Consumer Behaviour and Sales

Consumer Learning

•       “The process by which individuals acquire purchase and consumption knowledge and experience that they apply to future related behaviour” (Schiffman & Kanuk)

•       Learning should lead to a “relatively permanent change in behaviour caused by experience”

•       So, learning is a process. The result of knowledge and experience. It affects future behaviour.

•       Learning can be intentional or incidental

•       Marketers can influence and teach consumers:

•       What to buy

•       Where to buy

•       How to use

•       How to maintain

•       How to dispose of products

Elements of Learning

•       Motives: unfulfilled needs leads to motivation. Motives serves to stimulated learning.

•       Cues: Stimulus that directs the motives. Marketers must provides cues that don’t upset their expectation.

•       Response: How individual react to drive or cue – how they behave – constitute their response.

•       Reinforcement: Reinforcement increases the likelihood that a specific response will occur in the future as the result of particular cues or stimuli.

Learning Theories

•       Behavioral Theories

–      Based on observable behaviors (responses) that occur as the result of exposure to stimuli

•       Cognitive Theories

–      Learning based on mental information processing

–      Often in response to problem solving

Discussion Question

•       For Coca-Cola:

–      How have they used behavioral theory in their marketing?

–      Cognitive theory?

–      How have they built brand loyalty?

Behavioral Learning Theories

•       Classical Conditioning

•       Operant Conditioning

•       Modeling and Observational Learning

Classical Conditioning

•       A behavioral learning theory according to which a stimulus is paired with another stimulus that elicits a known response that serves to produce the same response when used alone. 

 S → R

•       S->R

•       A brand that you are particularly loyal to is no longer stocked in your local shop.

•       A new shop to which you have no loyalty begins to stock it

•       Do you also by association become loyal to the shop?

•       What if brand is no longer sold?

Applications of Classical Conditioning

Basic Concepts

•       Repetition: Increases the association between the conditioned and unconditioned stimulus

•       Slows the pace of forgetting

•       Advertising wearout is a problem

•       Stimulus generalization

•       Having the same response to slightly different stimuli

•       Helps “me-too” products to succeed

•       Useful in product extensions

•       Imitation products… similar brand/logo/qualities

•       Take advantage of market leader position

•       Branch out into new lines/areas

 •       Stimulus discrimination: Selection of a specific stimulus from similar stimuli

•       This discrimination is the basis of positioning which looks for unique ways to fill needs

Classical Consumers?

•       Consumers are not completely passive they are active

•       Most purchases do not take place as a result of reflex or association

•       Consumers are active and often embark on detailed information seeking before purchases.

•       No mention of how +ve and –ve events influence purchase behaviour… which we will consider next

Operant Conditioning

•       A behavioral theory of learning based on a trial-and-error process, with habits forced as the result of positive experiences (reinforcement) resulting from certain responses or behaviors.

A Model of Instrumental Conditioning

 Types of Reinforcement

•       Positive (reward)

–      Preceding behavior likely to re-occur

–      Example?

–      Nice food… go back to restaurant

–      Negative (no reward / threat of failure / fear?)

–      Preceding behavior unlikely to re-occur

–      Example?

–      Insurance? Toothpaste?

–      http://www.youtube.com/watch?v=eY3VSP-DNvo

Reinforcement Schedule

•       Positive reinforcements (reward) should be constantly present.

•       Otherwise they lose their appeal and value… J.N.D? Consumers no longer perceive them and so can’t be influenced by them

•       Sales… Autumn sale, winter sale, spring  sale, summer sale… usually sales are short lived

•       The model explains a greater proportion of consumer behaviour and learning than does classical conditioning

•       Gives an explanation for the value of brands from an emotion buffer perspective

–      Materialistic consumption

Cognitive Learning

•       Holds that the kind of learning most characteristic of human beings is problem solving, which enables individuals to gain some control over their environment.

•       Relates to cognitive ability and the complexity of the information

•       Individuals differ in imagery – their ability to form mental images which influences recall

•       Information Processing

•       Sensory Store

•       Short term store

•       Long term store

•       Rehearsal and Encoding

•       Retention

•       Retrieval

Information Processing and Memory Stores

•       Movement from short-term to long-term storage depends on

–      Rehearsal

–      Encoding

Discussion Question

•       How do advertisers drive consumers to rehearse information?

•       http://www.youtube.com/watch?v=F_-9QFvhQWo

•       http://www.youtube.com/watch?v=biL6zAMkOQs

•       http://www.youtube.com/watch?feature=player_embedded&v=MXiJBp7HK5o

•       When does this work against the advertiser?

•       Can you think of other examples of advertisements which drive you to rehearse?

Encoding

•       Allows new information to be interpreted in a manner that is meaningful and can be stored and retrieved from memory.

•       Chunking

•       741548689

•       145   278    463

•       How can marketers make use of this?

Retention

•       Information is stored in long-term memory

–      Episodically: by the order in which it is acquired

–      Semantically: according to significant concepts

•       Total package of associations is called a schema… remember those?

Measures of Consumer Learning

•       Recognition and Recall Measures

–      Aided and Unaided Recall

•       Cognitive Responses to Advertising

•       Attitudinal and Behavioral Measures of Brand Loyalty

•       E.g. current study examining effectiveness of in-game advertising.