CRYPTIC MARKETING: STRATEGIC TARGETING OF SUBCULTURE MARKETS Kelly Wi Yan CHOONG Bachelor of Business (Marketing) w/Distinction, QUT Master of Business (Research), QUT Submitted in fulfilment of the requirements for the degree of Doctor of Philosophy School of Advertising, Marketing and Public Relations QUT Business School Queensland University of Technology 2014 Abstract The growing importance of subcultures in marketing has emerged as consumers are increasingly choosing brands based on what is acceptable within their subculture (Mason & Wigley, 2013). As such, organisations must know how to attract subcultures using marketing strategies to build trust, acknowledge subculture value or practice equitable policies (Mason & Wigley, 2013), on top of traditional factors, such as quality and price (Kozinets, 2001). This needs to be communicated effectively to the subculture group as well (Mason & Wigley, 2013; Leigh, Peters & Shelton, 2006). However, brands targeting subculture consumers have encountered backlash from society, particularly when target markets are stigmatised or discriminated in society (Hildebrand, DeMotta, Sen & Kongsompong, 2013). Specifically, this thesis focuses on the gay subculture as the context for examination. This research aims to understand what factors influence consumers’ behaviour to subculture marketing and how companies can strategically overcome potential brand alienation in three studies. As such, this thesis addresses the following, broad research question: How can companies target subculture groups without encountering potential consumer backlash? To begin, the thesis evaluated the theories of social identity theory (Tajfel, 1982) and social categorisation (Hogg & Terry, 2000), which accounts for consumer behaviour on subcultures, such as the gay community. Some consumers consciously resist and avoid association with the gay subculture due to stigma and stereotyping; judging others based on the group in which they identify with (Maldonado, Tansuhaj & Muehling, 2003). This creates the challenge in marketing communication when targeting subculture consumers. As such, there is a need to understand the factors in which society reacts in support for – or oppose to – i advertisements that are gay themed. Therefore, the first research question addressed by this thesis was: What are the factors that influence consumer response to gay-specific advertisements? To address the first research question, the first study analysed 231 online comments from an online newspaper article about the ‘Rip and Roll’ advertising campaign. The study was analysed using thematic analysis with findings indicating strong, differing views that reflected anti-gay biased, indifferent and gay-receptive points of view. Themes emerged from the analysis found that factors such as attitudes, beliefs and values and religiosity reflect previous research studies (Hooghe, Claes, Harell, Quintelier & Dejaeghere, 2010; Averett, Strong-Blakeney, Nalavany & Ryan, 2011). These factors about the gay community shaped the behaviour of audiences and these attitudes and behaviours were unlikely to change, especially those deemed gay-intolerant. For this reason, marketers have to circumvent the objections of gay-intolerant consumers, while not alienating non-targeted audiences in their attempt to target the gay market via mainstream media. Consequently, the second research question addressed by this thesis was: How can marketers avoid alienating the non-targeted market when communicating to the subculture market? Instead of adopting covert marketing communication strategies, where marketing messages are surreptitiously targeting audiences, this thesis introduced the concept of cryptic marketing. For the purpose of this research, cryptic marketing is defined as a strategy to overcome the restraints in targeting subculture markets via mass media, without backlash from other consumers, while positively influencing subculture consumers through the use of cryptic subculture symbols and cues. This means that subculture markets are targeted overtly ii with subculture cues, but remain hidden to the non-target audience. This fundamentally overcomes the shortcomings of current covert approaches and enables brands to target gay consumers in the mainstream media without alienating the non-target markets. Using four different car print advertisements to test the effects of cryptic marketing, a group of 10 heterosexual and 10 homosexual/bisexual respondents were interviewed for the second study. The interview results showed that the advertisement with the cryptic-gay cues worked effectively in masking the cryptic-gay tones from the heterosexual sample, while positively influencing the gay/bisexual respondents. The concept showed how marketers can target subcultures through the use of cryptic cues, symbols and underlying messages, while avoiding alienation from the non-target market. To prove the effectiveness of cryptic marketing, factors important to subculture groups need to be incorporated while including the respondent types identified in study one; such as gay-intolerant, gay-indifferent, gay-friendly and the gay subculture. Consequently, the third and final research question addressed by this thesis was: How effective is cryptic marketing in improving brand perception in subculture markets without lowering brand perception among the non-target audience? The final study employed an experimental design with 400 online survey respondents from MTurk who were randomly assigned to one of three advertisement types: control, target- cryptic or target-specific. Respondents were also categorised into one of four respondent types, based on their “attitude towards gays” scores or if they identified themselves as gay/bisexual, at the end of the survey. Results showed cryptic marketing was validated with overall brand perception maintained with the non-target audience, while showing increased brand affect among the gay/bisexual respondents. iii Combined, the three mixed design studies provide an understanding that consumer behaviour is tied to their social identity and category, and that factors such as attitude, beliefs and values determine their perceptions toward subcultures. The results also revealed that through the use of cryptic marketing, it is possible to target subculture markets without encountering potential backlash. Study three quantitatively confirms the potential effectiveness of a cryptic marketing approach. Consequently, this research contributes to extending current understanding of marketing communication through the use of covert strategies, employing covert tactics on the non- target (wider) market, instead of the target (subculture) market. In addition, cryptic marketing can be applied to any other subculture or social group, whether based on religion, ethnicity, social status, stereotype or taboo. Overall, this thesis highlights the possibilities cryptic marketing can provide to brands, as new target subculture markets emerge, without risking the current customer base. Keywords: Marketing communication; Cryptic marketing; Subcultures; Gay subculture; Social identity theory; Social categorisation theory. iv Dedication To my family v Acknowledgement In my PhD journey, I have met many wonderful people who have guided me down the path of self discovery, wisdom and knowledge. There were plenty of ups and downs but I would not be the person I am today without them. I would like to acknowledge some of the people that were most influential along the way. First, I would like to express my special appreciation and thanks to my principal supervisor Professor Judy Drennan for her perseverance, compassion and support. You are my Glinda on the yellow brick road to Oz. I would also like to offer my sincere thanks to my associate supervisor Dr Clinton Weeks for his patience, support and knowledge. There has never been a better combination of advisors than these two amazing minds. I also had the great pleasure of working with a range of other researchers and support staff. I am very grateful to the expertise of Mr Ray Duplock from the computing unit at QUT for assistance with methodology. I owe thanks to Professor Gayle Kerr and Associate Professor Anne Pisarski for their insightful comments and feedback as panel chair and business school representative for my final seminar. Also to the eternal good guy Professor Greg Hearn and the ever charming Dr Jo Previte, thank you for always believing in me. I would also like to acknowledge the financial support provided to me by the School of Business and the School of Advertising, Marketing, and Public Relations, and specifically Professor Robina Xavier. Thank you for providing the opportunity to attend conference and participate in additional research training. Many thanks also go to my fellow PhD candidates, past and present, for their wise words and understanding. A special thank you to (soon to be Dr) Branko Koncarevic, Dr Joy Parkinson, (soon to be Dr) Ryan McAndrew and Rachel Sato. It has always been good to have someone to lean on and chat to. Also, a special mention to (soon to be Dr) Jane Fynes- Clinton. Thank you for all the kind words and encouragement, and always willing to meet for coffee to yak about life in general. I am also eternally grateful to friends and colleagues. Thank you to my friends Dr Shane Mathews and Dr Ian Weber, who always offered help and advice throughout my PhD. To vi my colleagues at the University of the Sunshine Coast, particularly Professor Joanne Scott, Associate Professor