Means-End Theory

AIRCEL

Core Philosophy….

• Key Questions– Who are my potential customers? • Segmentation

– What does matter—and what might matter—to potential customers?• Positioning

– On which of the things that matter should I focus?• Value Proposition

The core issue is –Why products and services have meaning for customers?

Meaning to customer…..

• Why does a customer buy a product? • What does it mean to a customer having a

product?• What happens if he does not have the

product?• Therefore, what does AIRCEL sell?

Welcome to the “Means-End Chain”

Personal Values

Psychological Benefits

Instrumental Benefits• Functional• Experiential• Financial

Abstract Attributes

Performance Attributes

Intrinsic Attributes Extrinsic Attributes

Virgin Mobile UK…

• What are the key features of the product?– Product—prepaid– Pricing—fairly uniform– Product off the shelf—self service– Customer Service– Operations—IT, Network Systems etc.– Brand– Communication….

Attribute (feature) identificationAttribute

One-dimensional

Pre-Performance

Intrinsic

Materials

Form

Manufacturing

Extrinsic

Brand

Price

Customer Service

Performance

Objective

Subjective

Multidimensional

Abstract

User Imagery

Use Situation Imagery

Weighted Multi-attribute

Evaluation

Relationships between attributes

Abstract Attributes

Performance Attributes

Intrinsic Attributes Extrinsic Attributes

The Attribute Matrix

• It is always useful to map the intrinsic attributes and the extrinsic attributes. – Customers normally pay attention to the extrinsic

attributes or performance attributes rather than the intrinsic attributes…..for example you are more bothered by whether Chloromint disguises the smell of cigarettes rather than the active ingredient “Herbasol” that leads to this extrinsic attribute.

Less Confusion Good at Local For youth

Wide acceptance

Single Price

Fewer Choices Colourful Packs Network

Off-the-Shelf

Exercise: Draw up the attribute classification for Aircel

The Attribute Map for Virgin Mobile, UK

Brand name

Colourful Packs

Sales through Stores

Pre-PaidCustom

er Service

Simple Price

Structure

The Attribute Map for Virgin Mobile, UK

Brand name

Colourful Packs

Sales through Stores

Pre-PaidCustom

er Service

Simple Price

Structure

Ease of PurchaseFun

The Attribute Map for Virgin Mobile, UK

Brand name

Colourful Packs

Sales through Stores

Pre-PaidCustom

er Service

Simple Price

Structure

Ease of PurchaseFun

For Youth

What do the attributes do?

• Provide benefits……– In August 1997, Sony introduced the Mavica digital

camera. The product was inferior to all current digital cameras in terms of picture quality and price• However, it had one feature which enabled the user to

store images on floppy discs which simplified the process of transferring the photos to the customer’s PC. No other camera offered this feature—the customer valued the benefit of “quick and easy” over “great photos”

• What this shows is that companies get so focused on a single benefit that they lose sight of the “bigger” picture.

Two Questions…..

• What benefits matter?• How are the benefits related?

Typology of Benefits

Benefits

Instrumental

Functional

Process

Output

Experiential

Process

Output

Financial

Process

Output

Expressive

Psychosocial

Process

Output

Output benefits Process benefit

Functional benefits

Experiential benefits

Financial Benefits

Psychosocial benefits

Relationship between benefits….

Functional

Psychosocial

Experiential Financial

Virgin Mobile UK—Benefits mappingAttributes Functional

benefitExperiential benefit

Financial Benefit

Psychosocial benefit

No Contracts Easy to procure Convenience Lower Search Cost

No fear of rejection

No Price Buckets

Less Confusion Convenience Less overuse cost

“All are same”

No Hidden Fees Trust more Loyalty Less costs Peace of Mind

No Peak/ off peak hours

More Use—less planning

Less “guilt” while using

Less costs Peace of Mind

No Credit Checks

Easy to buy Convenience Less Search costs

No fear of rejection

Simple Sales Process

Easy to buy Convenience Lower transaction cost

Immediate Gratification

Great Service Trust and good experience

A “good” feeling

Lower Search Costs

Happiness

So, Uni-dimensional

Attribute

Abstract Attribute

Instrumental benefits

Psychological benefits

Exercise

• Draw up the Attribute-benefit map for AIRCEL

How does the movement happen…

Product Attribute

How does the movement happen…

Product Attribute Benefit

How does the movement happen…

Brand Attribute Benefit

How does the movement happen…

Brand benefit

The basic issue…• Customers buy products with attributes…but what they

want is benefit….– However, no product offers all the benefits that is sought by the

customer…– So, the customer prioritizes benefits…

• Should I look for network quality or customer service?• Should I look for price or brand name?

– How does the customer “tradeoff”?• Depends on their “Values”

• It is virtuous to spend Rs. 2,00,000 on your kitchen, but you think 15 times spending Rs. 30000 on a mobile phone! – Why? Depends on our “value systems”

What are values?

• Social mores/norms that have developed thru ages which the consumer believes in….– Consistent yet changing…..

• People have to purchase goods that are consistent with social norms else there will be dissonance and anxiety.– Society has to feel good about ourselves– We have to feel good about ourselves.

Nature of values…..• Terminal Values: A preferred “end-state of existence”

– A comfortable life—A prosperous life– An exciting life (stimulating and exciting life)– A sense of accomplishment (lasting contribution to society/family)– Pleasure (enjoyable life)– Self-respect (self esteem)– Social recognition (respect admiration)– A world of beauty– Equality– Freedom– Happiness– Spiritual life

• Instrumental Values: refers to “modes of conduct” to achieve “end-state of existence” – Ambitious (Hard working)– Broadminded– Capable– Cheerful– Clean– Courageous– Forgiving– Helpful– Honesty– Imaginative

So, essentially

Instrumental Values Terminal Values

Personal ValuesInstrumental/Terminal

Psychosocial Benefits

Instrumental Benefits• Functional• Experiential• Financial

Abstract Attributes

Performance Attributes

Intrinsic Attributes Extrinsic Attributes

Therefore, questions you should be asking

• What values matter to your current and potential customers?

• How common are each of the values you have identified above

• Are customers consistent across purchase situations?

• What are the attribute-benefit-value linkages you have identified?– Customer Decision Mapping

CDM: Consumer Decision Mapping

• Nature– Attributes are anchors for meanings that

consumers find in products• Specifically: Attributes lead to Benefits that lead to

value• This is called the Means-end ladder—which is a chain

containing one or more attributes leading to one or more benefits leading to one or more values.

– Mapping the various ladders visually is called the consumer decision map or CDM

Flip-top Cap

Squeezable tube Price Fluoride Sweet

FlavorCartoons

on package

No looking for cap

Less Mess

Less Waste

Tastes Good

Brush Longer

Fun

Fewer Cavities

Neater Bathro

om

Less Irritatio

n

Clean Home

Healthy Child

Attractive

Smile

Happy Child

Good Mother

Save Money

CDM for a Toothpaste

Pre-Paid

Available everywhere

Single Price

Bucket

Excellent Customer Service

Attractive Packaging

No Credit Checks

No Contrac

ts

Easy to purchas

eFun

Easier Transac

tions

Convenient

Less Irritation Peaceful CheerfulHonest

CDM for Virgin Mobile

Transparent

Pleasurable and Happy end-state

Exercise.

• Draw up the possible Consumer Decision maps for Aircel.

Key question…..

• What Attribute-Benefit-Value ladder we focus on?– Question of Segmentation– This we will see tomorrow!