Direct Response and the Next Generation of Consumers

Research for Infomercials Inc. Brigham Young University Comms 318 Professor Cory Edwards

Linden Baker Tom Boyd Ethan Parry Eden Wen

Quantitative Methodology
We constructed our survey based on the information gained from both our qualitative research and the research questions presented to us by the client. Our class was split into four teams, and each team designed a 20-25 question survey. Survey leads from each team then looked over each teams survey, and worked to create one survey that included the most relevant questions pertinent to the client, Infomercials Inc. The final survey was then shown to our professor, who made final suggestions and edits.

The survey was created using Qualtrics Research Suite. Brigham Young Universitys Department of Communications and the class survey leads recruited the services of Survey Sampling International (SSI) to find 400 respondents, giving our survey a 0.049 margin of error. The survey was then distributed online.

Of our respondents, 61 percent were female, 39 percent male. A total of 99 percent of our respondents were between the ages of 18 and 30. Seventy percent of our respondents identified as Caucasian, with Asian/Pacific Islander being the next largest demographic at 15 percent. Most of our subjects live in the western or southern United States, but there were a few representatives from all over the country. As for the most common work status, 38 percent of respondents were either employed by a public or private company. Due to our relatively young target demographic, 28 percent of our subjects were students. Again, because of this young demographic, most of our subjects earn between $0 and $24,999 a year. Most of our respondents were single, and had no children in the home. Additionally, most of our

respondents had received at least some college education, and 40 percent had received a college degree.

Based on the United States 2010 Census, approximately 17 percent of the United States population consists of people aged 18-30 (So How Many). Our survey participants for the most part fell into this age group. The level of education, marital status, number of children and employment status was roughly equivalent between our survey and the United States population. The biggest difference was the ethnicity of our survey participants. Only 60 percent of the U.S. population identified as Caucasian, while 70 percent of our group, identified themselves as Caucasian (Millennials).

For a deeper understanding of the survey and our target market, each team was assigned a specific theme with corresponding questions to focus on. Our team focused on motivation. We were instructed to complete statistical research on a handful of questions dealing specifically with the purchasing motivations of consumers. While we still looked at the results of the entire survey, we tried to understand how each question tied into the purchasing motivations of consumers. The following sub-themes were identified: 1. Advertisements affect purchasing habits regarding hobbies 2. Specific attributes make advertisements effective 3. Certain product characteristics are more important than others during the purchasing process 4. Specific characteristics of advertisements drive traffic to company website

5. Effective infomercials motivate consumers to buy

1. Advertisements affect purchasing habits regarding hobbies

We wanted to better understand how advertising influences the purchasing habits with regards to specific hobbies. While our client knows how to effectively market to their current target audience, they wanted more information on the next generation of consumers. Based on our qualitative research, we felt that the next generation will be unlikely to purchase many of the products sold by infomercials. To better understand this, we included survey questions about purchasing behavior. Respondents were given a list of 25 common hobbies and were asked to select five hobbies based on which ones advertisements had influenced them to buy something for. In other words, advertising has the greatest influence on purchasing habits regarding which hobbies? Some demographics, such as annual income, didnt significantly affect responses. However, as expected, responses varied significantly based on gender.

The top five responses for men were video gaming, automobiles, shopping, money-making opportunities and cooking. For females, the top five responses were cooking, shopping, health and beauty, reading books and video gaming.

Many of these findings were expected, a few were surprising, though. Video gaming, automobiles, and moneymaking opportunities were anticipated as common responses for males. Cooking and shopping, on the other hand, are typically seen as feminine and werent expected to be common responses for males. For females, video games was in the top five, even though men are statistically more likely to be influenced to buy a video game because of an advertisement. Based on these findings, we can conclude that the focus of advertisements shouldnt be limited to one gender, even if a certain product or service is associated with one gender specifically. Popular hobbies of the next generation of consumers are becoming more equal between genders, with females enjoying more traditionally masculine activities and vice versa. Advertisements that appeal to both genders will likely be more effective than those that focus solely on one gender.

Another interesting finding was that both genders found infomercials that advertised collectible objects, such as coins and stamps, to be ineffective. Out of all 400 respondents, only 11 stated that advertisements influenced them to buy collectibles. Our research suggests that the next generation of consumers will not be influenced by advertisements to purchase collectible items.

2. Specific attributes make advertisements effective

In the survey, we asked participants to select, on a scale, how much they agreed with whether or not the following factors influence the effectiveness of an advertisement: humor, relatability, production quality and clear description. Each of these factors, tested against gender and age, came out to be statistically insignificant. However, while they are statistically insignificant based on gender and age, they are still important factors to consider in creating advertisements for future consumers.

Of these factors, the most important attribute of an advertisement is clear description. This factors ranking had a mean of 4.17 among males and 4.20 among females on a scale of one to (1 being strongly disagree, 5 being strongly agree). Humor, relatability and production quality follow closely, the lowest being humor with a mean of 3.97 among males and 3.93 among females. Each of these four elements of an advertisement are vital and effective in influencing consumer behavior, with clear product descriptions being the most important.

During a focus group we conducted, participants discussed two specific characteristics that determined the effectiveness of an advertisement. These were humor and believability (or relatability). We expected that these characteristics would rank high in survey results, and while they were important to respondents, clear description and production quality of an advertisement were determined to be more influential.

A consistent group of males and females (between 15 and 19) selected disagree or strongly disagree for humor, relatability and production quality. However, when asked about clear description, about half the number of respondents selected disagree or strongly disagree (8 responses in total). Many of those who disagreed or strongly disagreed with humor, relatability and production quality as important characteristics still selected clear description as an important characteristic.

Because infomercials inherently describe products very clearly, Infomercials, Inc. has an upper hand in creating effective advertisements. However, even with this advantage, Infomercials, Inc. should also consider the importance of humor, relatability and production quality.

3. Certain product characteristics are more important than others during the purchasing process
We needed to understand which factors are most important to consumers when purchasing a product. We asked survey participants to rank various characteristics on a scale from one to seven, with one being the most important. The factors listed were: price, brand image,

usefulness, quality, having a trial period, hearing by word-of-mouth, good reviews from peers, commercials, customer service, experience with company, products in the past and secure purchasing. All of these factors were tested against gender, age and income as seen in the results below.

In our survey of 400 respondents, 381 responded to this question. Of the 381 respondents, 56 percent selected price as the most important factor, 24 percent selected quality as most important, 12 percent selected usefulness as most important, and lastly, 7 percent selected brand image as the most important characteristic when purchasing a product. When compared with the income of respondents, brand image and usefulness were statistically significant. In other words, as income increases, individuals tend to consider brand image and usefulness more important. When compared with gender, brand image and usefulness were also statistically significant, meaning women consider brand image and usefulness more important in the purchasing process than males do. 368 individuals responded to the question, Which of

the following factors are the most important to you when making a purchase? Of those 368 individuals:

32 percent selected good reviews 19 percent selected trial periods 15 percent selected experience with the company and/or its products 14 percent selected word-of-mouth 10 percent selected secure purchasing, 7 percent selected customer service 4 percent selected commercials.

Females were less likely to be influenced by commercials during the purchasing process and males were more likely to select secure purchasing as a must when considering a product. Lastly, results show that as age increases, individuals were more likely to consider secure purchasing as highly important, which was expected.

We found similar results in our focus group about the importance of certain product characteristics. Brand loyalty was mentioned several times during our discussion. Participants

said they were more likely to purchase a product if they had previous experience with the company and its products. Consumers believe that brand image will be the deciding factor in cases when name brand and generic brand products are close in price. Another important takeaway is that participants felt that there is a connection between brand name and quality. Secure online purchasing was also an important factor considered more by male participants than female participants. Consumers do not trust television infomercials and are skeptical of providing their personal information over the phone. Lastly, both focus group and survey participants believe there must be a strong enough need to purchase a product. Products must be useful and need to enhance consumers everyday life.

Infomercials, Inc. should consider all of the product characteristics mentioned above, especially price and quality, when deciding how to market products to their customers. They should also keep in mind that women are looking less to commercials, and overall, individuals are very skeptical of television infomercials as a whole.

4. Specific characteristics of advertisements drive traffic to company websites

Focus group members made it clear that they were becoming increasingly skeptical of purchasing products over the phone. Although many people would rather shop at retail stores, online shopping was the most preferred method of purchasing for many of our focus group members. This is a marketing channel that should not be forgotten. Our client wanted to know what was next for direct response marketing and we expected that a transition to the Internet

would be a large part of that. In our survey, we asked subjects which characteristics of advertisements motivated them to visit a companys website the most.

The characteristics listed in the survey were sales promotions, humor, visual attractiveness, relatability, intrigue, brand and other. To see if any specific demographics, such as gender or income, influenced the results, we ran statistical tests for each characteristic of advertisements against various demographic questions. Although none of these tests ended up being statistically significant, they still provide valuable information on what motivates consumers to visit a companys website.

One of the main reasons focus group members said they preferred Internet transactions was because of the frequent sales and promotions included on the internet. For example, one focus group member preferred buying their glasses online because they got the first pair free. Survey results supported our focus groups opinion. By far, the most effective aspect of an advertisement in driving traffic to websites was sales promotions, with 132 subjects selecting

this optionmore than twice as many people as relatability, which was the second most common response.

Sixty-five subjects selected relatability as the second most effective aspect of an advertisement in driving traffic to websites. This was expected, since relatability was one of the themes our focus group members repeatedly brought up and was also an important attribute of effective advertisements. Focus group members felt that many infomercials were not relatable, which caused them to lose interest in a product, be less likely to visit a companys website, and therefore, cause the company to lose revenue. One focus group member stated that the primary reason she thought infomercials were ineffective was because of how out of touch they were with reality.

Closely following relatability as an influential characteristic was humor, with 56 responses. Again, this result was expected, as many focus group members stressed the importance of humor in advertisements. Even though our focus group members knew that humor in an advertisement does not impact the quality of the product itself, their favorite ads were humorous in nature, as reflected in our survey results. Humorous advertisements influenced our subjects to further investigate a companys website. One interesting note from our qualitative research that our quantitative research confirmed is that humor strongly affects other advertisement attributes. For example, even if a product is not on sale, or an advertisement is not relatable, a funny advertisement can create enough interest to drive potential customers to a website.

5. Effective infomercials motivate consumers to buy

We asked our survey participants a few questions in order to discover whether or not infomercials were effective at motivating them to buy. First, we asked survey participants, How many times have you ordered from an infomercial, and then if they answere d none, we asked them to fill the blank: I have not purchased from an infomercial because For those who said they had never ordered from an infomercial, they were then directed to select a reason why from the following options: the transaction is insecu re; didnt want the sales representative to pressure them anymore; didnt receive a full or accurate description of the product; they are not generally exposed to infomercials; would like to conduct more research before purchasing it (i.e. watching an infomercial does not suffice); and because of the stigma that is attached to infomercials. Respondents selected either strongly disagree, disagree, neither agree nor disagree, agree or strongly agree for each one of the characteristics mentioned above. All of these factors were tested against gender, age and income.

In our survey of 400 respondents:

55 percent have never bought from an infomercial 30 percent have bought one to two times 10 percent have bought three to five times 3 percent have bought six to ten times 2 percent have bought more than ten times.

When tests were run against the number of times individuals bought from infomercials, both age and income were statistically significant. In other words, as both age and income increase, individuals are more likely to order from an infomercial.

We then decided to dive deeper into the reasons individuals did not order from an infomercial. The results were, for the most part, expected. Income was statistically significant for the answer, didnt receive a full or accurate description of the product. In other words, as income increases, individuals become more wary of buying from infomercials because of unclear product descriptions. It is interesting to note that when this question was tested against gender and age, nothing came back as being statistically significant. One might assume that

men would be more concerned with insecure transactions and women with the stigma of buying from an infomercial. However, as the data shows, this is not the case.

Our focus group also noted similar findings. Distrust of purchasing through television was mentioned ten times throughout the meeting. The individuals in our focus group value secure purchasing and prefer to buy online.

These findings can prove to be very useful for Infomercials, Inc. As a company that is trying to market to the next generation of consumers, need to consider what the future of the industry holds in store. Half of survey participants had never purchased from an infomercial. Although concerning, it also provides Infomercials, Inc. with a great opportunity. Infomercials, Inc. should consider why individuals are not buying from infomercials and seek to address them.

Works Cited "Millennials: Confident. Connected. Open to Change." Pew Social Demographic Trends RSS. N.p., 24 Feb. 2010. "So How Many Millennials Are There in the US, Anyway?" MarketingCharts. N.p., 16 July 2013. Web. 14 Dec. 2013.