CONSUMER BEHAVIOR

Memory & Cognitive Learning

Memory . . .
. . . affects the exposure, attention, and comprehension stages . . . allows consumers to anticipate the stimuli they might encounter

Multiple-Store Model of Memory

Three different types of memory storage:
Sensory Memory Short-Term Memory

Long-Term Memory

Inputs Sensory memory

Short Term Memory ( Working Memory

Available Capacity
Affect and arousal Encoding Retrieval

Long Term Memory

A Simplified Memory Model

 Sensory memory happens in the pre-attention

stage where a stimulus is briefly analyzed to determine if it will receive additional processing. Short-term memory is where information is temporarily stored while people are actively processing it. Is like RAM in a computer. Long-term memory is connected to shortterm memory through encoding and retrieval processes. Is like the disk drive in a computer. Memory works like parallel processors.

 Encoding is the transfer of information

from short-term memory to long-term memory for permanent storage. Retrieval is the process of accessing information stored in long-term memory so that it can be utilized in short-term memory. Retrieval is a constructive process. Information in ads received after product experience can change the perception of the experience.

Relationship amongst Memory Systems

Short-term Memory Sensory Memory Attention Brief storage of information Capacity: limited Duration: less than 30 second

temporary storage of sensory information

capacity: High Duration:<second for vision, few seconds for hearing

Information that passes through attention is transferred to STM

Long-Term Memory

Relatively Permanent storage of information

Capacity: unlimited Duration: Long or Permanent

Elaborative Rehearsal
Information subjected to elaborative rehearsal or deep processing is transferred to LTM

Sensory Memory . . .

. . . consists of firing of nerve cells, shortterm in duration, usually less than a second.

Short-Term Memory. . .
. . . is the site where information is temporarily stored while being processed. Is also called working memory.
Rehearsal is silently repeating information to encode it into long-term memory. Elaboration means allocating processing capacity to comprehend the information If information in short-term memory is not rehearsed/elaborated, it is lost within 30 seconds.

The Limited Capacity of Short-Term Memory: Millers Law

Millers Law is the recognition that people can handle 7
(+/- 2) bits of information at a time.
In consumer contexts, however, STM is closer to 5 +/- 2 bits of information.

Information Overload describes the situation in which

more information is received than can be processed in short-term memory.

Marketing Implications
i.
ii. a. b.
Two questions with marketing implications: Can consumers become overloaded? Research has yielded an unequivocal yes to the question Do consumers become overloaded? Argubale: No: People actively manage the information they receive to avoid becoming overloaded i.e. stop far short of being overloaded Yes: Because this information overload actually decreases the quality of their purchase decision

Involvement & Short-Term Capacity

High involvement makes the consumer more
aroused and attentive, expanding the short-term memory capacity to full 7 +/-2 bits. (Some chemicals including caffeine has the same effect.) Low involvement tends to keep a consumers arousal levels low so the consumer focuses relatively little memory capacity on the stimulus. Under low involvement, capacity is at 5 +/-1 bits.

Marketing Implications
For print media advertising: For low involvement products keep copy points maximum to four (copy point is considered equivalent to a chunk) . For electronic media advertising, follow the KISS rule ( Keep It Simple, Stupid!).

Time Required to Transfer Information. . .

. . . the consumer's goal to either recognize or recall a task. It requires 2-5 seconds for recognition task and 5-10 seconds for recall task to transfer the information to LTM.

Recognition and Recall

Recognition tasks are when information is placed

before the consumer. The goal is to determine if the information has been seen before. Recall tasks are when the consumer must retrieve the information from long-term memory with the help of cues but without prompting. Requires greater depth of encoding. Recall impacts the size of the consideration set, which is the set of product choices retrieved from memory that are deemed satisfactory options.

Universe of potential brands

Awareness Set Known Brands

Unawareness set

Consideration Set: Brands given consideration

Inert Set Brands viewed with Indifference

Inept Set Unacceptable brands

Long-Term Memory
. . . has essentially unlimited capacity to store information permanently.
Stored information is either semantic or visual. Semantic memory deals with the encoding and storage of words and meanings. Visual deals with the storage of images. Long term memory is essentially permanent.

Relative Superiority of Picture Versus Word Memory

Visual images or pictures tend to be more memorable than their verbal counterparts, especially when there is low-involvement on the part of the consumer. Words that have high-imagery content are easier to encode and retrieve than words low in imagery and concreteness. Words and pictures should be used to complement each other in ads. Verbal material is better recalled in high involvement conditions. In high involvement information processing advertisers usually get better results if they present different information via verbal and pictorial means

Memory-Control Processes . . .
. . . are the methods of handling information which may operate consciously or unconsciously to influence the encoding, placement, and retrieval of information.

Encoding Process
Rehearsal and Elaboration influence whether or not
information will be transferred from STM to LTM The way information is coded will have great impact on speed of transfer as well as on the placement of that information For a new topic greater amount of rehearsal or elaboration is required With familiar topics person becomes more adept at coding information on it by drawing associations between it and the information they already have in memory, and storage process speeds up proportionally

Encoding Process
Marketing Implications: i. Understanding of encoding process in developing
brands ii. The closer the brand name fits with consumers association about the product class, the better will be his/her ability to recall the name iii. Highly concrete names ( ocean, orchestra, frog, and blossom) are easily visualized and remembered better than less concrete names (history, truth, moment) because they are coded both visually and verbally and also because they fit better into consumers existing knowledge structure.

Retrieval and Response Generation

Response generation is when a person develops

a response by actively reconstructing the stimulus. Retrieval cues create a response by providing a means of assisting the active reconstruction of the stimulus.

Retrieval and response Generation

Marketing Implications A major goal of marketers is to improve consumers ability to retrieve information from memory. E.g. i. Providing retrieval cues on the packaging of products (such as logo, color etc.) to assist consumers memories during decision making. ii. Assisting consumers retrieval and response generation to employ music in advertisements. There is evidence that people retrieve sung messages better than spoken one

Consumer Knowledge . . .
. . . is the amount of experience with and information a person has about particular products or services.
As knowledge increases, a consumer can think about a product across a greater number of dimensions and make finer distinctions between brands.

Three Types of Knowledge:

Objective knowledge is the correct
information about a product class that a consumer has stored in long-term memory perception of what or how much he or she knows about a product class. consumer has about another.

Subjective knowledge is the consumers

Knowledge of others is what information a

 Cognitive Learning: process of

How Do Consumers Gain Knowledge?

forming associations, solving problems, and gaining insights. Learning Through Education: Receiving information from firms who are trying to teach the consumer. Learning Through Experience: Actual contact/use of products.

Marketing Implications i. As consumers knowledge increases, they become better organized, grow more efficient and accurate in their information processing, and display better recall of information. ii. Information on the extent of consumer knowledge should influence promotion strategy. A message targeted to knowledgeable prospects can be much more complex than addressed to a novice

Consumer Knowledge

Gestalt Theory of Cognitive Knowledge

Gestalt psychologists believe that physiological and psychological events do not influence behavior in isolation of each other.

1+1= 3

Key idea: whole is greater than sum of parts. E.g. Perception of service quality in a restaurant (physiological) could be directly influenced by the quality of time spent there with friends/family (psychological)

Associationist Approaches to Cognitive Knowledge

1. The Serial-Position Effect: Serial learning concerns how people put into memory and recall information that is received in a sequential manner. Serial-Position effect occurs when the order of presentation of information in a list influences recall of the information in the list. The S-P effect is the basis for the higher price paid for book-end ads i.e., ads at the beginning and end of a commercial TV break.

Serial Position Effect

Explanation: Beginning and end of the list become anchors in learning. Because of limitation of STM, people pick reference points for when to start and end the learning process. Since only limited amounts of information can be stored in STM at a time, it is those items right around the beginning and end of the list (the reference points) that are recalled most readily. Many more repetitions of the material may be required before items in the middle can be recalled

Serial Position Effect

Marketing Implications i. Key information in the advertisement should be placed at the beginning and end of the message ii. Advertisers should strive to get their commercials placed either at the beginning or end of series of television ads

Serial Position Effect

Many

Trials to Learn Few

early Position in series Late

2. Paired Associate Learning

Consumers learn to pair response words/objects Example Brands & Tag Lines: Addidas Impossible is nothing McDonalds Im lovin it Nike Just do it Mountain Dew Do the Dew Example Brands & Celebrities Rolex & Roger Federer Nike & Maria Sherapova Tag Heur and SRK Pepsi & Shahid Afridi
with stimulus

Conditions for paired associate learning

The response words are easily pronounceable Consumer is familiar with both the stimulus

(brand) and response object (endorser) Stimulus and response words are meaningful The stimulus and response words are easily associated (make sense) Caution: Sometimes negative associations can also occur between (stimulus) brand and response object (endorser)

Semantic Memory Networks . . .

. . . refer to how people store the meanings of verbal material in longterm memory.
Semantic memory is organized into networks each of which is a series of memory nodes that represent the stored semantic concepts. Information is recalled via spreading activation.

Five Types of Information Stored in Nodes

Types of information
Brand names Brands characteristics/attributes Ads about brand Product category Evaluative (affective) reactions to the brand and the ad

This information represents a consumers brand

knowledge i.e., a brand node and the associations in memory connected to it.

Measuring Semantic Memory Networks

Guided Associations Think of your university
What are the first three words or images that come to mind. (e.g., BBA, teachers, courses) Select one of these words (e.g. BBA); now think of three words or images that you associate with fashion, etc.

Semantic Memory Network:

IU Courses BBA Teachers

Marketing
Sales Products

Accounting
Banks Finance Advertising

MBA Friends Prof. Knowsalot

Companies Jobs Grades Money Career CGPA

PR

Schemas . . .
. . . are organized sets of expectations and associations about an object.
When new information is inconsistent with a schema, consumers engage in more diligent processing and, consequently, have improved memory about the stimulus. Can derive from network analysis.

Forgetting
People forget because even though information has been placed in longterm memory, it may be extremely difficult to retrieve. This is called a retrieval failure.

Interference
Interference occurs when: later learned material interferes with the

recall of information learned earlier. OR earlier learned material interferes with learning and recall of information learned later.

The von Restorff Effect . . .

. . . occurs when a highly unique, novel, or unexpected item in a message is recalled more easily. Illustrated by absurdity in advertisements

The von Restorff Effect

An Ad using the Von Restorff Effect

The Zeigarnik Effect . . .

. . . occurs if a task is interrupted, material relevant to the task tends to be remembered. E.g., stories that are cut in the middle----,

The Zeigarnik Effect..

Aag ., laga do ! When the TV channel Aag was about to be launched

they put up billboards showing fire, creating curiosity in the target audience of what was the point of such an advertisement. Leaving an incomplete image in the mind of the people made it a successful technique for their launch and thus completing the task of being 46 remembered!

The Ziegarnik Effect: What will she say?

Time and Forgetting

The recall of verbal
information decreases over time. Rapid forgetting that occurs immediately after learning has been shown to occur in advertising as well.

Time and Forgetting

In an experiment an advertisement for a product was

shown to a group of housewives once a week for 13 weeks. At the end of 13 weeks period 63% of respondents could recall having seen the ad. After this, the ad was not shown to them for 13 weeks. After 20 weeks, those who could recall had dropped to under 30%; by the 9th month fewer than 10% of respondents could remember the ad. In another experiment one group of housewives was shown the same ad once a week with a gap of 4 weeks. In this group the ability to recall the ads increased slowly; by the end of the year 48% of respondents could remember the ad.

Time and Forgetting

Marketing Implications i. If advertisers goal is awareness of a product, than high frequency of ads over short period of time will be most effective. However consumer will rapidly forget the commercial message after the burst of advertisements end ii. If advertisers goal is to build long-term awareness of the ad, the commercial should be pulsed so that ads are seen by consumers over a long period of time iii. Some advertisers prefer to combine these approaches by using a high-intensity ad campaign to bring out a product, and then pulsing regularly after the introduction to maintain consumers awareness of the ad.

Affect and Memory

People are better able to recall information
that has the same affective quality as their mood state.
Affect refers to the feelings, emotions, and moods that consumers may experience. Mood is a transient feeling state that occurs in a specified situation or time.

How Companies can help consumers remember

Use Easy-to-remember stimuli Use of concrete words instead of

Abstract words Use of Stimuli that are distinctive or unique Put Consumers in a good mood

Brand Image and Product Positioning

Brand Image Schematic memory of a brand It contains the consumers interpretation of the

products attributes, benefits, usage situations, users and manufacturers characteristics It is what we think and feel when we hear or see a brand name o Product Positioning A decision taken by marketers to try and achieve a defined brand image relative to competition within a market segment Product positioning decisions are strategic (long-term) decisions Product Repositioning Refers to a deliberate decision to significantly alter the way a brand is viewed by the consumer

Perceptual Mapping and Product Repositioning Perceptual Mapping A useful technique in measuring and developing products positioning Takes consumers perception of how various brands are to each other and relates these perceptions to product attributes

Perceptual Mapping of Automobiles in US Market Volvo 850 R Chrysler LHS

Buick Park Avenue Staid, Conservative Older Nissan Sentra Plymouth Voyger

Stylish, Prestigious, Distinctive Mercedes 400 SE Porsche 914 TM2 Lexus LS 400 Jeep Grand Cherokee Acura Integra Ford Taurus TM1 Fun Sporty Fast

Dodge Caravan
Geo Metro Kia Sephia

TM3 Honda Civic Dodge Neon

Practical, Common, Economical

Brand Equity and Brand Leverage

Brand Equity The value consumers assign to a brand above and

beyond the functional characteristics of the product Brand Equity is nearly synonymous with Brand Image A strong brand equity allows the company to have brand leverage Brand Leverage: Refers to marketers capitalizing on brand equity by using existing brand for new products If done correctly , consumers will assign characteristics of existing brand to the new brand

Brand Leverage

Successful brand leverage requires that: a. Original brand has a strong positive image b. The new product fits well with the original product on at-least one of the three dimensions: 1. Complement: The two products are used together . 2. Transfer: The new product is seen by consumers as requiring the same manufacturing skills as the original 3. Image: The new product shares a key image component with the original

Brand Leverage Strategies

Brand Leverage Strategies

Examples of Line Extension: Variants by Sunsilk,
Pantene ; new flavors introduced by Lays, Cornetto etc. Examples of Brand Extension: Lifebuoy shampoo; Gillette aftershave, body sprays etc. Examples of Multibrands: One company marketing several brands in the same product category e.g. Head & Shoulders, Pantene and Herbal Essences (by P & G); Lux, Rexona and Lifebuoy soaps (by Unilever) Examples of New Brands: New product category (for the company), with a new brand Omore by Engro Foods; Aquafina & Lays by Pepsi, etc.