FHOO f DQG WKH WULDODG FHOO W S f &ROOHFWLYHO\ WKH HYLGHQFH LQGLFDWHV WKDW FKLOGUHQfV DIIHFWLYH UHVSRQVHV WR DGV GLUHFWO\ PHGLDWH DGYHUWLVLQJfV LQIOXHQFH RQ EUDQG DWWLWXGH $PRQJ WKH \RXQJHU FKLOGUHQ WKLV LQIOXHQFH EHJLQV WR GHFOLQH ZKHQ DGYHUWLVLQJ LV FRXSOHG ZLWK SURGXFW WULDO SDUWLFXODUO\ ZKHQ WULDO IROORZV PHVVDJH H[SRVXUH +RZHYHU LUUHVSHFWLYH RI DJH JURXS $DG FRQWLQXHV WR LQIOXHQFH FKLOGUHQfV EUDQG DWWLWXGHV HYHQ LQ WULDO VHWWLQJV ,QGLUHFW HIIHFWV RI $A RQ EUDQG SHUFHSWLRQV DQG DWWLWXGH + WKURXJK + H[DPLQH WKH LQGLUHFW HIIHFWV RI $DG RQ $% YLD EUDQG SHUFHSWLRQV +$ DQG +% SUHGLFW WKDW FKLOGUHQfV DIIHFWLYH UHVSRQVHV WR DQ DGYHUWLVHPHQW LQIOXHQFH WKHLU SHUFHSWLRQV RI WKH SURPRWHG EUDQG $DG r &RJ%f LQ D SUHSXUFKDVH FRQWH[W &KLOGUHQfV UHDFWLRQV WR WKH DG LWVHOI PD\ VKDSH PRUH VSHFLILF H[SHFWDWLRQV DERXW WKH EUDQG ZKHQ WKHUH LV OLWWOH RWKHU

PAGE 164

LQIRUPDWLRQ WR JXLGH WKHP +RZHYHU WKHVH H[SHFWDWLRQV DUH H[SHFWHG WR KDYH OLWWOH LQIOXHQFH RQ EUDQG DWWLWXGH &RJ% f§ $A DPRQJ WKH ROGHU FKLOGUHQ 6XSSRUW IRU WKLV K\SRWKHVLV LV VKRZQ LQ )LJXUH 7KH EHWD FRHIILFLHQW IRU WKH $DG r &RJ% SDWK LV VLJQLILFDQW IRU WKH ILIWK JUDGHUV M f DQG PDUJLQDOO\ VLJQLILFDQW IRU WKH VHFRQG JUDGHUV f UHSOLFDWLQJ WKH UHVXOWV RI SULRU UHVHDUFK DPRQJ DGXOW SRSXODWLRQV +RZHYHU WKH ILQGLQJV DUH PL[HG IRU WKH VHFRQG VWHS RI WKH LQGLUHFW PHFKDQLVP &RQWUDU\ WR H[SHFWDWLRQV QR VLJQLILFDQW GLIIHUHQFHV EHWZHHQ DJH JURXSV ZHUH IRXQG $PRQJ WKH ROGHU FKLOGUHQ WKH &RJ% WR $ SDWK ZDV ZHDN f DV DQWLFLSDWHG UHDFKLQJ RQO\ PDUJLQDO VLJQLILFDQFH W S f +RZHYHU LW ZDV H[SHFWHG WKDW ERWK SDWKV RI WKH LQGLUHFW PHFKDQLVP $DG r &RJ% DQG &RJ% } $% ZRXOG EH VLJQLILFDQW DPRQJ WKH \RXQJHU FKLOGUHQ 7KLV K\SRWKHVLV ZDV EDVHG RQ WKH \RXQJHU FKLOGUHQfV JUHDWHU SURFOLYLW\ WR HQMR\ ZDWFKLQJ DGV WR WUXVW WKHP DQG WR EHOLHYH ZKDW WKH\ VHH GHSLFWHG +RZHYHU WKH ILQGLQJV LQGLFDWH WKDW \RXQJ FKLOGUHQfV DIIHFWLYH UHVSRQVHV WR WKH DGV KDG OLWWOH LQIOXHQFH RQ WKHLU EUDQG SHUFHSWLRQV DQG DV D FRQVHTXHQFH OLWWOH LQGLUHFW LQIOXHQFH RQ WKHLU EUDQG DWWLWXGHV :KLOH $DG H[HUWV D GLUHFW LQIOXHQFH RQ $% LW KDV UHODWLYHO\ OLWWOH LPSDFW RQ VKDSLQJ \RXQJ FKLOGUHQfV EUDQG SHUFHSWLRQV 7KLV SDWWHUQ FRQWLQXHV WR KROG ZKHQ DGYHUWLVLQJ LV FRXSOHG ZLWK SURGXFW WULDO KLJKOLJKWLQJ FOHDU GLIIHUHQFHV EHWZHHQ WKH ROGHU DQG \RXQJHU FKLOGUHQ + SUHGLFWHG WKDW ZKHQ DGYHUWLVLQJ SUHFHGHV SURGXFW WULDO ERWK SDWKV RI WKH LQGLUHFW PHFKDQLVP $DG r &RJ% DQG &RJ% r $ ZRXOG EH VLJQLILFDQW DPRQJ WKH ROGHU FKLOGUHQ 7KLV K\SRWKHVLV ZDV SUHGLFDWHG RQ WKH LGHD WKDW FKLOGUHQfV SRVLWLYH UHDFWLRQV WR DQ DG OHDG WR JUHDWHU UHFHSWLYLW\ WR DG FODLPV ZKLFK LQ WXUQ DUH UHLQIRUFHG WKURXJK

PAGE 165

7DEOH 6WDQGDUGL]HG 3DUDPHWHU (VWLPDWHV 6HFRQG *UDGH )LIWK *UDGH $ $7 7$ $ $7 7$ $G ,QIR rf $AG Arrr (QWHUWDLQ f§ $9' rrr rrr rrr rrr rrr rrr 3ULRU $f $\ rrr $DG f§ ([SHFW r rr rrr $G ,QIR } ([SHFW rrr rrr rrr rrr rr rr ([SHFW rf $E rr r rr r 3ULRU $E r $E rrr rrr r r 3 rrr 3 rr 3 r

PAGE 166

SURGXFW WULDO 7KLV K\SRWKHVLV ZDV VXSSRUWHG DV VKRZQ LQ )LJXUH %RWK WKH $DG r &RJ% SDWK M f DQG WKH &RJ% r‘ $% IW 7f ZHUH VWDWLVWLFDOO\ VLJQLILFDQW 7KHVH ILQGLQJV SURYLGH IXUWKHU HYLGHQFH RI WKH ROGHU FKLOGUHQfV VHQVLWLYLW\ WR DG LQIRUPDWLRQ DQG UHLQIRUFH WKH FRQFOXVLRQV RI WKH SUHOLPLQDU\ VWXG\ :KHQ WKH DG SUHFHGHV WULDO ROGHU FKLOGUHQfV DIIHFWLYH UHVSRQVHV WR WKH DG FRORU WKHLU SHUFHSWLRQV RI WKH EUDQG ZKLFK DUH LQ WXUQ SUHGLFWLYH RI EUDQG DWWLWXGH 7KH VWDQGDUGL]HG SDUDPHWHU HVWLPDWHV UHSRUWHG LQ 7DEOH KLJKOLJKW WKH UHODWLYH VWUHQJWK RI WKHVH UHODWLRQVKLSV :KLOH + ZDV VXSSRUWHG IRU WKH ROGHU FKLOGUHQ WKH REVHUYHG SDWWHUQ IRU WKH \RXQJHU FKLOGUHQ ZDV FRQWUDU\ WR H[SHFWDWLRQV $V LQ WKH DG RQO\ FHOO VLJQLILFDQW UHODWLRQVKLSV ZHUH DQWLFLSDWHG IRU ERWK WKH $DG r‘ &RJ% DQG WKH &RJ% r $% SDWKV +RZHYHU FRQVLVWHQW ZLWK WKH DG RQO\ VHWWLQJ QHLWKHU SDWK ZDV VLJQLILFDQW 7KH EHWD FRHIILFLHQWV IRU WKH WZR SDWKV ZHUH IW $f DQG IW f UHVSHFWLYHO\ %RWK RI WKHVH UHSUHVHQW D VLJQLILFDQW GLIIHUHQFH EHWZHHQ WKH ILIWK JUDGHUV $$'r&RJ% W S &RJ%r$% W S f :KLOH WKH ILIWK JUDGHUVf DIIHFWLYH UHVSRQVHV FOHDUO\ LQIOXHQFHG WKHLU EUDQG SHUFHSWLRQV DQG DWWLWXGHV ZKHQ DG SUHFHGHG SURGXFW WULDO WKLV ZDV QRW WUXH RI WKH \RXQJHU FKLOGUHQ 7KH LPSDFW RI $DG ZDV FDSWXUHG H[FOXVLYHO\ WKURXJK LWV GLUHFW OLQN WR EUDQG DWWLWXGH &RQVLGHUHG WRJHWKHU WKH UHVXOWV RI +J DQG + VHHP WR VXJJHVW WKDW WKH ROGHU FKLOGUHQ DUH LQ VRPH UHVSHFWV PRUH VHQVLWLYH WR WKH DIIHFWLYH GLPHQVLRQV RI DGYHUWLVLQJ WKDQ WKH \RXQJHU FKLOGUHQ :KLOH \RXQJHU FKLOGUHQfV DIIHFWLYH UHVSRQVHV SOD\ D UROH LQ VKDSLQJ WKHLU EUDQG DWWLWXGHV WKH\ VHHP WR KDYH OLWWOH LPSDFW RQ WKHLU EHOLHIV DERXW WKH EUDQGfV VSHFLILF TXDOLWLHV

PAGE 167

:KLOH $DG ZDV H[SHFWHG WR LQIOXHQFH FKLOGUHQfV SHUFHSWLRQV DQG DWWLWXGHV ZKHQ DGYHUWLVLQJ SUHFHGHV WULDO LW ZDV H[SHFWHG WR KDYH OLWWOH LPSDFW ZKHQ DGYHUWLVLQJ IROORZV D WULDO H[SHULHQFH ,Q WKLV VLWXDWLRQ EHOLHIV DUH OLNHO\ WR EH EDVHG SULPDULO\ RQ WKH H[SHULHQWLDO GDWD WKDW LV HQFRXQWHUHG ILUVW UHGXFLQJ WKH DGfV FDSDFLW\ WR DIIHFW SURGXFW SHUFHSWLRQV $PRQJ WKH ROGHU FKLOGUHQ WULDO PD\ VHUYH DV WKH FXH WKDW HQOLVWV WKHLU FRJQLWLYH GHIHQVHV $V DQWLFLSDWHG WKH $DG &RJ% SDWK LQ WKH WULDODG FHOO ZDV QRW VLJQLILFDQW IRU HLWKHU DJH JURXS QG WK f 7KLV UHSUHVHQWV D VLJQLILFDQW FKDQJH IURP ERWK WKH DG RQO\ W S f DQG DGWULDO FHOOV M W S f ZLWKLQ WKH ROGHU DJH JURXS 7KHVH UHVXOWV LQGLFDWH WKDW FKLOGUHQfV DIIHFWLYH UHVSRQVHV WR DQ DG KDYH WKH FDSDFLW\ WR LQIOXHQFH WKHLU SHUFHSWLRQV DERXW WKH EUDQG ZKHQ f DGV DUH HQFRXQWHUHG LQ SUHSXUFKDVH VHWWLQJV RU f DGYHUWLVLQJ H[SRVXUH SUHFHGHV FRQVXPSWLRQ H[SHULHQFH :KHQ DGYHUWLVLQJ IROORZV FRQVXPSWLRQ $DG UHWDLQV OLWWOH LQIOXHQFH RYHU FKLOGUHQfV EUDQG SHUFHSWLRQV :KLOH WKH SDWK IURP $DG WR &RJ% ZDV H[SHFWHG WR EH ZHDN WKH SDWK IURP &RJ% }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

PAGE 168

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f )URP D PRWLYDWLRQDO SHUVSHFWLYH LQWHUHVW LQ WKH SURGXFW PD\ VLPSO\ RYHUZKHOP WKH DWWUDFWLRQ RI D FRPPHUFLDO PHVVDJH 7R WKH H[WHQW WKDW \RXQJHU FKLOGUHQ YLHZ DGV SULPDULO\ DV D VRXUFH RI EUDQG LQIRUPDWLRQ DV VXJJHVWHG LQ WKH SUHOLPLQDU\ VWXG\ LW LV QRW VXUSULVLQJ WKDW WKH SURGXFW ZRXOG GRPLQDWH WKH FRPPHUFLDOf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
PAGE 169

HOHPHQWV ZLWK GLUHFW SURGXFW H[SHULHQFH PD\ VLPSO\ RYHUWD[ WKH FKLOGfV UHVRXUFHV DW WKH LQWHJUDWLRQ VWDJH RI SURFHVVLQJ *UHDWHU XQGHUVWDQGLQJ RI WKH SURFHVVLQJ GHPDQGV SODFHG E\ PXOWLSOH VRXUFHV RI PDUNHWSODFH LQIRUPDWLRQ OLNH DGYHUWLVLQJ DQG SURGXFW WULDO LV QHHGHG WR GHWHUPLQH ZKHWKHU WKH ILQGLQJV UHIOHFW FDSDFLW\ FRQVWUDLQWV RU QRW :KLOH WKHUH LV VXEVWDQWLDO HYLGHQFH WKDW \RXQJ FKLOGUHQ DUH SHUVXDGHG E\ WKH DGYHUWLVHPHQWV WKH\ HQFRXQWHU LW DSSHDUV WKDW WKHVH PHVVDJHV DUH QRW EURXJKW IRUZDUG LQWR WKH FRQVXPSWLRQ FRQWH[W 7KHVH ILQGLQJV GR QRW LQ DQ\ ZD\ VXJJHVW WKDW \RXQJHU FKLOGUHQ DUH LPPXQH WR FRPPHUFLDO PHVVDJHV :KDW WKH\ GR VXJJHVW LV WKDW DPRQJ \RXQJHU FKLOGUHQ \HDUV ROGf DGYHUWLVLQJfV LPSDFW LV IHOW SULPDULO\ ZLWKLQ D SUHSXUFKDVH FRQWH[W $ GLVWLQFWO\ GLIIHUHQW UHVSRQVH SDWWHUQ ZDV UHYHDOHG E\ WKH ROGHU FKLOGUHQ :KLOH DGYHUWLVLQJ WKHRU\ DQG UHVHDUFK LQGLFDWHV WKDW ROGHU FKLOGUHQ DUH TXLFN WR GLVFRXQW FRPPHUFLDO PHVVDJHV WKH ILQGLQJV RI WKLV VWXG\ VHHP WR VXJJHVW RWKHUZLVH $PRQJ WKH ROGHU FKLOGUHQ DGYHUWLVLQJ DSSHDUV WR KDYH WKH FDSDFLW\ WR IUDPH WKH LQWHUSUHWDWLRQ RI D FRQVXPSWLRQ H[SHULHQFH &KLOGUHQfV EUDQGUHODWHG UHVSRQVHV ZHUH LQIOXHQFHG E\ DGYHUWLVLQJ HYHQ LQ WKH IDFH RI SUHVXPDEO\ XQDPELJXRXV H[SHULHQWLDO HYLGHQFH ,W LV WKH ROGHU UDWKHU WKDQ WKH \RXQJHU FKLOG ZKR DOORZV WKH DG WR VKDSH KLV KHUf EUDQG SHUFHSWLRQV DQG HYDOXDWLRQV %RWK WKH SUHOLPLQDU\ VWXG\ DQG UHFHQW UHVHDUFK LQGLFDWLQJ WKDW FXHG SURFHVVRUV GRQfW QHFHVVDULO\ DFWLYDWH WKHLU FRJQLWLYH GHIHQVHV VSRQWDQHRXVO\ VXSSRUW WKHVH ILQGLQJV 7KH ROGHU FKLOGfV LQFUHDVHG FRJQLWLYH VRSKLVWLFDWLRQ DQG H[SHULHQFH ZLWK DGYHUWLVLQJ PD\ FUHDWH D JUHDWHU VHQVLWLYLW\ WR FRPPHUFLDO FRQWHQW ZLWKLQ D WULDO FRQWH[W 7KH ILQGLQJV RI WKH SUHOLPLQDU\ VWXG\ UHYHDOHG WKDW WKHVH FKLOGUHQ DUH DVWXWH REVHUYHUV RI PXOWLSOH OHYHOV RI PHDQLQJ LQ DGYHUWLVLQJ 5DWKHU WKDQ YLHZLQJ WKH

PAGE 170

DG DV H[FOXVLYHO\ WUXH RU IDOVH JRRG RU EDG HQWHUWDLQLQJ RU QRW WKH\ VHHPHG WR WKLQN DERXW LW LQ WHUPV RI LWV SRVVLELOLWLHV :LWK JUHDWHU IDFLOLW\ LQ LQWHJUDWLQJ WKH IDQWDV\ RI DQ DG DQG WKH EUDQG UHDOLW\ LW UHSUHVHQWV WKH\ ZHUH PRUH RSHQ WR WKH DGfV DSSHDO ZLWKLQ D WULDO FRQWH[W WKDQ WKH \RXQJHU FKLOGUHQ &RQVLVWHQW ZLWK WKH SUHOLPLQDU\ ILQGLQJV SDWK DQDO\WLF UHVXOWV LQGLFDWH WKDW DGYHUWLVLQJ VHHPV WR H[HUW LWV LQIOXHQFH SULPDULO\ WKURXJK LWV DIIHFWLYH SURSHUWLHV 7KRXJK UHVHDUFKHUV KDYH QRW IRFXVHG VSHFLILFDOO\ RQ WKH PHGLDWLQJ LQIOXHQFH RI DWWLWXGH WRZDUG WKH DG RQ FKLOGUHQfV EUDQG DWWLWXGHV LW VHHPV WR SOD\ DQ LPSRUWDQW UROH DPRQJ ROGHU FKLOGUHQ ZKR KDYH WKH FDSDFLW\ WR GLVFRXQW DGYHUWLVLQJ EXW PD\ QRW DOZD\V EH LQFOLQHG WR GR VR &KLOGUHQfV DWWLWXGH WRZDUG WKH DG LQIOXHQFHG WKHLU EUDQG DWWLWXGHV DQG SHUFHSWLRQV HYHQ ZKHQ WKH\ KDG WKH EHQHILW RI GLUHFW SURGXFW H[SHULHQFH $DGfV LQIOXHQFH LV QRW FRQILQHG WR D GLUHFW WUDQVIHU WR EUDQG DIIHFW EXW PD\ VKDSH FKLOGUHQfV EHOLHIV DERXW D EUDQG DV ZHOO &KLOGUHQf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f :KLOH VHHPLQJO\ LQFRQJUXRXV DW ILUVW JODQFH DQG \HDUROGV PD\ GLIIHU LQ LPSRUWDQW UHVSHFWV IURP ERWK RI WKHVH RWKHU JURXSV 5HODWLYH WR \RXQJHU FKLOGUHQ WKH ROGHU DJH JURXS KDV D JUHDWHU FDSDFLW\ DQG LQFOLQDWLRQ WR FRQVWUXFW OLQNDJHV EHWZHHQ WKH IDQWDV\ FRQYH\HG E\ DQ DG DQG WKH

PAGE 171

UHDOLW\ RI EUDQG H[SHULHQFH +RZHYHU WKHVH OLQNDJHV PD\ QRW QHFHVVDULO\ WDNH WKH IRUP RI VSHFLILF EUDQG H[SHFWDWLRQV ZKLFK DUH HLWKHU FRQILUPHG RU GLVFRQILUPHG WKURXJK WULDO H[SHULHQFH %RWK WKH LQLWLDO VWXG\ UHYHDOLQJ WKH LPSRUWDQFH RI HQWHUWDLQPHQW LQ FKLOGUHQfV DVVHVVPHQWV DQG HYLGHQFH IURP WKLV VWXG\ LQGLFDWLQJ WKDW $DG KDV D UHOLDEOH LPSDFW RQ FKLOGUHQfV SHUFHSWLRQV DUH FRQVLVWHQW ZLWK WKH FRQFHSW RI WUDQVIRUPDWLRQDO DGYHUWLVLQJ %RWK VXJJHVW WKDW WKH FUHDWLYH HOHPHQWV ZLWKLQ DGYHUWLVHPHQWV PD\ SOD\ D PRUH FHQWUDO LQ WKH SHUVXDVLRQ SURFHVV WKDQ SUHYLRXVO\ UHFRJQL]HG ZLWKLQ WKH FKLOGUHQfV DGYHUWLVLQJ OLWHUDWXUH $GV DUH QRW QHFHVVDULO\ SHUFHLYHG SULPDULO\ DV FRQGXLWV RI EUDQG LQIRUPDWLRQ 2OGHU FKLOGUHQ PD\ DOORZ WKHLU UHDFWLRQV WR WKH DG FRORU WKHLU LPSUHVVLRQV RI WKH EUDQG H[SHULHQFH ,UUHVSHFWLYH RI ZKHWKHU \RXQJHU FKLOGUHQ GLVUHJDUG WKH DGYHUWLVHPHQW DV D FRQVHTXHQFH RI WKH JUHDWHU VDOLHQFH RI WKH SURGXFW RU GLIILFXOWLHV HQFRXQWHUHG LQ LQWHJUDWLQJ DG DQG EUDQG LQIRUPDWLRQ WKH\ PD\ EH LPPXQH WR DGYHUWLVLQJfV LQIOXHQFH ZLWKLQ FRQVXPSWLRQ VHWWLQJV $GXOWV RQ WKH RWKHU KDQG DUH PRUH OLNHO\ WR GUDZ VSRQWDQHRXVO\ RQ WKHLU VNHSWLFLVP RI DGYHUWLVLQJ EOXQWLQJ LWV LPSDFW H[FHSW ZKHQ WKH H[SHULHQFH LV DPELJXRXV ,W LV LQVWHDG WKH FKLOGUHQ ZKR IDOO EHWZHHQ WKHVH WZR H[WUHPHV ZKR PD\ EH PRVW UHFHSWLYH WR DGYHUWLVLQJfV LQIOXHQFH ZLWKLQ D FRQVXPSWLRQ FRQWH[W $UPHG ZLWK QHZ IRXQG XQGHUVWDQGLQJ DQG DSSUHFLDWLRQ IRU DG FRQWHQW WKLV JURXS PD\ EH PRUH VXVFHSWLEOH WR LWV VXJJHVWLRQ DQG QXDQFH ZKHQ LW FRPHV WR SURGXFW XVH &ROOHFWLYHO\ WKH ILQGLQJV VXJJHVW WKDW LQ WKH GHVLJQ RI DGYHUWLVLQJ IRU FKLOGUHQ HQWHUWDLQLQJ RU OLNDEOH DGV PD\ EH SDUWLFXODUO\ SRZHUIXO LQ UHDFKLQJ WKH ROGHU SUHVXPDEO\ PRUH VNHSWLFDO FKLOG $W WKH VDPH WLPH WKH H[SHULPHQWDO ILQGLQJV VHUYH WR

PAGE 172

PRYH LQLWLDO TXDOLWDWLYH LQVLJKWV EH\RQG WKH LGLRV\QFUDWLF HQDEOLQJ D EURDGHU DQG PRUH FRPSUHKHQVLYH DQDO\VLV RI KRZ FKLOGUHQ UHVSRQG WR DGV DQG SURGXFWV 1RWHV :KHQ WKH FUHGLELOLW\ RI EUDQG LQIRUPDWLRQ YDULHV WKH LQGLYLGXDOfV H[SHFWDQF\ WKDW D EUDQG DQG IHDWXUH DUH UHODWHG LV EDVHG RQ ERWK EHOLHI VWUHQJWK DQG EHOLHI FRQILGHQFH 0DUNV DQG .DPLQV 6PLWK 6PLWK DQG 6ZLQ\DUG f )ROORZLQJ IURP WKH H[SHFWDQF\ YDOXH PRGHO WRWDO H[SHFWDQF\ EHOLHI VWUHQJWK [ EHOLHI FRQILGHQFH 7KH SUREDELOLVWLF QDWXUH RI WKH EHOLHI VWUHQJWK FRQVWUXFW LV WRR FRPSOH[ WR XWLOL]H LQ UHVHDUFK ZLWK \RXQJ FKLOGUHQ ,Q WKLV VWXG\ H[SHFWDQF\ UHSUHVHQWV WKH VXP RI EHOLHI OHYHO WLPHV EHOLHI FRQILGHQFH $GYHUWLVHPHQWV IRU IRXU SURGXFWV ZHUH XVHG LQ WKLV VWXG\ f 3L]]DULD &KLSV f 6PDUWLHV f 6RGDOLFLRXV )UXLW 6QDFNV DQG f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

PAGE 173

&+$37(5 678'< &ROOHFWLYHO\ WKH ILUVW WZR VWXGLHV SDLQW DQ LQWULJXLQJ DQG VRPHZKDW FRXQWHULQWXLWLYH SLFWXUH RI FKLOGUHQfV SHUFHSWLRQV RI DGSURGXFW UHODWLRQVKLSV 8QDQWLFLSDWHG DJH JURXS GLIIHUHQFHV HPHUJHG LQ WHUPV RI KRZ FKLOGUHQ DSSURDFK DGV DQG UHODWH WKHP WR WKHLU FRQVXPSWLRQ H[SHULHQFHV
PAGE 174

SHUIRUPDQFH GULYHQ WKDQ LQLWLDOO\ SUHVXPHG +RZHYHU WKH FRQGLWLRQV ZKHQ FKLOGUHQfV EUDQG VSHFLILF H[SHFWDWLRQV SOD\ D PRUH IRFDO UROH DQG WKH FRQVHTXHQFHV RI FKLOGUHQfV SUHRFFXSDWLRQ ZLWK DGYHUWLVLQJfV FUHDWLYH DVSHFWV DUH QRW \HW FOHDU 7KH ILUVW WZR VWXGLHV VXJJHVW WKDW ROGHU DQG \RXQJHU FKLOGUHQ GLIIHU LQ WKHLU DSSUDLVDO VWUDWHJLHV WKH PHDQLQJ DQG VWDELOLW\ RI WKHVH REVHUYDWLRQV UHPDLQ WHQWDWLYH 5HWXUQLQJ WR TXDOLWDWLYH LQTXLU\ DW WKLV VWDJH LQ WKH SURMHFW UHSUHVHQWV DQ RSSRUWXQLW\ WR H[DPLQH WKH UDQJH DQG OLPLWDWLRQV RI WKHVH SDWWHUQV DV ZHOO DV HPEHG XQGHUVWDQGLQJ ZLWKLQ WKH FRQWH[W RI FKLOGUHQf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

PAGE 175

ZKR LV ERWK OHVV VWULGHQW DQG PRUH FRPSOH[ LQ KLVKHUf UHDFWLRQV WR DGYHUWLVLQJ WKDQ WKHRU\ VHHPV WR VXJJHVW -RLQWO\ WKHVH VWXGLHV SRLQW WR DQ LQFUHDVHG VHQVLWLYLW\ WR DGYHUWLVLQJfV PHDQLQJ DQG LQWHQW DPRQJ WKH ROGHU FKLOGUHQ WKDW GUDZV QRW RQO\ RQ UHODWLYHO\ VRSKLVWLFDWHG QRWLRQV RI IDQWDV\ DQG UHDOLW\ EXW GHPDQGLQJ VWDQGDUGV IRU FUHDWLYLW\ QRYHOW\ DQG FUHGLELOLW\ LQ DGYHUWLVLQJ H[HFXWLRQ 7KH ILUVW VWXG\ UHYHDOHG KRZ FHQWUDO D UROH HQWHUWDLQPHQW SOD\V LQ FKLOGUHQfV WKLQNLQJ DERXW DGV DQG ZKDW WKH\ PHDQ (YLGHQW ZDV D IDVFLQDWLRQ ZLWK WKH FUHDWLYH GLPHQVLRQV RI DGV DQG LWV XQLTXH SURSHUWLHV DV D FRPPXQLFDWLRQV JHQUH 'UDZLQJ RQ WKH FRQFHSWV VXJJHVWHG E\ WKH SUHOLPLQDU\ VWXG\ WKH H[SHULPHQWDO LQYHVWLJDWLRQ VKRZHG KRZ FKLOGUHQfV DIIHFWLYH UHVSRQVHV WR DGYHUWLVLQJ ERWK SRVLWLYH DQG QHJDWLYH PD\ VSLOO RYHU WR WKH FRQVXPSWLRQ H[SHULHQFH DIIHFWLQJ KRZ WKDW H[SHULHQFH LV VXEVHTXHQWO\ LQWHUSUHWHG DQG HYDOXDWHG
PAGE 176

FRQWUROOHG FLUFXPVWDQFHV 0RUH RSHQHQGHG TXDOLWDWLYH LQTXLU\ RIIHUV WKH RSSRUWXQLW\ WR LOOXPLQDWH REVHUYHG UHODWLRQVKLSV SURYLGLQJ D JOLPSVH RI ZKDW XQGHUSLQV WKH VFDOHG UHVSRQVHV 3RWHQWLDOO\ FRQVHTXHQWLDO DVSHFWV RI FKLOGUHQfV QDWXUDO UHVSRQVHV WR DGV DQG SURGXFWV DUH QRW FDSWXUHG WKURXJK WUDGLWLRQDO PHDVXUHV &ORVH HQGHG PHDVXUHV OHDYH OLWWOH URRP IRU UHVSRQGHQW SHUFHSWLRQV DQG UHDFWLRQV 4XDOLWDWLYH VWXG\ SURYLGHV WKH RSHQLQJ WR ORRN EDFN WR WKH H[SHULPHQWDO YDULDEOHV DQG DVVHVV WKHLU LPSRUW RU VLJQLILFDQFH ,WV FDSDFLW\ WR LOOXPLQDWH DQG HQULFK WKH ILQGLQJV DQG FRQFOXVLRQV RI PRUH WUDGLWLRQDO UHVHDUFK HIIRUWV LV SHUKDSV LWV JUHDWHVW DGYDQWDJH RQH ZKLFK LV FHUWDLQO\ ORVW ZKHQ OLPLWHG WR H[SORUDWRU\ VWDWXV 0HWKRGRORJLFDO 3OXUDOLVP 7KH XVH RI GLYHUVH UHVHDUFK DSSURDFKHV WR LQYHVWLJDWH D VLQJOH FRQVXPHU SKHQRPHQRQ RIIHUV ERWK JUHDW FKDOOHQJH DQG RSSRUWXQLW\ $OWKRXJK VRPH FRQVXPHU UHVHDUFKHUV KDYH DUJXHG WKDW SRVLWLYLVW DQG LQWHUSUHWLYH DSSURDFKHV DUH LQFRPPHQVXUDEOH DV D FRQVHTXHQFH RI GLYHUJHQW REMHFWLYHV DQG SKLORVRSKLFDO DVVXPSWLRQV HJ $QGHUVRQ +XGVRQ DQG 2]DQQH 7KRPSVRQ 6WHP DQG $PRXOG f RWKHUV KDYH EHHQ PRUH RSWLPLVWLF +LUVFKPDQ +XQW /XW] 0F4XDUULH DQG 0LFN f 5HFHQWO\ UHVHDUFKHUV KDYH VXJJHVWHG WKDW WKURXJK WKH H[SORUDWLRQ RI GLYHUJHQFH D JUHDWHU VHQVLWLYLW\ WR WKH VRFLRFXOWXUDO DVVXPSWLRQV WKDW XQGHUSLQ YDULRXV PHWKRGV LV REWDLQHG 7KRPSVRQ HW DO f $GYRFDWHV RI FULWLFDO SOXUDOLVP RQ WKH RWKHU KDQG KDYH IRFXVHG RQ WKH FRPSOHPHQWDULW\ RI PXOWLSOH PHWKRGV DQG WKH SRWHQWLDO V\QHUJLVWLF GLPHQVLRQV RI WKHLU XVH ZLWKLQ WKH FRQWH[W RI D VLQJOH UHVHDUFK SURMHFW $FFRUGLQJ WR LWV SURSRQHQWV FULWLFDO SOXUDOLVP RIIHUV D PHDQV WR FRQYHUJH XSRQ D

PAGE 177

FRQVXPHU SKHQRPHQRQ DQG FRQVHTXHQWO\ DWWDLQ D GHHSHU DQG PRUH FRPSOHWH XQGHUVWDQGLQJ RI LWV QDWXUH 7KH SRWHQWLDO EHQHILWV RI SOXUDOLVW DSSURDFKHV ZLWKLQ FRQVXPHU UHVHDUFK DUH ZHOO LOOXVWUDWHG LQ D VPDOO EXW JURZLQJ QXPEHU RI HPSLULFDO VWXGLHV )LVFKHU DQG $UQROG 0F4XDUULH DQG 0LFN 2f*XLQQ DQG )DEHU :DOOHQGRUI DQG $PRXOG f +RZHYHU HYHQ ZLWKLQ WKLV OLPLWHG VHW WKHUH LV VXEVWDQWLDO GLYHUVLW\ LQ WKH PHDQV E\ ZKLFK SRVLWLYLVW DQG LQWHUSUHWLYH PHWKRGV DUH XWLOL]HG DQG FRPELQHG )RU H[DPSOH 2f*XLQQ DQG )DEHU f DGRSWHG D PRUH WUDGLWLRQDO DSSURDFK LQ WKHLU VWXG\ RI FRPSXOVLYH EX\LQJ 7KH\ XWLOL]HG SKHQRPHQRORJLFDO LQWHUYLHZV WR LOOXVWUDWH DQG UHLQIRUFH NH\ VXUYH\ ILQGLQJV :DOOHQGRUI DQG $PRXOG f LQ FRQWUDVW UHOLHG RQ VXUYH\ GDWD WR JHQHUDWH LGHDV DERXW 7KDQNVJLYLQJ FRQVXPSWLRQ ULWXDOV WKDW WKH\ WKHQ UHILQHG DQG WHVWHG WKURXJK WKHLU SULPDU\ GDWD VHWV GHSWK LQWHUYLHZV DQG SDUWLFLSDQW REVHUYDWLRQ 7R LQYHVWLJDWH DGYHUWLVLQJ UHVRQDQFH 0F4XDUULH DQG 0LFN f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

PAGE 178

:LWKLQ WKH GRPDLQ RI FKLOGUHQfV FRQVXPHU VRFLDOL]DWLRQ UHVHDUFK WUDGLWLRQDO VXUYH\ RU H[SHULPHQWDO PHWKRGV UHPDLQ WKH QRUP 7KH SRVLWLYLVW WUDGLWLRQ KDV SURYLGHG XVHIXO WRROV IRU WKH DVVHVVPHQW RI DGYHUWLVLQJfV HIIHFWV RQ FKLOGUHQfV SHUFHSWLRQV DWWLWXGHV DQG EHKDYLRU ,QWHUSUHWLYH DSSURDFKHV KDYH QRW EHHQ XWLOL]HG H[WHQVLYHO\ ZLWKLQ FKLOGUHQfV FRQVXPHU VWXGLHV SHUKDSV RZLQJ WR FRQFHUQV DERXW \RXQJ FKLOGUHQfV HPHUJHQW YHUEDO DQG FRJQLWLYH DELOLWLHV HJ *ROGEHUJ DQG *RP 3HUDFFKLR :HOOV f 7KRXJK FRQGXFWHG D JHQHUDWLRQ DJR VRPH RI WKH PRVW ZLGHO\ FLWHG VWXGLHV ZLWKLQ WKH FKLOGUHQfV DGYHUWLVLQJ OLWHUDWXUH DUH EDVHG RQ RSHQHQGHG LQWHUYLHZV ZLWK FKLOGUHQ HJ %HYHU HW DO %ODWW HW DO 5RVVLWHU DQG 5REHUWVRQ :DUG :DUG HW DO f $V FKLOGUHQfV DGYHUWLVLQJ UHVHDUFK PDWXUHG WKLV W\SH RI DSSURDFK ZDV FULWLFL]HG IRU LWV H[SORUDWRU\ FKDUDFWHU DQG HVVHQWLDOO\ DEDQGRQHG :KLOH WKHVH LQYHVWLJDWLRQV SURYLGHG LQLWLDO LQVLJKW LQWR WKH ZD\V FKLOGUHQ WKLQN DERXW DGYHUWLVLQJ WKH\ ZHUH QRW VWULFWO\ SKHQRPHQRORJLFDO LQ RULHQWDWLRQ 7\SLFDOO\ FKLOGUHQfV UHVSRQVHV WR TXHVWLRQV DERXW DGYHUWLVLQJf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f &KLOGUHQ DUH IUHTXHQWO\ FDOOHG XSRQ WR SURYLGH WHVWLPRQ\ LQ OHJDO SURFHHGLQJV SDUWLFLSDWH LQ FOLQLFDO LQWHUYLHZV DQG UHVSRQG

PAGE 179

WR RSHQHQGHG TXHVWLRQV SRVHG E\ HGXFDWRUV DQG UHVHDUFKHUV HJ %LHUPDQ DQG 6FKZDUW] &DSHOOL 1DNDJDZD DQG 0DGGHQ *HOPDQ DQG .UHPHU *DUEDULQR DQG 6WRWW f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fV VXEMHFWLYH H[SHULHQFHV DQG V\VWHPV RI PHDQLQJ %\ WULDQJXODWLQJ DFURVV PHWKRGV WKH GHVLJQ KDV WKH SRWHQWLDO WR FDSWXUH ERWK WKH ULFK LQVLJKWV DIIRUGHG E\ LQWHUSUHWLYH DSSURDFKHV DV ZHOO DV WKH SUHFLVLRQ DQG UHSOLFDELOLW\ RI D FDXVDO GHVLJQ )LQGLQJV IURP WKH LQLWLDO TXDOLWDWLYH VWXG\ VHUYHG DV LQSXW WR WKH GHVLJQ RI WKH H[SHULPHQW E\ UHYHDOLQJ WKH FRPSOH[ UROH DIIHFWLYH FRQVWUXFWV SOD\ LQ VKDSLQJ FKLOGUHQfV LPSUHVVLRQV DERXW DGV DQG WKHLU SURGXFW H[SHULHQFHV 7KH H[SHULPHQW SURYLGHG WKH RSSRUWXQLW\ WR LVRODWH DQG WHVW D VXEVHW RI WKHVH UHODWLRQVKLSV XQGHU FRQWUROOHG FRQGLWLRQV 7KH WKLUG VWXG\ D PRUH LQ GHSWK TXDOLWDWLYH LQYHVWLJDWLRQ PD\ KHOS WR LOOXPLQDWH WKH H[SHULPHQWDO ILQGLQJV E\ FDSWXULQJ FRQWH[WXDO IDFWRUV RU FRQWLQJHQFLHV WKDW DUH KLJKO\ UHOHYDQW WR FKLOGUHQfV HYHU\GD\ OLYHV \HW UHPDLQ XQGHWHFWHG LQ DQ H[SHULPHQWDO VHWWLQJ $W D PRUH PRODU OHYHO WKH TXDOLWDWLYH LQYHVWLJDWLRQ DGGUHVVHV D PRUH FRPSOH[ DQG ULFKHU VHW RI LVVXHV WKDQ DQ

PAGE 180

H[SHULPHQWDO GHVLJQ PLJKW DOORZ 1RW RQO\ GRHV LW VHUYH WR JURXQG XQGHUVWDQGLQJ LQ WKH FRQWH[W RI FKLOGUHQf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f %\ EOHQGLQJ WKH ILQGLQJV RI LQGLYLGXDO VWXGLHV FRQGXFWHG IURP GLIIHUHQW SHUVSHFWLYHV DQG XVLQJ GLIIHUHQW PHWKRGV ZLWKLQ D VLQJOH UHVHDUFK SURMHFW LW LV KRSHG WKDW RXU DSSUHFLDWLRQ RI FKLOGUHQf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f KRZ IRFDO DUH WKH OLQNV EHWZHHQ DGYHUWLVLQJ DQG SURGXFW FRQVXPSWLRQ IURP D FKLOGfV SHUVSHFWLYH" f ZKDW DUH WKH FDWHJRULHV RI PHDQLQJ WKDW FKLOGUHQ GUDZ XSRQ LQ WKLQNLQJ DERXW DGYHUWLVHPHQWV DQG WKHLU

PAGE 181

SURGXFW H[SHULHQFHV" DQG f KRZ DUH WKHVH UHODWLRQVKLSV HPEHGGHG LQ FKLOGUHQfV EURDGHU FRQFHSWLRQV RI ZKDW DGYHUWLVLQJ LV DQG KRZ LW ZRUNV" %\ DGRSWLQJ D PRUH PRODUOHYHO SHUVSHFWLYH WKLV VWXG\ ZDV LQWHQGHG WR HYRNH D GHHSHU DZDUHQHVV RI WKH SHUFHLYHG FDXVHV DFWLYLWLHV DQG FRQVHTXHQFHV WKDW XQGHUSLQ FKLOGUHQf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f ,Q WKH SUHOLPLQDU\ VWXG\ WKLV VWUDWHJ\ ZDV XVHG WR JUHDW DGYDQWDJH 7KH FKLOGUHQ VHHPHG WR ILQG WKH DGV DQG WULDO H[SHULHQFH KLJKO\ PRWLYDWLQJ EXW TXLFNO\ PRYHG RQ WR WKH LVVXHV DQG FRQFHUQV RI LQWHUHVW WR WKHP $V D FRQVHTXHQFH WKH VHFRQG SKDVH RI WKHVH LQWHUYLHZV ZDV GHVLJQHG WR EH YHU\ ORRVHO\ VWUXFWXUHG GUDZLQJ PRUH H[WHQVLYHO\ RQ WKH FKLOGUHQfV SHUVRQDO H[SHULHQFHV 0RUH VWULFWO\ SKHQRPHQRORJLFDO LQ QDWXUH WKH GLUHFWLRQ DQG IORZ RI WKHVH GLVFXVVLRQV ZHUH VHW ODUJHO\ E\ WKH FKLOGUHQ ZKR ZHUH HQFRXUDJHG WR GHVFULEH WKHLU H[SHULHQFHV IHHOLQJV DQG UHDFWLRQV *UHDWHU XQGHUVWDQGLQJ RI FKLOGUHQfV LQWXLWLYH LGHDV DERXW PDUNHWLQJ DFWLYLWLHV DQG LQIOXHQFH LV DQ LPSRUWDQW UHVHDUFK REMHFWLYH EHFDXVH WKHVH LGHDV PD\ JXLGH WKHLU UHDFWLRQV WR VSHFLILF VLWXDWLRQV RU FLUFXPVWDQFHV :ULJKW f

PAGE 182

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f WKH DGYHUWLVHPHQW DORQH f WKH DGYHUWLVHPHQW IROORZHG E\ WKH SURGXFW f WKH SURGXFW IROORZHG E\ WKH DG RU f WKH SURGXFW DORQH 7KHVH SURSV ZHUH XVHG DV D PHDQV WR JURXQG WKH FRQYHUVDWLRQ DW OHDVW LQLWLDOO\ DW D FRQFUHWH OHYHO UDWKHU WKDQ DW WKH PRUH DEVWUDFW OHYHO XWLOL]HG LQ HDUO\ VWXGLHV RI FKLOGUHQfV DGYHUWLVLQJ UHVSRQVH 7KH LQFOXVLRQ RI WKH DG DQG SURGXFW ZLWKLQ WKH LQWHUYLHZ FOHDUO\ OHVVHQV WKH FRJQLWLYH GHPDQGV SODFHG RQ WKH FKLOG WKXV HQKDQFLQJ WKH WUXVWZRUWKLQHVV RI WKH GDWD REWDLQHG *ROGEHUJ DQG *RP 3HUDFFKLR :HOOV f 8VH RI WKH FRQFUHWH VWLPXOL PD\ DOVR KHOS WR FODULI\ KRZ WKH FKDUDFWHU RI FKLOGUHQfV UHVSRQVHV FKDQJH GHSHQGLQJ RQ ZKHWKHU WKH\ DUH DVNHG WR FRPPHQW RQ DGYHUWLVLQJ LQ JHQHUDO RU UHDFW WR VSHFLILF FRPPHUFLDO PHVVDJHV :KLOH UHVHDUFK HIIRUWV KDYH RIWHQ SRLQWHG WR WKH JURZLQJ VNHSWLFLVP RI FKLOGUHQ WKURXJK WKH HOHPHQWDU\ \HDUV HJ 5REHUWVRQ DQG 5RVVLWHU :DUG HW DO f WKH ILQGLQJV RI WKH SUHOLPLQDU\ VWXG\ VXSSRUW PRUH UHFHQW ZRUN VXJJHVWLQJ WKDW FKLOGUHQ PD\ QRW GUDZ RQ WKHVH JHQHUDO DWWLWXGHV LQ D YLHZLQJ FRQWH[W :KLOH WKH SURSV FOHDUO\ OHQW VRPH VWUXFWXUH WR WKH LQWHUYLHZV WKH\ ZHUH XWLOL]HG SULPDULO\ DV D VSULQJERDUG WR WKH LVVXHV DQG

PAGE 183

FRQFHUQV RI LQWHUHVW WR WKH FKLOGUHQ 7KH VHFRQG SKDVH RI WKH LQWHUYLHZ ZDV TXLWH ORRVHO\ VWUXFWXUHG GUDZLQJ PRUH H[WHQVLYHO\ RQ WKH FRQVXPSWLRQ UHODWHG HYHQWV DQG SHUVRQDO H[SHULHQFHV WKDW WKH FKLOGUHQ UHFRXQWHG $SSHQGL[ FRQWDLQV D FRS\ RI WKH LQWHUYLHZ VFKHGXOH 4XDOLWDWLYH UHVHDUFK LQWHUYLHZV DUH QHLWKHU VWULFWO\ VWUXFWXUHG QRU HQWLUHO\ QRQn GLUHFWLYH EXW IRFXVHG RQ SDUWLFXODU WKHPHV RI WKH UHVSRQGHQWVf OLIHZRUOG .YDOH f 7KH VKDSH DQG WRQH RI WKHVH FRQYHUVDWLRQV ZDV FDVW ODUJHO\ E\ WKH FKLOGUHQ DV WKH\ UHODWHG VSHFLILF H[SHULHQFHV WKH\ KDG KDG ERWK SRVLWLYH DQG QHJDWLYH ZLWK KHDYLO\ SURPRWHG SURGXFWV 7KH WZRSKDVHG VWUDWHJ\ RIIHUV WKH SRWHQWLDO WR DWWDLQ D GHHSHU XQGHUVWDQGLQJ RI FKLOGUHQf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fV SHUFHSWLRQV PLJKW VKLIW DV D IXQFWLRQ RI ZKHWKHU WKH\ DUH H[SRVHG WR D EUDQG WKURXJK DQ DGYHUWLVHPHQW D FRQVXPSWLRQ H[SHULHQFH RU ERWK 7KH VWUXFWXUH SHUPLWV V\VWHPDWLF DQDO\VLV QRW RQO\ DFURVV DJH JURXSV EXW DFURVV VLWXDWLRQV FKLOGUHQ IUHTXHQWO\ HQFRXQWHU $ EDVLF RSHUDWLRQDO VWUDWHJ\ FRPPRQ WR ERWK JURXQGHG WKHRU\ UHVHDUFK DQG RWKHU IRUPV RI QDWXUDOLVWLF LQTXLU\ LV WR VHHN PD[LPDO YDULDWLRQ LQ WKH SKHQRPHQRQ XQGHU

PAGE 184

LQYHVWLJDWLRQ $ FOHDU DGYDQWDJH RI WKH VWUXFWXUHG SKDVH RI WKH LQWHUYLHZ LV WKDW LW SHUPLWV VXFK FRPSDULVRQ 7KH ODUJHO\ XQVWUXFWXUHG DSSURDFK ZLWKLQ WKH VHFRQG SKDVH RI WKH LQWHUYLHZ IXUWKHU RSHQV XS WKH GHVLJQ WR DOORZ NH\ GLPHQVLRQV RI D FKLOGf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

PAGE 185

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f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f 8VH RI WKH FRQVWDQW FRPSDUDWLYH PHWKRG KHOSV WKH UHVHDUFKHU WR JXDUG DJDLQVW ELDV E\ FKDOOHQJLQJ SURYLVLRQDO FRQFHSWV ZLWK QHZ GDWD &RUELQ DQG 6WUDXVV *ODVHU DQG 6WUDXVV 6WUDXVV DQG &RUELQ f ,QFOXVLRQ RI WKH WZR DJH JURXSV LV QHFHVVDU\ WR DVFHUWDLQ WKH H[WHQW WR ZKLFK WKH H[SODQDWLRQ DGYDQFHG LQ WKH LQLWLDO VWXG\ LV HQGXULQJ DQG WKH H[WHQW WR ZKLFK LW GHULYHV IURP WKH LGLRV\QFUDWLF FRQYHUJHQFH RI D SDUWLFXODU WLPH DQG SODFH 7KH LQWHUYLHZV UDQJHG IURP WR PLQXWHV YDU\LQJ DV D IXQFWLRQ RI WKH FKLOGfV LQWHUHVW GHSWK RI LQVLJKW DQG VFKHGXOH 0RVW RI WKHVH LQWHUYLHZV ZHUH FDUULHG RXW

PAGE 186

LQ WZR UDQJH f VHVVLRQV VFKHGXOHG DQ\ZKHUH IURP WZR WR WHQ PHDQ f GD\V DSDUW 7KLV IRUPDW SURYHG TXLWH XVHIXO SURYLGLQJ WKH UHVHDUFKHU ZLWK WKH RSSRUWXQLW\ WR UHYLHZ WKH DXGLRWDSHV DQG LGHQWLI\ DUHDV WKDW PLJKW EHQHILW IURP IXUWKHU H[SORUDWLRQ LQ DQ DGGLWLRQDO PHHWLQJ ,QWHUHVWLQJO\ WKH FKLOGUHQ DOVR IUHTXHQWO\ UHWXUQHG ZLWK WRSLFV WKH\ ZDQWHG WR LQWURGXFH FODULI\ RU HPEHOOLVK $Q XQDQWLFLSDWHG EHQHILW RI WKLV DSSURDFK ZDV WKDW LW HQDEOHG DQ LQIRUPDO DVVHVVPHQW RI WKH FRQVLVWHQF\ RI WKH FKLGfV SHUVSHFWLYH DFURVV D VKRUW WLPH IUDPH ,W ZDV QRW XQXVXDO DV WRSLFV ZHUH UHYLVLWHG IRU WKH FKLOG WR UHWXUQ WR HDUOLHU H[DPSOHV WKH\ KDG LQWURGXFHG DQG H[WHQG WKHP LQ VRPH ZD\ W\SLFDOO\ SUHFHGHG E\ D VWDWHPHQW VXFK DV 5HPHPEHU ZKHQ ZDV WHOOLQJ \RX DERXW WKH RWKHU GD\ $V LV FKDUDFWHULVWLF RI TXDOLWDWLYH LQTXLU\ NH\ LQIRUPDQWV ZHUH LGHQWLILHG DV WKH LQWHUYLHZV SURJUHVVHG /LQFROQ DQG *XED f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

PAGE 187

)LHOG QRWHV $V LQ WKH SUHOLPLQDU\ VWXG\ GHWDLOHG ILHOG QRWHV ZHUH NHSW VXPPDUL]LQJ WKH SURJUHVV DQG GLUHFWLRQ RI WKH UHVHDUFK 0RVW RI WKHVH ZHUH DQDO\WLF PHPRV ([WHQVLYH QRWHV ZHUH WDNHQ GHWDLOLQJ WKH FRXUVH RI WKH GDWD DQDO\VLV WKH FRQFHSWXDO GHYHORSPHQW DQG QHZ TXHVWLRQV DULVLQJ IURP LQGLYLGXDO LQWHUYLHZV $ FULWLFDOO\ LPSRUWDQW IXQFWLRQ RI DQDO\WLF ILHOG QRWHV LV WKH YHQXH LW HVWDEOLVKHV IRU FRQWLQXRXV WHVWLQJ RI WKH HPHUJLQJ LQWHUSUHWDWLRQ DJDLQVW WKH GDWD DQG WKH UHFRUGLQJ RI WKH UHVHDUFKHUfV DQDO\WLF SURFHVV 1RW RQO\ DUH FRQYHUJHQW SDWWHUQV RU WKHPHV LGHQWLILHG EXW DOVR ZHDNQHVVHV LQ WKH GDWD GLVFUHSDQFLHV DQG DUHDV RI FRQIXVLRQ DUH QRWHG %\ DUWLFXODWLQJ ERWK WKH VWUHQJWKV DQG ZHDNQHVVHV RI WKH GDWD WKH UHVHDUFKHU FDQ DVVHVV WKH FUHGLELOLW\ RI WKH LQWHUSUHWDWLRQ DV LW GHYHORSV FDUHIXOO\ GRFXPHQWLQJ WKH GHJUHH WR ZKLFK FRQFOXVLRQV DUH JURXQGHG LQ WKH GDWD 7R PLQLPL]H WKH SRWHQWLDO LPSDFW RI LQYHVWLJDWRU ELDV LW LV LPSHUDWLYH WKDW UHVHDUFKHUV GHWDLO WKHLU DVVXPSWLRQV PHWKRGRORJLFDO GHFLVLRQV DQG WKH SURJUHVV RI WKHLU DQDO\VLV RQ D FRQWLQXLQJ EDVLV $QDO\WLF 6WUDWHJ\ *URXQGHG WKHRU\ SURFHGXUHV DQG DLPV FRQVWLWXWH WKH SULPDU\ DQDO\WLF VWUDWHJ\ IRU WKLV VWXG\ *ODVHU DQG 6WUDXVV 6WUDXVV 6WUDXVV DQG &RUELQ f 7KH XOWLPDWH REMHFWLYH RI WKLV DSSURDFK LV WKH GHYHORSPHQW RI DQ LQGXFWLYHO\ GHULYHG VXEVWDQWLYH WKHRU\ JURXQGHG LQ WKH UHDOLW\ RI FKLOGUHQfV H[SHULHQFH 7KLV VWXG\ UHSUHVHQWV D VWHS WRZDUGV WKH DFKLHYHPHQW RI WKDW REMHFWLYH $ ZHOOFRQVWUXFWHG JURXQGHG WKHRU\ FRQVWLWXWHV D ULFK WLJKWO\ ZRYHQ H[SODQDWRU\ WKHRU\ RI D VXEVWDQWLYH SKHQRPHQRQ 7KURXJK WKLV PHWKRGRORJ\ FRQFHSWV DQG UHODWLRQVKLSV DUH QRW RQO\ JHQHUDWHG EXW DOVR SURYLVLRQDOO\ WHVWHG 0RYLQJ EH\RQG WKH

PAGE 188

JHQHUDWLRQ RI LQWHUSUHWLYH WKHPHV D JURXQGHG WKHRULVW VSHFLILHV WKH UHODWLRQVKLSV DPRQJ WKHVH FRQFHSWXDO FDWHJRULHV (DFK FRQFHSWXDO FDWHJRU\ RU WKHPH LV GHYHORSHG LQ WHUPV RI LWV SURSHUWLHV DQG GLPHQVLRQV FRQGLWLRQV ZKLFK JLYH ULVH WR LW WKH LQWHUDFWLRQ E\ ZKLFK LW LV H[SUHVVHG DQG WKH FRQVHTXHQFHV LW SURGXFHV &RUELQ DQG 6WUDXVV f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fV RYHUDOO RULHQWDWLRQ WR DGSURGXFW UHODWLRQV )DLOXUH WR DFFRXQW IRU WKHVH GLIIHUHQFHV UHIOHFWV WKH QHHG WR UHWXUQ WR WKH D[LDO FRGLQJ VWDJH RI WKH DQDO\WLF SURFHVV ,W LV DW WKLV VWDJH WKDW FRQFHSWXDO FDWHJRULHV DUH UHILQHG DQG UHODWHG WR RQH DQRWKHU

PAGE 189

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f 5HVHDUFK FRQFOXVLRQV DUH EDVHG RQ WKH YHUEDWLP WUDQVFULSWV RI WKH GHSWK LQWHUYLHZV $SSUR[LPDWHO\ HLJKW KXQGUHG SDJHV RI WUDQVFULSW ZHUH JHQHUDWHG E\ WKLUW\ HLJKW LQWHUYLHZV 7KHVH WUDQVFULSWV DUH WKH GDWD IURP ZKLFK FRQFHSWXDO FDWHJRULHV DQG UHODWLRQVKLSV DUH GLVFRYHUHG FODULILHG DQG XOWLPDWHO\ LQWHJUDWHG $QDO\VLV LQ JURXQGHG WKHRU\ FRQVLVWV RI WKUHH PDMRU W\SHV RI FRGLQJ f RSHQ FRGLQJ f D[LDO FRGLQJ DQG f VHOHFWLYH FRGLQJ &RUELQ DQG 6WUDXVV 6WUDXVV DQG &RUELQ f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

PAGE 190

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fV UHDFWLRQV WR DGV DQG LQGLUHFWO\ SURGXFWV 7KURXJK RSHQ

PAGE 191

FRGLQJ SURFHGXUHV PXOWLSOH LQVWDQFHV RI FKLOGUHQf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f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fV FRQVXPSWLRQ H[SHULHQFH WKDW GHSDUWV LQ VRPH PHDVXUH IURP WUDGLWLRQDO WKLQNLQJ %\ ORRNLQJ EH\RQG SXUHO\ LQIRUPDWLRQ SURFHVVLQJ DQG SROLF\ GULYHQ FRQFHUQV LW LV SRVVLEOH WR EHJLQ WR FDSWXUH WKH ULFK WH[WXUH DQG HVVHQFH RI DGYHUWLVLQJfV PHDQLQJ LQ FKLOGUHQ OLYHV

PAGE 192

3HUKDSV WKH JUHDWHVW FKDOOHQJH LQ WKH FRQGXFW RI TXDOLWDWLYH UHVHDUFK LV WKH GHULYDWLRQ RI D VHW RI DQDO\WLF FDWHJRULHV WKDW FDSWXUH ERWK WKH HVVHQFH DQG ULFKQHVV RI D VXEVWDQWLYH SKHQRPHQRQ )URP YROXPHV RI GHVFULSWLYH GHWDLO D VHW RI DEVWUDFW LQWHUSUHWLYH WKHPHV DUH GHYHORSHG DQG LQWHJUDWHG WKDW PXVW UHPDLQ WUXH WR WKH UHDOLW\ DQG FRPSOH[LW\ RI UHVSRQGHQWVf WKRXJKWV IHHOLQJV DQG H[SHULHQFH $W D PLQLPXP WKLV LV D GDXQWLQJ WDVN 5HVHDUFK )LQGLQJV $ 3ULRUL 7KHPHV $W WKH LQFHSWLRQ RI WKLV VWXG\ WZR D SULRUL FRQMHFWXUHV KDG HPHUJHG )LUVW DJH UHODWHG SDWWHUQV REVHUYHG LQ WKH ILUVW WZR VWXGLHV ZHUH LQFRQVLVWHQW ZLWK SUHYDLOLQJ YLHZV DERXW KRZ FKLOGUHQf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fV SHUFHSWLRQV RI DQ DGYHUWLVHPHQW DUH GULYHQ DW OHDVW DV PXFK E\ LWV FDSDFLW\ WR HQWHUWDLQ DQG DPXVH DV E\ LWV XWLOLW\ DV D VRXUFH RI SURGXFW LQIRUPDWLRQ 7KLV IDVFLQDWLRQ ZLWK WKH FUHDWLYH GLPHQVLRQV RI DGYHUWLVHPHQWV KDV ERWK SUR[LPDO DQG GLVWDO FRQVHTXHQFHV $W RQH

PAGE 193

OHYHO FKLOGUHQfV DIIHFWLYH UHVSRQVHV WR DQ DG PD\ LQIOXHQFH WKHLU SHUFHSWLRQV RI D VXEVHTXHQW FRQVXPSWLRQ H[SHULHQFH PDNLQJ LW PRUH HQMR\DEOH H[FLWLQJ RU LQWULJXLQJ WKDQ LW PLJKW RWKHUZLVH EH 7KH OLQN EHWZHHQ WKH EUDQG FRQYH\HG WKURXJK WKH IDQFLIXO ZRUOG RI DGYHUWLVLQJ DQG LWV UHDOLW\ LQ WKH HYHU\GD\ ZRUOG PD\ EH IRUJHG QRW VR PXFK RQ WKH EDVLV RI VSHFLILF H[SHFWDWLRQV DERXW SHUIRUPDQFH EXW RQ D PXFK PRUH GLIIXVH EDVLV GUDZLQJ H[WHQVLYHO\ RQ WKH DGfV DIIHFWLYH DSSHDO DV ZHOO DV WKH EUDQGfV RYHUDOO SHUFHLYHG YDOXH $W DQRWKHU OHYHO FKLOGUHQfV IRFXV RQ DGYHUWLVLQJfV FUHDWLYH SURSHUWLHV KDV OLWWOH WR GR ZLWK WKH SURGXFW EHLQJ SURPRWHG &KLOGUHQ VHHP WR FRQVXPH DGV PXFK WKH ZD\ WKH\ PLJKW FRQVXPH D SURJUDP $GV DUH MXGJHG RQ WKHLU FDSDFLW\ WR KROG DWWHQWLRQ WKH QRYHOW\ RI WKH H[HFXWLRQ WKH FUHDWLYLW\ RI WKH LGHD DQG WKH VRFLDO FRQVHTXHQFHV LI DQ\f RI WKH PHVVDJH &RQWULYHG DSSHDOV DUH MXGJHG KDUVKO\ DV DUH DFWRUVf SHUIRUPDQFHV ,Q SDUW WKLV DSSURDFK WR DGYHUWLVLQJ UHFHSWLRQ PD\ UHSUHVHQW DQ HQG LQ DQG RI LWVHOI $GV DUH VLPSO\ D ULFK VRXUFH RI HQWHUWDLQPHQW DJJUDYDWLRQ RU DPXVHPHQW $W WKH VDPH WLPH WKH FKLOGUHQ IRFXVHG H[WHQVLYHO\ RQ KRZ VSHFLILF DGV ZHUH FUHDWHG DQG ZK\ WKH\ ZHUH FRQVWUXFWHG LQ SDUWLFXODU ZD\V 7KH\ VHHPHG WR EH WU\LQJ WR ILJXUH RXW DGYHUWLVLQJfV XQLTXH SURSHUWLHV DQG VWUDWHJLHV LQ VRPH VHQVH JUDSSOLQJ ZLWK WKH QDWXUH RI WKH FRPPXQLFDWLRQ LWVHOI )RFXV RQ DQ DGfV FUHDWLYH HOHPHQWV PD\ LQ SDUW UHIOHFW FKLOGUHQfV GHHSHQLQJ XQGHUVWDQGLQJ RI DGYHUWLVLQJfV SHUVXDVLYH LQWHQW DQG FKDUDFWHU 5HSUHVHQWLQJ GLYHUVH UHVHDUFK WUDGLWLRQV WKH ILQGLQJV RI ERWK WKH SUHOLPLQDU\ VWXG\ DQG WKH H[SHULPHQW VXJJHVW WKDW WKH LQIRUPDWLRQFHQWHUHG SHUVSHFWLYH WKDW KDV JXLGHG UHVHDUFK PD\ QHJOHFW LPSRUWDQW DVSHFWV RI FKLOGUHQfV DGYHUWLVLQJ UHFHSWLRQ 3HUKDSV LW LV DSSURSULDWH WR YLHZ DGYHUWLVLQJfV UROH LQ EURDGHU WHUPV WKDQ DV D SXUYH\RU

PAGE 194

RI EUDQG LQIRUPDWLRQ :LWK DGGLWLRQDO LQVLJKW LQWR FKLOGUHQf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f WKH SHUFHLYHG LQWHUGHSHQGHQFH RI DGV DQG EUDQGV f FKLOGUHQfV MXGJPHQWV RI IDQWDV\ DQG UHDOLW\ f FRQVLGHUDWLRQV RI DGYHUWLVLQJfV XQLTXH FKDUDFWHU DQG IRUP DQG f WKH UROH RI VNHSWLFLVP LQ D YLHZLQJ FRQWH[W 8VH RI WKH DG DQG EUDQG SURSV IDFLOLWDWHG WKH LQWHUYLHZ SURFHVV DQG KHOSHG WR LOOXPLQDWH WKH QDWXUH DQG FRQVHTXHQFHV RI WKHVH GLIIHULQJ DSSURDFKHV WR LQWHUSUHWLQJ DGFRQVXPSWLRQ UHODWLRQV 6XEWOH GLIIHUHQFHV LQ FKLOGUHQfV LQWHUSUHWLYH VWUDWHJLHV ZHUH HYLGHQW DFURVV H[SRVXUH FRQWH[WV +RZHYHU WKHVH GLIIHUHQFHV WHQGHG WR EH RYHUVKDGRZHG E\ DJHUHODWHG GLVWLQFWLRQV $V D FRQVHTXHQFH GLVFXVVLRQ RI

PAGE 195

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f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fV FUHDWLYH HOHPHQWV DQG WKH SURFHVV E\ ZKLFK

PAGE 196

WKHVH PHVVDJHV DUH FRQVWUXFWHG 7KH HQWHUWDLQPHQW YDOXH RI DQ DG LWV XQGHUO\LQJ FUHDWLYH VWUDWHJ\ DQG SUHVXPSWLRQV DERXW DQ DGYHUWLVHUf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f SURGXFW RULHQWDWLRQ KHOSV WR LOOXPLQDWH WKH VLJQLILFDQFH RI WKH FUHDWLYH IRFXV DGRSWHG E\ WKH ROGHU FKLOGUHQ

PAGE 197

:LWKRXW TXHVWLRQ WKH VKLIW LQ HPSKDVLV WKDW RFFXUV LV WLHG WR FKLOGUHQfV HYROYLQJ LQWHUSUHWLYH VWUDWHJLHV $V QRWHG LQ DQ HDUOLHU FKDSWHU ROGHU FKLOGUHQ DUH EHWWHU DEOH WR GLVWDQFH WKHPVHOYHV IURP D PHVVDJH DQG WKLQN DERXW LW HYDOXDWH DQG MXGJH LW LQ D PRUH UHIOHFWLYH IDVKLRQ :DUG HW DO
PAGE 198

&RPPHUFLDOV UHSUHVHQW D YDOXHG VRXUFH RI SURGXFW LQIRUPDWLRQ SDUWLFXODUO\ ZLWK UHVSHFW WR QHZ WR\V IHDWXUHV RU OLQH H[WHQVLRQV UHDOO\ UHDOO\ ZDWFK VRPH FRPPHUFLDOV DERXW %DUELH OLNH WR ZDWFK WKHP EHFDXVH OLNH WR VHH KRZ SUHWW\ WKH %DUELHV DUH DQG LI WKHUH LV JRLQJ WR EH OLNH D QHZ NLQG RI %DUELH 7KHUH LV RQH %DUELH WKDW JRW RQ D FRPPHUFLDO ZKHUH VKH FRXOG GDQFH ZLWK D .HQ GROO 7KHQ LW FRPHV ZLWK VRPH OLWWOH OLSVWLFN W\SH WKLQJ RQ D WRZHO
PAGE 199

\RXQJHU FKLOGUHQ UDUHO\ FRQVLGHUHG SURGXFWV WKH\ ZHUH XQOLNHO\ WR FRQVXPH :KHQ DVNHG WR GHVFULEH FRPPHUFLDO FRQWHQWV FKLOGUHQfV FRPPHQWV IRFXVHG RQ WKH EUDQG DQG LWV IHDWXUHV ZKDW LW ORRNV OLNH DQG ZKDW LW GRHV KDYH D FROOHFWLRQ RI 0\ /LWWOH 3RQLHV DQG OLNH WKRVH FRPPHUFLDOV 7KH\ VKRZ GLIIHUHQW SRQLHV 7KH\ VKRZ JLUOV SOD\LQJ ZLWK SRQLHV DQG WKH\ PDNH WKH SRQLHV OLNH MXPS DQG VWXII -XVW IRU RQH FHUWDLQ SRQ\ IRU RQH NLQG OLNH LI \RX WZLVW LW XS RU VRPHWKLQJ LW ZLOO GDQFH KDYH RQH RI WKRVH KDYH OLNH WZHQW\ILYH 0\ /LWWOH 3RQLHV JHW RQH IRU HYHU\ ELUWKGD\ DQG VWXII ^ )`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f DV ZHOO DV VWRUH YLVLWV ZKHUH WKH\fYH VHHQ WKHVH LWHPV DQG VWUDWHJLHV WKH\ KDYH XVHG WR LQIOXHQFH WKHLU SDUHQWVf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

PAGE 200

WXUQV FRORUV DQG KDV D IXQQ\ YRLFH LV SHUFHLYHG WR EH IXQQ\ EXW WKH FKLOGfV SULPDU\ LQWHUHVW LV VWLOO WKH SURGXFW DQG SUHPLXP RIIHU 7KH\ KDYH UHDO IXQ VWXII OLNH IO\LQJ H\HEDOOV ZLWK OHJV 7KH\ GR UHDOO\ IXQQ\ WKLQJV 7KH\ KDYH OLWWOH ELUGV RQ VSULQJV DQG WKH\ WHOO \RX VWXII WKDW \RX FDQ GR DW WKH VWRUH OLNH FRXQW VWLFNHUV
PAGE 201

, GLGQfW OLNH LW ZKHQ KH MXVW OLNH ZDONHG WR D PDFKLQH EHFDXVH GRQfW NQRZ DQ\ PDFKLQHV WKDW JLYH IUXLW VQDFNV GRQfW OLNH WKDW
PAGE 202

WR FKLOGUHQf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f 7KH \RXQJHU FKLOGUHQ VHHPHG WR EHOLHYH WKDW WKHUH ZDV DW OHDVW D UHDVRQDEOH SRVVLELOLW\ WKDW WKH\ ZRXOG DFWXDOO\ REWDLQ WKHVH SURGXFWV *LYHQ WKLV SUHVXPSWLRQ LW LV QRW VXUSULVLQJ WKDW WKH\ FRQFHQWUDWH RQ WKH SURGXFW DQG WKH EHQHILWV LW RIIHUV LQ WKLQNLQJ DERXW DGYHUWLVHPHQWV )XQGDPHQWDOO\ LW LV WKH UHOHYDQFH RI WKH DGYHUWLVHG SURGXFW WR WKH FKLOGUHQf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

PAGE 203

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f ZDWFK WKHP IRU VWXII WKDW WKH\ GR WKDW PDNH SHRSOH JHW DWWHQWLRQ ,I WKH\ IODVKHG GLIIHUHQW WKLQJV RU LI WKH\ MXVW VWD\HG RQ WKH VDPH WKHPH WKH ZKROH ZD\ WKURXJK WKH FRPPHUFLDO /LNH ZHOO LQ WKH 3HSVL FRPPHUFLDO LW VD\V LWfV JRW WZR ZRUGV *RWWD +DYH ,W 7KDWfV WKUHH ZRUGV DQG LW PDNHV SHRSOH WKLQN DERXW LW *RWWD +DYH ,W 6R VWXII OLNH WKDW PDNHV \RX WKLQN DERXW LW RU UHPHPEHU LW /LNH VRPHWKLQJ VWXSLG WKDW ZLOO PDNH \RX WKLQN DERXW KRZ GXPE WKDW FRPPHUFLDO ZDV DQG WKDW PDNHV \RX WKLQN DERXW LW ^ )f $PRQJ WKLV JURXS WKHUH ZDV VXEVWDQWLDO LQWHUHVW QRW RQO\ LQ WKH HQG SURGXFW RI WKH FUHDWLYH SURFHVV EXW LQ WKH ZD\ WKH DGYHUWLVHPHQW ZDV FRQVWUXFWHG DQG ZK\ SDUWLFXODU FUHDWLYH WHFKQLTXHV ZHUH XWLOL]HG )RU H[DPSOH D PXVLFDO H[HFXWLRQ PLJKW DW RQH OHYHO EH HQMR\HG IRU LWV RZQ VDNH DQG DW DQRWKHU UHFRJQL]HG DV DQ HIIHFWLYH DSSURDFK IRU JDLQLQJ FRQVXPHUVf DWWHQWLRQ $GYHUWLVHPHQWV GR VHUYH DV D ULFK VRXUFH RI HQWHUWDLQPHQW 5HDGLO\ EURXJKW WR PLQG DUH DGYHUWLVHPHQWV WKDW DUH SHUFHLYHG WR EH IXQQ\ ULGLFXORXV VWXSLG RU H[FLWLQJ LUUHVSHFWLYH RI WKH VSHFLILF SURGXFW WKH\ SURPRWH WKRXJKW LW ZDV QHDW EHFDXVH LI JRW D YLGHR FDPHUD DQG WULHG WR PDNH D FRPPHUFLDO SUREDEO\ FRXOGQfW PDNH LW WKDW JRRG 7KH +RQH\ &RPE FRPPHUFLDO KDV QHYHU OHIW P\ KHDG EHFDXVH LWV JRW DOO WKRVH GHWDLOV LQ LW ,WV JRW EULJKW FRORUV DQG PXVLF DQG NLGV ZLWK LQWHUHVWLQJ WKLQJV LQ LW 7KDWfV ZKDW PDNHV LW VWD\ LQ P\ KHDG GRQfW OLNH WKDW NLQG RI FHUHDO RU WKH QHZ NLQGV GRQfW OLNH VZHHW FHUHDO MXVW OLNH WKH FRPPHUFLDOV WKRXJK ^ )`

PAGE 204

:KHUHDV WKH \RXQJHU FKLOGUHQ IRFXVHG RQ SURGXFWV WKH\ FRQVXPH LQ WKLQNLQJ DERXW DGV SHUVRQDO FRQVXPSWLRQ KDG OLWWOH WR GR ZLWK WKH RSLQLRQV DQG LGHDV WKH ROGHU FKLOGUHQ RIIHUHG 7KH\ ZHUH DV OLNHO\ WR GUDZ XSRQ DGYHUWLVHPHQWV IRU 6WDLQPDVWHU &DUSHW +XJJLHV RU &KLFNHQ 7RQLJKW DV 3HSVL RU &KHHULRV &KLOGUHQfV MXGJPHQWV RI ZKDW FRQVWLWXWHV DQ HQWHUWDLQLQJ DG DUH UHODWLYHO\ FRPSOH[ DQG VRSKLVWLFDWHG &RQQRLVVHXUV RI WHFKQLFDOO\ DGYDQFHG YLGHR LPDJHV IURP WHOHYLVLRQ PRYLHV FRPSXWHUV DQG JDPHV WKHVH FKLOGUHQ KDYH KLJK H[SHFWDWLRQV IRU FRPPHUFLDO FRQWHQW 7KH\ SDUWLFXODUO\ DSSUHFLDWH QRYHOW\ LQ DGYHUWLVHPHQWV ZKHWKHU UHSUHVHQWHG E\ D QHZ LGHD RU WKH UHVXOW RI VSHFLDO HIIHFWV 7KHLU NQRZOHGJH RI DGYHUWLVHPHQWV LV YDVW KDYLQJ EHHQ H[SRVHG WR WKRXVDQGV RI FRPPHUFLDOV E\ WKH WLPH WKH\ UHDFK ILIWK JUDGH $V D FRQVHTXHQFH WKH\ FDQ EH KDUVK FULWLFV RI DGYHUWLVLQJ H[HFXWLRQV WKDW UHSUHVHQW QRWKLQJ QHZ RU H[FLWLQJ $GV ZKLFK DUH SHUFHLYHG WR EH XQXVXDO DUH YDOXHG IRU WKHLU FUHDWLYLW\ DQG HIIRUW 7KLV ZDV D UHDOO\ VWUDQJH DG EHFDXVH PHDQ SHRSOH ZHUH IODW DQG WKH\ ZHUH ZDONLQJ DURXQG $W ILUVW LW ZLOO UHDOO\ FDWFK P\ DWWHQWLRQ EXW WKHQ DIWHU D ZKLOH LW ZRQfW ,WfV D JRRG VWDUWLQJ EXW LWfV MXVW QRW UHDOO\ IXOO RI VXUSULVHV -XVW WKH EHJLQQLQJ ZDV VXUSULVLQJ 7KH UHVW RI LW \RX SUREDEO\ NQHZ ZKDW ZDV JRLQJ WR KDSSHQ $IWHU KH SXIIV XS WKH JX\ LW JHWV NLQG RI GXOO IRU PH %HFDXVH \RX NQRZ WKH RWKHU SHRSOH ZLOO MXVW SRS XS WRR %XW WKH EHJLQQLQJ ZDV FDWFK\ ^ 0` 7KH VKLIW IURP D SURGXFW IRFXV WR D PRUH HQWHUWDLQPHQWRULHQWHG SHUVSHFWLYH RI DGYHUWLVLQJ VHHPV WR GHULYH ERWK IURP ROGHU FKLOGUHQfV JUHDWHU FRJQLWLYH VRSKLVWLFDWLRQ DV ZHOO DV WKHLU LQFUHDVHG H[SHULHQFH ZLWK DGV SURGXFWV DQG SDUHQW QHJRWLDWLRQ 8QWLO FKLOGUHQ DUH DSSUR[LPDWHO\ WHQ WR HOHYHQ \HDUVROG WKH\ WHQG WR EH UDWKHU OLWHUDO LQ WKHLU LQWHUSUHWLYH VWUDWHJLHV
PAGE 205

DZDUH RI DGYHUWLVLQJfV VHOOLQJ LQWHQW UHFRJQLWLRQ VHHPV WR KDYH OLWWOH GLUHFW EHDULQJ RQ KRZ WKH\ LQWHUSUHW RU HYDOXDWH DG FRQWHQWV 7KH OLWHUDO FKDUDFWHU RI \RXQJHU FKLOGUHQf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
PAGE 206

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fP ROG HQRXJK DQG D ORW RI RWKHU SHRSOH DUH ROG HQRXJK WR XQGHUVWDQG OLIH \RX NQRZ 7KDWfV MXVW WKH ZD\ RI H[SUHVVLQJ VRPHWKLQJ /LIH LVQfW IODW ZLWKRXW WKHP \RX NQRZ
PAGE 207

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fV YLHZ RI DGSURGXFW UHODWLRQV $PRQJ WKH ROGHU FKLOGUHQ WKHUH ZHUH PXFK PRUH ZHOOHVWDEOLVKHG SDWWHUQV IRU QHJRWLDWLQJ WKH SXUFKDVH RI SDUWLFXODU EUDQGV ZLWKLQ WKH IDPLO\ $OWKRXJK WKH \RXQJHU FKLOGUHQ VHHPHG WR IHHO WKDW WKH\ ZHUH ODUJHO\ DW WKH PHUF\ RI WKHLU SDUHQWVf GHFLVLRQV WKH ROGHU FKLOGUHQ IHOW WKDW WKH\ KDG JUHDWHU IUHHGRP WR FKRRVH WKH NLQGV RI VQDFNV FHUHDOV DQG OXQFKWLPH LWHPV WKH\ ZDQWHG :LWK

PAGE 208

JUHDWHU IUHHGRP RI FKRLFH WKHVH NLQGV RI SURGXFWV DUH UHDGLO\ DYDLODEOH IUHTXHQWO\ FRQVXPHG DQG WDNHQ IRU JUDQWHG *LYHQ WKHLU VWDWXV LQ FKLOGUHQf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f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fV VSHFLILF DWWULEXWHV RU EHQHILWV 7KHLU UHDFWLRQV WR WKH XVDJH H[SHULHQFH FRQYHUVHO\ ZHUH FRQVXPHG E\ VHQVRU\ FKDUDFWHULVWLFV VXFK DV WDVWH WH[WXUH DQG DSSHDUDQFH *LYHQ WKH GLIIXVH OLQNV EHWZHHQ DQ DG DQG SHUFHSWLRQV RI SHUIRUPDQFH DSSDUHQW LQ WKH LQLWLDO VWXG\ DQG WKH SRWHQWLDO LPSOLFDWLRQV RI WKHVH ILQGLQJV IRU XQGHUVWDQGLQJ KRZ DGYHUWLVLQJ SHUVXDGHV WKHVH ILQGLQJV ZHUH VXEMHFWHG WR PRUH VWULQJHQW

PAGE 209

H[DPLQDWLRQ LQ WKLV VWXG\ ,QFOXVLRQ RI WKH DGSURGXFW VWLPXOL LQ WKH ILUVW SKDVH RI WKH LQWHUYLHZ DOORZV IRU D GLUHFW DVVHVVPHQW RI FKLOGUHQf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fW OLNH EHFDXVH WKHLU SDUHQWV ZHUH XQZLOOLQJ WR EX\ WKH KHDYLO\ VZHHWHQHG VQDFN RU FHUHDO GHSLFWHG 7KH SDUHQWfV UROH DV JDWHNHHSHU ZDV D VDOLHQW FRQVLGHUDWLRQ ZHLJKLQJ KHDYLO\ LQ WKHLU VSHFLILFDWLRQ RI OLNHV DQG GLVOLNHV :LWKRXW FRQILGHQFH LQ WKHLU DELOLW\ WR REWDLQ WKH SURGXFW WKHUH LV OLWWOH UHDVRQ WR IHHO SRVLWLYHO\ DERXW WKH EUDQG RU WKH DG GHVLJQHG WR SURPRWH LW GRQfW OLNH WKDW RQH EHFDXVH LW PDGH PH WRR KXQJU\ &RRNLHV DUH P\ IDYRULWH $QG ZHfUH QRW DOORZHG WR KDYH VQDFNV ^ )` 6LQFH DGYHUWLVHPHQWV DUH MXGJHG ODUJHO\ LQ WHUPV RI WKH EUDQGfV LQKHUHQW DSSHDO LW LV QRW VXUSULVLQJ WKDW WKH \RXQJHU FKLOGUHQfV MXGJPHQWV ZHUH HYDOXDWLYHO\ FRQVLVWHQW ZKHWKHU WKH EUDQG RU WKH DG ZDV WKH LPPHGLDWH WRSLF RI FRQYHUVDWLRQ
PAGE 210

DVVXPH WKDW WKH SURGXFW LV DV GHSLFWHG LQ WKH DGYHUWLVHPHQW $V D FRQVHTXHQFH WKH FRPPHUFLDO LV WUXVWHG WR SURYLGH WKH LQIRUPDWLRQ QHHGHG WR HYDOXDWH WKH EUDQG ,I WKH EUDQG ORRNV OLNH VRPHWKLQJ WKH\ ZRXOG OLNH WR KDYH WKHQ WKH DG LV MXGJHG SRVLWLYHO\ ,Q WKH ILUVW LQWHUYLHZ SKDVH WKHUH ZDV OLWWOH HYLGHQFH WKDW WKH \RXQJHU FKLOGUHQ VKLIWHG WKHLU DG EDVHG LPSUHVVLRQV DV D FRQVHTXHQFH RI WULDO H[SRVXUH ,I WKH\ H[SHFWHG WR GLVfOLNH WKH EUDQG SURGXFW WULDO VLPSO\ FRQILUPHG WKHLU H[SHFWDWLRQV 7KHUH ZDV DOVR OLWWOH LQGLFDWLRQ RI DWWLWXGH FKDQJH ZKHQ SURGXFW WULDO SUHFHGHG DG H[SRVXUH 7KLV DOPRVW H[FOXVLYH IRFXV RQ WKH EUDQG LUUHVSHFWLYH RI WKH H[SRVXUH FRQWH[W PD\ KHOS WR H[SODLQ WKH H[SHULPHQWDO ILQGLQJV ,I WKH \RXQJ FKLOG MXGJHV WKH DGYHUWLVHPHQW VLPSO\ RQ WKH EDVLV RI ZKHWKHU WKH\ OLNH URRW EHHU IUXLW VQDFNV RU QRW WKHQ LW LV QRW VXUSULVLQJ WKDW WKHLU DG EDVHG DQG WULDOEDVHG MXGJPHQWV DUH TXLWH VLPLODU ,W VHHPV DV WKRXJK DOO EXW WKH EUDQGf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fV VSHFLILF IHDWXUHV WKHLU LPSUHVVLRQV DOVR LQFRUSRUDWHG DVVHVVPHQWV RI WKH DGfV LQWHUHVW YDOXH DQG WKH DFFXUDF\ RI LWV SRUWUD\DO /LQNV WR WKH EUDQG ZHUH FRQVLGHUHG QRW RQO\ DV D FRQVXPHU PLJKW EXW DV D GLVSDVVLRQDWH REVHUYHU RI WKH FRPPXQLFDWLRQ PLJKW DV ZHOO ,W LV QRW VLPSO\ ZKDW WKH DG VD\V DERXW WKH EUDQG EXW KRZ LW LV VDLG WKDW GHILQHV

PAGE 211

WKH OLQN EHWZHHQ WKH PHVVDJH DQG WKH SURGXFW ,W LV QRW WKDW WKHVH FKLOGUHQ IDLO WR DSSUHFLDWH WKH OLQNDJHV EHWZHHQ D SURGXFW DQG WKH DGYHUWLVHPHQW GHVLJQHG WR SURPRWH LW DV LPSOLHG LQ WKH LQLWLDO VWXG\ 5DWKHU WKLV VWXG\ KHOSV WR KLJKOLJKW WKH PXOWLn GLPHQVLRQDOLW\ RI WKLV UHODWLRQ 7KH LQWULQVLF DSSHDO RI WKH SURGXFW SOD\V D VHFRQGDU\ UROH UHODWLYH WR WKH FUHDWLYH DQG VWUDWHJLF SURSHUWLHV RI WKH DGYHUWLVHPHQW -XGJPHQWV DERXW WKH OLQN EHWZHHQ WKH DG DQG WKH EUDQG IRFXV PRUH H[WHQVLYHO\ RQ KRZ ZHOO WKH DG FRPPXQLFDWHV WKH EUDQGfV DSSHDO DQG ZKHWKHU WKH DSSURDFK WDNHQ LV DSSURSULDWH RU QRW 7KLV RULHQWDWLRQ PD\ FUHDWH D JUHDWHU RSHQQHVV WR WKH FRPPHUFLDO PHVVDJH WKDQ W\SLFDOO\ UHFRJQL]HG 7KLV VHQVLWLYLW\ ZDV SDUWLFXODUO\ DSSDUHQW LQ FKLOGUHQfV UHVSRQVHV WR WKH DGYHUWLVHPHQW DQG EUDQG VWLPXOL XVHG ZLWKLQ WKH ILUVW SKDVH RI WKH LQWHUYLHZV ,I \RX OHDYH VRGD RXW WRR ORQJ WKH IL]] LQ LW JHWV IODW DQG WKHQ LW GRHVQfW WDVWH YHU\ JRRG WKLQN WKH\ VDLG LW ,I \RX HDW LW \RXfUH QRW IODW RU VRPHWKLQJ 7KH\fUH SUREDEO\ WDONLQJ DERXW VRGDOLFLRXV WDVWHV OLNH UHDO FRNH OLNH UHDO VRGDV DQG VWXII $QG LW GRHVQfW WDVWH OLNH WKH QRUPDO IUXLW VQDFNV WKDW DUH VXSSRVHGO\ IODW LQ WKH FRPPHUFLDO ^ )`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

PAGE 212

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fV FRPPHQWV DQG FULWLTXHV LV D SDUWLFXODU DWWHQWLYHQHVV WR WKH IDQWDV\ LQ FRPPHUFLDO PHVVDJHV ,Q D IDLUO\ V\VWHPDWLF IDVKLRQ WKH FKLOGUHQ VHSDUDWHG ZKDW WKH\ SHUFHLYHG WR EH UHDO DQG QRW LQ DGYHUWLVHG SRUWUD\DOV 'LVWLQFWLRQV EHWZHHQ IDQWDV\ DQG UHDOLW\ ZHUH D FHQWUDO IRFXV RI DWWHQWLRQ

PAGE 213

DFURVV LQWHUYLHZV DJH JURXSV DQG DGYHUWLVHPHQWV 7KHVH ZHUH QRW GLUHFWHG FRPSDULVRQV EXW VSRQWDQHRXV DWWHPSWV WR WHDVH DSDUW IDQWDV\ DQG UHDOLW\ LQ WKH FRQWH[W RI VSHFLILF PHVVDJHV 7KHVH GLVWLQFWLRQV DUH QRW ZLWKRXW FRQVHTXHQFH 7KH\ VHHP WR XQGHUSLQ FKLOGUHQfV RYHUDOO UHDFWLRQV WR DG FRQWHQWV DQG VHUYH DV D WRRO WR IDFLOLWDWH PHVVDJH FRPSUHKHQVLRQ 7KH FHQWUDOLW\ RI WKH IDQWDV\ YHUVXV UHDOLW\ GLPHQVLRQ LQ FKLOGUHQfV UHDFWLRQV WR DGYHUWLVHPHQWV ZDV DOVR TXLWH DSSDUHQW LQ WKH LQLWLDO TXDOLWDWLYH VWXG\ 7KLV VWXG\ H[WHQGV WKHVH ILQGLQJV E\ H[DPLQLQJ WKH UHOHYDQFH RI WKLV GLPHQVLRQ LQ WKH FRQWH[W RI \RXQJHU FKLOGUHQfV WKRXJKWV DQG UHDFWLRQV WR DGYHUWLVHPHQWV ,W DOVR SURYLGHV WKH RSSRUWXQLW\ WR H[DPLQH WKH UROH MXGJPHQWV RI IDQWDV\ DQG UHDOLW\ SOD\ LQ FKLOGUHQf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fV OLIH ZRUOG WKH FRQFHSW RI SUHWHQGf YHUVXV UHDO LV UHDGLO\ XQGHUVWRRG DQG XWLOL]HG WR RUGHU SOD\ DV ZHOO DV LQWHUSUHWDWLRQV RI RWKHUVf EHKDYLRU DQG HYHQWV :KDW LV LQWHUHVWLQJ LQ WKH FRQWH[W RI DGYHUWLVLQJ UHFHSWLRQ LV KRZ FKLOGUHQ GUDZ RQ WKLV XQGHUVWDQGLQJ WR HYDOXDWH SDUWLFXODU PHVVDJH FODLPV $OWKRXJK GLVWLQFWLRQV EHWZHHQ IDQWDV\ DQG UHDOLW\ VHHPHG WR FRQVXPH WKH DWWHQWLRQ RI ERWK DJH JURXSV WKH EDVHV IRU WKHVH GLVWLQFWLRQV ZHUH QRW LGHQWLFDO DFURVV \RXQJHU DQG

PAGE 214

ROGHU FKLOGUHQ :KLOH WKH \RXQJHU FKLOGUHQ UHDGLO\ UHFRJQL]H IDQWDV\ LQ DGYHUWLVHPHQWV WKH EDVLV IRU WKHLU MXGJPHQWV UHVWV SULPDULO\ RQ LVVXHV RI SK\VLFDO SRVVLELOLW\ RU LPSRVVLELOLW\ RXWZDUG DSSHDUDQFH DQG IRUPDW 7KLV LV FRQVLVWHQW ZLWK SULRU UHVHDUFK ZKLFK VXJJHVWV WKDW \RXQJHU FKLOGUHQfV MXGJPHQWV DUH PRUH FORVHO\ WLHG WR WKH SHUFHSWXDO IHDWXUHV RI PHGLD FRQWHQW .HOOH\
PAGE 215

$JHUHODWHG GLIIHUHQFHV ZHUH TXLWH DSSDUHQW LQ FKLOGUHQfV UHDFWLRQV WR WKH IUXLW VQDFN DGYHUWLVHPHQWV XWLOL]HG LQ WKH ILUVW SKDVH RI WKH LQWHUYLHZV 9LUWXDOO\ DOO RI WKH UHVSRQGHQWV LUUHVSHFWLYH RI DJH JURXS ZHUH DWWHQWLYH WR WKH IDQFLIXO DVSHFWV RI WKH IUXLW VQDFN FRPPHUFLDO :KHWKHU WKH\ OLNHG WKH DG RU QRW WKH \RXQJHU FKLOGUHQ ORRNHG DW WKH HYHQWV GHSLFWHG LQ WKH DG LQ OLWHUDO WHUPV 7KH\ FRQFHQWUDWHG RQ WKH IDFW WKDW WKH FRPPHUFLDO ZDV QRW UHDO EHFDXVH LW LV LPSRVVLEOH IRU DQ\RQH WR EH IODW ,WfV OLNH D IDLU\ WDOH RQ WKH FRPPHUFLDO PHDQ SHRSOH FDQfW UHDOO\ EH WKLQ $QG WKH\ FDQfW MXVW SRS RXW RI LW OLNH WKDW 7KDWfV QRW UHDO ^ 0` 7KDW WKH IODW H[HFXWLRQ PLJKW KDYH VRPH KLJKHUOHYHO FRQQRWDWLRQ ZDV QRW UHIOHFWHG LQ WKHLU VSRQWDQHRXV LPSUHVVLRQV DQG UHDFWLRQV 7KH\ GLGQf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f WKDW WKH SURGXFW PDNHV NLGV IHHO EHWWHU ZKHQ WKH\ DUH VDG XQKDSS\ RU GRZQ f WKDW WKH WZR WR WKUHH GLPHQVLRQDO WUDQVIRUPDWLRQ VXJJHVWV WKDW WKH VQDFN LV OLNH D VRIW GULQN DQG LW ILOOV NLGV XS f WKDW ZLWKRXW VRGD IODYRUV UHJXODU IUXLW VQDFNV DUH ERULQJ OLNH IODW VRGD f WKDW VRGDOLFLRXV FUHDWHV H[FLWHPHQW LQ NLGVf OLYHV DQG f WKDW E\ FRQVXPLQJ WKLV EUDQG \RX FRXOG LQFUHDVH \RXU SRSXODULW\ DQG VWDQGLQJ DPRQJ SHHUV

PAGE 216

7KHUH ZHUH RWKHU SHRSOH HDWLQJ LW EHFDXVH KH GLG VRUW RI OLNH KH ZDV SRSXODU +H DWH LW DQG WKHQ DOO WKHVH RWKHU SHRSOH DWH LW ,WfV OLNH D ORW RI SHRSOH ZRXOG GR WKDW 2QH SHUVRQ ZLOO EX\ VRPHWKLQJ DQG HDW LW $QG WKHQ WKH RWKHU SHRSOH LI KHfV SRSXODU WKH\fOO JR DQG JHW LW WRR ,W KDSSHQV LQ UHDO OLIH D OLWWOH ELW ^ 0`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fV VXJDU\ ,WfV FRYHUHG LQ OLNH WKLV VXJDU VWXII KDV OLNH VXJDU VSULQNOHG RQ LW 7KH\fUH WU\LQJ WR VD\ WKDW \RXfOO EH EHWWHU DIWHU \RX WU\ VRGDOLFLRXV > @ $IWHU KH WULHG WKH VRGDOLFLRXV KH SRSSHG RXW DQG MXVW JRW D ORW RI HQHUJ\ ,W GLGQfW KDSSHQ WR PH PHDQ GLG IHHO JRRG EXW ZDV VWLOO WKH VDPH DIWHU WULHG LW ,W WDVWHG JRRG OLNHG LW ^ )`

PAGE 217

:KLOH QRW OLWHUDOO\ WUXH WKHUH LV D OHYHO DW ZKLFK WKH DGYHUWLVHPHQW LV SHUFHLYHG DV ERWK DFFXUDWH DQG WUXWKIXO 7KH LVVXH RI IDQWDV\ DQG UHDOLW\ LV QRW FXW DQG GULHG 7UXWK RU UHDOLW\ EHFRPHV D PDWWHU RI GHJUHH UDWKHU WKDQ DQ DEVROXWH GLVWLQFWLRQ $V D FRQVHTXHQFH LW DSSHDUV WKDW LW LV WKH ROGHU FKLOG ZKR DSSUHFLDWHV WKHVH PRUH HOXVLYH V\PEROLF PHDQLQJV ZKR LV PRUH VXVFHSWLEOH WR DGYHUWLVLQJfV LQIOXHQFH ZLWKLQ D FRQVXPSWLRQ FRQWH[W
PAGE 218

:KDW PDNHV WKLV LQWHUHVWLQJ LV WKDW WKHVH HPHUJLQJ H[SHFWDWLRQV DERXW ZKDW DGYHUWLVLQJ LV DQG KRZ LW ZRUNV JXLGH WKHLU LQWHUSUHWDWLRQ RI VSHFLILF PHVVDJHV SHUKDSV FUHDWLQJ D JUHDWHU RSHQQHVV WR SHUVXDVLYH PHVVDJHV WKDQ SUHYLRXVO\ WKRXJKW 7KH \RXQJHU FKLOGUHQ LQ WKLV VWXG\ FOHDUO\ UHFRJQL]HG DGYHUWLVLQJfV VHOOLQJ LQWHQW +RZHYHU WKH LPSOLFDWLRQV RI WKLV IDFW ZHUH UDUHO\ FRQVLGHUHG 7KH\ NQRZ WKDW DGYHUWLVHPHQWV DUH FUHDWHG WR VHOO SURGXFWV EXW WKDW GRHV QRW QHFHVVDULO\ DOWHU WKHLU SHUFHSWLRQV RI KHDYLO\SURPRWHG SURGXFWV RU LPSO\ WKDW FRPPHUFLDOV DUH YLHZHG ZLWK GLVWUXVW 7KH IDFW WKDW FRPPHUFLDOV DUH GHVLJQHG WR VHOO SURGXFWV LV WDNHQ DW IDFH YDOXH :LWK IHZ H[FHSWLRQV WKH \RXQJHU FKLOGUHQ GLG QRW VHHP WR UHDOL]H WKDW DGYHUWLVLQJfV UROH DV D VHOOLQJ WRRO GHPDQGV D SDUWLFXODU PRGH RI FRPPXQLFDWLRQ LQ ZKLFK SURGXFW FODLPV DUH XQLIRUPO\ SRVLWLYH DQG H[DJJHUDWLRQ LV FRPPRQ )URP WKH FKLOGf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

PAGE 219

UHFRJQL]H :LWKLQ WKH GRPDLQ RI FKLOGUHQfV DGYHUWLVLQJ LW LV WKH PHVVDJH UDWKHU WKDQ WKH FRQVXPSWLRQ H[SHULHQFH WKDW LV DPELJXRXV DQG GLIILFXOW WR GLVSXWH GLUHFWO\ &RJQL]DQW RI DGYHUWLVLQJfV VHOOLQJ LQWHQW WKH ROGHU FKLOGUHQ UHFRJQL]H WKDW H[DJJHUDWLRQ LV D QHFHVVDU\ LQJUHGLHQW LQ HIIHFWLYH DGYHUWLVLQJ 5DWKHU WKDQ ORRNLQJ DW DGYHUWLVLQJ SXUHO\ IURP WKH FRQVXPHUfV SHUVSHFWLYH WKH\ EHJLQ WR FRQVLGHU WKH PDQXIDFWXUHUf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fV LPPHGLDWH QHHGV $V D UHVXOW WKH\ EHOLHYH WKDW DGYHUWLVHUV ZLOO JR WR

PAGE 220

JUHDW SHUKDSV ULGLFXORXV OHQJWKV WR SURPRWH WKHLU SURGXFWV EHFDXVH WKH FRQFHSW RI ORQJn WHUP FRQVHTXHQFHV GRHV QRW HQWHU LQWR WKHLU WKLQNLQJ 7KLV LV LQWHUHVWLQJ EHFDXVH WKLV SHUFHSWLRQ XQGHUSLQV KRZ WKH\ WKLQN DERXW ZKDW DGYHUWLVHUVf PRWLYHV DQG DFWLRQV 2OGHU FKLOGUHQ UHFRJQL]H WKDW SHRSOH DUH HPSOR\HG E\ SURGXFW PDQXIDFWXUHUV DQG WKDW ZLWKRXW SURILWDEOH EUDQGV EXVLQHVV ILUPV ORVH PRQH\ DQG SHRSOH ORVH WKHLU MREV 7KLV DZDUHQHVV VHHPV WR FUHDWH VRPHWKLQJ RI DQ HWKLFDO GLOHPPD IRU WKH FKLOGUHQ %\ EHLQJ DEOH WR WDNH WKH PDQXIDFWXUHUfV SRLQWRIYLHZ WKH\ UHFRJQL]H WKH YDOXH RI DGYHUWLVLQJ \HW VLPXOWDQHRXVO\ IHHO WKDW WKH FRQVXPHU VKRXOG QRW EH FRQIXVHG RU PLVOHG $V D FRQVHTXHQFH WKH\ VHHP WR GHYHORS UXOHV RU VWDQGDUGV IRU DGYHUWLVHUV WKDW DUH VHHPLQJO\ LQFRQVLVWHQW )RU H[DPSOH RQH RI WKH UHVSRQGHQWV UHODWHG DQ H[SHULHQFH VKH KDG KDG ZLWK DQ DUWV DQG FUDIWV NLW WKDW GLG QRW SHUIRUP DV H[SHFWHG +DYH \RX VHHQ 0DNH LW 7DNH LW"
PAGE 221

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fW KDYH WR VDZ D FRPPHUFLDO WKDW VDLG WKDW DQG WKH\ UHDOO\ VROG ZHOO 7KH\ UHDOO\ VROG D ORW RI SURGXFWV 7KH FRPPHUFLDOV WKDW VD\ OLNH EX\ LW RU HOVH DQG VWXII WKH SHRSOH VD\ ZHOO GRQfW UHDOO\ ZDQW WR EX\ LW FDXVH WKH\fUH IRUFLQJ PH WR EX\ LW %XW LI \RX GRQfW IRUFH WKHP WKH\ PLJKW WXUQ DURXQG DQG EX\ LW ^ )` :KDW UHVXOWV LV D SHUVSHFWLYH RQ DGYHUWLVLQJ WKDW LV ERWK IRUJLYLQJ DQG SULQFLSOHG )URP

PAGE 222

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nV VNHSWLFLVP UHDO RU LPDJLQHG 2QH RI WKH EDVLF DVVXPSWLRQV XQGHUSLQQLQJ WUDGLWLRQDO UHVHDUFK RQ FKLOGUHQ DQG DGYHUWLVLQJ LV WKDW DV FKLOGUHQ PDWXUH WKH\ EHFRPH LQFUHDVLQJO\ VNHSWLFDO RI DG FRQWHQW HJ %HYHU HW DO 5REHUWVRQ DQG

PAGE 223

5RVVLWHU 5RVVLWHU :DUG HW DO f %\ WKH WLPH WKH\ UHDFK WKH DJH RI WR WKH\ DUH SUHVXPHG WR EH RSHQO\ FULWLFDO RI DGYHUWLVLQJ DQG LWV FUHDWRUV 7KLV VNHSWLFLVP UHVXOWV DW OHDVW LQ VRPH PHDVXUH IURP GLVDSSRLQWPHQW ZLWK KHDYLO\ SURPRWHG SURGXFWV 5REHUWVRQ DQG 5RVVLWHU f :LWK WKH HPHUJHQFH RI VNHSWLFLVP FRPH FRJQLWLYH DQG DWWLWXGLQDO GHIHQVHV WKDW VHUYH WR SURWHFW FKLOGUHQ IURP DGYHUWLVLQJfV SHUVXDVLYH DSSHDO &RQVHTXHQWO\ DV D FKLOG PDWXUHV VfKH DFTXLUHV D EHWWHU XQGHUVWDQGLQJ RI DGYHUWLVLQJ EHFRPHV PRUH VNHSWLFDO RI LWV FRQWHQW DQG LV OHVV OLNHO\ WR EH SHUVXDGHG E\ LW 7UDGLWLRQDO UHVHDUFK SHUVSHFWLYHV WKXV LPSOLFLWO\ SUHVXPH D OLQHDU UHODWLRQVKLS EHWZHHQ DJH DQG VXVFHSWLELOLW\ WR DGYHUWLVLQJfV LQIOXHQFH %RWK WKH UHVXOWV RI WKH H[SHULPHQW DQG WKH GLIIHUHQWLDO DJHUHODWHG SHUVSHFWLYHV DSSDUHQW LQ WKLV VWXG\ VXJJHVW WKDW WKLV PD\ RYHUVLPSOLI\ DFWXDO SDWWHUQV RI UHFHSWLYLW\ WR DGYHUWLVLQJ SDUWLFXODUO\ LQ WHUPV RI LWV LPSDFW RQ FKLOGUHQf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

PAGE 224

H[DJJHUDWLRQ DQG GHFHSWLRQ $OWKRXJK WKH\ ZHUH YHU\ QHJDWLYH DERXW DGYHUWLVHPHQWV WKDW OLH WKH UHVSRQGHQWV ZHUH YHU\ KHVLWDQW WR XVH WKDW WHUP 2QO\ LQ WKH FDVH RI EODWDQW PLVUHSUHVHQWDWLRQ ZHUH WKH\ ZLOOLQJ WR DSSO\ LW 7KLV LV QRW VLPSO\ D VHPDQWLF LVVXH 7KH ROGHU FKLOGUHQ VHHPHG WR EHOLHYH WKDW WKHUH LV D ILQH OLQH EHWZHHQ H[DJJHUDWLRQ DQG GHFHSWLRQ *LYHQ WKHLU DZDUHQHVV DQG DFFHSWDQFH RI DGYHUWLVHUVf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fV HYDOXDWLRQ RI WKH DG FRQVWUXFWLRQ HIIRUW ,W LV QRW VLPSO\ D TXHVWLRQ RI WUXWK KRZHYHU EURDGO\ GHILQHG EXW WKH LQWHUHVW DQG H[FLWHPHQW WKH DG LWVHOI JHQHUDWHV 'LVFXVVLRQ 7KH SUHFHGLQJ DQDO\VLV KDV H[DPLQHG FKLOGUHQfV SHUFHSWLRQV RI WKH UHODWLRQVKLSV EHWZHHQ WKH DGV DQG SURGXFWV WKDW SHUPHDWH WKHLU HYHU\GD\ OLYHV 7ZR GLVWLQFWLYH SHUVSHFWLYHV HPHUJHG WKDW FODULI\ DQG HQULFK WKH ILQGLQJV RI WKH ILUVW WZR VWXGLHV :KLOH DJHUHODWHG GLIIHUHQFHV ZHUH LQGLFDWHG LQ WKH H[SHULPHQWDO ILQGLQJV LW ZDV QRW DOWRJHWKHU FOHDU ZKDW WKH \RXQJHU FKLOGUHQfV UHVSRQVHV VLJQLILHG XQWLO UHFRQVLGHUHG LQ OLJKW RI WKH LQWHUYLHZ GDWD )URP WKH SHUVSHFWLYH RI D \RXQJ FKLOG DGV DQG SURGXFWV DUH KLJKO\

PAGE 225

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fV EURDGHU SHUVSHFWLYH RI DGYHUWLVLQJ DV D FUHDWLYH FXOWXUDO DQG FRUSRUDWH SURGXFW 7KLV SHUVSHFWLYH LV LOOXPLQDWHG WKURXJK WKH FRQWUDVW SURYLGHG E\ WKH \RXQJHU DJH JURXS ,WV FRQVLVWHQFLHV DFURVV WKH WZR TXDOLWDWLYH VWXGLHV OHQG FUHGLELOLW\ WR WKH LQWHUSUHWDWLRQ &KLOGUHQfV UHVSRQVHV LQ WKH H[SHULPHQWDO VHWWLQJ DUH DOVR FRQVLVWHQW ZLWK WKH LQWHUYLHZ GDWD :KLOH

PAGE 226

WKH H[SHULPHQWDO DSSURDFK KDV WKH SRZHU WR GHWHFW VXEWOH DQG SHUKDSV GLIILFXOW WR DUWLFXODWH FKDQJHV LQ FKLOGUHQfV DVVHVVPHQWV DQG EHOLHIV LW LV OHVV VXLWHG WR XQGHUVWDQGLQJ KRZ FKLOGUHQ VSRQWDQHRXVO\ LQWHUSUHW WKHLU H[SHULHQFHV ZLWK DGYHUWLVHPHQWV DQG SURGXFWV ,QVLJKW LQWR WKH FRPSOH[LW\ DQG ULFKQHVV RI FKLOGUHQfV HYHU\GD\ H[SHULHQFH LV WKH JLIW RI TXDOLWDWLYH LQTXLU\ %\ WULDQJXODWLQJ DFURVV VRXUFHV LQIRUPDQWVf PDWHULDOV DGVf DQG PHWKRGV H[SHULPHQWDO DQG LQWHUSUHWLYHf WKLV GHVLJQ KDV DWWHPSWHG WR PD[LPL]H WKH WUXVWZRUWKLQHVV RI WKH UHVHDUFK ZKLOH JDLQLQJ D GHWDLOHG XQGHUVWDQGLQJ RI WKH PHDQLQJV RI DGYHUWLVLQJ DQG FRQVXPSWLRQ H[SHULHQFHV LQ FKLOGUHQfV OLYHV

PAGE 227

&+$37(5 &21&/86,216 $1' )8785( ',5(&7,216 7UDGLWLRQDOO\ UHVHDUFKHUV KDYH DGRSWHG HLWKHU H[SHULPHQWDO RU VXUYH\ PHWKRGV WR LQYHVWLJDWH DGYHUWLVLQJfV LPSDFW RQ FKLOGUHQf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fV SHUVSHFWLYH WKDW WKLV UHVHDUFK ZDV LQLWLDWHG DQG FRQGXFWHG 5HFRJQL]LQJ WKDW FKLOGUHQ DUH QRW VLPSO\ XQILQLVKHG DGXOWV DQG WKDW WKH\ KDYH D XQLTXH SHUVSHFWLYH RI WKH PDUNHWSODFH DQ HPLF DSSURDFK ZDV DGRSWHG WR FDSWXUH WKHLU UHDFWLRQV DQG IHHOLQJV 7KRXJK LQWHUSUHWLYH DSSURDFKHV KDYH JDLQHG DFFHSWDQFH ZLWKLQ FRQVXPHU UHVHDUFK WKH\ KDYH QRW \HW EHHQ DSSOLHG WR XQGHUVWDQG FKLOGUHQfV FRQVXPHU LVVXHV &RQFHUQV DERXW FKLOGUHQfV DELOLWLHV WR DUWLFXODWH WKHLU WKRXJKWV PD\ KDYH FUHDWHG VRPH DSSUHKHQVLRQ DPRQJ UHVHDUFKHUV EXW WKH ZLOOLQJQHVV DQG VNLOO HYLGHQFHG E\ WKH FKLOGUHQ LQ VWXGLHV RQH DQG WKUHH PD\ KHOS WR

PAGE 228

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fV DGYHUWLVLQJ UHFHSWLRQ WKDW KDG OHVV WR GR ZLWK WKH FRPPXQLFDWLRQ RI EUDQG LQIRUPDWLRQ WKDQ WKH HQWHUWDLQPHQW SURYLGHG *LYHQ WKH DOPRVW H[FOXVLYH IRFXV E\ FKLOGUHQfV DGYHUWLVLQJ UHVHDUFKHUV RQ FKLOGUHQf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fV H[SHULHQFH 3HVKNLQ f VXJJHVWV WKDW XQGHUVWDQGLQJ FRPSOH[LW\ LV WKH XQLTXH JLIW RI TXDOLWDWLYH LQTXLU\ 5DWKHU WKDQ OLPLWLQJ LQYHVWLJDWLRQ WR D IHZ FDUHIXOO\ FRQWUROOHG YDULDEOHV TXDOLWDWLYH LQTXLU\ UHWDLQV WKH FRPSOH[LW\ DQG QXDQFH RI KXPDQ EHKDYLRU &RXSOHG ZLWK PRUH WUDGLWLRQDO H[SHULPHQWDO PHWKRGV WKH K\EULG GHVLJQ RIIHUV D PRUH FRPSUHKHQVLYH DQG WUXVWZRUWK\ YLHZ RI FKLOGUHQfV UHVSRQVH WKDQ HLWKHU PHWKRG PLJKW DFFRPSOLVK DORQH 7KH ILQGLQJV RI WKH SUHOLPLQDU\ VWXG\ VHUYHG

PAGE 229

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f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

PAGE 230

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f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fV LQIOXHQFH RQ WKH EUDQGUHODWHG UHVSRQVHV RI WKH ROGHU FKLOGUHQ PDNHV VHQVH JLYHQ WKH OHDG UROH HQWHUWDLQPHQW SOD\V LQ WKHLU WKLQNLQJ DV PDQLIHVWHG LQ ERWK TXDOLWDWLYH VWXGLHV 4XDOLWDWLYH LQTXLU\ LV UDUHO\ XWLOL]HG DV D PHDQV

PAGE 231

RI LOOXPLQDWLQJ H[SHULPHQWDO ILQGLQJV EXW WKLV PD\ EH RQH RI LWV JUHDWHVW VWUHQJWKV VHH 0F4XDUULH DQG 0LFN IRU DQ H[FHSWLRQf &ROOHFWLYHO\ WKH WKUHH VWXGLHV SDLQW DQ LQWHUHVWLQJ SLFWXUH RI FKLOGUHQfV SHUFHSWLRQV RI DGSURGXFW UHODWLRQVKLSV 3HUKDSV PRVW LQWULJXLQJ DUH WKH DJHUHODWHG GLIIHUHQFHV WKDW ZHUH KLQWHG DW LQ WKH LQLWLDO VWXG\ DQG PRUH IXOO\ HYLGHQW LQ VWXGLHV WZR DQG WKUHH :KLOH WKHVH SDWWHUQV PDNH D JUHDW GHDO RI VHQVH XSRQ UHIOHFWLRQ WKH\ ZHUH QRW DQWLFLSDWHG DW WKH RXWVHW RI WKH UHVHDUFK :KHQ UHVSRQGHQWV LQ WKH LQLWLDO VWXG\ VHHPHG WR YLHZ WKH EUDQG DV WDQJHQWLDO WR WKH PRUH LQWHUHVWLQJ FUHDWLYH PHVVDJH P\ WKRXJKWV WXUQHG WR WKH VHDUFK IRU D QHZ WRSLF 7KH FKLOGUHQ ZHUHQfW UHVSRQGLQJ LQ WKH ZD\ D FRJQLWLYHf WKHRU\GULYHQ FKLOGUHQf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fV HIIHFWV DUH QRW QHFHVVDULO\ FRQILQHG WR WKH SUHSXUFKDVH VWDJH RI FRQVXPHU GHFLVLRQ PDNLQJ 5HVHDUFK ZKLFK SXUSRUWV WR DVVHVV DGYHUWLVLQJfV LPSDFW RQ FKLOGUHQ QHHGV WR EHJLQ WR FRQVLGHU WKH EURDGHU FRQWH[W LQ ZKLFK SURGXFWV DUH DOVR SXUFKDVHG DQG FRQVXPHG 3UHVXPSWLRQV DERXW WKH UHODWLYH LPPXQLW\ RI ROGHU FKLOGUHQ WR FRPPHUFLDO PHVVDJHV PD\ QRW KROG ZKHQ H[WHQGHG WR WKH XVDJH VLWXDWLRQ &KLOGUHQfV JHQHUDO

PAGE 232

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f QHHGV DQG DLPV ZHUH HYLGHQW UHIOHFWLQJ PRYHPHQW DZD\ IURP D VLQJXODU RU LGLRV\QFUDWLF SRLQW RI YLHZ $GV ZHUH UDUHO\ SHUFHLYHG WR EH IDOVH WUXWK EHLQJ SHUFHLYHG PRUH LQ FRQWLQXRXV UDWKHU WKDQ GLFKRWRPRXV WHUPV 7KH VHFRQG TXDOLWDWLYH VWXG\ UHYHDOHG VLPLODU WKHPDWLF HOHPHQWV HQKDQFLQJ WKH WUXVWZRUWKLQHVV RI WKH RYHUDOO ILQGLQJV )HZ RI WKHVH HOHPHQWV ZHUH HYLGHQW LQ WKH WKRXJKWV DQG RSLQLRQV RI WKH \RXQJHU FKLOGUHQ 7KHLU MXGJPHQWV ZHUH PRUH DEVROXWH DQG WKHLU SHUVSHFWLYH H[FOXVLYHO\ WKH FRQVXPHUfV $GV ZHUH MXGJHG SULPDULO\ LQ WHUPV RI WKH EUDQG SURPRWHG $V D FRQVHTXHQFH DGV DQG EUDQGV ZHUH SHUFHLYHG WR EH KLJKO\ LQWHUGHSHQGHQW ,I WKH SURGXFW LV SHUFHLYHG SRVLWLYHO\ RU QHJDWLYHO\f VR LV WKH DGYHUWLVHPHQW 7UXWK LQ DGYHUWLVLQJ ZKLOH QRW D IRFDO LVVXH LV SHUFHLYHG LQ DEVROXWH WHUPV ZKHQ LW HQWHUV WKH \RXQJHU FKLOGfV MXGJPHQW :KDW LV LQWHUHVWLQJ LQ FRQWUDVWLQJ WKHVH WZR SHUVSHFWLYHV LV WKDW LW LV WKH ROGHU FKLOG ZKR VLPXOWDQHRXVO\ FDQ DSSUHFLDWH WKH PHVVDJH DQG LWV UHODWLRQ WR WKH SURGXFW RQ PXOWLSOH OHYHOV DQG \HW EH PRUH VHQVLWLYH WR LWV VXJJHVWLRQ LQ D FRQVXPSWLRQ VHWWLQJ 3HUKDSV WKH PRUH XQLGLPHQVLRQDO EUDQG IRFXV RI WKH \RXQJHU FKLOGUHQ VRPHKRZ GHVHQVLWL]HV WKHP WR WKHVH PRUH GLIIXVH HIIHFWV RI DGYHUWLVLQJ 7KHUH LV D FRPSOH[LW\

PAGE 233

LQYROYHG LQ LQWHJUDWLQJ WKHVH GLVSDUDWH VRXUFHV WKDW WKH \RXQJHU FKLOGUHQ PD\ QRW IXOO\ DSSUHFLDWH :KDW WKHVH ILQGLQJV VXJJHVW LV WKDW WKH SUHVXPSWLRQ WKDW FKLOGUHQ DGYDQFH DORQJ VRPH OLQHDU FRQWLQXXP DV WKH\ PDWXUH XQWLO WKH\ DUH SURWHFWHG IURP DGYHUWLVLQJfV SHUVXDVLYH LQIOXHQFH PD\ EH HUURQHRXV ,QFUHDVHG NQRZOHGJH DQG VNLOO PD\ EH DFFRPSDQLHG E\ VKLIWLQJ LQWHUHVWV DQG DSSURDFKHV IRU GHDOLQJ ZLWK DGYHUWLVLQJ &RJQLWLYH IDFWRUV DORQH DUH QRW VXIILFLHQW WR FDSWXUH WKH FRPSOH[LW\ RI FKLOGUHQfV UHVSRQVH $IIHFWLYH DQG PRWLYDWLRQDO GLPHQVLRQV DUH RSHUDWLYH DV ZHOO (YLGHQFH IURP WKLV VHULHV RI VWXGLHV VXJJHVWV WKDW ZLWK JUHDWHU H[SHULHQFH DQG VNLOO PD\ FRPH QHZ ZD\V RI WKLQNLQJ DERXW DGYHUWLVLQJ DQG LWV UHODWLRQ WR SURGXFWV WKDW DUH ERWK PRUH IOH[LEOH DQG FRPSOH[ :LWK WKLV LQFUHDVHG VRSKLVWLFDWLRQ FRPHV D JUHDWHU VXVFHSWLELOLW\ WR DGYHUWLVLQJfV LQIOXHQFH ZLWKLQ FRQVXPSWLRQ VHWWLQJV 7KH DG PD\ LQ HIIHFW GLUHFW KRZ WKH H[SHULHQFH VKRXOG EH LQWHUSUHWHG $IIHFW JHQHUDWHG LQ UHVSRQVH WR WKH DG PD\ VSLOO RYHU RQWR WKH H[SHULHQFH DIIHFWLQJ KRZ WKH EUDQG LV VXEVHTXHQWO\ SHUFHLYHG 7KLV LV FRQVLVWHQW ZLWK WKH WUDQVIRUPDWLRQDO FRQFHSW RI DGYHUWLVLQJ $DNHU DQG 6WD\PDQ 3XWR DQG :HOOV :HOOV f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

PAGE 234

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f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fV HIIHFWV E\ PLQLPL]LQJ UHFDOO GHPDQGV %RWK H[SHULPHQWDO DQG LQWHUYLHZ PHWKRGV PLJKW EH XVHG HIIHFWLYHO\ WR DGGUHVV WKHVH LVVXHV LQ PRUH QDWXUDOLVWLF VHWWLQJV

PAGE 235

)URP WKLV IRXQGDWLRQ WKHUH DUH D QXPEHU RI GLUHFWLRQV WKDW IXWXUH UHVHDUFK PLJKW WDNH $V D ILUVW VWHS LW ZRXOG EH XVHIXO WR H[SORUH WKH UROH HQWHUWDLQPHQW SOD\V LQ FKLOGUHQf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fV DGYHUWLVLQJ UHVSRQVH ZKHUH VR IHZ PHDVXUHV RI DQ\ NLQG FXUUHQWO\ H[LVW 7KLV ODFN RI DSSURSULDWH PHDVXUHV VHHPV WR KDYH FRQVWUDLQHG WKLV HQWLUH UHVHDUFK DUHD )XWXUH UHVHDUFK LV DOVR QHHGHG WR GHYHORS D GHHSHU XQGHUVWDQGLQJ RI FKLOGUHQfV FRQVXPSWLRQ LVVXHV 9HU\ OLWWOH LV NQRZQ DERXW FKLOGUHQfV FRQVXPHU EHKDYLRU H[FHSW WKDW ZKLFK SHUWDLQV WR DGYHUWLVLQJ HIIHFWV 2QH GLUHFWLRQ WKDW PLJKW EH WDNHQ IURP WKLV VWXG\ LV WR EHJLQ WR FRQVLGHU WKH VKRSSLQJ FRQWH[W DQG LWV UHODWLRQ WR FKLOGUHQfV FRQVXPSWLRQ DV ZHOO &KLOGUHQfV LQYROYHPHQW LQ WKH IDPLO\ VKRSSLQJ PD\ UHSUHVHQW DQ LPSRUWDQW FRQVLGHUDWLRQ LQ WKHLU FRQVXPSWLRQ SDWWHUQV EHOLHIV DQG DWWLWXGHV $OWHUQDWLYHO\ FRQVXPSWLRQ VWXGLHV PLJKW EH DSSURDFKHG IURP WKH SHUVSHFWLYH RI IDYRUHG SRVVHVVLRQV DQG WKHLU PHDQLQJ DQG UROH ZLWKLQ FKLOGUHQfV OLYHV ,UUHVSHFWLYH RI WKH VSHFLILF GLUHFWLRQ WDNHQ ZKDW WKLV UHVHDUFK GRHV VXJJHVW LV WKDW WKH FKLOGUHQfV SHUVSHFWLYHV DUH XQLTXH YDOLG DQG ZRUWK\ RI LQYHVWLJDWLRQ 7KHLU FXOWXUH LV WKHLU RZQ $V DGXOWV ZH KDYH ORQJ IRUJRWWHQ ZKDW LW PHDQV WR H[SHULHQFH WKH ZRUOG WKURXJK WKH H\HV RI D FKLOG +RZHYHU LI ZH OLVWHQ SHUKDSV WKH\fOO WHOO XV

PAGE 236

$33(1',; $ 35(/,0,1$5< 678'< ,17(59,(: 6&+('8/( ,QWURGXFWLRQ 7KDQN \RX IRU YROXQWHHULQJ WR WDON ZLWK PH WRGD\ UHDOO\ DSSUHFLDWH LW %HIRUH ZH VWDUW ZRXOG OLNH WR DVN \RX LI LW LV RND\ LI UHFRUG RXU FRQYHUVDWLRQ VR WKDW FDQ JR EDFN WR LW ODWHU RQ ZLOO EH WDONLQJ WR VR PDQ\ SHRSOH WKDW PLJKW IRUJHW WKLQJV RWKHUZLVH ,I LW LV RND\ ZLWK \RX DP JRLQJ WR VKRZ \RX VRPH WHOHYLVLRQ FRPPHUFLDOV DQG SURGXFWV DQG WKHQ DVN \RX WR WHOO PH ZKDW \RX WKLQN DERXW WKHP ,fG OLNH WR NQRZ ZKDW \RX WKLQN RI WKH FRPPHUFLDOV ZKDW \RX WKLQN RI WKH SURGXFWV ZKDW \RX ILQG LQWHUHVWLQJ RU QRW ,W FDQ EH DQ\WKLQJ DW DOO ,fP LQWHUHVWHG LQ HYHU\WKLQJ \RX KDYH WR VD\ 7KH UHDVRQ ,fG OLNH WR NQRZ WKHVH WKLQJV LV EHFDXVH JURZQXSV GRQfW NQRZ YHU\ PXFK DERXW ZKDW NLGV WKLQN DERXW WKH SURGXFWV WKH\ VHH DGYHUWLVHG RQ 79 3HRSOH QRWLFH GLIIHUHQW WKLQJV LQ D FRPPHUFLDO ZRXOG OLNH WR NQRZ MXVW ZKDW \RX WKLQN %HIRUH ZH VWDUW OHW PH WHOO \RX WKDW LI WKHUH DUH DQ\ TXHVWLRQV \RX GRQfW ZDQW WR DQVZHU WKDWfV RND\ 2U LI \RX ZDQW WR VWRS WKDWfV RND\ WRR 'R \RX KDYH DQ\ TXHVWLRQV" %DFNJURXQG 4XHVWLRQV $JH %LUWKGD\ 7KLQJV OLNH WR GR DIWHU VFKRRO 6LEOLQJV

PAGE 237

*HQHUDO 3URGXFW ([SHULHQFH DQG 6KRSSLQJ ,QYROYHPHQW 3URGXFWV :KDW NLQGV RI WKLQJV GR \RX HDW IRU EUHDNIDVW" 'R \RX HDW FHUHDOV" (YHU\ GD\VRPH GD\Vf :KDW NLQGV RI FHUHDO GR \RX OLNH" GLVOLNH" :KDW LV LW WKDW \RX OLNHGLVOLNHf DERXW $ :KDW PDNHV JRRG" QRW VR JRRG" % :KDW GR \RX ORRN IRU LQ D FHUHDO" +RZ GLG \RX ILQG DERXW 21/< ,) $' 0(17,21('f $ 7HOO PH DERXW D FRPPHUFLDO IRU % :KDW GR \RX WKLQN D FRPPHUFLDO IRU VKRXOG VD\ RU KDYH LQ LW" :KDW DUH WKH ZD\V WKDW \RX ILQG DERXW GLIIHUHQW NLQGV RI FHUHDOV" $W \RXU KRXVH KRZ GR \RX GHFLGH ZKDW NLQGV WR EX\" :KR FKRRVHV" +RZ GRHV WKDW ZRUN" 6KRSSLQJ 'R \RX JR JURFHU\ VKRSSLQJ ZLWK \RXU SDUHQWV" +RZ RIWHQ" 7KLQN DERXW WKH ODVW WLPH \RX ZHQW WR WKH JURFHU\ VWRUH &DQ \RX WHOO PH DERXW LW" :KDW GLG \RX GR" :KHUH GLG \RX JR LQ WKH VWRUH" :KDW GLG \RX ORRN DW" 'R \RX OLNH WR JR JURFHU\ VKRSSLQJ" :KDW LV LW WKDW \RX OLNHGLVOLNH DERXW LW"

PAGE 238

3URGXFW ([SHULHQFH 4XHVWLRQV $IWHU 3URGXFW 7ULDOf :KDW GLG \RX ILQG RXW DERXW E\ WU\LQJ LW" :KDW GR \RX WKLQN RI QRZ WKDW \RXfYH WULHG LW :KDW GR \RX OLNH DERXW GLVOLNH" +RZ LV FRPSDUHG WR ZKDW \RX WKRXJKW LW ZRXOG EH OLNH EHIRUH \RX WULHG LW" +RZ LV LW WKH VDPH" +RZ LV LW GLIIHUHQW" ,I \RX ZHUH JRLQJ WR WHOO D IULHQG DERXW ZKDW ZRXOG \RX VD\" ,V OLNH DQ\ RWKHU SURGXFWV \RXfYH WULHG" +RZ" 21/< ,) $' +$6 %((1 0(17,21('f :KHQ \RX HDW LV LW OLNH WKH FRPPHUFLDO" +RZ LV LW WKH VDPH" GLIIHUHQW" :KDW VKRXOG D FRPPHUFLDO IRU WHOO NLGV DERXW LW"

PAGE 239

$GYHUWLVLQJ 5HVSRQVH 4XHVWLRQV $IWHU $G ([SRVXUHf 7HOO PH DERXW WKH VWRU\ LQ WKLV FRPPHUFLDO :KDW GLG WKLV FRPPHUFLDO PDNH \RX WKLQN RI ZKLOH \RX ZHUH ZDWFKLQJ LW" :KDW GRHV WKLV FRPPHUFLDO WHOO \RX DERXW EUDQG QDPHf" $ :KDW GLG \RX ILQG RXW DERXW E\ ZDWFKLQJ WKLV FRPPHUFLDO" % 'HVFULEH :KDW LV OLNH" & :KDW GR \RX WKLQN DERXW :KDW LV OLNH" ,V WKHUH DQ\WKLQJ WKDW \RX WKLQN WKH FRPPHUFLDO VKRXOG KDYH WROG \RX DERXW EXW GLGQfW" :K\ GLG WKH DGYHUWLVHU VKRZ WR WHOO \RX DERXW ,I \RX ZHUH JRLQJ WR WHOO D IULHQG DERXW WKLV FRPPHUFLDO ZKDW ZRXOG \RX VD\" 'R \RX OLNH WKLV FRPPHUFLDO" :KDW LV LW WKDW \RX OLNH" GLVOLNH" 'HVFULEH WKH NLGV SHRSOHf LQ WKH FRPPHUFLDO :KDW DUH WKH\ OLNH" 6XSSRVH \RX ZHUH PDNLQJ \RXU RZQ FRPPHUFLDO IRU W :KDW ZRXOG \RX ZDQW WR SXW LQ LW" :KDW GR \RX WKLQN WKH SHRSOH ZKR PDGH WKH FRPPHUFLDO DUH WU\LQJ WR WHOO NLGV LQ WKLV FRPPHUFLDO" 2U ZKDW GLG WKH DGYHUWLVHU ZDQW \RX WR WKLQN DERXW" :KDW NLQG RI D SHUVRQ LV WKH DGYHUWLVHU WU\LQJ WR WDON WR ZLWK WKLV FRPPHUFLDO"

PAGE 240

*HQHUDO 3HUFHSWLRQV RI 7HOHYLVLRQ DQG $GYHUWLVLQJ 'R \RX OLNH WR ZDWFK WHOHYLVLRQ" :KDW DUH \RXU IDYRULWH VKRZV" :KHQ \RX DUH ZDWFKLQJ WHOHYLVLRQ GR \RX ZDWFK WKH FRPPHUFLDOV" :KDW DUH VRPH FRPPHUFLDOV WKDW \RX UHPHPEHU" 'LVFXVV HDFK DG LQGLYLGXDOO\ SUREH IRU FRPSDULVRQVFRQWUDVWV ZKHUH SRVVLEOHf $ 7HOO PH DERXW FRPPHUFLDOV PHQWLRQHG % ,V WKDW D FRPPHUFLDO \RX OLNHGLVOLNH" & :KDW LV LW DERXW WKDW \RX OLNHGLVOLNH"
PAGE 241

$33(1',; % 6$03/( (;3(5,0(17$/ 48(67,211$,5( 6V 1XPEHU 6HTXHQFH 'DWH ,1752'8&7,21 ,nP WDONLQJ WR NLGV OLNH \RX LQ QGWK JUDGHf WR ILQG RXW ZKDW \RX WKLQN DERXW WKH FRPPHUFLDOV DQG SURGXFWV WKDW \RX VHH RQ 79 GRQnW ZRUN IRU WKH SHRSOH WKDW PDNH WKHVH SURGXFWV DQG FRPPHUFLDOV VR LW ZRQnW ERWKHU PH LI \RX VD\ \RX GRQnW OLNH VRPHWKLQJ 7KLV LVQnW OLNH VFKRRO ZRUN WKHUH DUH QR ULJKW RU ZURQJ DQVZHUVf§ MXVW ZDQW WR NQRZ ZKDW \RX WKLQN 7R GR WKLV ZH DUH JRLQJ WR SOD\ VRPH JDPHV 3%$ ,16758&7,216 )RU WKH ILUVW JDPH ,nP JRLQJ WR DVN \RX KRZ PXFK \RX OLNH GLIIHUHQW SURGXFWV E\ XVLQJ WKLV VHW RI VWDPSV 2Q WKHVH VWDPSV DUH VRPH IDFHVf§ OHW PH WHOO ZKDW WKH\ PHDQ )LUVW WKLV RQH PHDQV \RX OLNH WKH SURGXFW UHDO UHDO ZHOO LWnV RQH RI \RXU YHU\ IDYRULWHV SRLQWf 6HFRQG WKLV RQH PHDQV \RX OLNH LW EXW LWnV QRW RQH RI YRXU IDYRULWHV SRLQWf 7KLV IDFH PHDQV \RX IHHO PHGLXP \RX GRQnW UHDOO\ OLNH LW EXW \RX GRQnW UHDOO\ GLVOLNH LW HLWKHU 3RLQWf +HUH \RX GRQnW OLNH WKH SURGXFW EXW LWnV QRW UHDOO\ WHUULEOH HLWKHU 3RLQWf $QG WKLV IDFH PHDQV \RX GRQnW OLNH WR HDW LW DW DOO LWnV UHDOO\ WHUULEOH 2ND\" +RZ PXFK GR \RX WKLQN \RX OLNH )RU LQLWLDO LWHPV UHSHDW UDWLQJ DQG DVN LV WKDW ZKDW \RX PHDQf 6DPH IDFH ; %\ SLFNLQJ WKH VDPH IDFH IRU %UDQG ; DQG %UDQG < WKDW PHDQV \RX OLNH WKHP DERXW WKH VDPH ,V WKDW ZKDW \RX WKLQN"
PAGE 242

&RJQLWLYH 5HVSRQVHV $UH \RX D JRRG VWRU\WHOOHU" :HOO $G 2QO\ +HUH LV D SLFWXUH RI D ER\ DQG JLUO ZKR DUH LQ QGWKf JUDGH MXVW OLNH \RX 7KH\ MXVW ZDWFKHG WKH FRPPHUFLDO IRU EUDQG QDPH DQG QRZ WKH\ DUH WDONLQJ WR HDFK RWKHU DERXW ZKDW WKH\ VDZ 7HOO PH D VWRU\ DERXW ZKDW \RX WKLQN WKH\ DUH VD\LQJ" 3UREH 7KDWnV JUHDW ,V WKHUH DQ\WKLQJ HOVH \RX ZDQW WR SXW LQ \RXU VWRU\"f 7ULDO 2QO\ +HUH LV D SLFWXUH RI D ER\ DQG JLUO ZKR DUH LQ QGWKf JUDGH MXVW OLNH \RX 7KH\ MXVW WULHG VRPH EUDQG QDPH DQG QRZ WKH\ DUH WDONLQJ WR HDFK RWKHU DERXW LW 7HOO PH D VWRU\ DERXW ZKDW \RX WKLQN WKH\ DUH VD\LQJ 3UREH 7KDWnV JUHDW ,V WKHUH DQ\WKLQJ HOVH \RX ZDQW WR SXW LQ \RXU VWRU\"f &RPELQDWLRQ &HOOV +HUH DUH WZR SLFWXUHV RI D ER\ DQG D JLUO ZKR DUH LQ QGWK JUDGH MXVW OLNH \RX ,Q WKLV SLFWXUH WKH ER\ DQG JLUO MXVW VDZ WKH FRPPHUFLDO IRU DQG QRZ WKH\ DUH WDONLQJ WR HDFK RWKHU DERXW LW ,Q WKLV SLFWXUH WKH\ KDYH MXVW WULHG VRPH RI WKH DQG WKH\ DUH WDONLQJ WR HDFK RWKHU DERXW LW 3OHDVH SLFN RQH RI WKHVH SLFWXUHV DQG WHOO PH D VWRU\ DERXW ZKDW \RX WKLQN WKH ER\ DQG JLUO DUH VD\LQJ 3UREH 7KDWnV JUHDW 'R \RX ZDQW WR SXW DQ\WKLQJ HOVH LQ \RXU VWRU\"f QG 1RZ OHWnV ORRN DW WKH RWKHU SLFWXUH +RZ FDQ WKDW KHOS \RX WHOO \RXU VWRU\ RU DGG WR LW"

PAGE 243

3& &/ 66 1XPEHU 6HTXHQFH 6HVVLRQ 'DWH 3UHYLRXV ([SRVXUH WR $G +DYH \RX VHHQ WKLV FRPPHUFLDO EHIRUH WRGD\f" <(6 12 127 685( ,I
PAGE 244

$G 3HUFHSWLRQV ,QVWUXFWLRQV 1RZ ,nP JRLQJ WR UHDG \RX VRPH VHQWHQFHV DERXW WKH FRPPHUFLDO \RX MXVW VDZ DQG ZDQW WR NQRZ ZKDW \RX WKLQN 5HDG IW f 7HOO PH LI \RXU DQVZHU LV \HV RU QR *HW \HVQRO 'R \RX UHDOOY WKLQN RU VRUW RI WKLQN ,I YRX UHDOOY WKLQN JLYH LW D %,* <(612f LI \RX VRUW RI WKLQN WKHQ JLYH LW D OLWWOH \HVQRf 2NDY" $IWHU H[DPSOH UHYLHZ DOO RSWLRQV LQFOXGLQJ LI \RX MXVW FDQnW GHFLGHf 7KH FRPPHUFLDO ZDV ORWV RI IXQ WR ZDWFK DQG OLVWHQ WR 7KHUH ZHUH WRR PDQ\ WKLQJV JRLQJ RQ LQ WKLV FRPPHUFLDO OLNHG WKH WKLQJV WKH SHRSOH GLG LQ WKLV FRPPHUFLDO 7KH FRPPHUFLDO ZDV GXOO DQG ERULQJ ,WnV WKH NLQG RI FRPPHUFLDO WKDW NHHSV JRLQJ WKURXJK P\ PLQG DIWHU ,nYH VHHQ LW WKLQN WKLV FRPPHUFLDO LV KDUG WR XQGHUVWDQG ZLVK WKHUH ZHUH PRUH FRPPHUFLDOV OLNH WKLV RQ 79 =U ,nYH VHHQ WKLV FRPPHUFLDO VR PDQ\ WLPHV EHIRUH,nP WLUHG RI LW WKRXJKW WKLV FRPPHUFLDO ZDV UHDOO\ QHDW 7KH VWRU\ LQ WKH FRPPHUFLDO ZDV GXPE 7KLV FRPPHUFLDO LV EHWWHU WKDQ PRVW RWKHU FRPPHUFLDOV RQ 79 MXVW ODXJKHG WKRXJKW WKH FRPPHUFLDO ZDV YHU\ IXQQ\

PAGE 245

1RZ ,nP JRLQJ WR DVN \RX VRPH TXHVWLRQV DERXW WKH FHUHDO LQ WKH FRPPHUFLDO f %UDQG )DPLOLDULW\ 'R \RX UHPHPEHU HYHU WDVWLQJ EHIRUH WRGD\f" <(6 12 16 ,I
PAGE 246

%UDQG 3HUFHSWLRQV ,QVWUXFWLRQV 1RZ ZH DUH JRLQJ WR SOD\ D PDWFKLQJ JDPH DP JRLQJ WR UHDG VRPH WKLQJV WKH FRPPHUFLDO VDLGf DERXW ,nG OLNH \RX WR WHOO PH KRZ PXFK \RX EHOLHYH WKHP ZKDW WKH FRPPHUFLDO VDLGf ,I \RX WKLQN VRPHWKLQJ LV YHU\ WUXH WKHQ \RX ZRXOG SLFN WKLV RQH 5($//< %(/,(9( ,I \RX WKLQN VRPHWKLQJ LV VRUW RI WUXH WKHQ SLFN WKLV RQH VRUW RI EHOLHYH ,I \RX WKLQN VRPHWKLQJ LV QRW YHU\ WUXH WKHQ FKRRVH WKLV RQH GRQnW UHDG\ EHOLHYH 2U LI \RX WKLQN VRPHWKLQJ LV QRW WUXH DW DOO WKHQ FKRRVH WKLV RQH GRQnW EHOLHYH DW DOO 2ND\" /HWnV WU\ RQH nWKH FHUHDO LV PDGH ZLWK VXJDUn /HWnV PDWFK WKLV FDUG WR RQH RI WKHVH IRXU FDUGV :RXOG \RX VD\ UHDG RSWLRQVf 7KDW PHDQV \RX WKLQN UHDG EDFN WR FKLOGf ,V WKDW ULJKW" *UHDW 5HPHPEHU ZDQW WR NQRZ ZKDW \RX UHDOO\ WKLQN LV WUXH DQG QRW WUXH DERXW QRW ZKDW WKH FRPPHUFLDO VDLGVRPHERG\ HOVH PLJKW VD\f DERXW LW

PAGE 247

%UDQG 3HUFHSWLRQV &HUHDO WKH FHUHDO LV FUXQFK\ LV PDGH ZLWK KRQH\ LV GLSSHG LQ WZR IODYRUV WDVWHV VZHHW KDV QXWV LQ LW LV SDUW RI D FRPSOHWH EUHDNIDVW KDV D JUHDW WDVWH L UHDOO\ EHOLHYH GRQnW EHOLHYH DW DOOf %HOLHI &RQILGHQFH ,QVWUXFWLRQV 1RZ DP JRLQJ WR UHDG \RX VRPH VHQWHQFHV DQG ZDQW \RX WR WHOO PH ZKLFK RQH LV WUXH IRU \RX UHDG RSWLRQVf /HWnV WU\ RQH
PAGE 248

%HOLHI (YDOXDWLRQV ,QVWUXFWLRQV 'LIIHUHQW NLGV OLNH GLIIHUHQW WKLQJV DERXW IRRG ,nP JRLQJ WR UHDG \RX VRPH WKLQJV DERXW FHUHDO DQG \RX WHOO PH KRZ PXFK \RX OLNH WKHVH WKLQJV 2N" VKRZ VFDOHf 3RLQW WR WKLV SLFWXUH LI \RX UHDOO\ OLNH VRPHWKLQJ D ORW WKLV RQH LI \RX OLNH LW D OLWWOH DQG WKLV RQH LI \RX GRQnW OLNH LW DW DOO 2N" +RZ PXFK GR \RX OLNH FHUHDO WKDW LV FUXQFK\" LV FUXQFK\ LV PDGH ZLWK KRQH\ LV GLSSHG LQ WZR IODYRUV WDVWHV VZHHW KDV QXWV LQ LW LV SDUW RI D FRPSOHWH EUHDNIDVW KDV D JUHDW WDVWH 7 OLNH D ORW GRQnW OLNH DW DOOf

PAGE 249

6DWLVIDFWLRQ ZLWK 3URGXFW ([SHULHQFH 1RZ WKDW \RXnYH DFWXDOO\ WULHG ZKLFK VHQWHQFH LV ULJKW IRU \RX" 'RXEOH 'LS $ ZDV QRW DV JRRG D ORW ZRUVH D OLWWOH % MXVW WKH VDPH & RU EHWWHU WKDQ WKRXJKW LW ZRXOG EH D ORW D OLWWOH :KHQ ZDWFKHG WKH FRPPHUFLDO LW PDGH PH WKLQN DERXW DVNLQJ P\ 0RP WR EX\ WKH FHUHDO WKDW ZDV VKRZQ RQ 79 <(6 \HV QR 12 %UDQG $WWLWXGH )LOOHU %UDQGVf 6WDU 6FDOH ,QVWUXFWLRQV ZRXOG OLNH WR NQRZ KRZ PDQ\ VWDUV \RX WKLQN WKHVH RWKHU FHUHDOV VKRXOG JHW LV UHDOO\ JUHDW )LYH VWDUV PHDQV \RX WKLQN )RXU OLNH B 7KUHH WKLQN 7ZR GRQnW OLNH LW LWnV EDG EXW QRW WHUULEOH 2QH GRQnW OLNH LW DW DOO LWnV UHDOO\ WHUULEOH LWnV JRRG EXW QRW JUHDW LV MXVW VRVR +RZ PDQ\ VWDUV ZRXOG \RX JLYH

PAGE 250

$WWLWXGHV WRZDUG 7HOHYLVLRQ &RPPHUFLDOV 6HVVLRQ f ,QVWUXFWLRQV 1RZ ,nP JRLQJ WR UHDG \RX VRPH VHQWHQFHV DQG ZDQW \RX WR WHOO PH LI \RX WKLQN WKH\ DUH ULJKW RU ZURQJ /HWnV WU\ RQH &DUWRRQV DUH IXQ WR ZDWFKf 7HOHYLVLRQ FRPPHUFLDOV WHOO WKH WUXWK 0RVW 79 FRPPHUFLDOV DUH QRW QLFH DQG ERWKHU PH 7HOHYLVLRQ FRPPHUFLDOV WHOO RQO\ WKH JRRG WKLQJV OLNH PRVW WHOHYLVLRQ FRPPHUFLDOV 7HOHYLVLRQ FRPPHUFLDOV WU\ WR PDNH SHRSOH EX\ WKLQJV WKH\ GRQnW UHDOO\ QHHG 0RVW RI WKH WLPH \RX FDQ EHOLHYH ZKDW WKH SHRSOH LQ FRPPHUFLDOV VD\ RU GR 7KH SURGXFWV WKH\ VKRZ WKH PRVW RQ 79 DUH XVXDOO\ WKH EHVW SURGXFWV WR EX\ 7HOHYLVLRQ FRPPHUFLDOV PDNH WKLQJV ORRN EHWWHU WKDQ WKH\ UHDOO\ DUH

PAGE 251

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f %R\V 7DVWH &KLSVf 3L]]D ([RWLF 0DQ &KLSV 1HZ 3L]]DULDV &UDQNLQf ZLWK UHDO SL]]D GRXJK &KHHVH 6SLFHV 5DGLFDO *UXE 7DVWHV OLNH UHDO SL]]D 2QO\ ORXGHU 3L]]DULDV 5XOH *URRY\ FKLSV KXK ER\V" :KDW GLG KH VD\" $GYHUWLVHG 3URGXFW $WWULEXWHV 0HDVXUHG LQ ([SHULPHQWDO 4XHVWLRQQDLUH 6 6HDUFK ( ([SHULHQFH & &UHGHQFH $WWULEXWHVf 7DVWH OLNH UHDO SL]]D (f 6PHOO OLNH SL]]D (f &KLSV DUH FUXQFK\ (f 0DGH ZLWK UHDO SL]]D GRXJK 6f 0DGH ZLWK FKHHVH 6f .LGV ZKR DUH IXQ DQG OLNH WR KDYH D JRRG WLPH HDW WKHP &f

PAGE 252

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f )HHOLQJ IODW" $GG VRPH SRS ZLWK QHZ 6RGD/LFLRXV 7KH VRGD SRS IUXLW VQDFNV ZLWK WKH WLQJO\ VRGD VHQVDWLRQ 7ULHV VQDFN DQG SRSV EDFN WR QRUPDOf 6R 6RGD/LFLRXV 2RRRRK 6RGD/LFLRXV )UXLW 6QDFNV LQ 6RGD/LFLRXV VRGD IODYRUV OLNH FKHUU\ FROD DQG URRW EHHU 1HZ 6RGD/LFLRXV IUXLW VQDFNV %HFDXVH OLIH ZLWKRXW LW LV IODW $GYHUWLVHG 3URGXFW $WWULEXWHV 0HDVXUHG LQ ([SHULPHQWDO 4XHVWLRQQDLUH 7LQJOH LQ \RXU PRXWK ZKHQ \RX HDW WKHP (f 7DVWH OLNH VRGD (f 0DNH \RX IHHO EHWWHU ZKHQ \RXfUH IODW RU WLUHG (f $UH H[FLWLQJ WR HDW WKH\ SRS (f 'HOLFLRXV (f 0DGH ZLWK UHDO IUXLW 6f &RPH LQ GLIIHUHQW IODYRUV WKDQ RWKHU IUXLW VQDFNV 6f

PAGE 253

'RXEOH 'LS &UXQFK &HUHDO $W WKH RXWVHW RI WKLV DG FHUHDO ER[HV DUH GDQFLQJ DV D WXQH SOD\V LQ WKH EDFNJURXQG 7KHQ DV WKH DQQRXQFHU EHJLQV WR VSHDN DV WKH PXVLF FRQWLQXHVf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f 1HZ .HOORJJfV 'RXEOH 'LS &UXQFK FHUHDO LV GLSSHG LQ WZR WDVW\ IODYRUV 2QFH LQ KRQH\ 0PPPP WKH VZHHW NLQG PDGH E\ EHHV $QG WKHQ LQ QXWV 1RW WKHVH SLFWXUHV VWHHO QXWVf EXW WKHVH 'HOLFLRXV KRQH\ DQG QXWV WKH EHVW RI ERWK ZRUOGV 1HZ .HOORJJfV 'RXEOH 'LS &UXQFK WZR GHOLFLRXV GLSV RQH JUHDW WDVWH $QG SDUW RI D FRPSOHWH EUHDNIDVW 7ZR 'LSV 2QH *UHDW 7DVWH $GYHUWLVHG 3URGXFW $WWULEXWHV 0HDVXUHG LQ ([SHULPHQWDO 4XHVWLRQQDLUH &HUHDO LV &UXQFK\ (f 7DVWHV 6ZHHW (f 0DGH ZLWK +RQH\ 6f &RQWDLQV QXWV 6f 3DUW RI D FRPSOHWH EUHDNIDVW 6f +DV D JUHDW WDVWH (f 'LSSHG LQ WZR IODYRUV 6f

PAGE 254

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f $GYHUWLVHG 3URGXFW $WWULEXWHV 0HDVXUHG LQ ([SHULPHQWDO 4XHVWLRQQDLUH 0DGH RXW RI PLON FKRFRODWH 6f &UXQFK\ (f &DQ PDNH WKHP ODVW D ORQJ WLPH E\ VXFNLQJ WKHP YHU\ VORZO\ (f &RPH LQ GLIIHUHQW FRORUV 6f 0DQ\ FDQGLHV SHU ER[ 6f 6XSSRVHG WR HDW WKH UHG RQH ODVW 6f

PAGE 255

$33(1',; ,17(59,(: 6&+('8/( )25 678'< ,QWURGXFWLRQ 7KDQN \RX IRU WDONLQJ ZLWK PH WRGD\ ,I LW LV RND\ ZLWK \RX DP JRLQJ WR VKRZ \RX VRPH WHOHYLVLRQ FRPPHUFLDOV DQG SURGXFWV DQG DVN \RX WR WHOO PH ZKDW \RXU RSLQLRQV DUH RU ZKDW \RX WKLQN DERXW WKHP ,W FDQ EH DQ\WKLQJ DW DOO 7KH UHDVRQ ,fG OLNH WR NQRZ WKHVH WKLQJV LV WR OHDUQ DERXW ZKDW NLGV WKLQN DERXW WKH SURGXFWV WKH\ VHH DGYHUWLVHG RQ 79 3HRSOH QRWLFH GLIIHUHQW WKLQJV VR ZRXOG OLNH WR NQRZ MXVW ZKDW \RX WKLQN %HIRUH ZH VWDUW LV LW RND\ LI UHFRUG RXU FRQYHUVDWLRQ VR WKDW FDQ JR EDFN WR LW ODWHU RQ ZLOO EH WDONLQJ WR VR PDQ\ SHRSOH WKDW PLJKW IRUJHW VRPH WKLQJV RWKHUZLVH $V ZH WDON LI WKHUH DUH DQ\ TXHVWLRQV \RX GRQfW ZDQW WR DQVZHU WKDWfV RND\ 2U LI \RX ZDQW WR VWRS WKDWfV RND\ WRR 'R \RX KDYH DQ\ TXHVWLRQV IRU PH" ,I \RX WKLQN RI VRPH EH VXUH WR DVN %DFNJURXQG 4XHVWLRQV $JH %LUWKGD\f 6LEOLQJV 7KLQJV OLNH WR GR DIWHU VFKRRO 79 9LHZLQJ

PAGE 256

(YHU\GD\ ([SHULHQFH 4XHVWLRQV *HQHUDO 3HUFHSWLRQV RI $GYHUWLVLQJ3URGXFW /LQNDJHV $G'ULYHQ 5HDFWLRQV /HWfV WDON DERXW VRPH FRPPHUFLDOV WKDW \RX FDQ UHPHPEHU D 7HOO PH ZKDW KDSSHQV LQ WKDW FRPPHUFLDO :KDW LV WKH VWRU\"f E :KDW LV LW DERXW WKDW FRPPHUFLDO WKDW PDNHV \RX UHPHPEHU LW" F 2QFH DQ\ IRUP RI DG HYDOXDWLRQ LV RIIHUHGf ,V WKDW D FRPPHUFLDO WKDW \RX OLNH RU GLVOLNH" :KDWfV LQ LW WKDW \RX OLNH GLVOLNHf" 3URGXFW'ULYHQ 5HDFWLRQV D :KDW DUH VRPH RI \RXU PRVW IDYRULWH VQDFNV FKLSV FRRNLHV IUXLW VQDFNV VWXII OLNH WKDW" OHDVW IDYRULWH" E :KDW LV LW WKDW \RX UHDOO\ OLNH GLVOLNHf DERXW :KDW PDNHV JRRG" QRW VR JRRG" F +RZ GLG \RX ILUVW ILQG RXW DERXW LI DG SXUVXH IXUWKHU HJ :KDW GLG \RX VHH"f

PAGE 257

6WLPXOXV 6SHFLILF 4XHVWLRQV 3URGXFW ([SHULHQFH 4XHVWLRQV $IWHU 7ULDOf :KDW GLG \RX ILQG RXW DERXW E\ WU\LQJ LW" 1RZ WKDW \RXfYH WULHG WHOO PH LQ \RXU ZRUGV ZKDW LWV OLNH :KDW GR \RX OLNH DERXW GLVOLNH" +RZ LV FRPSDUHG WR ZKDW \RX WKRXJKW LW ZRXOG EH EHIRUH \RX WULHG LW" +RZ LV LW GLIIHUHQW" ,V OLNH DQ\ RWKHU SURGXFWV \RXfYH WULHG" +RZ" :KDW NLQG RI SHRSOH GR \RX WKLQN ZRXOG OLNH ,I \RX ZDQWHG WR PDNH WKH SHUIHFW ZKDW ZRXOG \RX FKDQJH DERXW :KDW ZRXOG \RX NHHS WKH VDPH" D ,I \RX ZDQWHG WR OHW SHRSOH NQRZ DERXW \RXU SHUIHFW ZKDW ZRXOG EH D JRRG ZD\ WR GR WKDW" +DYH \RX HYHU KHDUG RI EHIRUH" :KHUH" ,I 79 SUREH IRU VSHFLILFV RQ DGV VHHQ ,I WULDO H[WHQW RI SULRU XVHf $GYHUWLVLQJ 5HVSRQVH 4XHVWLRQV $IWHU 9LHZLQJf ,fG OLNH WR NQRZ ZKDW \RX WKLQN RI WKLV FRPPHUFLDO SDXVHf :KDW GLG LW PDNH \RX WKLQN RI ZKLOH \RX ZHUH ZDWFKLQJ LW" :KDW ZDV WKH VWRU\ LQ WKLV FRPPHUFLDO" )ROORZXSf :KDW KDSSHQHG" :KDW GLG WKH SHRSOH LQ WKH FRPPHUFLDO GR" VD\" :KDW HOVH FDQ \RX UHPHPEHU DERXW ZKDW WKH SHRSOH FKDUDFWHUVf VDLG RU GLG" 'LG \RX OLNH RU GLVOLNH WKLV FRPPHUFLDO" +RZ PXFK" D :KDWfV LQ LW WKDW \RX OLNH GLVOLNHf" E :KDW PDNHV LW VHHP JRRG EDGf WR \RX" :KDW GR \RX WKLQN WKH\ ZHUH WU\LQJ WR WHOO \RX DERXW

PAGE 258

$G [ 3URGXFW 7ULDO ,QWHUDFWLRQ :KHQ \RX HDW LV LW ZRXOG LW EHf OLNH WKH FRPPHUFLDO" +RZ LV LW WKH VDPH" GLIIHUHQW" ,I GLIIHUHQW D +RZ GLG LW KDSSHQ WKDW WKH FRPPHUFLDO PDNHV ORRN GLIIHUHQW WKDQ LW LV ZKHQ \RX JHW LW" E +RZ DUH WKH FRPPHUFLDO DQG WKH VQDFN PDGH" :KHUH" %\ ZKRP" 'R \RX WKLQN WKH FRPPHUFLDO PDGH PDNHVf WKH IRRG ORRN EHWWHU RU ZRUVH WKDQ LW UHDOO\ LV" +RZ" :KDW GR \RX WKLQN FRPPHUFLDOV IRU VKRXOG WHOO NLGV DERXW LW" :KDW GR \RX WKLQN NLGV ZRXOG ZDQW WR NQRZ EHIRUH WKH\ WU\ "f ,V WKHUH DQ\WKLQJ WKH FRPPHUFLDO PD\EH VKRXOG KDYH VDLG DERXW EXW GLGQfW" ,V WKHUH DQ\WKLQJ WKDW PD\EH ZRXOG KDYH EHHQ JRRG WR VD\ LQ WKH FRPPHUFLDO EXW WKH\ GLGQfW"f

PAGE 259

(YHU\GD\ ([SHULHQFH 4XHVWLRQV &KRLFH 3URFHVVHV DQG 6KRSSLQJ ,QYROYHPHQW /HWfV WDON DERXW KRZ \RXU IDPLO\ GHFLGHV ZKDW NLQGV RI IRRGV WR JHW RND\" $W \RXU KRXVH KRZ GR \RX GHFLGH ZKDW NLQGV RI FHUHDOVVQDFNVFKLSV WR EX\" ZKR FKRRVHV" +RZ GRHV WKDW ZRUN" RU JR EDFN WR IDYRULWH FHUHDOVVQDFNV PHQWLRQHG HDUOLHUf +RZ RIWHQ GR \RX JR JURFHU\ VKRSSLQJ ZLWK \RXU 0RP RU 'DG" 'R \RX OLNH WR JR JURFHU\ VKRSSLQJ RU QRW :KDW LV LW WKDW \RX OLNH GLVOLNHf" /HWfV WKLQN DERXW WKH ODVW WLPH \RX ZHQW WR WKH JURFHU\ VWRUH &DQ \RX WHOO PH DERXW LW" :KR ZDV WKHUH" :KDW GLG \RX GR" :KHUH GLG \RX JR LQ WKH VWRUH" :KDW GLG \RX ORRN DW" *HQHUDO $G3URGXFW ([SHULHQFHV 'LG \RX HYHU VHH VRPHWKLQJ RQ 79 WKDW \RX JRW DQG WKHQ ZKHQ \RX JRW LW LW ZDVQfW DV JRRG DV \RX WKRXJKW LW ZRXOG EH" 7HOO PH ZKDW KDSSHQHG 'R \RX DVN \RXU 0RP'DG IRU WKLQJV \RX VHH RQ 79 ,I \HV FDQ \RX WHOO PH DERXW VRPHWKLQJ \RX DVNHG IRU" :HfYH WDONHG D ORW DERXW 79 FRPPHUFLDOV DQG VWXII \RX OLNH WR HDW :KR PDNHV WKH FRPPHUFLDOV" :KHUH GR WKH\ FRPH IURP" :KDW DERXW WKH VQDFNV"

PAGE 260

5()(5(1&(6 $DNHU $ t 0 6WD\PDQ f ,PSOHPHQWLQJ WKH &RQFHSW RI 7UDQVIRUPDWLRQDO $GYHUWLVLQJ 3V\FKRORJ\ t 0DUNHWLQJ f $FNHUPDQ % 3 f
PAGE 261

$QGHUVRQ 5 & t 3 3HDUVRQ f $ 6FKHPD7KHRUHWLF 9LHZ RI %DVLF 3URFHVVHV LQ 5HDGLQJ &RPSUHKHQVLRQ LQ +DQGERRN RI 5HDGLQJ 5HVHDUFK HG 3 3HDUVRQ 1HZ
PAGE 262

%HON 5 : ) 6KHUU\ t 0 :DOOHQGRUI f $ 1DWXUDOLVWLF ,QTXLU\ LQWR %X\HU DQG 6HOOHU %HKDYLRU DW D 6ZDS 0HHW -RXUQDO RI &RQVXPHU 5HVHDUFK 0DUFKf %HYHU 7 0 6PLWK % %HQJHQ t 7 -RKQVRQ f
PAGE 263

&KDWWRSDGK\D\ $ t 3 1HGXQJDGL f 'RHV $WWLWXGH WRZDUG WKH $G (QGXUH" 7KH 0RGHUDWLQJ (IIHFWV RI $WWHQWLRQ DQG 'HOD\ -RXUQDO RI &RQVXPHU 5HVHDUFK f &KLOGUHQfV $GYHUWLVLQJ 5HYLHZ 8QLW f 6HOI5HJXODWRU\ *XLGHOLQHV IRU &KLOGUHQfV $GYHUWLVLQJ 1DWLRQDO $GYHUWLVLQJ 'LYLVLRQ &RXQFLO RI %HWWHU %XVLQHVV %XUHDXV ,QF 1HZ
PAGE 264

'HLJKWRQ t 5 0 6FKLQGOHU f &DQ $GYHUWLVLQJ ,QIOXHQFH ([SHULHQFH" 3V\FKRORJ\ t 0DUNHWLQJ f 'HQ]LQ 1 f &KLOGKRRG 6RFLDOL]DWLRQ 6WXGLHV LQ WKH 'HYHORSPHQW RI /DQJXDJH 6RFLDO %HKDYLRU DQG ,GHQWLW\ 6DQ )UDQFLVFR &$ -RVVH\%DVV 'HQ]LQ 1 f ,QWHUSUHWLYH ,QWHUDFWLRQLVP 6WUDWHJLHV IRU 4XDOLWDWLYH 5HVHDUFK 1HZEXU\ 3DUN &$ 6DJH 'HQ]LQ 1 f 7KH 5HVHDUFK $FW $ 7KHRUHWLFDO ,QWURGXFWLRQ WR 6RFLRORJLFDO 0HWKRGV (QJOHZRRG &OLIIV 13UHQWLFH+DOO 'HVPRQG 5 f 0HWDFRJQLWLRQ 7KLQNLQJ $ERXW 7KRXJKWV LQ &KLOGUHQfV &RPSUHKHQVLRQ RI 7HOHYLVLRQ &ULWLFDO 6WXGLHV LQ 0DVV &RPPXQLFDWLRQ 'RQRKXH 7 5 / / +HQNH t : $ 'RQRKXH f 'R .LGV .QRZ :KDW 79 &RPPHUFLDOV ,QWHQG" -RXUQDO RI $GYHUWLVLQJ 5HVHDUFK f 'RUU $ f 7HOHYLVLRQ DQG &KLOGUHQ $ 6SHFLDO 0HGLXP IRU D 6SHFLDO $XGLHQFH %HYHUO\ +LOOV &$ 6DJH 'RUU $ t .XQNHO f &KLOGUHQ DQG WKH 0HGLD (QYLURQPHQW &KDQJH DQG &RQVWDQF\ $PLG &KDQJH &RPPXQLFDWLRQ 5HVHDUFK f 'XUNLQ f 7HDFKLQJ 7KHP WR 5HDG WK HG %RVWRQ 0$ $OO\Q DQG %DFRQ (GHOO $ t 0 & %XUNH f 7KH 3RZHU RI )HHOLQJV LQ 8QGHUVWDQGLQJ $GYHUWLVLQJ (IIHFWV -RXUQDO RI &RQVXPHU 5HVHDUFK 'HFHPEHUf (QJHO ) 7 .ROODW t 5 %ODFNZHOO f &RQVXPHU %HKDYLRU 1HZ
PAGE 265

)HOGPDQ 6 t $ :ROI f :KDWfV :URQJ :LWK &KLOGUHQfV &RPPHUFLDOV" -RXUQDO RI $GYHUWLVLQJ 5HVHDUFK f )LQH $ t / 6DQGVWURP f .QRZLQJ &KLOGUHQ 3DUWLFLSDQW 2EVHUYDWLRQ ZLWK 0LQRUV 1HZEXU\ 3DUN &$ 6DJH )LVFKHU ( t 6 $UQROG f 0RUH 7KDQ D /DERU RI /RYH *HQGHU 5ROHV DQG &KULVWPDV *LIW6KRSSLQJ -RXUQDO RI &RQVXPHU 5HVHDUFK 'HYHPEHUf )ORRG f 3URVH &RPSUHKHQVLRQ $ 6HOHFWHG 5HYLHZ RI /LWHUDWXUH RQ ,QIHUHQFH *HQHUDWLRQ DV D 5HTXLVLWH IRU 8QGHUVWDQGLQJ 7H[W LQ &RPSUHKHQVLRQ DQG WKH &RPSHWHQW 5HDGHU HGV ) )LVKHU DQG & : 3HWHUV 1HZ
PAGE 266

*ROGEHUJ 0 ( t *RP f &KLOGUHQfV 5HDFWLRQV WR 7HOHYLVLRQ $GYHUWLVLQJ $Q ([SHULPHQWDO $SSURDFK -RXUQDO RI &RQVXPHU 5HVHDUFK 6HSWHPEHUf *ROGEHUJ 0 ( t *RP f 5HVHDUFKLQJ WKH (IIHFWV RI 7HOHYLVLRQ $GYHUWLVLQJ RQ &KLOGUHQ $ 0HWKRGRORJLFDO &ULWLTXH LQ /HDUQLQJ IURP 7HOHYLVLRQ 3V\FKRORJLFDO DQG (GXFDWLRQDO 5HVHDUFK HG 0 +RZH 1HZ
PAGE 267

+DZNLQV 6 $ t 6 +RFK f /RZ ,QYROYHPHQW /HDUQLQJ 0HPRU\ :LWKRXW (YDOXDWLRQ -RXUQDO RI &RQVXPHU 5HVHDUFK f +LOO 5 3 t 0 6WDPH\ f 7KH +RPHOHVV LQ $PHULFD $Q ([DPLQDWLRQ RI 3RVVHVVLRQV DQG &RQVXPSWLRQ %HJDYLRUV -RXUQDO RI &RQVXPHU 5HVHDUFK 'HFHPEHUf +LUVFKPDQ ( & f +XPDQLVWLF ,QTXLU\ LQ 0DUNHWLQJ 5HVHDUFK 3KLORVRSK\ 0HWKRG DQG &ULWHULD -RXUQDO RI 0DUNHWLQJ 5HVHDUFK $XJXVWf +RFK 6 t 'HLJKWRQ f 0DQDJLQJ :KDW &RQVXPHUV /HDUQ )URP ([SHULHQFH -RXUQDO RI 0DUNHWLQJ $SULOf +RFK 6 t < +D f &RQVXPHU /HDUQLQJ $GYHUWLVLQJ DQG WKH $PELJXLW\ RI 3URGXFW ([SHULHQFH -RXUQDO RI &RQVXPHU 5HVHDUFK 6HSWHPEHUf +RPHU 3 0 f 7KH 0HGLDWLQJ 5ROH RI $WWLWXGH 7RZDUG WKH $G 6RPH $GGLWLRQDO (YLGHQFH -RXUQDO RI 0DUNHWLQJ 5HVHDUFK )HEUXDU\f +XGVRQ / $ t / 2]DQQH f $OWHUQDWLYH :D\V RI 6HHNLQJ .QRZOHGJH LQ &RQVXPHU 5HVHDUFK -RXUQDO RI &RQVXPHU 5HVHDUFK 0DUFKf +XJKHV 1 f 7KH &KLOG ,QWHUYLHZ 6FKRRO 3V\FKRORJ\ 5HYLHZ f +XQW 6 f 3RVLWLYLVP DQG 3DUDGLJP 'RPLQDQFH LQ &RQVXPHU 5HVHDUFK 7RZDUG &ULWLFDO 3OXUDOLVP DQG 5DSSURFKHPHQW -RXUQDO RI &RQVXPHU 5HVHDUFK -XQHf +XVWRQ $ & % $ :DWNLQV t .XQNHO f 3XEOLF 3ROLF\ DQG &KLOGUHQfV 7HOHYLVLRQ $PHULFDQ 3V\FKRORJLVW )HEUXDU\f ,VOHU / ( 7 3RSSHU t 6 :DUG f &KLOGUHQfV 3XUFKDVH 5HTXHVWV DQG 3DUHQWDO 5HVSRQVHV 5HVXOWV IURP D 'LDU\ 6WXG\ -RXUQDO RI $GYHUWLVLQJ 5HVHDUFK 2FW1RYf -HQVHQ % f 4XDOLWDWLYH $XGLHQFH 5HVHDUFK 7RZDUG DQ ,QWHJUDWLYH $SSURDFK WR 5HFHSWLRQ &ULWLFDO 6WXGLHV LQ 0DVV &RPPXQLFDWLRQ -RQHV ( ( t + % *HUDUG f )RXQGDWLRQV RI 6RFLDO 3V\FKRORJ\ 1HZ
PAGE 268

.HOOHU / f 0HPRU\ )DFWRUV LQ $GYHUWLVLQJ 7KH (IIHFW RI $GYHUWLVLQJ 5HWULHYDO &XHV RQ %UDQG (YDOXDWLRQV -RXUQDO RI &RQVXPHU 5HVHDUFK 'HFHPEHUf .HOO\ + f 5HDVRQLQJ DERXW 5HDOLWLHV &KLOGUHQfV (YDOXDWLRQ RI 7HOHYLVLRQ DQG %RRNV LQ 9LHZLQJ &KLOGUHQ WKURXJK 7HOHYLVLRQ HGV + .HOO\ DQG + *DUGQHU 6DQ)UDQFLVFR &$ -RVVH\%DVV .LQVH\ f 7KH 8VH RI &KLOGUHQ LQ $GYHUWLVLQJ DQG WKH ,PSDFW RI $GYHUWLVLQJ $LPHG DW &KLOGUHQ ,QWHUQDWLRQDO -RXUQDO RI $GYHUWLVLQJ .OLQH 6 f /LPLWV WR WKH ,PDJLQDWLRQ 0DUNHWLQJ DQG &KLOGUHQfV &XOWXUH LQ &XOWXUDO 3ROLWLFV LQ &RQWHPSRUDU\ $PHULFD HGV $QJXV DQG 6 6KDOO\ 1HZ
PAGE 269

/HYLQ 3 t *DHWK f +RZ &RQVXPHUV DUH $IIHFWHG E\ WKH )UDPLQJ RI $WWULEXWH ,QIRUPDWLRQ %HIRUH DQG $IWHU &RQVXPLQJ WKH 3URGXFW -RXUQDO RI &RQVXPHU 5HVHDUFK f /LHEHUW ( 1 6SUDINLQ 5 0 /LHEHUW t ( $ 5XELQVWHLQ f (IIHFWV RI 7HOHYLVLRQ &RPPHUFLDO 'LVFODLPHUV RQ WKH 3URGXFW ([SHFWDWLRQV RI &KLOGUHQ -RXUQDO RI &RPPXQLFDWLRQ :LQWHUf /LHEHUW 5 0 t 1 6SUDINLQ f 7KH (DUO\ :LQGRZ (IIHFWV RI 7HOHYLVLRQ RQ &KLOGUHQ DQG
PAGE 270

0DF.HQ]LH 6 % t 5 /XW] f $Q (PSLULFDO ([DPLQDWLRQ RI WKH 6WUXFWXUDO $QWHFHGHQWV RI $WWLWXGH 7RZDUG WKH $G LQ DQ $GYHUWLVLQJ 3UHWHVWLQJ &RQWH[W -RXUQDO RI 0DUNHWLQJ $SULOf 0DF.HQ]LH 6 % 5 /XW] t ( %HOFK f 7KH 5ROH RI $WWLWXGH 7RZDUG WKH $G DV D 0HGLDWRU RI $GYHUWLVLQJ (IIHFWLYHQHVV $ 7HVW RI &RPSHWLQJ ([SODQDWLRQV -RXUQDO RI 0DUNHWLQJ 5HVHDUFK 0D\f 0DFNOLQ 0 & f 'R
PAGE 271

0F1HDO 8 f &KLOGUHQ DV &RQVXPHUV /H[LQJWRQ 0$ & +HDWK 0F4XDUULH ( ) t 0LFN f 2Q 5HVRQDQFH $ &ULWLFDO 3OXUDOLVW ,QTXLU\ LQWR $GYHUWLVLQJ 5KHWRULF -RXUQDO RI &RQVXPHU 5HVHDUFK 6HSWHPEHUf ,62 0HULQJRII / f &KLOGUHQ DQG $GYHUWLVLQJ $Q $QQRWDWHG %LEOLRJUDSK\ &KLOGUHQfV $GYHUWLVLQJ 5HYLHZ 8QLW 1HZ
PAGE 272

1DWLRQDO $VVRFLDWLRQ RI %URDGFDVWHUV &RGH $XWKRULW\ f &KLOGUHQfV 7HOHYLVLRQ $GYHUWLVLQJ *XLGHOLQHV UHSULQWHG LQ 7KH (IIHFWV RI 7HOHYLVLRQ $GYHUWLVLQJ RQ &KLOGUHQ HGV 5 3 $GOHU 6 /HVVHU / 0HULQJRII 7 6 5REHUWVRQ 5 5RVVLWHU DQG 6 :DUG /H[LQJWRQ 0$ '& +HDWK 1HHODQNDYLO 3 9 2f%ULHQ t 5 7DVKMLDQ f 7HFKQLTXHV WR 2EWDLQ 0DUNHW5HODWHG ,QIRUPDWLRQ IURP 9HU\
PAGE 273

3HPHU f +LJKHU2UGHU %HOLHIV DQG ,QWHQWLRQV LQ &KLOGUHQfV 8QGHUVWDQGLQJ RI 6RFLDO ,QWHUDFWLRQ LQ 'HYHORSLQJ 7KHRULHV RI 0LQG HGV : $VWLQJWRQ 3 / +DUULV DQG 5 2OVRQ 1HZ
PAGE 274

5RHGGHU / f $JH 'LIIHUHQFHV LQ &KLOGUHQfV 5HVSRQVHV WR 7HOHYLVLRQ $GYHUWLVLQJ $Q ,QIRUPDWLRQ3URFHVVLQJ $SSURDFK -RXUQDO RI &RQVXPHU 5HVHDUFK 5RHGGHU / % 6WHPWKDO t % &DOGHU f $WWLWXGH%HKDYLRU &RQVLVWHQF\ LQ &KLOGUHQfV 5HVSRQVHV WR 7HOHYLVLRQ $GYHUWLVLQJ -RXUQDO RI 0DUNHWLQJ 5HVHDUFK 1RYHPEHUf 5RMFHZLF] 5 f 0HUOHDX3RQW\ DQG &RJQLWLYH &KLOG 3V\FKRORJ\ -RXUQDO RI 3KHQRPHQRORJLFDO 3V\FKRORJ\ f 5RVV 5 3 7 &DPSEHOO $ +XVWRQ6WHLQ t & :ULJKW f 1XWULWLRQDO 0LVLQIRUPDWLRQ RI &KLOGUHQ $ 'HYHORSPHQWDO DQG ([SHULPHQWDO $QDO\VLV RI WKH (IIHFWV RI 7HOHYLVHG )RRG &RPPHUFLDOV -RXUQDO RI $SSOLHG 'HYHORSPHQWDO 3V\FKRORJ\ f 5RVVLWHU 5 f 'RHV 79 $GYHUWLVLQJ $IIHFW &KLOGUHQ" -RXUQDO RI $GYHUWLVLQJ 5HVHDUFK )HEUXDU\f 5RVVLWHU 5 f 5HOLDELOLW\ RI D 6KRUW7HVW 0HDVXULQJ &KLOGUHQfV $WWLWXGHV 7RZDUG 79 &RPPHUFLDOV -RXUQDO RI &RQVXPHU 5HVHDUFK f 5RVVLWHU 5 t 7 % 5REHUWVRQ f &KLOGUHQfV 79 &RPPHUFLDOV 7HVWLQJ WKH 'HIHQVHV -RXUQDO RI &RPPXQLFDWLRQ f 5XVW / f &KLOGUHQfV $GYHUWLVLQJ +RZ LW :RUNV +RZ WR 'R LW +RZ WR .QRZ LI LW :RUNV -RXUQDO RI $GYHUWLVLQJ 5HVHDUFK $XJ6HSWf 5&5& 5XVW / t & +\DWW f 4XDOLWDWLYH DQG 4XDQWLWDWLYH $SSURDFKHV WR &KLOG 5HVHDUFK LQ $GYDQFHV LQ &RQVXPHU 5HVHDUFK 9RO HGV 5 + +ROPDQ DQG 0 5 6RORPRQ 3URYR 87 $VVRFLDWLRQ IRU &RQVXPHU 5HVHDUFK 6FKOLQJHU 0 f $ 3URILOH RI 5HVSRQVHV WR &RPPHUFLDOV -RXUQDO RI $GYHUWLVLQJ 5HVHDUFK f 6KLPS 7 $ f $WWLWXGH 7RZDUG WKH $G DV D 0HGLDWRU RI %UDQG &KRLFH -RXUQDO RI $GYHUWLVLQJ f 6PLWK % 7 )RUG t / 6ZDV\ f 7KH (FRQRPLFV RI ,QIRUPDWLRQ 5HVHDUFK ,VVXHV LQ 0DUNHWLQJ DQG $GYHUWLVLQJ 5HJXODWLRQ 7KH )HGHUDO 7UDGH &RPPLVVLRQ LQ WKH V HGV 3 ( 0XUSK\ DQG : / :LONLH 6RXWK %HQG ,1 8QLYHUVLW\ RI 1RWUH 'DPH 3UHVV

PAGE 275

6PLWK 5 ( f ,QWHJUDWLQJ ,QIRUPDWLRQ IURP $GYHUWLVLQJ DQG 7ULDO 3URFHVVHV DQG (IIHFWV RQ &RQVXPHU 5HVSRQVH WR 3URGXFW ,QIRUPDWLRQ -RXUQDO RI 0DUNHWLQJ 5HVHDUFK 0D\f 6PLWK 5 ( t : 5 6ZLQ\DUG f $WWLWXGH%HKDYLRU &RQVLVWHQF\ 7KH ,PSDFW RI 3URGXFW 7ULDO 9HUVXV $GYHUWLVLQJ -RXUQDO RI 0DUNHWLQJ 5HVHDUFK $XJXVWf 6PLWK 5 ( t : 5 6ZLQ\DUG f &RJQLWLYH 5HVSRQVH WR $GYHUWLVLQJ DQG 7ULDO %HOLHI 6WUHQJWK %HOLHI &RQILGHQFH DQG 3URGXFW &XULRVLW\ -RXUQDO RI $GYHUWLVLQJ f 6PLWK 5 ( t : 5 6ZLQ\DUG f ,QIRUPDWLRQ 5HVSRQVH 0RGHOV $Q ,QWHJUDWHG $SSURDFK -RXUQDO RI 0DUNHWLQJ :LQWHUf 6RORPRQ 0 5 f &RQVXPHU %HKDYLRU %RVWRQ 0$ $OO\Q DQG %DFRQ 6WUDXVV $ / f 4XDOLWDWLYH $QDO\VLV IRU 6RFLDO 6FLHQWLVWV &DPEULGJH (QJODQG &DPEULGJH 8QLYHUVLW\ 3UHVV 6WUDXVV $ t &RUELQ f %DVLFV RI 4XDOLWDWLYH 5HVHDUFK *URXQGHG 7KHRU\ 3URFHGXUHV DQG 7HFKQLTXHV 1HZEXU\ 3DUN &$ 6DJH 7DPPLYDDUD t 6 (QULJKW f 2Q (OLFLWLQJ ,QIRUPDWLRQ 'LDORJXHV ZLWK &KLOG ,QIRUPDQWV $QWKURSRORJ\ DQG (GXFDWLRQ 4XDUWHUO\ 7KRPSVRQ & : % /RFDQGHU t + 5 3ROOLR f 3XWWLQJ &RQVXPHU ([SHULHQFH %DFN LQWR &RQVXPHU 5HVHDUFK 7KH 3KLORVRSK\ DQG 0HWKRG RI ([LVWHQWLDO3KHQRPHQRORJ\ -RXUQDO RI &RQVXPHU 5HVHDUFK f 7KRPSVRQ & % % 6WHP t ( $PRXOG f $ 3UHIHUHQFH IRU 'LYHUVLW\ $ 3RVWSRVLWLYLVW $SSURDFK WR 0HWKRGRORJLFDO 3OXUDOLVP LQ &RQVXPHU 5HVHDUFK :RUNLQJ 3DSHU 'HSDUWPHQW RI 0DUNHWLQJ 8QLYHUVLW\ RI :LVFRQVLQ0DGLVRQ 7UDEDVVR 7 f 2Q WKH 0DNLQJ RI ,QIHUHQFHV 'XULQJ 5HDGLQJ DQG 7KHLU $VVHVVPHQW LQ &RPSUHKHQVLRQ DQG 7HDFKLQJ 5HVHDUFK 5HYLHZV HG 7 *XWKULH 1HZDUN '( ,QWHUQDWLRQDO 5HDGLQJ $VVRFLDWLRQ 7\ERXW $ 0 t & $ 6FRWW f $YDLODELOLW\ RI :HOO'HILQHG ,QWHUQDO .QRZOHGJH DQG WKH $WWLWXGH )RUPDWLRQ 3URFHVV ,QIRUPDWLRQ $JJUHJDWLRQ 9HUVXV 6HOI3HUFHSWLRQ -RXUQDO RI 3HUVRQDOLW\ DQG 6RFLDO 3V\FKRORJ\ f :DNVOHU ) & f 6WXG\LQJ &KLOGUHQ 3KHQRPHQRORJLFDO ,QVLJKWV +XPDQ 6WXGLHV f

PAGE 276

:DOOHQGRUI 0 t ( $PRXOG f :H *DWKHU 7RJHWKHU &RQVXPSWLRQ 5LWXDOV RI 7KDQNVJLYLQJ 'D\ -RXUQDO RI &RQVXPHU 5HVHDUFK -XQHf :DOOHQGRUI 0 t 5 : %HON f $VVHVVLQJ 7UXVWZRUWKLQHVV LQ 1DWXUDOLVWLF &RQVXPHU 5HVHDUFK LQ ,QWHUSUHWLYH &RQVXPHU 5HVHDUFK HG ( & +LUVFKPDQ 3URYR 87 $VVRFLDWLRQ IRU &RQVXPHU 5HVHDUFK :DUG 6 f &KLOGUHQfV 5HDFWLRQV WR &RPPHUFLDOV -RXUQDO RI $GYHUWLVLQJ 5HVHDUFK f :DUG 6 t % :DFNPDQ f &KLOGUHQfV 3XUFKDVH ,QIOXHQFH $WWHPSWV DQG 3DUHQWDO
PAGE 277

:HOOV : f 'LVFRYHU\2ULHQWHG &RQVXPHU 5HVHDUFK -RXUQDO RI &RQVXPHU 5HVHDUFK 0DUFKf :HOOV : f /HFWXUHV DQG 'UDPDV LQ &RJQLWLYH DQG $IIHFWLYH 5HVSRQVHV WR $GYHUWLVLQJ HGV 3 &DIIHUDWD DQG $ 0 7\ERXW /H[LQJWRQ 0$ & +HDWK :HOOV : f 7KUHH 8VHIXO ,GHDV LQ $GYDQFHV LQ &RQVXPHU 5HVHDUFK 9RO HG 5 /XW] 3URYR 87 $VVRFLDWLRQ IRU &RQVXPHU 5HVHDUFK :LQQHU ( f 7KH 3RLQW RI :RUGV &DPEULGJH 0$ +DUYDUG 8QLYHUVLW\ 3UHVV :LQQLFN 0 3 t & :LQQLFN f 7KH 7HOHYLVLRQ ([SHULHQFH %HYHUO\ +LOOV &$ 6DJH :ULJKW $ $ t 5 /XW] f &RJQLWLYH DQG $IIHFWLYH 5HVSRQVH WR 1HZ 3URGXFW $GYHUWLVLQJ DQG 7ULDO :RUNLQJ 3DSHU &ROOHJH RI %XVLQHVV $GPLQLVWUDWLRQ &DOLIRUQLD 6WDWH 8QLYHUVLW\ /RQJ %HDFK :ULJKW 3 f 6FKHPHU 6FKHPD &RQVXPHUVf ,QWXLWLYH 7KHRULHV $ERXW 0DUNHWHUVf ,QIOXHQFH 7DFWLFV LQ $GYDQFHV LQ &RQVXPHU 5HVHDUFK 9RO HG 5/XW] 3URYR 87 $VVRFLDWLRQ IRU &RQVXPHU 5HVHDUFK :ULJKW 3 t 3 5LS f 3URGXFW &ODVV $GYHUWLVLQJ (IIHFWV RQ )LUVW7LPH %X\HUVf 'HFLVLRQ 6WUDWHJLHV -RXUQDO RI &RQVXPHU 5HVHDUFK 6HSWHPEHUf
PAGE 278

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

PAGE 279

, FHUWLI\ WKDW KDYH UHDG WKLV VWXG\ DQG WKDW LQ P\ RSLQLRQ LW FRQIRUPV WR DFFHSWDEOH VWDQGDUGV RI VFKRODUO\ SUHVHQWDWLRQ DQG LV IXOO\ DGHTXDWH LQ VFRSH DQG TXDOLW\ DV D GLVVHUWDWLRQ IRU WKH GHJUHH RI 'RFWRU RI 3KLORVRSK\ W n EKf 5LFKDUG /XW] &KDLUPDQ 3URIHVVRU RI 0DUNLQJ FHUWLI\ WKDW KDYH UHDG WKLV VWXG\ DQG WKDW LQ P\ RSLQLRQ LW FRQIRUPV WR DFFHSWDEOH VWDQGDUGV RI VFKRODUO\ SUHVHQWDWLRQ DQG LV IXOO\ DGHTXDWH LQ VFRSH DQG TXDOLW\ DV D GLVVHUWDWLRQ IRU WKH GHJUHH RI 'RFWRU RI 3KLORVRSK\ $ODQ 6DZ\HU 3URIHVVRU RI 0DUNHWLQJ FHUWLI\ WKDW KDYH UHDG WKLV VWXG\ DQG WKDW LQ P\ RSLQLRQ LW FRQIRUPV WR DFFHSWDEOH VWDQGDUGV RI VFKRODUO\ SUHVHQWDWLRQ DQG LV IXOO\ DGHTXDWH LQ VFRSH DQG TXDOLW\ DV D GLVVHUWDWLRQ IRU WKH GHJUHH RI 'RFWRU RI 3KLORVRSK\ 'DYLG *OHQ 0LFN $VVLVWDQW 3URIHVVRU RI 0DUNHWLQJ FHUWLI\ WKDW KDYH UHDG WKLV VWXG\ DQG WKDW LQ P\ RSLQLRQ LW FRQIRUPV WR DFFHSWDEOH VWDQGDUGV RI VFKRODUO\ SUHVHQWDWLRQ DQG LV IXOO\ DGHTXDWH LQ VFRSH DQG TXDOLW\ DV D GLVVHUWDWLRQ IRU WKH GHJUHH RI 'RFWRU RI 3KLORVRSK\ 5LFKDUG ( 5RPDQR $VVRFLDWH 3URIHVVRU RI (FRQRPLFV 7KLV GLVVHUWDWLRQ ZDV VXEPLWWHG WR WKH *UDGXDWH )DFXOW\ RI WKH 'HSDUWPHQW RI 0DUNHWLQJ LQ WKH &ROOHJH RI %XVLQHVV $GPLQLVWUDWLRQ DQG WR WKH *UDGXDWH 6FKRRO DQG ZDV DFFHSWHG DV SDUWLDO IXOILOOPHQW RI WKH UHTXLUHPHQWV IRU WKH GHJUHH RI 'RFWRU RI 3KLORVRSK\ $SULO 'HDQ *UDGXDWH 6FKRRO

PAGE 280

/E PR PRV 81,9(56,7< 2) )/25,'$


107
and consequently given little weight when consumers develop their overall impressions
of the brand. Smith (1993) reported findings consistent with this hypothesis. When the
ad and the trial experience were consistently favorable, consumers exposed to an ad/trial
sequence and those exposed to trial alone did not differ with respect to their brand related
beliefs or expectations. Only when an obvious discrepancy existed between ad claims
and the brands actual performance, did advertising have a significant impact on
consumers perceptions. Olson and Dover (1979) examined this issue in the context of
the expectancy-disconfirmation paradigm and also found that lower order beliefs formed
by advertising can influence subsequent experience-based product perceptions when the
trial experience and ad are obviously inconsistent with one another. In a closely related
study, Marks and Kamins (1988) focused on framing effects in the context of highly
versus slightly exaggerated ad claims. Though the effects were weak, they did find that
consumers exposed to a slightly exaggerated ad followed by trial experience had more
positive purchase intentions than those exposed to trial alone. No differences were
observed between these groups with respect to beliefs or attitudes. Differences between
trial and ad/trial groups were much more pronounced in the context of highly
exaggerated ad claims.
Collectively, the evidence indicates that advertising has little impact on
consumers interpretation of their product experiences, except when the experience is
difficult to judge or when the product is substantially different than the ad portrayal.
Otherwise, experiential evidence is more trustworthy, salient and diagnostic of product
quality than advertised information. As a consequence, beliefs formed on the basis of


260
Hawkins, S. A. & S. J. Hoch (1992), "Low Involvement Learning: Memory Without
Evaluation," Journal of Consumer Research, 19 (2), 212-225.
Hill, R. P. & M. Stamey (1990), "The Homeless in America: An Examination of
Possessions and Consumption Begaviors," Journal of Consumer Research. 17
(December), 303-321.
Hirschman, E. C. (1986), "Humanistic Inquiry in Marketing Research: Philosophy,
Method and Criteria," Journal of Marketing Research. 23 (August), 237-249.
Hoch, S. J. & J. Deighton (1989), "Managing What Consumers Learn From
Experience," Journal of Marketing. 53 (April), 1-20.
Hoch, S. J. & Y. Ha (1986), "Consumer Learning: Advertising and the Ambiguity of
Product Experience," Journal of Consumer Research. 13 (September), 221-233.
Homer, P. M. (1990), "The Mediating Role of Attitude Toward the Ad: Some
Additional Evidence," Journal of Marketing Research. 27 (February), 78-86.
Hudson, L. A. & J. L. Ozanne (1988), "Alternative Ways of Seeking Knowledge in
Consumer Research," Journal of Consumer Research. 14 (March), 508-521.
Hughes, J. N. (1989), "The Child Interview," School Psychology Review. 18 (2), 247-
259.
Hunt, S. D. (1991), "Positivism and Paradigm Dominance in Consumer Research:
Toward Critical Pluralism and Rapprochement," Journal of Consumer Research.
18 (June), 32-44.
Huston, A. C., B. A. Watkins & D. Kunkel (1989), "Public Policy and Childrens
Television," American Psychologist. 44 (February), 424-433.
Isler, L., E. T. Popper & S. Ward (1987), "Childrens Purchase Requests and Parental
Responses: Results from a Diary Study," Journal of Advertising Research. 4
(Oct/Nov), 28-39.
Jensen, K. B. (1987), "Qualitative Audience Research: Toward an Integrative Approach
to Reception," Critical Studies in Mass Communication. 4, 21-36.
Jones, E. E. & H. B. Gerard (1967), Foundations of Social Psychology. New York,
NY: John Wiley & Sons, Inc.


133
or wrong answers. I just want to know what you think. To do this, we are going
to play some games. For the first game, Im going to ask you how much you
like different foods by using this set of stamps.
Following this, the interviewer showed the child an ink pad and set of five stamps with
cartoon smiley/frowning faces imprinted on them, similar to those traditionally used in
marketing research with children (e.g., Neelankavil, OBrien and Tashjian 1985;
Roedder et al. 1983; Wells 1965). The specific meaning for each of the stamps was
explained, illustrated and the child was given the opportunity to try each one. (Appendix
B contains a sample questionnaire and specific instructions for all scales used in the
study). Then, the child was asked to rate a total of twenty brands on this scale as each
of the package fronts were displayed sequentially by the experimenter. These initial
brand attitude measures were collected for a group of childrens cereals, snack foods and
candies. Embedded within this group were the four experimental brands used in the
study. Many children spontaneously remarked that the game was a lot of fun, thus
serving as a very effective and highly motivating warm-up exercise for the first day.
After this, the researcher turned to the experimental task, in which the child was exposed
to advertising, product trial or a combination of the two. In the advertising only
condition, the child was shown a videotape with two filler ads followed by the target
commercial (shown twice) with ten seconds of black in between. After the first
exposure, the child was told "This is the commercial I really wanted to talk to you about.
If its okay with you, we are going to watch it one more time". In the trial condition,
the child was provided with the target brand (in its original packaging) and given four
minutes to sample it. Subjects in the two ad-plus-trial conditions then received either


74
against bias by challenging provisional concepts with new data. A basic operational
strategy common to both grounded theory research and other forms of naturalistic
inquiry, is to seek systematically the widest variation in the phenomenon under
investigation. Through careful, ongoing comparison and the deliberate search for
negative case examples, the consistency of provisional concepts is assessed (Glaser and
Strauss 1967; Lincoln and Guba 1985; Strauss and Corbin 1990). Greater precision is
achieved as comparisons warrant the subdivision or elimination of original concepts.
Concepts and categories must earn their way into the emerging explanation through
repeated observation and demonstration of their relationship to the phenomena in
question. In this study, insight into the experiences of the younger children was initially
sought as part of the researchers obligation to seek negative instances or data that would
be most likely to disconfirm the evolving theory (Wallendorf and Belk 1989). Though
age-related differences began to emerge even with such a small sample size, the available
evidence in this study provides little more than a suggestion of how these differences
might be manifested.
The interviews ranged from 45 to 75 minutes, depending on the childs interest
level and schedule. Several of these interviews were conducted over two sessions, which
proved quite interesting as the children would often return wanting to add something they
had "forgotten to say the other day". The informants were free to describe their
reactions to particular ads and products and typically recounted a range of experiences.
The format of the interview was flexible so as to allow informants to discuss their
personal experiences, feelings and reactions. The interviews were rather loosely


66
of their cognitive limitations is widely acknowledged. That children share what might
be considered a separate culture replete with norms, conventions and meaning that also
affects their interpretation of advertisements is a more novel concept (Fine and Sandstrom
1988; Goode 1986; Young 1990). Communications scholars have adopted the notion of
interpretive communities to differentiate media recipients along shared lines of interest
and usage (e.g., Anderson and Meyer 1988; Lindlof 1988). An interpretive community
is a specific audience group united by common experiences, affiliations and concerns that
shape their interpretation of media content. Though the notion of interpretive
communities has not yet been extended to investigations of childrens media response,
it offers an intriguing counterpoint to traditional models. Much like an interpretive
community, a separate "kids culture" generationally transmitted by children to other
children may play an important yet unrecognized role in childrens interpretation of
advertising. Challenging conventional wisdom, a small group of social scientists and
educators have argued that critical observation of children reveals an interpretive
competence, creativity and honesty that is often masked in empirical research and broad
based models of the socialization process (e.g., Goode 1986; Waksler 1986; Young
1990). As cultural outsiders, adults may have only limited access to, and superficial
knowledge of, the norms and values that structure meaning creation. This is evident
even in the gestures and words children use in day to day interactions. As adults, we
may sometimes assume that we know what children mean, when, in fact, our perceptions
are filtered through the lens of adult expectations, mores and common sense. From a
marketing perspective, the potential for disaster in the design of communications certainly


188
the findings focuses primarily on clarifying these more fundamental patterns and
relationships.
Among the younger children, advertisements tend to be perceived primarily as a
conduit for communicating brand information. Much like an aisle within a toy store or
a catalog before Christmas, ads are a source of product hopes and ideas. Within this
perspective ads are viewed primarily in functional terms. Commercials are helpful in the
sense that they present information about new toys or enhancements, ideas for lunchtime
or snacks and serve as a basis for product requests to parents. As a consequence,
specific messages are judged primarily on the basis of the products they depict. Whether
an ad is viewed positively or not, is largely a function of the products inherent appeal.
Products are assumed to be as they are represented in commercial messages, and among
these children, little evidence of disappointment was revealed. Links between ads and
brands are feature based and direct. Ads are perceived as a means to an end. Their
interest value rests on excitement generated by the products they depict.
Among the older children, on the other hand, ad-consumption relations were
construed on a much more diffuse basis. An advertisement may be viewed in a more
complex, multidimensional fashion that incorporates creative and strategic considerations,
but that has little direct relation to the appeal of the product itself. Motivated in their
reactions to advertising not so much by skepticism but by an interest in the creative
properties of ads, older children focused their attention primarily on executional elements
with the personal implications of the brand message a distant second. Evident in their
comments is a fascination with advertisings creative elements and the process by which


CHAPTER 2
REVIEW OF LITERATURE
Few consumer issues in recent memory have stimulated as spirited and protracted
a dialogue as the question of how advertising affects children. Educators, academic
researchers, regulatory agencies, public policymakers, public interest groups,
broadcasters and advertisers and their ad agencies have all contributed to the complex and
often fiery debate about the impact of advertising in childrens lives. Issues of social and
regulatory policy are at the heart of this controversy (Huston, Watkins and Kunkel 1989).
Though virtually all interested parties agree that children constitute a special audience
with distinct needs and vulnerabilities, there is substantial disagreement regarding issues
of fairness in advertising to children and its broader impact on the socialization process
(Armstrong and Brucks 1988; Kinsey 1987; Kline 1989; Liebert and Sprafkin 1988).
During the last twenty years, Americans have witnessed the rise and fall of the
Federal Trade Commissions proposal to ban childrens television advertising, the advent
of program-length commercials, substantial fluctuation in the number of commercial
minutes the Federal Communications Commission allows during childrens programming
and the latest innovation, Channel One (Condry, Bence and Scheibe 1987; Federal Trade
Commission 1978; Greenberg and Brand 1993; Kunkel 1988a, 1988b, 1991; Kunkel and
Watkins 1987; Mueller and Wulfemeyer 1992). It is within this social and political
context that research questions have been framed, methods chosen and knowledge
20


87
he gets his own shopping basket and then goes off on his own to choose cereals, snacks,
sodas and fruit drinks within loose guidelines that his mother has established. Most of
the children interviewed indicated that they accompany their parents to the grocery store
on a fairly regular basis, but that it did not necessarily mean they had substantial
influence on the brands chosen. Whether and how their experiences as a shopper and
consumer are influenced by advertising can not be determined on the basis of this
preliminary study. However, these interviews did provide some initial insights worthy
of further exploration. The understanding of how children interpret and evaluate
advertising can only be enriched by a deeper appreciation of their role as both shopper
and consumer.
One of the primary issues in the third wave of interviews, was to determine
whether and how children would talk about advertising in the context of products they
like and dislike. Without exception, children raised the issue of advertisings impact at
some point during the conversation. Though consumption tends to be viewed as the most
important source of information about frequently purchased packaged goods, family
members, friends and advertisements were readily mentioned. In these interviews,
advertising was viewed more critically. Though the participants discussed things that
they thought were funny or entertaining about advertisements, they tended to focus as
well on advertisings capacity to "trick" or "fool" people. Perhaps thinking about their
product preferences first establishes a different mind set, a "logical or rational" young
consumer. In their interpretations of ads, the children seemed to think more about the
brand and what is said about it, than its capacity to entertain or its stylistic features. In


151
causal model is recursive (Asher 1983). OLS regression provides good estimates of the
parameters providing regression assumptions are met, particularly the requirement that
the residual variable in a structural equation is uncorrelated with the explanatory
variables in that equation. The relationships in the modified dual mediation model can
be specified as a series of regression equations with grade represented as a dummy
variable:
AAd = a, + j3,AdInfo + /32Ent + j33PAB + /34Grade +
j35(AdInfoGrade) 4- /?6(Ent*Grade) + /37(PAB*Grade)4- e,
CogB = <*2 4- /SgAdlnfo 4- j8gAAD + /39Grade 4- /310(AdInfo*Grade) 4-
0n(AADGrade) 4- e2
Ab = a3 "h ^i2^ad "h ^uCoga + /3I4PAb + 015Grade +
/3i6(AAD#Grade) + /317(CogB*Grade) + /3lg(PABGrade)+ e3
where:
AAd
=
attitude toward the ad
CogB
=
perceptions of the brand
Ab
=
brand attitude
Grade
=
second or fifth grade
pab
=
prior brand attitude
Adlnfo
=
perceptions of ads informativeness
Ent

perceptions of ads entertainment value
e
=
error term
With these equations, it is possible to test whether the significance of the paths in the
model change when children of different age groups are exposed to advertising or a
combination of advertising and product trial. Path coefficients were estimated for each
of the three cells incorporating ad exposure, using traditional regression techniques.
Differences between age groups in the strength of model relationships were indicated by


152
the significance of interaction terms. For example, a significant coefficient for the
(AAD*Grade) term (016) in the ad only cell indicates a significant change in the impact of
Aad on Ab between second and fifth grade children. The results of these analyses are
depicted in Figure 4, which lists unstandardized parameter estimates. Black arrows
denote statistically significant relations at p > .05. White arrows represent nonsignificant
relations. T-tests for within group differences between ad only and ad plus trial cells
were conducted by incorporating appropriate covariance estimates in the error term. The
within subjects comparisons suffered from low power due to relatively small samples per
age group.
Direct effects of A.P on AP Hypothesis four predicts that childrens prior brand
attitudes would have little impact on current brand attitudes, except in an ad only setting.
As shown in Figure 4, the beta coefficient for the PAB term was significant in the ad only
condition for both second and fifth graders. Follow-up within group analyses among the
fifth graders, revealed that the influence of prior brand attitudes (PAB) on current brand
evaluations was smaller in the ad only in comparison to the ad/trial combination cells.
Differences observed between ad only and trial/ad were significant, but neither was
significantly different from the ad/trial cell. Among the second graders, prior brand
evaluations continued to influence current attitudes, even in a trial context.
Hypothesis five serves to establish the baseline against which trial based issues
can be examined. It predicts a direct transfer of ad affect to brand attitude (Aad -* AB),
in an ad only setting. As anticipated, Aad mediates advertisings influence on AB in a


205
the older children applied multiple criteria in trying to find the linkages between the more
elusive or whimsical ad message and the sensory-laden trial experience.
Fairly elaborate judgments were made about the quality of specific advertisements
often with little mention of specific aspects of performance, except as a means of
diagnosing the truth value of the ad. These children were careful to tease apart what
aspects of an advertisement were literally true, which reflected exaggeration or fantasy
and more rarely, which represented outright falsehoods. While obviously this evaluative
process focuses directly on product performance, rarely did the children view the issue
of truth in advertising in terms of its personal consequences. Instead, the perceived
accuracy of performance claims was factored into their judgments of the overall quality
of the commercial message. Their comments often reflected the analytical stance of a
dispassionate observer rather than a potential consumer of these products.
Although the older children would readily point out the merits or weaknesses of
an advertisement, irrespective of what they thought about the brand, this was extremely
rare among the younger group. These patterns were particularly apparent in the first
phase of the interview in which the ad-brand stimuli were utilized. While the older
children might hold their attitudes about the brand in abeyance as they commented on the
quality of the ad, this was not the case among the younger children.
Judgments of fantasy and reality. Evident in childrens comments and critiques,
is a particular attentiveness to the fantasy in commercial messages. In a fairly systematic
fashion, the children separated what they perceived to be real, and not, in advertised
portrayals. Distinctions between fantasy and reality were a central focus of attention


265
National Association of Broadcasters Code Authority (1977), "Childrens Television
Advertising Guidelines," reprinted in The Effects of Television Advertising on
Children, eds. R. P. Adler, G. S. Lesser, L. K. Meringoff, T. S. Robertson, J.
R. Rossiter and S. Ward, Lexington, MA: D.C. Heath, 304-309.
Neelankavil, J. P., J. V. OBrien & R. Tashjian (1985), "Techniques to Obtain
Market-Related Information from Very Young Children," Journal of Advertising
Research. 25 (3), 41-47.
Nisbett, R. E. & T. D. Wilson (1977), "The Halo Effect: Evidence for Unconscious
Alteration of Judgments," Journal of Personality and Social Psychology. 35 (4),
250-256.
OGuinn, T. C. & R. J. Faber (1989), "Compulsive Buying: A Phenomenological
Exploration," Journal of Consumer Research. 16 (September), 147-157.
Oliver, R. L. (1980), "A Cognitive Model of the Antecedents and Consequences of
Satisfaction Decisions," Journal of Marketing Research. 17 (November), 460-469.
Olson, J. C. & P. A. Dover (1979), "Discontinuation of Consumer Expectations
Through Product Trial," Journal of Applied Psychology. 64(2), 179-189.
Park, C. W. & S. M. Young (1986), "Consumer Response to Television Commercials:
The Impact of Involvement and Background Music on Brand Attitude Formation,"
Journal of Marketing Research. 23(February), 11-24.
Parker, W. C. (1984), "Interviewing Children: Problems and Promise," Journal of
Negro Education. 53 (1), 18-28.
Pateman, T. (1983), "How is Understanding an Advertisement Possible ?," in Language.
Image. Media, eds. H. Davis & P. Walton, Basil Blackwell, UK: 187-204.
Pearson, P. D., J. Hansen & C. Gordon (1979), "The Effect of Background Knowledge
on Young Childrens Comprehension of Explicit and Implicit Information,"
Journal of Reading Behavior. 11(3), 201-209.
Peracchio, L. A. (1990), "Designing Research to Reveal the Young Childs Emerging
Competence," Psychology & Marketing. 7 (4), 257-276.
Pereira, J. (1991), "Are Ninja Turtles Headed for Ooze from Whence They Came?,"
Wall Street Journal. (May 22), Bl, B6.
Pereira, J. (1990), "Kids Advertisers Play Hide-and-Seek, Concealing Commercials in
Every Cranny," Wall Street Journal. (April 30), B1,B6.


249
Everyday Experience Questions
General Perceptions of Advertising-Product Linkages
1. Ad-Driven Reactions
Lets talk about some commercials that you can remember.
a. Tell me what happens in that commercial. (What is the story?)
b. What is it about that commercial that makes you remember it?
c. (Once any form of ad evaluation is offered) Is that a commercial that you
like or dislike? Whats in it that you like (dislike)?
2. Product-Driven Reactions
a. What are some of your most favorite snacks (chips, cookies, fruit snacks-
stuff like that? least favorite?
b. What is it that you really like (dislike) about ?
What makes good? not so good?
c. How did you first find out about ?
(if ad, pursue further- e.g., What did you see?)


228
From this foundation, there are a number of directions that future research might
take. As a first step, it would be useful to explore the role entertainment plays in
childrens judgments of advertisements across both a wider age range and message types.
Based on research evidence among adult populations, there appears to be a shift in how
ad-trial interactions are evaluated that occurs at some point beyond age 11. Research
which examines the nature and timing of this shift would be useful for gaining a more
in-depth understanding of ad-trial interactions from childhood to adulthood. A second
area that bears investigation is the development of better measures of transformational
effects. This is particularly important in the realm of childrens advertising response
where so few measures of any kind currently exist. This lack of appropriate measures
seems to have constrained this entire research area. Future research is also needed to
develop a deeper understanding of childrens consumption issues. Very little is known
about childrens consumer behavior except that which pertains to advertising effects.
One direction that might be taken from this study is to begin to consider the shopping
context and its relation to childrens consumption as well. Childrens involvement in the
family shopping may represent an important consideration in their consumption patterns,
beliefs and attitudes. Alternatively, consumption studies might be approached from the
perspective of favored possessions and their meaning and role within childrens lives.
Irrespective of the specific direction taken, what this research does suggest is that the
childrens perspectives are unique, valid and worthy of investigation. Their culture is
their own. As adults, we have long forgotten what it means to experience the world
through the eyes of a child. However, if we listen, perhaps theyll tell us.


37
Translating Product Meaning: From the Mundane to the Magical
The associations children construct between advertisements and the products they
promote are fundamental to their emerging understanding of the marketplace. Without
the opportunity to contrast their own experiences with the idealized images conveyed by
advertisements, children would lose the most basic source of information they have
available about marketing activity and influence. However, the specific character of
these linkages are neither simple nor necessarily direct. To begin to appreciate how
children perceive the ad-consumption relationship, requires first, an understanding of the
nature of the task with which they are faced.
Broadly speaking, children encounter consumer products in one of two distinct
contexts. On the one hand, they may learn about a brand through their own direct
experiences. Sitting on a kitchen shelf, in a lunch box or sampled at a friends house,
the brand may be part of a childs familiar, everyday world. The brand is acquired,
consumed and disposed of, through the ordinary course of day-to-day life. It exists in
the realm of the commonplace or conventional. Alternatively, children may be exposed
to a brand through the imagery of an advertisement. Here, the brand is located in a
figurative or symbolic world, explicitly fashioned to extend the brands meaning and
appeal. The advertisers task is to transport the brand from the world of the mundane
and familiar, to the more ephemeral symbolic realm (Young 1990). Through the
language and images of advertising, the brand is elevated from the ordinary or everyday
context of existence to one replete with fantasy, play and adventure. To depict the
product in its most appealing light, the advertiser seeks to move the brand from the realm


213
great perhaps ridiculous lengths to promote their products because the concept of long
term consequences does not enter into their thinking. This is interesting because this
perception underpins how they think about what advertisers motives and actions.
Older children recognize that people are employed by product manufacturers, and
that without profitable brands business firms lose money and people lose their jobs. This
awareness seems to create something of an ethical dilemma for the children. By being
able to take the manufacturers point-of-view, they recognize the value of advertising yet
simultaneously feel that the consumer should not be confused or misled. As a
consequence, they seem to develop rules or standards for advertisers that are seemingly
inconsistent. For example, one of the respondents related an experience she had had
with an arts and crafts kit that did not perform as expected.
Have you seen "Make it, Take it?" You put little beads into a frame and then
you melt it in the oven. Well, I mean they show it so easily on the commercial.
Just pour a little bit in and then you put it in the oven and in 10 seconds its
done. But they are like tiny beads and you have to put each individual one into
everything. And it usually flows over and gets into your frame. Its not that
easy, as theyre trying to make it look like! If Im buying something like that,
I dont like when they do that. But sometimes if its a real flop of a product they
have to do that to protect their product.
Like the art project, I mean if it turns out to be a major flop, then you shouldnt
show on the commercial how its done. You should just show the product. You
shouldnt show them that it could be done perfect. And then when you get it and
youre not an expert at it, it doesnt come out perfect. But I think if you said
something, it would be okay. As long as you didnt say, "ours is the best."
{503, F}
Although she felt disappointment, she continued to support the manufacturers right to
advertise. Though she clearly believed on the basis of her experience that it was a bad
product, she also felt that the advertiser should continue to promote it as long as they


18
Rojcewicz 1987; Waksler 1986). Discovery-based research methods offer the
opportunity to strip away "adultcentric" interpretations of childrens consumer activities.
Rather than translating childrens experiences into adult categories or commonsense views
of the world, this approach attempts to understand the childs experience as it is.
Discovery-oriented research recognizes that childrens consciousness differs from adults
but views this as a positive phenomenon to be understood and respected. The childs
realm is depicted as natural, everyday or phenomenal rather than scientific or theoretical.
The qualitative investigation offers the opportunity to view the
advertising-consumption relationship through the eyes of a child. In combination with
more traditional experimental methods, a great deal can be learned about how children
evaluate what they consume. A hybrid research design brings to bear the strengths of
multiple approaches and perspectives (Lutz 1991). The potential contributions of such
a study are both substantive and methodological. From a substantive perspective, very
little is known about product use, though it is a critical element of the consumption cycle.
The investigation is designed to provide specific knowledge about how children perceive
and evaluate the relationship between the advertisements they see and the products they
consume. The ways in which advertisements may potentially alter childrens product
experiences has important consequences both in an immediate sense and in terms of
advertisings broader impact on children and their understanding of the marketplace.
Methodologically, the investigation represents one of the first attempts within the
consumer literature to approach issues affecting children from a phenomenological
perspective. This approach offers the opportunity to question assumptions made about


247
Smarties
This is a fast-action musical ad, that employs special effects. At the outset, children are
on a city rooftop watching a blimp drop giant boxes of Smarties from the sky. As they
parachute to the ground, the children run to open the giant boxes and happily eat the
candies. A giant box is shown with candies streaming across the sky. Quick shots of
the children eating the candy with delight are interspersed throughout. The Smarties then
become a train that speeds through the city as the children look on and cheer. As the
song ends, a Smarties package is shown with a giant candy on top.
Song: "When you eat your Smarties do you eat the reds one last? Do you suck them
very slowly or crunch them very fast? Eat that candy coated chocolate. Now tell
me when I ask, when you eat your Smarties do you eat the red ones last?
When you eat your Smarties do you eat the red ones last? Do you suck them
very slowly or crunch them very fast? Eat that candy coated chocolate. Now tell
me when I ask, when you eat your Smarties do you eat the red ones last?
(Performed by an adult male with children joining in during the second verse)
Advertised Product Attributes Measured in Experimental Questionnaire
1. Made out of milk chocolate (S)
2. Crunchy (E)
3. Can make them last a long time by sucking them very slowly (E)
4. Come in different colors (S)
5. Many candies per box (S)
6. Supposed to eat the red one last (S)


30
should but will erect defenses against advertised messages once they acquire the capacity
to do so. However, it is perfectly reasonable that a child will be fully aware of an
advertisements aim, and interpret it as such, without any negative feeling or connotation.
There is no reason why recognition of advertisings persuasive purpose necessitates a
decline in a childs responsiveness to specific commercial messages.
Childrens awareness of persuasive intent is an important issue not only because
of its link to the acquisition of cognitive defenses, but because a childs interpretation of
a particular advertisement depends on his(her) understanding of the nature and function
of advertising in general. Unlike other forms of mass communications a child
encounters, advertising transmits its sales plea through the symbolism of idealized
settings and situations. To make sense of these appeals, a child learns that ads use
dramatized episodes, characters and emotions to symbolize or represent real situations
(Robertson and Rossiter 1974). Before a child can fully grasp the meaning of a
commercial, (s)he needs to understand that the primary focus of the message is not
information but persuasion. Inherent in the content of the advertisement is a systematic
partiality or bias such that those features that enhance persuasion are emphasized and
those that impede it are de-emphasized. From this perspective, the key characteristic of
an ad is not simply that there is an intent to sell but that, in order to do so, the content
of the appeal is crafted in specific ways. If a child is aware of the purpose and form of
advertising as communications designed for commercial aims, then the imagery will be
interpreted within that broader context. Identifying a message as an advertisement helps
the child to draw on knowledge relevant to decoding the specific meanings of text and


193
turns colors and has a funny voice is perceived to be funny but the childs primary
interest is still the product and premium offer.
They have real fun stuff, like flying eyeballs with legs. They do really funny
things. They have little birds on springs and they tell you stuff that you can do
at the store, like count stickers. You press the sticker and it does a funny voice.
If you get the Mr. Kool-Aid guy, you press one button thats green and he says
"This is the Wacky Warehouse Mall!" When you press the red button, for the
great Bluedini, he goes in the vacuum cleaner. Theyre fifty cents each sticker.
You win a prize by, you open the package and it says either "You are an instant
winner" or "Sorry, try again." Once Ive gotten to be a winner. I won the
Purplesaurus Rex that way. {210, M}
The use of the brand and ad stimuli within the interview were useful for
examining the product versus execution focused distinction that had emerged in the data.
While the product was emphasized in the context of ads that the children spontaneously
brought to mind, and in the examples they offered, the execution of the fruit snack ad
to which they were exposed during the interview was an obvious source of interest, and
pleasure or distaste. In this ad, a fanciful execution was employed to promote the idea
that the snack was exciting and unusual, containing soda flavors and features unlike
conventional brands. Through the use of special effects, children in the advertisement
are initially depicted as one dimensional characters. After trying the snack, they pop
back to three dimensional form, and enthusiastically proclaim the merits of the brand.
Soda bubbles cover the screen and other children come to join the fun. Uniformly, the
informants commented on the "flat" execution, though their reactions were rather evenly
split between positive and negative evaluations.
I think its really cute how they pop out and I like it when hes all flat, like
someone in a picture. Then when they have the sodalicious they turn to regular
people. Its kind of cute and I dont know how they do it. {205, F}


24
construction and communication of cultural meanings. Fully occupied in the process of
learning and negotiating their notions of self and community, children may use
advertisements as a window on the larger culture. To the child engaged in the process
of discovering what it means to be a child and a consumer, advertisements are more than
simply product information. They are rich sources of cultural knowledge and insight.
This perspective departs from the prevailing paradigm by viewing the child not just as
a passive recipient of information but as an active participant in the construction of
meaning. Children construct and shape meanings that are multifaceted, intriguing and
often complex yet may bear little relationship to adult interpretations. This research
project departs from traditional approaches by explicitly focusing on the childs unique
perspective on the advertising-consumption relationship. Though childrens responses
legitimately reflect the situations and objects that they confront in daily life, relatively
little is known about their unique perspective. In many studies of childrens media
reception, adult responses are used as the asserted or implied standard of performance
(Anderson 1981; Anderson and Avery 1988; Bever etal. 1975; Dorr 1986; Rossiter and
Robertson 1974). Researchers have utilized their own interpretations of televised content
as the standard and evaluated childrens responses against it. With this criterion,
childrens perceptions are implicitly regarded as some sort of flawed approximation to
the adult model, rather than a true and valuable perspective on the world. This research
is based on the assumption that childrens reactions to the situations and objects they
confront in daily life are far more complex than theory often gives them credit (Denzin
1977). Until this complexity is recognized and incorporated into empirical studies of


141
subjects were asked to point to the most appropriate response. Their responses to these
four questions were summed to obtain an overall attitude score (a = .88).
Ad perceptions and attitudes about advertising. Childrens general attitudes about
advertising were measured using a slightly modified version of Rossiters (1977) scale.
This four point yes-no scale allows subjects to choose between two levels of affirmation
and two levels of negation. In this study, a question mark neutral category was added
to ascertain the level of uncertainty present among this group. Since the scale had been
used only once with children as young as second grade (Riecken and Samli 1981), all
items were verbally administered to both age groups. In this study, the alpha value was
.67 for the fifth grade sample and .55 for the second grade sample. Though researchers
have reported some empirical difficulties with the unidimensionality of the scale (Macklin
1984), it has been shown to capture meaningful differences within the target population
(e.g., Bearden, Teel and Wright 1979). To measure ad perceptions a series of items
derived from Barling and Fullager (1983) and Schlinger (1979) were used to develop
measures for "entertainment" and "ad information". Childrens ad perceptions were
measured on five-point yes-no scales similar to those employed by Roedder, Stemthal
and Calder (1983) and Rossiter (1977). Cronbachs alpha was a = .69 for "ad
information" and a = .77 for "entertainment".
All scaled items were verbally administered to each participant to eliminate
potential difficulties that might have arisen as a consequence of differing literacy levels.


7
subsequently when the consumer comes into contact with a product. What a consumer
discovers through product consumption is not a mere reflection of objective reality but
an interpretation that may be influenced by the images and language of advertising
(Deighton 1984; Hoch and Deighton 1989; Hoch and Ha 1986; Puto and Wells 1984;
Wells 1986). Many everyday consumption experiences are open to multiple
interpretations. From the clothes we wear to the food we eat, product use is laden with
meaning that accrues from sources beyond its structural features or form (McCracken
1986). Even the simple act of eating a bowl of cereal may be subject to diverse
interpretations. The experience is sufficiently bland and potentially uninformative enough
to support a variety of assertions gleaned from other sources, such as advertising
(Deighton 1984). In these kinds of situations, advertisements have the potential to alter
the experience by suggesting what features should be noticed and remembered. They
may provide clues that consumers use to understand their feelings and reactions.
Advertisements seem to have the greatest capacity to reach into the product experience
when they are plausible and attractive, yet difficult to dispute directly. Well-executed
advertisements use striking images and language to enlarge a products meaning and
value. Advertising claims are frequently more affective than factually based. This is
particularly true in the realm of childrens advertising where fun, excitement and
adventure are overriding themes (Barcus 1980). How these kinds of advertisements may
influence childrens interpretations of their product experiences is unknown. Researchers
interested in the interaction of advertising and evidence have confined their efforts to
understanding adult responses and processing strategies.


46
expression of these cultural norms and values (McCracken 1986). Through their
anticipation, choice and consumption, products are a prominent source of meanings that
individuals draw upon in constructing notions of self, status and community. This
process of negotiating and refining conceptions of self and the social world is an ongoing
developmental process throughout the life-span. Movement through the life cycle,
changing circumstances, as well as evolving needs and preferences each bring about re-
evaluation and refinement. Children, actively and primarily engaged in the process of
defining their sense of self and society, may be particularly responsive, within the
general constraints imposed by information processing capabilities, to the meanings
contained in consumer goods. These are not meanings in a deep, philosophical sense but
useful ideas about the structure, expectations and values of the culture in which they live.
The central developmental task of childhood is to learn what it means to be an adult, in
all its complexity and nuance. Consumer goods, in their acquisition and use, are a key
source of cultural material and insight for the child.
Advertising is also implicated in the transmission and expression of cultural
meanings. It is the channel through which meanings are transported from the world of
everyday existence to consumer goods. Advertising, in a sense, captures cultural
meanings and invests them in consumer goods (McCracken 1986, 1987). It makes
accessible to children expressions of the culture in which they are learning to live and
contribute. As active participants in this process, children learn about the contents and
range of cultural meaning that exist in consumer goods (McCracken 1986). The picture
of the world as conveyed through advertising shapes or influences the picture of the


103
suggest that product trial may dominate advertisings influence in shaping consumers
perceptions about a brands experience attributes.
In this study, packaged food products primarily targeted and marketed to children
represent the domain of interest. These products as well as the ads designed to promote
them are dominated by experiential attributes and claims. Within this domain, product
trial is particularly informative, providing straightforward, diagnostic evidence about
unambiguous experience attributes. Advertising, on the other hand, is less credible or
trustworthy and likely to be discounted in the face of experiential evidence. In essence,
this study focuses on a substantive domain in which theory would suggest that advertising
has relatively little impact, except when considered in isolation.
Where the credibility of information and truth value are at issue, age differences
are likely to occur. Extensive research within the childrens advertising literature would
suggest that older children are much more critical of advertising than their younger
counterparts (Bever et al. 1975; Blatt et al. 1972; Rossiter and Robertson 1974; Ward
1972; Ward et al. 1977). Given the skepticism apparent among older children, they are
likely to readily distinguish between the credibility of advertised information and that
obtained through direct product experience. While the ad may produce weak, tentatively
held expectations about the brand, product use will result in stronger, more confidently-
held beliefs and attitudes, replicating the findings observed among adult consumers
(Marks and Kamins 1988; Smith and Swinyard 1983; Wright and Lutz 1993). However,
younger children may not make the distinction between advertising and experiential
evidence so readily. Though their experiences clearly provide pertinent evidence


254
Anderson, R. C. & P. D. Pearson (1984), "A Schema-Theoretic View of Basic
Processes in Reading Comprehension," in Handbook of Reading Research, ed.
P. D. Pearson, New York, NY: Longman, 255-291.
Armstrong, G. M. & M. Brucks (1988), "Dealing with Childrens Advertising: Public
Policy Issues and Alternatives," Journal of Public Policy and Marketing. 7,
98-113.
Asher, H. B. (1983), Causal Modeling. New York, NY: Sage.
Atkin, C. K. (1980), "Effects of Television Advertising on Children," in Children and
the Faces of Television, eds. E. L. Palmer and A. Dorr, New York, NY:
Academic Press, 287-305.
Barcus, F. E. (1980), "The Nature of Television Advertising to Children," in Children
and the Faces of Television, eds. E. L. Palmer and A. Dorr, New York, NY:
Academic Press, 273-285.
Barker, P. (1990), Clinical Interviews with Children and Adolescents. New York, NY:
W. W. Norton & Co.
Barling, J. & C. Fullagar (1983), "Childrens Attitudes to Television Advertisements:
A Factorial Perspective," The Journal of Psychology. 113, 25-30.
Batra, R. & M. L. Ray (1986), "Affective Responses Mediating Acceptance of
Advertising," Journal of Consumer Research. 13 (September), 234-249.
Bearden, W. O., J. E. Teel & R. R. Wright (1979), "Family Income Effects on
Measurement of Childrens Attitudes Toward Television Commercials," Journal
of Consumer Research. 6, 308-311.
Beckwith, N. E. & D. R. Lehmann (1975), "The Importance of Halo Effects in Multi-
Attribute Attitude Models," Journal of Consumer Research. 12 (August), 265-
275.
Belk, R. W., K. D. Bahn, & R. N. Mayer (1982), "Developmental Recognition of
Consumption Symbolism," Journal of Consumer Research. 9 (June), 4-17.
Belk, R. W., R. N. Mayer & A. Driscoll (1984), "Childrens Recognition of
Consumption Symbolism in Childrens Products," Journal of Consumer Research.
10 (March), 386-397.


170
consumer phenomenon, and consequently attain a deeper and more complete
understanding of its nature.
The potential benefits of pluralist approaches within consumer research are well-
illustrated in a small but growing number of empirical studies (Fischer and Arnold 1990;
McQuarrie and Mick 1992; OGuinn and Faber 1989; Wallendorf and Amould 1991).
However, even within this limited set there is substantial diversity in the means by which
positivist and interpretive methods are utilized and combined. For example, OGuinn
and Faber (1989) adopted a more traditional approach in their study of compulsive
buying. They utilized phenomenological interviews to illustrate and reinforce key survey
findings. Wallendorf and Amould (1991), in contrast, relied on survey data to generate
ideas about Thanksgiving consumption rituals that they then refined and tested through
their primary data sets, depth interviews and participant observation. To investigate
advertising resonance, McQuarrie and Mick (1992) utilized both interpretive and
positivist approaches including semiotic text analysis, phenomenological interviews,
content analysis of ads, and experimentation. An explicit goal of their investigation
concerned the synergistic insights that would emerge from a combined approach. In their
analysis and discussion, they focused on how the disparate methods converged upon key
findings, consequently providing a more complete, well-grounded and scientifically valid
picture of resonance than any single approach might offer. Collectively, these early
forays into critical pluralism testify to the value of combining positivism and
interpretivism in such a way that the unique strengths of each are maximized.


210
While not literally true, there is a level at which the advertisement is perceived as both
accurate and truthful. The issue of fantasy and reality is not cut and dried. Truth or
reality becomes a matter of degree rather than an absolute distinction. As a consequence,
it appears that it is the older child who appreciates these more elusive, symbolic
meanings who is more susceptible to advertisings influence within a consumption
context. Younger children who fail to appreciate non-literal meanings remain unaffected
by these more abstract, relatively difficult to dispute claims.
Advertising as a communications genre. When children think about the relations
between advertisements and products one of the primary issues that seems to consume
their attention is the underlying meaning and purpose of the communications genre. By
the time (s)he is 7 or 8 years-old, the typical American child has been exposed to
thousands of television commercials. These communications differ markedly from
television programs, stories, letters and other forms of communications children
encounter. Among the older children, in particular, there is a real curiosity about
advertisings unique character and strategies. Ads represent puzzles to be solved.
Keenly aware of advertisings persuasive purpose, the older children often look beyond
the message to the rationale behind it. Why a brand name is repeated frequently, or the
reason behind the inclusion of a jingle is sometimes more interesting than the message.
They show the shape of the cereal a lot of times. When they show the box a lot
of times, they show the name a lot of times. Make sure you remember it. Or
sometimes they have a song, and its like when you get songs in your head and
you cant get them out. Like sometimes Ill do that. Like the other day, I had
that Target song in my head. I couldnt get it out of my head. When I think of
the song, I think of that logo with the target, and that makes you remember.
{513, F}


2nd Grade 2nd Grade
(hypothesized) (observed)
Figure 4. -- Continued. Path Analysis Results,
b) Hypothesized versus Observed Relationships: 2nd Grade


38
of the everyday, to a world imbued with appealing signs and symbols. Through the
advertisement, a broader context is crafted for the brand, one that not only positions the
brand within the marketplace but mirrors the desires and interests of a young audience.
The advertiser must not only select desired properties for the product among a wide
range of possibilities but successfully evoke intended consumer reaction in the narrow
frame of an advertisement. An advertisement is not a neutral entity but a fluid, cultural
construction. The potential for meaning resides at a number of levels from the obvious
to the culturally interpreted (McCracken 1987). The content of persuasive appeals shapes
the meanings brands ultimately acquire. Advertising is one of the primary mechanisms
through which cultural beliefs, assumptions and values are transferred to consumer goods
(McCracken 1986). The transition from brand in the world to brand in the ad is a
complex process, not only from the advertisers perspective but from the receivers
perspective as well.
How children interpret or perhaps reconcile these varying sources of brand
information is neither clear nor necessarily simple. The seemingly objective reality of
a consumption experience is juxtaposed against the symbolic experience of an
advertisement. Both of these experiences have the potential to shape or transform the
interpretation of the other. That product experience may affect a childs subsequent
responsiveness and reactions to an advertisement makes sense, intuitively. That an
advertisement may have the capacity to alter a childs interpretations of his(her)
consumption experience is both intriguing and potentially disturbing (Hoch and Ha 1986;
Puto and Wells 1984). Research that attempts to characterize the process by which


173
experimental design might allow. Not only does it serve to ground understanding in the
context of childrens subjective experiences, it also enables an assessment of the
convergence or lack thereof among methods. Essentially complementary in nature, the
hybrid design provides the opportunity to consider advertising-consumption relationships
within a traditional methodological domain yet assess how the pattern of these
relationships appears relative to a more open-ended perspective. By triangulating across
methods, different aspects of a phenomenon may be revealed, providing a more enriched
perspective of a substantive phenomenon than that obtained through a single
methodological source (Lutz 1991; Wells 1993). By blending the findings of individual
studies conducted from different perspectives and using different methods within a single
research project, it is hoped that our appreciation of childrens consumption activities will
be enhanced.
Overview
Utilizing grounded theory perspectives and analytic strategies, the third study
represented a return to the field for a more in-depth qualitative examination of the
concepts and a priori themes suggested by the first two studies. Essentially
phenomenological in nature, this investigation was designed to provide a forum for
children to express their point of view about specific ads, their personal experiences with
advertised products, and the marketplace in which these stimuli are encountered. Three
broad research questions framed this study (1) how focal are the links between
advertising and product consumption from a childs perspective? (2) what are the
categories of meaning that children draw upon in thinking about advertisements and their


98
Both pragmatic and conceptual considerations suggest that the relationship
between childrens cognitive and affective reactions to advertisements warrants careful
study. Conceptually, advertising response patterns observed in adult populations can not
be extrapolated to a young audience uniquely engaged in learning about what advertising
is and how it works. Models of adults advertising response do not incorporate the
developmental constructs needed to explain response variation among age groups. While
these theories provide the critical foundation for further study, they were neither designed
nor intended for examining advertising effects among children. Further, though
extensive research effort has been focused on the nature and effects of consumers
attitudes towards advertisements, the impact of entertainment per se, has received scant
attention. Research within the "viewer response profile" (VRP) tradition assesses
consumers affective reactions to ads on a set of multidimensional descriptive rating
scales (Lastovicka 1983; Schlinger 1979). In these investigations, entertainment emerges
as a stable, analytically-derived underlying factor. However, its relationship to other
measures of advertising effectiveness has not been addressed systematically. The
emergence of entertainment as a central conceptual theme in the preliminary study
suggests that this construct may be an important explanatory factor in the realm of
childrens advertising response. Ads were assessed not simply in terms of their likability
but their entertainment value. Among the older children, these judgments were relatively
sophisticated, frequently drawing on a number of form and content dimensions. The
complexity and detail that characterized childrens comments seems to suggest that
alternative models of the persuasion process bear consideration. It may be that an


39
children integrate and internalize these disparate marketplace stimuli represents an
important first step towards understanding the likely consequences of ad-consumption
interactions.
From the childs perspective, the transition requires the capacity to translate
product representations between disparate experiential and viewing contexts. The
advertiser takes the simple or mundane and envelops it with symbolic properties or
significance. To the extent that the consumption experience represents a kind of literal
reality, the depiction of the brand in the ad appears to require more figuratively based
interpretive strategies (Young 1990). Childrens advertisers frequently employ fantasy,
hyperbole, humor and simple metaphors to create attractive brand images. Mythical
beings, magical transformations and whimsical flights of fantasy are the rule rather than
the exception. The development of an understanding of non-literal uses of language and
visual images is an important mediator of the meaning children assign to ads utilizing
these creative techniques. However, the process of learning to interpret media
communications on a figurative level is both complex and protracted (Young 1986). At
a very simple level, preschool children spontaneously generate creative metaphors,
playfully fusing literal reality and fantasy (Winner 1988). School-age children, on the
other hand, seem to approach communications from a much more literal perspective.
Messages tend to be strictly interpreted or taken at face value. Though an eight year-old
recognizes the discrepancy between the message and reality in an advertisement that
incorporates obvious exaggeration (s)he may not fully understand the communicators
purpose in employing this technique (Young 1990). The advertiser is likely to be


99
entertaining execution enhances persuasion through its ability to capture attention and
enhance brand recall, thereby facilitating entry into the childs evoked set, irrespective
of any brand-specific expectations.
From a more pragmatic perspective, a special emphasis on childrens affective
responses is warranted due to the frequency of emotional or image-based appeals in
advertising targeted at a young audience. Children have become an increasingly
important market segment in terms of absolute size, spending power, and purchase
influence (McNeal 1987). Their receptivity to promotional efforts is of direct interest
to advertising professionals, public policy makers, manufacturers and academic
researchers.
The purpose of this study was to examine how advertising may affect childrens
interpretations and performance evaluations when combined with direct brand experience.
Using products and advertisements specifically designed for and marketed to children,
this study investigates how children assimilate information gleaned from their
consumption experiences and advertising. In addition, the relationships among childrens
affective reactions to commercials, brand beliefs and attitudes are explored in the context
of pre-trial advertising as well as situations where the child has had the benefit of direct
experience with the brand.
This investigation extends experimental research on childrens responses to
advertising by (1) focusing on the potential impact of product experience and (2)
incorporating affective as well as cognitive response variables. While research on
advertising-trial interactions has suggested that advertising influences adults subsequent


110
research on childrens cognitive responses, seem to suggest that an alternative pattern in
which advertising does exert influence is possible, even among the older children.
Among the younger age group, it is important to consider whether they even have
the capacity to integrate ad and trial based information. Information integration theory
has been applied to a number of issues within developmental psychology including
childrens perceptual judgments (e.g., numerical quantity), moral judgments, perceptions
of groups, and social attribution (Anderson 1980). One of the general findings of this
work is that young children (below age 6) consistently combine stimulus dimensions
according to rules, such as averaging and adding. This research indicates that even the
younger children (7-8 year-olds) in this study, should have the capacity to combine
advertised claims and information gleaned through product trial in a meaningful way.
With the capacity to integrate advertised and experience based information, it is likely
that the younger children will do so. Unlike the older children, advertising is not likely
to be viewed skeptically, and as a consequence may play an important role in guiding the
interpretation of subsequent experiential evidence. Since younger children tend to judge
complex stimuli on a holistic basis, the ad may create diffuse, positive impressions about
the brand, rather than specific expectations that tend to be confirmed through product
trial. In the case of childrens advertising, it is often the ad claims rather than the
experience that is open to multiple interpretations. Ad claims are often cast in terms of
broad, relatively vague assertions that can easily be confirmed through trial. To the
extent that the ad portrays the brand in the best possible light, children may be
predisposed to interpret the experiential evidence favorably. Without the skepticism to


221
assuage these worries. While this approach may not be appropriate for research with
very young children, it can be profitably employed with school-aged children who have
gained some facility in expressing their thoughts and opinions. Qualitative inquiry offers
insight into a neglected side of consumer behavior, the meanings children impose on their
everyday encounters with ads and products. Evidence for the value of this approach was
gathered as the project unfolded.
Emerging from the preliminary study was a view of childrens advertising
reception that had less to do with the communication of brand information than the
entertainment provided. Given the almost exclusive focus by childrens advertising
researchers on childrens cognition, this was not wholly expected. Rarely are the
executional dimensions of advertisements expressly considered, either in terms of their
persuasive influence or impact as an expression of cultural meaning. Preliminary
evidence that this fascination with the creative side of advertising might not hold for the
younger children was also indicated by the initial interviews. Discovery-oriented
research helps to surface these kinds of unanticipated relations and grasp their meaning
within the context of childrens experience. Peshkin (1988) suggests that understanding
complexity is the unique gift of qualitative inquiry. Rather than limiting investigation
to a few carefully controlled variables, qualitative inquiry retains the complexity and
nuance of human behavior. Coupled with more traditional experimental methods, the
hybrid design offers a more comprehensive and trustworthy view of childrens response
than either method might accomplish alone. The findings of the preliminary study served


231
Product Experience Questions
(After Product Trial)
1. What did you find out about by trying it?
2. What do you think of now that youve tried it.
3. What do you like about ? dislike?
4. How is compared to what you thought it would be like before you tried
it? How is it the same? How is it different?
5. If you were going to tell a friend about what would you say?
6. Is like any other products youve tried? How?
(ONLY IF AD HAS BEEN MENTIONED)
7. When you eat is it like the commercial? How is it the same? different?
What should a commercial for tell kids about it?
8.


125
onto the product experience itself. Young childrens Aad may derive both from their
responses to the ads executional characteristics and the initial appeal of the product, to
a greater extent than message based elements such as the credibility of the claims or the
advertiser. This group may not so readily differentiate between the ad and the brand.
If they like the brand, then the ad is also likely to be perceived positively. Young
children tend to judge ads and brands on a more holistic basis than older children
(Roedder 1981; Rust 1986; Ward 1972). Rather than evaluating a product on the basis
of multiple specific features, they may form more global impressions about the ad and
the brand that it promotes. When the ad is funny, silly, or otherwise engaging it may
create positive feelings and reactions which lead to more positive evaluations of the brand
irrespective of whether the child has had the opportunity to sample the product or not.
With little incentive to discount the ad or its contents, it may set the stage for a positive
experience.
As children mature, they may be expected to begin to reflect on the utility of
information contained in the advertisement and modify their responses accordingly.
Among older children, Aad is likely to be shaped by the perceived credibility of the ad,
the advertiser and advertising in general as well as the executional characteristics of the
ad (MacKenzie and Lutz 1989). When evaluations of the ad and its claims are the
primary source of brand information available, their direct role in shaping brand attitude
is substantial. However, childrens affective reactions to the ad may pale in comparison
to more confidently-held trial based beliefs, which are likely to play the dominant role
in determining childrens brand attitudes. So, while Aad may exert a substantial direct


118
In a pretrial context, the dual mediation model posits both a direct effect of Aad
on brand attitude as well as an indirect effect via brand cognitions. The direct effect is
a one-way causal flow from Aad to AB through which affect generated by an ad is
transferred directly to the advertised brand. Aad may also influence brand attitude
through a more indirect two-step mechanism: (1) Aad -* CogB and, (2) CogB -* AB).
According to the model, the first step occurs because consumers affective reactions to
an ad may foster message acceptance. The more positively consumers feel about the ad,
the more receptive they are to its content. The second step, (CogB -* AB) is based on the
traditional hierarchy-of-effects framework, whereby brand attitudes are determined by