Advantages and Limitations of Elaboration Likelihood Model - Research Paper Example

ADVANTAGES AND LIMITATIONS OF ELABORATION LIKELYHOOD MODEL A STUDY OF TESCO Table of Contents Page 3 2 Introduction 4 3 Research Methods 4 4 Research Findings 5 5 Research Outcomes 6 6 Research Conclusions 8 7 Force Five Analysis 9 8 Power of Buyers 9 9 Attitudes 10 10 Relevance 12 11 Limitations of ELM 13 12 Conclusions 13 13 Bibliography 14 1 Abstract Tesco has embarked on capturing the Muslim segment of their customers by offering Halal Food at their outlets that are located predominantly in Muslim neighbourhoods. The result of a survey reveals that this move is not successful as the customers have preconceived notions or negative attitudes about this offer. The importance of the Elaboration Likelihood Model of persuasion has been dealt in length in this report and its relevance has been highlighted for action by Tesco. It has been concluded that the company needs to use this model for effectively communicating its move through effective messages for making this move a success. 2 Introduction Markets are heterogeneous and are created by reasons of different values, needs, wants, constraints, beliefs and incentives. Customers differ in their values and perceptions and want to purchase things that have value for them. Value is not just the monetary part, but also the usefulness and emotions that with go with it. The need and want play a great role in determining this value. The price actually determines the location from which this purchase will be made. Service and reliability are other important determining factors Tesco have been prudent to the above needs and have, with professional help and advice, divided the markets into various segments catering to different groups and sub-groups of customers. They have done this by discovering their needs and determining the want of their customers. In order to attract a large customer base of Muslims it has on offer Halal Food in its stores, especially in areas where there is large concentration of Muslim population. The decision is based on their current habits, needs and the affluence that makes them potential and recurring customers. The question however arises whether is it sufficient to just introduce Halal food and sit back and expect loyalty from Muslim customers? 3 Research Methods For testing the veracity of Tesco’s move to introduce Halal Food it was necessary to make a survey. Hence a study was carried out to find the perceptions of Muslims about the Halal Food offerings at Tesco outlets and to give it credibility; both Positivist and Post-Positivists Methods were applied. Method refers to the research tactics used in the conduct of a research effort. Examples include drawing samples, conducting questionnaire surveys, engaging, and participating in observations. Positivist methods are based on Descriptive and Experimental Research. Their justification lies in Internal and External reliability of content and Validity through Random and Deliberate sampling of data. In case of Post-Positivist Research the method adopted are Naturalistic Inquiry and Narrative Inquiry. Here the justification is based on Trustworthiness, as the result is credible, confirmable, dependable and transferable. It is further validated by fairness of the research. The reason for adopting a mix of both methods is that while in Business and Management researches, the quantitative or the numerical approach to analysis is based on Positivism, unless this is qualified by qualitative means (post positivism), the numbers alone can often be misleading. For instance Sales figures of a particular time period are of little value unless they are further divided into sales of individual items with prices and costs for each treated separately, from which the contribution to profit or loss of each item can be found. 4 Research Findings Two sets of questionnaires were prepared and targeted towards two types of customers. The first was the customers that were actually visiting the Tesco stores and were approached at the exit while they were leaving after their purchase was over. These customers were perceived to be Muslims by their appearance, for instance the ladies by their attire and the men by their demeanour. The second questionnaire was carried around in the area around the store, where a large Muslim community exists. Here the Muslims were identified by their residence. 90% of ladies answered, especially people who shop more than 3 times a month, that they would go to one store if the price and the availability of product was steady, However only 70% of the men agreed to this. There were other answers like; I like to see what other stores have, check with competition for better price and quality. The loyalty scheme used by Tesco is not seen as a great influence and the price and the product were considered to be the most important. Special offer was the most attractive feature and incentive for 65% people. 60% said that they rate Tesco moderately for providing products which meet their dietary needs. The younger group of up to 40 years wished for more Halal products. especially English fast food type (hotdog, pizza, ready meals). 20% wanted the Halal sign to be used more prominently in all products that meet their dietary needs. But there is a low trust when it comes to Halal meat, and a high percentage of 55% suspect whether it is really Halal? The second questionnaire was for the surrounding community. Surprisingly the majority of 80% did not know that Tesco had a Halal section. More trust issues was mentioned, and most of them questioned if it was really Halal. 5 Research Outcome The findings reveal a rather dismal picture of the market segmentation effort by Tesco. While Tesco have been quite successful in other segments like the Kosher Foods and other kosher offering for the Jewish community, they have not fared as well with the Muslim community. The general result of the research is: i) Muslims are largely unaware that Tesco is offering Halal Foods. The largest negative finding was that the extraordinarily high 80% of the people living around the store area were unaware that Tesco have Halal Food counters. This is a glaring failure of publicity. Apparently either the publicity campaigns have totally ignored to inform the Muslim population of these new offerings or they have been misdirected altogether. ii) Muslims doubt if Halal food is in fact Halal. The second disturbing outcome is the reply of over 55% of Muslims who express doubt about the food being Halal. This shows the failure of Tesco in getting together the supply chain to give strong signal that food procured was indeed Halal. This can be attributed to following reasons. It is apparent that the employees do not have the required exposure or experience and only their accurate knowledge will raise the comfort level of the customers. It also reveals that special relationships with suppliers and distribution channels are missing. iii) There is no special reason to go to Tesco for Halal Food. The third outcome was another negative when 60% said that they rate Tesco moderately for providing products which meet their dietary needs. The younger group of up to 40 years wished for more Halal products, especially English fast food type (hotdog, pizza, ready meals). iv) Tesco did not offer consistent prices and products A large number of ladies (90%) and sizeable number of men (70%) who shopped at least thrice a month were of opinion that they prefer going to stores that offered consistency in prices and products on offer. v) They want to check competition for price and product offerings. This thought or perception on the part of Muslim customers leads to one conclusion only. Tesco is unable to project the quality and price of its Halal Foods in sufficiently responsible manner so that the customer is always in constant need to check it out elsewhere. Confidence building measures are called for in this case. vi) After sales service Out of this develops another factor which is capability to offer pre and after sales service to the customer a very valued attribute cherished by loyal customers. Although there is no data to really comment directly on the subject, but other data above suggests that there must be gaps in this area too. 6 Research Conclusions Tesco has realized that in order to attract a sizable customer base of Muslims it needs to offer Halal Food in its stores, especially in areas where there is a large concentration of Muslim population. The decision is also based on their current habits, needs and the affluence that makes them potential and recurring customers. However it is insufficient to just introduce Halal food and sit back and expect loyalty from Muslim customers. To build loyalty certain measures are to be adopted apart from identifying Halal food and placing it on counters for sale. Loyalty is a result of favourable Purchase decisions and Sales characteristics. Marketing is all about customers. Their behavior and attitude towards buying a product is of paramount importance. Their needs and wants and their likes and dislikes are decisive factors and purchase decisions depend on these issues. It is the understanding of these factors that will develop a marketing strategy. Therefore Marketing is all about understanding the customers and of finding ways and means to for providing product or service as per his requirements. For success of any marketing strategy the product has to be competitive and this raises two problem questions. The first is to find out how and why a product is competitive and if not when and how it can be made competitive. 7 Force Five Analysis An important method of finding the competitiveness is by using the Five Force Analysis devised by Porter M.E. (1985), often called the Porter’s five force analysis. This will help the management to devise appropriate marketing strategy to take care of vital issues. Porter divides the competitive environment into five forces of ‘powers’, these are Power of buyers, Power of suppliers, Threat of new entrants, Threat of substitutes, Intensity of rivalry between existing firms. (Porter, M. E.1985) In fact the Five Force Analysis is a critical constituent of any purposeful marketing strategy. 8 The Power of Buyers Four different reasons influence a buyers’ decision. They are also known as 4Ps as explained by Phillips Kotler . This needs careful study to understand customer behaviour. (Kotler. P,1994) 1 Product. The buyer is greatly influence if the product or service is perceived as useful for him. 2 Price. The price is not usually a stand-alone factor. It has to be comparable with other products or services but with weight given to factors like quality and after sale service. 3 Promotion. Image plays a very important role. Whether it is the image of the product which enhances value or status or the image of the buyer when he acquires a product or service, both factors are extremely important for the buyer in arriving at a purchase decision. 4 Place or Time of offer. It is of great value to the buyer if a product or service is offered to him at a place and time that suits him. The importance of this can be gauged from the fact that often a deal is concluded at the most awkward time and place just because of the whim and fancy of the customer. The company needs to understand Buyer Behavior or Attitude by applying this concept. 9 Attitudes All Buyers have an opinion about a product or service formed out of experience, and information. These are perceived over a period of time. Companies attempt, through their marketing strategies, to garner this opinion in favour of their product or brand. However the customers have usually built an attitude towards the company and its products. The strategy is to persuade the buyers to purchase this product or service. Extensive use is made of the Elaborate Likelihood Model and this theory provides the most efficient way to persuade the targeted segment for producing an attitude change. The company needs to communicate the message in the most effective way for the audience to respond. There are basically two ways of forcing changes in attitudes. These are the two routes to persuasion. One is the Central Route and the other is the Peripheral Route. Petty and Cacioppo (1981) have defined Central route to be one that looks at attitude that has developed as a result of issue related arguments. This means that this attitude is well thought out and has encompassed all possible views on the subject. Usually this attitude is also rather rigid and not changeable as it has already considered alternatives. Elaboration or explanations tend to impact attitude changes. In such cases careful evaluation of the content of the message is made through the central route to test the strength of the arguments and attempts are made to change the mind-set of the customer. If successful, the result is strong change in the attitude. On the other hand the Peripheral route is subject to change based on either positive or negative attitudes. When the views have not become unyielding or rigid they are likely to be either for or against. However these are triggered by some event or phrase/word or activity that sets off this attitude. Here the message is less important but the attack is on motivation and emotions of the buyer. If successful, the result is a change in attitude but since it is a play on sentiments, it is comparatively weak. The central route fabricates a major positive attitude change, while the peripheral route uses six different signals or cues to draw a quick response with a slight shift in attitude. Both routes involve message elaboration. The central route is used to examine ideas, wrap up their merit and consider possible consequences. The peripheral route is used to offer a quick accept or reject judgment without going into the depth of the matter. These cues relate to reciprocation, consistency, social proof, liking, authority and scarcity. These six cues automatically lead a person to the peripheral route. By character ELM is a scientific theory that portrays people as reactors to a motivation. It provides a platform for making a desired reaction or assists in making attitude change possible.  Indeed it is a fairly accurate model of how attitude changes are achieved and it also shows the difficulty in producing a major or long-term attitude change. The theory clearly and simply explains both routes of persuasion and the ideal circumstances for each. But despite being scientific in approach it is not possible to verify it through the traditional falsification test of true and false. Petty and Cacioppo (1981) conducted studies to arrive at the above conclusions. The study revealed that when perceptions are fixed or rigid, reactions of customers are predictive. People will react in an identical way in a comparable situation. When perception is flexible or unclear then people look for cues or indicative signs to take a positive or a negative attitude. Central and peripheral progressions are a continuous occurrence but there is relative variance in the impact of these processes from time to time. The Elaboration Likelihood Model (ELM) serves the purpose of conveying an explanation of information to test the probability of the likely change in attitudes through the message. The level of motivation these can generate, and the ability of the buyer, will have a bearing on the outcome. 10 Relevance It has been established by Porter (1985) that buyer power influences purchase decisions. Yet they can be persuaded to change their attitudes positively towards Tesco’s Halal food offerings. The research shows dismal results and calls for a more effective and persuasive campaign through the media to draw the numbers required for making this a successful venture. It is one thing to publicize the event and to promote the products through various schemes, but the message has to go loud and clear to the Muslim community at large that an offer that suits their requirements and that matches their aspirations is now authentically available. There is no doubt that to be effective an appeal must match the attitude. Arguments will be perceived as being better if they match more with the way the customers view their world. It must be remembered that personal relevance plays a great role and once the company can show it cares for this the result will be in strong persuasion. (Petty & Cacioppo 1979). It is therefore further suggested that trustworthy and credible sources be used to expound this fact for lasting persuasion. (Eagly, Wood, & Chaiken 1978). Indeed Petty, Cacioppo, & Goldman (1981) emphasize that high expert sources led to more persuasion than inexpert sources. 11 Limitations of ELM There are some serious limitations of ELM. The effectiveness of a persuasive message depends on the level of acceptance by consumers that is in turn dependant on the extent to which the consumers rely on the content of the message. (Petty and Cacioppo 1986). Fishbein & Ajzen (1975) state, that arguments present a consequence. They become more or less compelling depending on the perception of their likeability or desirability. Sometimes a persuasive message that is from an apparently trustworthy source is perceived as deceptive. In such cases the “sleeper effect” takes over and the message is completely discounted in present situation. (Cook, Gruder, Hennigan& Flay, 1979; Mazursky & Schul, 1988; Pratkanis, Greenwald, Leippe, & Baumgardner, 1988). Later, when trust is finally established, the message revives. But the delay causes a loss in the immediate state. 12 Conclusions The segment being targeted by Tesco is huge and the company has made a huge effort to cater to them. The relevance factor is important and therefore it will be prudent for the company to send out a wide and strong message to the community of the Halal Food offered by them. They must also back it up with confirmations from community leaders and those whose opinions are highly respected in this regard to convey the authenticity and authority of this offer. Another strong message should also convey the company’s concern for maintaining the high standards required and mention the supply chain’s authenticity to highlight the reliability factor. Lastly it must innovate in product packaging to suit the taste of the younger generations. 13 Bibliography Azjen, I., & Fishbein, M. (1980). Understanding attitudes and predicting social behavior. Englewood Cliffs, NJ: Prentice Hall. Cook, T. D., Gruder, C. L., Hennigan, K. M., & Flay, B. R. (1979). History of the sleeper effect: Some logical pitfalls in accepting the null hypothesis. Psychological Bulletin, 86, 662–679. Eagly A. H., W. Wood And S. Chaiken (1978), "Causal inferences about communicators and their effect on opinion change". Journal of Personality and Social Psychology, Vol. 36, pp. 424-435 Kotler, P., Armstrong, G,. Principles of Marketing, Prentice Hall & Pearson Education, 1994 Kotler, Philip. (1988). Marketing Management: Analysis, Planning and Control. Englewood Cliffs, N.J.: Prentice Hall Mazursky, D., & Schul, Y. (1988). The effects of advertisement encoding on the failure to discount information: Implications for the sleeper effect. Journal of Consumer Research, 15, 24– 36. Petty, R. E., & Cacioppo, J. A. (1979). Issue involvement can increase or decrease persuasion by enhancing message-relevant cognitive responses. Journal of Personality and Social Psychology, 37, 1915-1926. Petty, R.E., and Cacioppo, J.T., (1981) The American psychologist 36 (5), pp. 441-456 Petty, R. E., Cacioppo, & Goldman, R. (1981). Personal involvement as a determinant of argument-based persuasion. Journal of Personality and Social Psychology, 41, 847-855. Petty, R. E., and J. T. Cacioppo (1986), ‘The elaboration likelihood model of persuasion’, Advances in Experimental Social Psychology 19:pp. 123-205. Porter, M.E. (1985) "Competitive Advantage", The Free Press, New York, 1985. Pratkanis, A. R., Greenwald, A. G., Leippe, M. R., & Baumgardner, M. H. (1988). In search of reliable persuasion effects: III. The sleeper effect is dead: Long live the sleeper effect. Journal of Personality and Social Psychology, 54, 203–218. Read More