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PBSB 812 Marketing Management

PBSB 812 Marketing Management. Risky Shift Phenomena Chicken Run. How do we approach risk?. When we are in groups, we make decisions about risk differently from when we are alone .

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PBSB 812 Marketing Management

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  1. PBSB 812 Marketing Management Risky Shift Phenomena Chicken Run

  2. How do we approach risk? • When we are in groups, we make decisions about risk differently from when we are alone. • The presence of other people in a situation makes one less personally responsible for the events that occur in that situation • As a result of group dynamics, we are more likely to make riskier decisions, as the shared risk makes the individual risk less • Example: • Entire football teams sometime get into aggressive or defensive moods as they either throw caution to the winds trying to score or desperately try to avoid being caught out.

  3. Definition • Group discussion of alternatives has a tendency to shift initial risk preferences of individuals and groups. This social phenomenon is known as “risky shift” (Stern and Gazda) • Experiments by Woodside showed conservative and significant risky shifts in the sale of consumer items • Many decisions involve group consensus or social influence • Also referred to as Group Think

  4. Other perspectives • Reingen offered another perspective on experiments by Woodside • A generalised risky shift phenomenon in consumer behaviour appears unlikely – not enough empirical evidence • Consumers deal with perceived risk – as they see it subjectively – not empirical

  5. Application to Types of Consumer Products • Life Insurance for example – unsought product – influence of peer group strong – comparing financial wealth – best deal - stability • Branded vehicles, for example Lamborghini – speciality products – snob effect – high prices and fashion statement – influence of reference group also strong • Shopping products -airline services – lowest prices and good service – influence of groups relatively strong, getting a bargain

  6. References • ANON. 2011. Risky Shift Phenomenon. Website: http://changingminds.org/explanations/theories/risky_shift.htm. Date accessed: 07 March 2011. • REINGEN, P. M. Journal of Marketing Research. May 1974. Page 223 • STERN B.L. and GAZDA G.M. Journal of Academy of Marketing Science, Summer 1975, Vol 3, No 3, pages 287-295 • WOODSIDE. A.G. Journal of Marketing Research, May 1974, Page 225.

  7. Chicken Run Group Members • Bezuidenhout, P.J. 1224 6093 • Botha, Desere. 2250 2556 • Buys, Johan. 2049 8705 • Kleynhans, Wessel. 1251 7755 • Schoeman, Willie. 1032 6065 • Van Wieringen, Anton. 1231 8388 • Wohlfahrt, Andre. 2255 3533

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