Notes On Consumer Behavior

MOTIVATION Needs and Motivation

•People who achieve their goals set new and

•Needs are the essence of the marketing

Substitute Goals

concept. –Marketers do not create needs but can make consumers aware of needs.

•Motivation: –is the driving force within individuals that

impels them to action –refers to the processes that lead people to behave as they do (occurs when a need is aroused that the consume wishes to satisfy) –refers to an activated state within a person that leads to goal-oriented behavior; consists of drives, urges, wishes, or desires that initiate the sequence of events leading to a behavior –“what gets you going…and what keeps you going” Types of Needs

higher goals for themselves

•Acquired Needs Learned in response to our culture or environment. Are generally psychological and considered secondary needs Goals. The sought-after results of motivated behavior

•Generic goals are general categories of goals that consumers see as a way to fulfill their needs

•Product-specific goals are specifically branded products or services that consumers select as their goals The Selection of Goals

•The goals selected by an individual depend on their:

–Personal experiences –Physical capacity –Prevailing cultural norms and values –Goal’s accessibility in the physical and social environment

Motivations and Goals Positive

•Motivation.

A driving force TOWARD some object or condition

•Approach Goal. A positive goal toward which behavior is directed Negative

•Motivation A driving force AWAY from some object or condition

•Avoidance Goal.

A negative goal from which behavior is directed away Rational versus Emotional Motives

Superiority – being above others

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Recognition – displaying achievements, gaining approval and social status

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Exhibition – shocking or thrilling other people; attracting attention

•Behaviorist School

•

–Behavior is response to stimulus –Elements of conscious thoughts are to be

Infavoidance – avoiding failure, shame, humiliation, ridicule or concealing a weakness

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Defendance – defensive attitude; justifying actions

specific goal he/she anticipates will satisfy a need

•The substitute goal will dispel tension •Substitute goals may actually replace the primary goal over time Philosophies Concerned with Arousal of Motives

ignored

–Consumer does not act, but reacts –Behavior is directed at goal achievement –Needs and past experiences are reasoned,

Counteraction – counteractive attitude; defending honor Needs Connected with Human Power:

categorized, and transformed into attitudes and beliefs

•

Abraham Maslow’s Hierarchy of Needs 5. Self-Actualization (self-fulfillment) 4. Ego Needs (prestige, status, self-esteem) 3. Social Needs (affection,friendship, belonging) 4. Safety and Security Needs (Protection, Order) 5. Physiological Needs (food, water, air)

Deference – obeying and cooperating with others; following a superior, serving

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Similance – empathizing with others; suggestible attitude

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Autonomy – independence and resistance; resisting others and standing strong

1. Biological and Physiological needs - air, food, drink, shelter, warmth, sex, sleep, etc. 2. Safety needs - protection from elements, security, order, law, limits, stability, etc. 3. Belongingness and Love needs - work group, family, affection, relationships, etc. 4. Esteem needs - self-esteem, achievement, mastery, independence, status, dominance, prestige, managerial responsibility, etc. 5. Self-Actualization needs - realizing personal potential, self-fulfillment, seeking personal growth and peak experiences 1970’s Adapted Hierarchy of Needs 1. Biological and Physiological needs 2. Safety needs 3. Belongingness and Love needs 4. Esteem needs 5. Cognitive needs - knowledge, meaning, etc. 6. Aesthetic needs - appreciation and search for beauty, balance, form, etc. 7. Self-Actualization needs 1990’s Adapted Hierarchy of Needs 1. Biological and Physiological needs 2. Safety needs 3. Belongingness and Love needs 4. Esteem needs 5. Cognitive needs 6. Aesthetic needs 7. Self-Actualization needs 8. Transcendence needs - helping others to achieve self actualization. Henry Murray’s List of Psychogenic Needs Needs Associated with Inanimate Objects:

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Acquisition/Conservancy – obtaining things/possessions

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Order – making things neat and organized; arranging, organizing and being precise

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Retention – keeping things

The Dynamic Nature of Motivation

•Needs are never fully satisfied •New needs emerge as old needs are satisfied

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Dominance – controlling and leading others

based on totally objective criteria such as size, weight, price, or miles per gallon according to personal or subjective criteria

Achievement – success, accomplishment and overcoming obstacles

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•Rationality implies that consumers select goals •Emotional motives imply the selection of goals

Construction – building or creating things Needs Reflecting Ambition, Power, Accomplishment, and Prestige:

• •

•Are used when a consumer cannot attain a

•Innate Needs Physiological (or biogenic) needs •Cognitive School that are considered primary needs or motives

•

•

Contrariance – being unique; acting differently from others Sado-Masochistic Needs :

• •

Aggression – injuring others

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Affiliation – spending time with other people; making associations and friendships

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Rejection – rejecting other people; excluding another

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Nurturance – taking care of another person; nourishing, aiding, or protecting the helpless

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Succorance – being helped or protected by others; seeking aid, protection or sympathy

Abasement – confessing and apologizing; surrendering and accepting punishment Needs Concerned with Affection between People:

• Play – having fun with others Needs Concerned with Social Intercourse: •

Cognizance – seeking knowledge and asking questions; Inquiring attitude

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Exposition – educating others, providing information; expositive attitude

A Trio of Needs (Developed by David McClelland)

•Need for Power (nPow) –individual’s desire to control environment

(other persons, various objects) –the desire to obtain and exercise control over others; the goal is to influence, direct and possibly dominate other people –can have 2 directions: positive (resulting in persuasive and inspirational power), or negative (resulting in the desire to dominate and obtain submission from others)

•Need for Affiliation (nAff)

–Moderating variable: an individual-difference

–need for friendship, acceptance, and belonging variable that interacts with the consumer –similar to Maslow’s belongingness needs situation and/or type of message being communicated –what motivates people to make friends, join groups and associate with others –rank the desire to be with others ahead of the need to succeed

•Need for Achievement (nAch) –need for personal accomplishment –closely related to egoistic and self-

actualization needs –seek to get ahead, strive for success, and take responsibility for solving problems

PERSONALITY

What Is Personality?

•The (enduring) inner psychological

characteristics that both determine and reflect how a person responds to his/her environment

–Inner characteristics: specific qualities,

attributes, traits, factors, mannerisms that distinguish one individual from other individuals

–Likely to influence product choices, response to marketers’ promotional efforts, and when/where/how they consume particular products/services

•A person’s unique psychological makeup and

how it consistently influences the way a person responds to his/her environment

–Consumer situation: temporary environmental factors that form the context within which a consumer activity occurs EXAMPLE: the social context in which purchases take place Researchers have found that consumers act differently when other people are observing their purchase behavior than when they believe they are unobserved. – This situational variable may interact with a personality characteristic that distinguishes individuals on their tendency to conform to social pressures when making purchases – The ATSCI (attention to social comparison information) scale has been developed to measure this disposition to conform – Findings: • A person who has a low tendency to conform will tend to make her desired purchases whether she is shopping alone or with a group • Someone with a high tendency to conform will make many more changes in purchase plans when shopping with a group than when shopping alone Thus, the personality variable ATSCI moderates the impact of the situation on consumer behavior.

Theories of Personality The Nature of Personality •Personality reflects individual differences Freudian theory –No 2 individuals are exactly alike; many Unconscious needs or drives are at the heart individuals may be similar in a single personality characteristic but not in others of human motivation –Enables marketers to categorize customers Neo-Freudian personality theory into different groups on the basis of one or several traits Social relationships are fundamental to the formation and development of personality •Personality is consistent and enduring –Essential to explain/predict consumer behavior Trait theory in terms of personality Quantitative approach to personality as a set –Marketers cannot change consumers’ of psychological traits personalities to conform to their products but can attempt to appeal to the relevant traits (those influencing consumer responses) inherent Freudian Theory in their target market/consumers Sigmund Freud’s psychoanalytic theory of –Consumption behavior varies due to personality was built on the premise that psychological, socio-cultural, environmental, unconscious needs or drives, especially sexual situational factors [Personality is only 1 of a and other biological drives, are at the heart of combination of factors that influence behavior] human motivation and personality

•

–

specific behaviors, such as what brand a consumer will purchase * Moral: Behavior must be measured on multiple occasions to assess personality-behavior relationships accurately Focus: 4th Aspect of Personality

•Single measures of personality cannot predict specific behaviors

–Moderates the effects of advertising messages and marketing situations on consumer behavior

•Consumer researchers using Freud’s personality theory see consumer purchases and/or consumption situations as a reflection and extension of the consumer’s own personality

–A person channels his/her unacceptable desire into acceptable outlets by using products that signify these underlying desires. This is the connection between symbolism and motivaton: The product stands for or represents a consumer’s true goal. By acquiring the product, the person is able to vicariously experience the “forbidden fruit”. Neo-Freudian Personality Theory

•We seek goals to overcome feelings of inferiority

•We continually attempt to establish relationships with others to reduce tensions

•Karen Horney was interested in child-parent relationships and desires to conquer feelings of anxiety. Proposed three personality groups –Compliant move toward others, they desire to be loved, wanted, and appreciated –Aggressive move against others, competes with others –Detached move away from others, desires independence, self-sufficiency, and freedom from obligations Trait Theory

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–Primarily a quantitative/empirical approach

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•Behavior shows consistency •Behaviors distinguish one person from another •Behaviors interact with the situation •Single measures of personality cannot predict

Freudian Theory and Consumer Behavior

•Personality theory with a focus on

–

Aspects of Personality

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Referee in the fight between temptation and virtue Balances opposing forces according to the reality principle

• •

•Personality can change –By major life events –By a gradual maturing process –Personality stereotypes may change over time

–

–Human personality results from a dynamic

struggle between inner physiological drives (e.g. hunger, sex, aggression) and social pressures to follow laws, rules and moral codes. Id – – – –

Warehouse of primitive or instinctual needs for which individual seeks immediate satisfaction Entirely oriented toward immediate gratification The “party animal” of the mind Operates according to the pleasure principle

Superego – Individual’s internal expression of society’s moral and ethical codes of conduct – Counterweight of the id – The person’s conscience

psychological characteristics with the use of personality tests

•Trait - any distinguishing, relatively enduring way in which one individual differs from another

•Personality is linked to how consumers make their choices or to consumption of a broad product category - not a specific brand Trait Theory

•Innovativeness •Dogmatism •Social character •Need for uniqueness •Optimum stimulation level •Variety-novelty seeking 1. Innovativeness. The degree to which consumers are receptive to new products, new services, or new practices 2. Dogmatism. Reflects the degree of rigidity a person displays toward the unfamiliar and toward information that is contrary to his/her own established beliefs – If low in dogmatism (open-minded): likely to prefer innovative products – If high in dogmatism: more receptive to ads for new products that contain an appeal from an authoritative figure

Ego 3. Social character. Ranges on a continuum: – Individual’s conscious control that balances – Inner-directedness the demands of the id and superego • rely on own values when evaluating – System that mediates between the id and products the superego • consumer innovators

prefer ads that stress product features/personal benefits – Other-directedness • look to others • less likely to be innovators • prefer ads that feature an approving social environment or social acceptance •

4. Need for uniqueness. Consumers who avoid appearing to conform to expectations or standards of others 5.Optimum stimulation level. Measures the level or amount of novelty or complexity that individuals seek in their personal experiences – Reflects a person’s level of lifestyle stimulation • High OSL consumers tend to accept risky and novel/new products more readily than low OSL consumers.

internal driver. VALS reflects a real-world pattern that explains the relationship between personality traits and consumer behavior. VALS uses psychology to analyze the dynamics underlying consumer preferences and choices. VALS not only distinguishes differences in motivation, it also captures the psychological and material constraints on consumer behavior.

Cognitive Personality Factors

•Need for cognition (NC) –A person’s craving for or enjoyment of thinking –Individual with high NC more likely to respond to ads rich in product-related information of description •More responsive to cool colors

–If low NC, more likely to be attracted to the

background or peripheral aspects of an ad VALS is based on current personality research •Spend more time on print content, into specific components of social behavior. VALS have much stronger brand recall asserts that people express their personalities – Plays a role in an individual’s use of the through their behaviors. People with different Internet personalities engage in different behaviors or exhibit similar behaviors for different reasons. Visualizers versus verbalizers

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–A person’s preference for information presented visually or verbally

6. Variety Novel-Seeking. Measures a consumer’s degree of variety seeking: – Exploratory Purchase Behavior (brand switching) – Use Innovativeness (using an already adopted product in a new/novel way) – Vicarious Exploration (obtaining information about new and different alterna-tives, then contemplating/ daydreaming about the option)

–Visualizers prefer visual information and

Specific Traits Related to Consumer Behavior

From Consumer Materialism to Compulsive Consumption

products that stress the visual

–Verbalizers prefer written/verbal information

and products that stress the verbal over graphics and images

•This distinction helps marketers know whether to stress visual or written elements in their ads

•Innovativeness:

•Consumer materialism

–The degree to which a person likes to try new things

–The extent to which a person is considered

•Materialism:

“materialistic”

–Amount of emphasis placed on acquiring/

–A trait of people who feel their possessions

owning products –Regarding possessions as essential to identities and lives

are essential to their identity

–Value acquiring and showing off possessions;

•Self-Consciousness:

self-centered and selfish; seek lifestyles full of possessions and their possessions do not give them greater happiness

–The degree to which a person deliberately

monitors and controls the image of the self that is projected to others

•Need for Cognition: –Degree to which a person likes to think about things and expands the necessary effort to process brand information

•Frugality: –Deny short-term purchasing whims, choosing to resourcefully use what they already own

–Often linked to advertising The Big 5 Dimensions*

•The Big Five encompasses trait distinctions in most cultures:

–Surgency/Extraversion –Agreeableness –Conscientiousness –Emotional Stability –Intellect

VALS (Values and Lifestyle System) •The original VALS system was built by consumer futurist Arnold Mitchell to explain changing U.S. 7 Mindsets of the Filipino Consumer* values and lifestyles in the 1970s. Passive Survivors: “Life is a series of ups and downs over which I have little control” •A marketing and consulting tool that helps businesses worldwide develop and execute more Relationship-Centered: “My relationships, particularly with my family, matter to me more effective strategies. than anything else in the world” –The system identifies current and future opportunities by segmenting the consumer Advisers: “I work to realize my full potential, marketplace on the basis of the personality contribute to society, and, in so doing, find traits that drive consumer behavior. more meaning in my life.”

•The basic tenet of VALS is that people express

their personalities through their behaviors. VALS specifically defines consumer segments on the basis of those personality traits that affect behavior in the marketplace. –Rather than looking at what people do and segregating people with like activities, VALS uses psychology to segment people according to their distinct personality traits. –The personality traits are the motivation—the cause. Buying behavior becomes the effect—the observable, external behavior prompted by an

Achievers: “I am success-oriented and confident in all that I do” Happy Adventurers: “I am fun-loving. I constantly seek new and exciting experiences.” Approval-Seekers: “I want to be accepted and to belong. I fear failure and losing face.” Control Seekers: “I am orderly and organized in everything I do. I am focused and directed in all the tasks I do.”

•Fixated consumption behavior –Consumers fixated on certain products or

categories of products but still in the realm of normal and socially acceptable behavior

–Characterized by: •Deep/passionate interest in a particular object/product category

•Willing to go to considerable lengths to obtain more of the desired object/product

•Dedicate considerable time and money to searching for the object/product

–Includes collectors or hobbyists

•Compulsive consumption behavior –“Addicted” or “out-of-control” consumers –Their actions may have damaging consequences to them and those around them

–In the realm of abnormal behavior Brand Personality

•Personality-like traits associated with brands •Examples –Freshness –Athlete –Performance driven –Dependable

•Can either be functional or symbolic

•Brand personality which is strong and favorable •Makeup of the self-image will strengthen a brand but not necessarily •Extended self demand a price premium •Altering the self- image Brand Personification

•Recasts consumers’ perception of the attributes of a product/service into the form of a “human-like character”

•Consumers can express their inner feelings about products or brands in terms of associations with a known personality

–Identifying consumers’ current brand

Consumers use self-altering products to express individualism or uniqueness by

1.One or multiple selves. A single consumer will act differently in different situations or with different people

–Certain products, in the minds of consumers,

possess a strong geographical association •Using the geographical association can create a geographical equity –Actual locations or fictitious names of places are used

Marketing Implications of Self-Concept

“self”

•For marketers it is important to know that

Different Self-Images

Actual SelfImage

Ideal SelfImage

•Color –Consumers tend to associate personality factors with specific colors •Blue appeals particularly to female consumers •Yellow is associated with novelty •Black connote sophistication •Bright colors like red, yellow and blue used by fast-food restaurants = associated with fast service and inexpensive food •Fine dining restaurants use sophisticated colors like gray, white, shades of tan or other pale/muted color to reflect fine leisurely service

–Color combinations in packaging and products

How consumers see themselves

How consumers would like to see themselves

Self and Self-Image

•Consumers have a variety of enduring images of themselves (“self-image” or “perceptions of self”)

consumers make purchase decisions to support their self concept.

•Using research techniques to identify how

customers view themselves may give marketers insight into products and promotion options that are not readily apparent.

–For example, when examining consumers a

marketer may initially build marketing strategy around more obvious clues to consumption behavior, such as consumer’s demographic indicators (e.g., age, occupation, income).

–However, in-depth research may yield

information that shows consumers are purchasing products to fulfill self-concept objectives that have little to do with the demographic category they fall into (e.g., senior citizen may be making purchases that make them feel younger).

•Appealing to the consumer’s self concept needs

could expand the market to which the product is targeted.

PERCEPTION Perception

•The process by which an individual selects, Ideal Social SelfImage

Social Self-Image

How consumers feel others see them

How consumers would like others to see them

denotes personality Red Green Black Gray Blue Purple Brown Yellow

particular type of person

•We have a variety of social roles •Marketers can target products to a particular

personality link or creating one for new products 2.Makeup of self-image. are important marketing tasks Contains traits, skills, habits, possessions, Product Personality Issues relationships and ways of behavior •Gender •Developed through background, experience, –A product personality/persona often means and interaction with others (unique) that the product/brand has a “gender” •Consumers select products congruent with this –Some products perceived as masculine while image others as feminine (i.e. they have a “gender–Marketers can segment their markets on the being”) basis of relevant consumer self-images, and •Knowing the perceived gender of a product or position their products as symbols for such selfspecific brand, marketers are in a better images position to select visual and copy-text for various marketing messages

•Geography

–Creating new self –Maintaining the existing self –Extending the self –Conforming to/taking on the appearance of a

organizes, and interprets stimuli into a meaningful and coherent picture of the world

–Has strategy implications for marketers

because consumers make decisions based on what they perceive than on the basis of objective reality

•How we see the world around us Sensation

Expected Self-Image

“Ought-to”

Self

•The immediate and direct response of the sensory organs to stimuli

•A stimulus is any unit of input to any of the senses

How consumers expect Traits/characteristics to see themselves at some specified future consumers believe it is their duty or obligation time to possess

–advertisement, product, package, brand name

•Sensory receptors are the human organs (eyes, ears, nose , mouth, skin) that receive sensory inputs, sight, sound, smell, taste or touch

•

Human sensitivity refers to the experience of 3. Extended Self. Possessions can extend self in sensation: a number of ways:

–Sensitivity to stimuli varies with the quality of

•These images are associated with personality

–Actually:

in that individuals’ consumption relates to selfimage

to accomplish

exposed

–Symbolically:

–Sensation itself depends on energy change, or

–Tend to buy products or services and patronize retailers with images/”personalities” that closely correspond to their own self images The Marketing Concept

•One or multiple selves

an individual’s sensory receptors and the amount

•allowing the person to do things that is difficult of intensity of the stimuli to which he/she is

•Making the person feel better/bigger

–Conferring status or rank –Bestowing feelings of immortality –Endowing with magical powers 4. Altering the Self-image.

the difference of input

•Thus, a constant environment (whether very

busy/noisy or relatively quiet) would provide little sensation because of the lack of change – the consistent level of stimulation

•As sensory input decreases, the ability to detect changes increases

Marketing Applications of the J.N.D.

–This ability of the human organism to

•Marketers need to determine the relevant

accommodate itself to varying levels of sensitivity as external conditions vary not only protects us from damaging, disruptive, or irrelevant bombardment when the input level is high…

j.n.d. for their products

–so that negative changes are not readily discernible to the public

3. Perceptual Defense. Screening out of stimuli which are threatening or damaging –If a stimulus is threatening to us in some way, we may not process it or we may distort its meaning so that it’s more acceptable

•People don’t see what they don’t want to see Perceptual Selection

–so that product improvements are very

4. Perceptual Blocking. Consumers avoid being bombarded by tuning out (screening out enormous amounts of advertising/ stimuli)

The Study of Sensation

Some Marketing Examples of the J.N.D.

•The investigation of the ways in which people

•Pricing: When raising the price, try to move

[Organization] Perceptual Organization

–…but has important implications for marketers

apparent to consumers

•

less than a JND People do not experience the numerous stimuli –When lowering the price for a sale, move more they select from the environment as separate than a JND and discrete sensations Its goal is to analyze people’s raw responses to •Sales promotion: Make coupons larger than the –Tend to organize stimuli into groups and a stimulus before they: JND perceive them as unified wholes react to the raw sensory information they receive through their sense organs.

•

–attend to it –comprehend it –give it meaning

•Product: Make decreases in size of food less

Absolute Threshold

Three basic principles of perceptual keep within the JND organization: –To change image, make styling changes greater –Figure and ground than the JND –Grouping Aspects of Perception –Closure Selection Organization Organization Interpretation

•The absolute threshold is the lowest level at

which an individual can experience a sensation

–The point at which a person can detect the

difference between “something” and “nothing”

–Under conditions of constant stimulation, the

absolute threshold increases (the senses become increasingly dulled)

•Sensory adaptation: “getting used to” certain

sensations, or becoming accustomed to a certain level of stimulation

than JND –When the word new is used, make sure the product change is greater than the JND

•Packaging: To update package styling and log,

[Selection] Perceptual Selection

•Consumers subconsciously are selective as to

•Gestalt psychology (Gestalt in German means pattern or configuration) is the school of psychology that first developed the basic principles of perceptual organization

•

•Figure and ground •Grouping •Closure

1. Figure & Sound. People tend to organize perceptions into figure-and-ground –The nature of the stimulus (nature of the relationships. change their advertising campaigns regularly product, its physical attributes, package design, –The figure is usually perceived clearly brand name, advertising, position of the ad, Differential Threshold –The ground is usually perceived as indefinite, editorial environment) hazy, continuous, subordinate Minimal difference that can be detected •Contrast is among the most •Marketers usually design so the figure is the between two similar stimuli attention-compelling attributes of a noticed stimuli. stimulus (color contrasts, Also known as the just noticeable difference differentiated packaging) 2. Grouping. People group stimuli to form a (the j.n.d.) –Consumers’ previous experience as it affects unified impression or concept or “chunks” rather their expectations than discrete bits of information The j.n.d. between two stimuli is not an •People see what they expect to see, based on –Consumers tend to group together objects that absolute amount but an amount relative to the familiarity, previous experience, preconditioned share similar physical characteristics intensity of the first stimulus set of expectations •Grouping helps memory and recall Absolute Threshold –Consumers’ motives (needs, desires, interests) •Can be used by marketers to imply certain Marketers try to increase sensory input in order •People tend to perceive things they need or desired meanings in connection with their want to cut through the daily clutter consumers products experience in the consumption of advertising Perceptual Selection 3. Closure. People have a need for closure and –Increase sensory input to cut through the organize perceptions to form a complete Selective Exposure advertising “clutter” picture. Other advertisers try to attract attention by Selective Attention Will often fill in missing pieces decreasing sensory input (e.g. silence, use of Perceptual Defense unusual media) Incomplete messages remembered more than

–a problem that causes many advertisers to

what they perceive, depending on:

• • • •

•Package designers determine consumers’

• • • •Perceptual Blocking

absolute thresholds to make sure that their new product designs will stand out from those of competitors

1. Selective Exposure. Consumers seek out messages which:

[Interpretation] Perceptual Interpretation

–Are pleasant –They can sympathize with –Reassure them of good purchases

•The interpretation of stimuli is uniquely

•

Weber’s* Law

•Weber’s law states that the stronger the

• •

complete

individual because it is based on what individuals expect to see in light of their previous experience

initial stimulus, the greater the additional intensity needed for the second stimulus to be Stimuli are often highly ambiguous 2. Selective Attention. Also called perceptual perceived as different vigilance – Individuals interpret them in such a way that –An additional level of stimulus, equivalent to they serve to fulfill personal needs, wishes and Heightened awareness when stimuli meet their the j.n.d., must be added for the majority of interests needs people to perceive a difference between the resulting stimulus and the initial stimulus How close a person’s interpretations are to Consumers prefer different messages and reality depends on the clarity of the stimulus, –Holds for all senses and almost all levels of medium the past experiences of the perceiver, and intensity

•

• •

•

his/her motives and interest at the time of the perception Perceptual Distortion

•Individuals are subject to influences that tend to distort their perceptions:

–Physical appearances –Stereotypes –First impressions –Jumping to conclusions –Halo effect Interpretation

•Physical Appearances •Stereotypes •First Impressions •Jumping to Conclusions •Halo Effect 1. Physical Appearances. Positive attributes of people they know to those who resemble them

•Important for model selection •Attractive models are more persuasive for

some products (enhancement products) but not problem-solving products Interpretation

–Manufacturer Image –Perceived Risk

–Intrinsic to the product or service

Positioning

–Extrinsic Cues

•Establishing a specific image for a brand in the

•Physical characteristics of the product itself (size, color, flavor, aroma)

•Price, packaging, advertising, brand image,

consumer’s mind

store image, peer pressure

•Product is positioned in relation to competing

Perceived Quality of Services

brands

•Conveys the concept, or meaning, of the product in terms of how it fulfills a consumer need

•Result of successful positioning is a distinctive, positive brand image Positioning Techniques

•Umbrella Positioning –Creating an overall image of the company

around which many products can be featured individually

•Positioning against Competition •Positioning Based on a Specific Benefit –effective depictions of a core product benefit often include memorable imagery

•Finding an “Unowned” Position –Finding a niche unfulfilled by other companies

•Difficult due to characteristics of services –Intangible –Variable –Perishable –Simultaneously Produced and Consumed

•Service quality that a customer perceives is a function of the magnitude and direction of the gap between expected service and the customer’s assessment of the service actually delivered Price/Quality Relationship

•Perceived product value is the trade-off between the product’s perceived benefits (quality) and perceived sacrifice required to acquire it

•The perception of price as an indicator of product quality (e.g., the higher the price, the higher the perceived quality of the product)

2. Stereotypes. People hold meanings related to stimuli

•Filling Several Positions

–Other studies show that customers rely on

–Tend to carry “pictures” in their minds of the

form of different brands to fill several unidentified niches

–A later study found out that consumers use

•Stereotypes influence how stimuli are

•Repositioning

meaning of various kinds of stimuli

perceived 3. First Impressions. First impressions are lasting

•Formed while the

perceiver does not know which stimuli are relevant, important, or predictive 4. Jumping to Conclusions. People tend not to listen to all the information before making a conclusion –Many jump to conclusions before examining the relevant evidence like hearing the beginning of an ad and drawing the incorrect conclusions

•Important to put persuasive arguments first in advertising Interpretation

–Creating several distinct offerings, often in the well-known brand name as a quality indicator

–In response to market events (competitors cutting into market share) –To satisfy changing consumer preferences Perceptual Mapping

•A research technique that enables marketers to plot graphically consumers’ perceptions concerning product attributes of specific brands

•Enables the marketer to see gaps in the •Reference prices – used as a basis for comparison in judging another price

– –

Issues in Consumer Imagery

•Consumers have a number of enduring

•

–The consumer’s perceived economic gain or

•Retail stores have images of their own that serve to influence the perceived quality of products they carry and the decisions of consumers as to where to shop

•Consumers tend to perceive stores that offer a

•The width of product assortment also affects retail store image

•The type of product the consumer wishes to buy influences his/her selection of a retail outlet

–conversely, the consumer’s evaluation of a product often is influenced by the knowledge of where it was bought.

•When a second extrinsic cue is available (e.g.

–Function of product utility and purchase price

price and store image), perceived quality is sometimes a function of the interaction of both cues on the consumer

•

Manufacturers’ Image

loss associated with the purchase

Transaction utility perceptions/images and products/ brands have symbolic value for individuals who evaluate –The perceived pleasure or displeasure them on the basis of their consistency with their associated with the financial aspect of the personal picture of themselves: purchase

–Product Positioning and Repositioning –Positioning of Services –Perceived Price –Perceived Quality –Retail Store Image

Retail Store Image

small discount on a large number of items (frequency of price advantage) as having lower positioning of all brands in the product class and prices overall than competing stores that offer to identify areas in which consumer needs are larger discounts on a larger discounts on a not being adequately met smaller number of products (magnitude of price Issues in Perceived Price advantage)

Internal: prices retrieved by the consumer from memory 5. Halo Effect. Consumers perceive and evaluate multiple objects based on just one or a External: advertisers use a higher external few dimensions reference price in an ad in which a lower sales price is being offered •Used in licensing of names: associating products with a well-known celebrity or designer Acquisition-Transaction Utility name Acquisition utility

•Important with spokesperson choice

price and brand to evaluate the prestige of the product but do not generally use these cues when they evaluate the product’s performance

•Manufacturers who enjoy a favorable image

internal reference price and the purchase price

generally find that their new products are accepted more readily than those of manufacturers who have a less favorable of even a “neutral” image

Perceived Quality of Products

–Researchers have found out that consumers

–Determined by the difference between the

•Consumers often judge the quality of a product (perceived quality) on the basis of a variety of informational cues:

generally have favorable perceptions of pioneer brands (the first in a product category), even after follower brands become available

Perceived Risk

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LEARNING

•The degree of uncertainty perceived by the

consumer as to the consequences (outcome) of a Learning specific purchase decision Marketers are concerned on how individuals •Consumer perception of risk varies, depending learn because they want to teach them about: on: –Products –The person –Product attributes –The product –Potential consumer benefits –The situation –The culture Marketers must teach consumers:

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•High-risk perceivers:

–described as narrow categorizers because they limit their choices (e.g. product choices) to a few safe alternatives

•Low-risk perceivers: –described as broad categorizers because they tend to make their choices from a much wider range of alternatives Types of Perceived Risk

•Functional RiSk: –The risk that the product will not perform as expected

•Physical Risk: –The risk to self and others that the product may pose

•Financial Risk: –The risk that the product will not be worth its cost

•Social Risk: –The risk that a poor product choice may result in social embarrassment

•Psychological Risk: –The risk that a poor product choice will bruise the consumer’s ego

•Time Risk: –The risk that the time spent in product search may be wasted if the product does not perform as expected How Consumers Handle Risk (Risk-Reduction Strategies)

•Seek Information: –Through word-of-mouth communication, from salespeople, from the general media

•Stay Brand Loyal –Remaining loyal to a brand with which they

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–The stimuli that give direction to the motives –In the marketplace, the following may serve as cues to help consumers fulfill their needs

•price •styling •packaging •advertising •store displays

–where to buy their products –how to use their products –how to maintain their products –how to dispose of their products

–Serve to direct consumer drives when they are

•Marketing strategies are based on

–Not tied to a need in a one-to-one fashion –A need/motive may evoke a whole variety of

communicating with consumers

–Marketers want their communication to be: •Noted •Believed •Remembered •Recalled

consistent with their expectations

•Response: –How individuals react to a drive or cue; how they behave

responses

–The response a consumer makes depends heavily on previous learning that depends on how related responses were reinforced previously

•Reinforcement:

–Thus, marketers are very interested in every –Increases the likelihood that a specific aspect of the learning process

•Learning- the process by which individuals acquire the purchase and consumption knowledge and experience that they apply to future related behavior

–Consumer learning is a process, continually evolving and changing:

•as a result of newly acquired knowledge (gained from reading, discussions, observation, thinking)

•from actual experience [serve as feedback to the individual and provides the basis for future behavior in similar situations]

•The role of experience does not mean that all learning is deliberately sought.

–Though much learning is intentional (acquired

response will occur in the future as the result of particular cues or stimuli Learning Theories 1.

Behavioral Theories

–Based on observable behaviors (responses) that occur as the result of exposure to stimuli –Sometimes called stimulus-response theories •When a person responds in a predictable way to a known stimulus, he/she is said to have “learned” –Most concerned with the inputs and outcomes of learning, not the process 2. Cognitive Theories –Learning based on mental information processing –Often in response to problem solving Behavioral Learning Theories

•Encompasses the total range of learning:

•Classical Conditioning •Instrumental or Operant Conditioning •Modeling or Observational Learning

–From simple, almost reflexive responses –To the learning of abstract concepts and

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as the result of careful search for information)

–…a great deal of learning is also incidental

(acquired by accident or without much effort)

Classical Conditioning

Early classical conditioning theorists regarded all organisms as passive recipients have been satisfied instead of purchasing new or complex problem-solving untried brands Conditioning involved building automatic BUT, there is no single, universal theory of how responses to stimuli Select by Brand Image people learn Ivan Pavlov, a Russian physiologist, was the When consumers have no experience with a Elements of first to describe conditioning… product, they tend to “trust” a favored/wellLearning Theories known brand name …and to propose it as a general Motivation: model of how learning occurs. He Rely on Store Image used dogs to demonstrate his theories Based on needs and goals If consumers have no other information about a product, they often trust the judgment of the The degree of relevance, or involvement, with –A behavioral learning theory according to merchandise buyers of a reputable store the goal, is critical to how motivated the which a stimulus is paired with another stimulus consumer is to search for that elicits a known response that serves to Buy the Most Expensive Model knowledge/information about a product/ service produce the same response when used alone. Consumers may equate price with quality Acts as a spur to learning; Stimulates learning Models of Classical Conditioning * Uncovering consumer motives is one of the Seek Reassurance prime tasks of marketers, who try to teach

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–Via money-back guarantees, government and private laboratory test results, warranties, and pre-purchase trial

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consumer segments why their product will best fulfill their needs

•Cues:

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•Advertising wearout can be decreased or avoided by varying the advertising message through: –Cosmetic variation –Substantive variation

•Some disagree about how much repetition is needed. –The three-hit theory states that the optimum number of exposures to an ad is three •One to make the consumer aware of the product •A second to show consumers the relevance of the product •A third to remind them of its benefits

•The effectiveness of repetition is somewhat Classical Conditioning

•In a consumer behavior context, an

unconditioned stimulus might consist of a wellknown brand symbol that implies products that have certain qualities.

dependent upon the amount of competitive advertising to which the consumer is exposed –As exposure increases, the potential for interference increases 2. Stimulus Generalization. Learning depends also on the ability of individuals to generalize

•This previously acquired consumer perception

•Having the same response to slightly different

•Conditioned stimuli might consist of new

•Helps “me-too” products to succeed •Useful in product extensions

of the brand is the unconditioned response.

stimuli

–Valuable to consumers

•It often is quite difficult to unseat a brand leader once stimulus discrimination has occurred

–In general, the longer the period of learning [of associating a brand name with a specific product] the more likely the consumer is to discriminate…

–and the less likely to generalize the stimulus Instrumental Conditioning A behavioral theory of learning based on a trialand-error process, with habits forced as the result of rewards or positive experiences (reinforcement) resulting from certain responses or behaviors.

•Like classical conditioning, instrumental

conditioning requires a link between a stimulus and a response

–However, in instrumental conditioning, the stimulus that results in the most satisfactory response is the one that is learned

•Although classical conditioning is useful in

explaining how consumers learn very simple kinds of behaviors…

products bearing the well-known symbol and the ….instrumental conditioning is more helpful in conditioned response would be trying these explaining complex, goal-directed activities products because of the belief that they embody Explains why imitative “me-too” products the same attributes which the brand name is succeed in the marketplace: According to American psychologist, B. F. associated. -consumers confuse them with the Skinner (1904 – 1990): original product they have seen advertised Cognitive Associative Learning most learning occurs in a controlled Applied by marketers to product line, form, environment in which individuals are Contemporary behavioral scientists view and category extensions: “rewarded” for choosing an appropriate classical conditioning: –Product line extensions: related products to an behavior already established brand as the learning of associations among events Like Pavlov, Skinner developed a model of that allows the organism to anticipate and –Product form extensions: includes different learning by working with animals “represent” its environment. sizes, colors, flavors

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–rather than being a reflexive action, it is seen –Product category extensions: generally target as cognitive associative learning (the acquisition new market segments of new knowledge about the world). Family branding:

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Neo-Pavlovian Conditioning

•Optimal conditioning: creation of a strong association between the conditioned stimulus (CS) and the unconditioned stimulus (US) requires: –Forward conditioning (the CS should precede the US) –Repeated pairing of the CS and US –A CS and US that logically belong together –A CS that is novel and unfamiliar –A US that is biologically or symbolically salient

•The consumer is an information seeker who uses logical and perceptual relations among events, along with his/her preconceptions to form a sophisticated representation of the world Strategic Applications of Classical Conditioning

•Repetition •Stimulus generalization •Stimulus discrimination 1. Repetition. Increases the strength of the association between the conditioned and unconditioned stimulus

•Slows the pace/process of forgetting •After a certain number of repetitions, retention declines. This effect is called advertising wearout Repetition and Wearout

Types of Reinforcement

•Positive reinforcement:

–The practice of marketing a whole line of

–Events that strengthen the likelihood of a

–Another strategy that capitalizes on the

•Negative reinforcement:

company products under the same brand name consumer’s ability to generalize favorable brand associations from one product to the next

•Retail private branding often achieves the same effect as family branding

•Licensing: –allowing a well-known brand name to be

affixed to products of another manufacturer

specific response

–An unpleasant or negative outcome that also serves to encourage a specific behavior

–Fear appeals in ad messages are examples of

negative reinforcement [Negative reinforcement should not be confused with punishment which is designed to discourage behavior.]

•Extinction:

3. Stimulus Discrimination. This discrimination –When a learned response is no longer is the basis of positioning which looks for unique reinforced, it diminishes to the point of ways to fill needs or seeks to establish a unique extinction (the point at which the link between image for a brand in the consumer’s mind the stimulus and the expected reward is eliminated) -Selection of a specific stimulus from similar Forgetting: stimuli

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•The key to stimulus discrimination is effective positioning, a major competitive advantage

–The image, or position, that a product/service has in the mind of the consumer is critical to its success

•Most product differentiation strategies are

–The behavior is unlearned because of lack of use rather than lack of reinforcement

–Often related to the passage of time; known

as the process of decay * Marketers can overcoming forgetting through repetition and can combat extinction through the deliberate enhancement of consumer satisfaction.

designed to distinguish a product/brand from that of competitors on the basis of an attribute that is:

Instrumental Conditioning and Marketing

–Relevant –Meaningful

–Provide the best possible product/service for

•Customer Satisfaction (Reinforcement): the money and

–…avoid raising consumer expectations for the

Cognitive Learning Theory

product/service beyond what it can deliver

Holds that the kind of learning most characteristic of human beings is problem Aside from the use of the product itself, solving, which enables individuals to gain some consumers can receive reinforcement from other control over their environment. elements in the purchase situation

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–Relationship marketing (developing a close relationship with customers) is another form of non-product reinforcement

•Reinforcement Schedules: –Total/continuous –Systematic/fixed ratio –Random/variable ratio: •tends to engender high rates of desired behavior and are somewhat resistant to extinction (perhaps because, for many consumers, hope springs eternal).

•Shaping:

•Not all learning is the result of repeated trials –Learning also takes place as the result of consumer thinking and problem-solving

•Massed vs. Distributed Learning: –Massed: •learning schedule is “bunched up” all at once •produces more initial learning •When advertisers want an immediate impact (introduce a new product or to counter a competitor’s blitz campaign)

–Distributed: •learning schedule spread out over a period of

time •results in learning that persists longer •when the goal is long-term repeat buying on a regular basis •A distributed scheduler with ads repeated on a regular basis usually results in more long-term learning and is relatively immune to extinction

storage depends on

–Rehearsal –Encoding •Rehearsal and encoding: –the amount of information available for

•Cognitive learning is based on mental activity

delivery from the short-term store to the longterm store depends on the amount of rehearsal an individual gives to it

Information Processing

–Encoding: the process by which we select and

•The human mind processes the information it receives as input much as a computer does

assign a word or visual image to represent a perceived object

–Information processing is related to both the –Learning visually takes less time than learning consumer’s cognitive ability and the complexity of the information

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

–Reinforcement performed before the desired •The more experience a consumer has with a consumer behavior actually takes place

•Movement from short-term to long-term

product category, the greater his/her ability to make use of product information The Structure of Memory

•Because information processing occurs in stages…

•…it is believed that content is stored in the memory in separate storehouses for further processing:

•Sensory store •Short-term store •Long-term store Information Processing and Memory Stores

verbal information

•Information overload: when the consumer is presented with too much information

–Result is confusion, leading to poor purchase decisions

•Retention – information is constantly organized and reorganized as new links of information are forged

–Many theorists view the long-term store as a

network consisting of nodes/concepts with links among them

–As individuals gain more knowledge, they

expand their network of relationships, and sometimes their search for additional information •This process is known as activation, which involves relating new data to old to make the material more meaningful

Observational Learning A process by which individuals observe how others behave in response to certain stimuli and reinforcements. Also known as modeling or vicarious learning. Modeling or Observational Learning

•A considerable amount of learning takes place

How Consumers Store, Retain, and Retrieve Information

•Consumers’ information search is often

dependent upon how similar or dissimilar presented products are to product categories in the absence of direct reinforcement (positive Sensory store: all data come to us through our already stored in memory or negative) through a process psychologists call senses; however, our senses do not transmit modeling or observational/vicarious learning –Consumers recode what they have already information as whole images encoded to include larger amounts of They observe how others behave in response to The separate pieces of information are information (chunking) certain situations (stimuli), the ensuing results synchronized as a single image (reinforcement) that occur, and they imitate The degree of prior knowledge is an important (model) the positively-reinforced behavior when This sensory store holds the image of a consideration faced with similar situations sensory input for just a second or two Knowledgeable consumers can take in more –Modeling is the process through which * This suggests that it’s easy for marketers to get complex chunks of information than those who information into the consumer’s sensory store, individuals learn behavior by observing the are less knowledgeable in the product category behavior of others and the consequences of such but hard to make a lasting impression •Information is stored in long-term memory in 2 behavior Short-term store: if the data survive the ways: –Their role models are usually people they sensory store, it is moved to the short-term –Episodically: by the order in which it is admire because of such traits as appearance, store accomplishment, skill, and even social class acquired This is our working memory –Semantically: according to significant Advertisers recognize the importance of If rehearsal – the silent, mental repetition of concepts observational learning in their selection of [memories stored are organized into framematerial – takes place, then the data are models, whether celebrities or unknowns. works by which we integrate new data with transferred to the long-term store previous experience] Ads may depict negative consequences for If data are not rehearsed and transferred, •Total package of associations brought to mind certain types of behavior they are lost in a few seconds when a cue is activated is called a schema public policy ads showing the negative Long-term store – once data are transferred to consequences of smoking, of driving too fast, or Retrieval: the long-term store, they can last days, weeks taking drugs. or even years

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–the process by which we recover information from long-term storage

–Studies show that consumers tend to remember the product’s benefits, rather than it’s attributes

–Motivated consumers are likely to spend time

Elaboration Likelihood Model (ELM)

•Suggests that a person’s level of involvement during message processing is the critical factor in determining the most effective route of persuasion

interpreting and elaborating on information they –When involvement is high, consumers follow find relevant to their needs and are likely to activate such relevant knowledge from longthe central route and base their attitudes or term memory choices on the message arguments

•Studies show that incongruent/unexpected elements pierce consumers’ perceptual screens:

–improve the memorability of an ad when

–When involvement is low, they follow the peripheral route and rely more heavily on other message elements to form attitudes or make product choices

these elements are relevant to the advertising

–BUT provide no memorability for the product

when these elements are not relevant to the ad

•Interference effects: –Caused by confusion with competing ads and result in a failure to retrieve

–Advertisements for competing brands or for

Marketing Applications of ELM

•For high involvement purchases: –Use arguments stressing the strong, solid, highquality attributes of their products, thus using the central (highly cognitive) route

other products made by the same manufacturer can lower the consumer’s ability to remember advertised brand information

•For low involvement purchases:

•2 kinds of interference –New learning can interfere with the retrieval

focusing on the method of presentations rather than on the content of the message [e.g. use of celebrity spokespersons or highly visual and symbolic ads]

–Old learning can interfere with the recall of

•The best strategy for increasing the personal

of previously stored material recently learned material

•Consumer Relevance •Central and Peripheral Routes to Persuasion •Measure of Involvement Consumer Relevance

Measures of Consumer Learning

•Involvement depends on degree of personal

•Recognition and Recall Measures

relevance that the product holds for the consumer

•High involvement is: –Very important to the consumer …mainly in terms of perceived risk

–Provokes extensive problem solving –Finding fewer brands acceptable (narrow categorizers)

–Aided Recall (recognition tests) –Unaided Recall (recall tests)

•Cognitive Responses to Advertising –Comprehension: a function of the message characteristics, the consumer’s opportunity and ability to process information, and the consumer’s motivation or level of involvement

–Pre-tests and post-tests Measures of Consumer Learning

Central and Peripheral Routes to Persuasion

•Central route to persuasion –For high involvement purchases –Requires cognitive processing

•Peripheral route to persuasion –Low involvement –Consumer less motivated to think –Learning through repetition, visual cues, and holistic perception

•Function of three groups of influences –Consumer drivers –Brand drivers –Social drivers

•Four types of loyalty –No loyalty –Covetous loyalty –Inertia loyalty –Premium loyalty

[reflects a correlation among consumer involvement and the cognitive and behavioral dimensions of brand loyalty]

•Loyalty programs: –Generally designed with the intention of forming and maintaining brand loyalty

–Use the peripheral route to persuasion,

relevance of products to consumers is the same as the core of modern marketing: –Provide benefits that are important and relevant to consumers –Improve the product and add benefits as competition intensifies –Focus on forging bonds and relationships with customers rather than just engaging in transactions

Issues in Involvement Theory

Brand Loyalty

•Attitudinal and Behavioral Measures of Brand Loyalty

–Attitudinal measures: concerned with

consumers’ overall feelings/evaluation about the product and the brand, and their purchase intentions

–Behavioral measures: based on observable responses to promotional stimuli (purchase behavior)

Brand Equity

•Refers to the value inherent in a well-known brand name

•Value stems from consumer’s perception of brand superiority

•Brand equity reflects learned brand loyalty •Brand loyalty and brand equity lead to increased market share and greater profits

direct feedback are beginning to blur the distinction between interpersonal & impersonal communication

•Direct marketers (often called database COMMUNICATION Communication

•The link between the individual and society •The tool that marketers use to persuade consumers to act in a desired way

marketers) also seek individual responses from ads they have placed in all the mass media

–Broadcast, print, online as well as from direct mail The Message

•Can be a verbal message, spoken or written, and usually can contain more specific product information than a nonverbal message

Can be a non-verbal message in the form of •Today, the media and communication models •symbolic communication that have been used for decades are undergoing fundamental changes

•The transmission of a message from a sender to a receiver (or channel) of transmission Components of Communication

•The transmission of a message from a sender

–Non-verbal communication takes place in interpersonal channels as well as in impersonal channels Feedback

•An essential component of both interpersonal and impersonal communications

to a receiver (or channel) of transmission

•Prompt feedback permits the sender to:

•An essential component is feedback, which alerts the sender as to whether the intended message was, in fact, received

–reinforce –change –modify the message to ensure that it is

The Sender

•Generally, it is easier to obtain feedback (both

•The initiator of the communication… •… and can be a: –Formal source: might be the organization communicating the message

–Informal source: might be a parent or friend who gives product information or advice

•Informal word-of-mouth communication tends to be highly persuasive The Receiver

•The targeted prospect or a customer •There are also intermediary audiences for a message such as:

–Wholesalers, distributors, and retailers who receive trade

•There are also unintended audiences which include everyone who is exposed to the message, whether or not they are specifically targeted by the source The Medium

•The channel/way the message is communicated

•Can be –

understood in the intended way verbal and non-verbal) from interpersonal communications than impersonal communications The Communications Process

•The Message Initiator (the Source) •The Sender •The Receiver •The Medium •The Message •The Target Audience (the Receivers) •Feedback - the Receiver’s Response In general, a company’s marketing communications are designed to make the consumer:

–aware of the product –give the product a symbolic meaning –show how it can solve the consumer’s problem better than a competitive product/service The Message Initiator (Source)

•The sponsor (initiator) must encode the

•e.g. a mass medium like a newspaper of TV

message in such a way that its meaning is interpreted by the target audience in precisely the intended way

–an interpersonal communications channel

symbols, spokespersons, and special channels

–an impersonal communications channel program

•an informal conversation between two friends •a formal conversation between a salesperson & a customer

•Mass media are generally classified as: –Print (newspapers, magazines, billboards) –Broadcast (radio, television) –Electronic (Internet) The Medium

•New modes of interactive communication that permit the audiences of mass media to provide

–Encoding can be done through words, pictures,

•Publicity is usually the result of public

relations efforts and tends to be more believable because its commercial origins and intent are not readily apparent

•The credibility of the source affects the decoding of the message

•The perceived honesty and objectivity of the source contributes to his/her credibility

–If the source is well-respected and highly

•Source credibility judged on past performance, thought of by the intended audience, the reputation, service, quality, spokesperson message is much more likely to be believed, and image, retailers, social responsibility vice versa •Institutional advertising used to promote favorable company image Credibility is build on several factors, foremost Not-for-profit sources generally have more of which are the intentions of the source credibility than for-profit sources –If the receiver perceives any type of personal –Such formal sources as neutral rating services gain for the message sponsor as a result of the or editorial sources have greater credibility than proposed action or advice, the message itself commercial sources becomes suspect Consumers judge commercial source credibility The Message Initiator (Source) on such factors as: Issues with credibility –Past performance Credibility of Informal Sources –The kind and quality of service Credibility of Formal Sources –The quality and image of products offered

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• • •Credibility of Spokespersons and Endorsers •Message Credibility

–Their position in the community

•The reputation of the retailer who sells the product has a major influence on message credibility

•The reputation of the medium that carries the advertisement also enhances the credibility of the advertiser

•There is no single answer as to which medium has the most credibility

– especially now when new forms of media and traditional media in new forms are emerging

•The consumer’s previous experience with the product or the retailer has a major impact on the credibility of the message

•Firms with well-established reputations

Sleeper Effect The idea that both positive and negative credibility effects tend to disappear after a period of time.

1. Credibility of informal sources. o Includes word of mouth

generally have an easier time selling their products than do firms with lesser reputations

Effects of Time on Source Credibility

•These sources also called opinion leaders •Informal sources may not always be credible •Built on the perception that the informal

•A quality image permits a company to

•The persuasive effects of high-credibility

experiment more freely in many more areas of marketing than would otherwise be considered prudent

•Although a high-credibility source is initially

sources (friends, neighbors, relatives) have nothing to gain from their recommendation

•An opinion leader is an example of an informal source who profits psychologically, if not tangibly, by providing product information to others

–This ego gratification may actually improve the quality of the information provided

–The fact that the opinion leader does not receive material gain from the recommended action increases the likelihood that the advice will be seriously considered

•Clever marketers initiate word-of-mouth (WOM) campaigns

–Many firms enlist typical consumers to serve as their buzz agents

•Marketers are now more acutely concerned

Credibility of Formal Sources

sources do not endure over time

more influential than a low-credibility source, research suggests that both positive and promote a favorable company image rather than negative credibility effects tend to disappear after 6 weeks or so to promote specific products

•Institutional advertising is designed to

•Firms often engage in cause-related marketing, –This phenomenon has been termed the

where they contribute a portion of the revenues sleeper effect = consumers simply forget the source of the message faster than they forget they receive from selling certain products to the message itself causes 3. Credibility of Spokespersons and Endorsers

•Effectiveness related to:

–The sleeper effect is caused by disassociation over time, leaving just the message content

•The theory of differential decay suggests that

–The message the memory of a negative cue simply decays –Synergy between endorser and type of product faster than the message itself, leaving behind the primary message content –Demographic characteristics of endorser •Reintroduction of a similar message by the –Corporate credibility source serves to jog the audience’s memory, and the original effect remanifests itself –Endorsement wording

•The spokesperson that gives the product

with negative word-of-mouth that can result in unfounded rumors about products

message is often perceived as the source

publicity online are called determined detractors

related to the message itself

•Studies show: •Persistent critics of marketers who initiate ad –The effectiveness of the spokesperson is

–i.e. the high-credibility source remains more persuasive than the low-credibility source The Target Audience (Receivers)

•Receivers decode the messages they receive

–The synergy between the endorser and the

on the basis of their personal experience and personal characteristics

WOM:

type of product/service advertised is an important factor

•Personal characteristics and comprehension:

–Consumer involvement with the product or

–Endorsers who have demographic

–The amount of meaning derived from the

message is the result of the message characteristics, the receiver’s opportunity and ability to process the message, and the receiver’s motivation –Personality, attitudes, and prior learning all affect how a message is decoded –Perception, based as it is on expectations, motivation, and past experience, certainly influence message interpretation

•Factors motivating consumers to engage in message

–Self-involvement –Alleviating post-purchase uncertainty & dissonance

–Seeking information –Concern for others

•Primary motives behind eWOM: –Venting negative feelings –Concern for others –Extraversion and positive self-enhancement –Social benefits –Economic incentives –Helping the company –Advice seeking 2. Credibility of Formal sources. Neutral sources have the greatest credibility

characteristics that are similar to those of the target audience are viewed as more credible/persuasive than those who do not

–The endorser’s credibility is not a substitute for corporate credibility

•Marketers who use celebrities to give testimonials/ endorse products must be sure that the specific wording of the endorsement lies within the recognized competence of the spokesperson

•In interpersonal communications, consumers are more likely to be persuaded by salespersons who engender confidence and who give the impression of honesty and integrity 4. Message Credibility

•Credibility of retailers •Reputation of the medium that carries the ad •Consumer’s previous experience with product

•Involvement and congruency –A person’s level of involvement determines

how much attention is paid to the message & how carefully it is decoded

•Mood –A consumer’s mood (cheerfulness,

unhappiness) affects the way in which an ad is perceived, recalled and acted upon –Often influenced by the context in which the advertising message appears (e.g. the adjacent TV program or newspaper story) and the content of the ad itself which in turn, affect the consumer’s evaluation and recall of the message

•Barriers to communication may affect the accuracy with which consumers interpret messages –Selective exposure to messages –Psychological noise Selective Exposure to Messages

•Consumers selectively perceive advertising messages

–Tend to ignore ads that have no special interest or relevance to them

–Which consumers received the message [Data collected via both types of measures are offered for sale by syndicated services]

•Message Attention and Interpretation –Physiological measures –Theater tests –Readership surveys –Attitudinal measures

–TV remote controls offer viewers the ability to

•Message Recall Measures

“wander” among program offerings with ease (referred to as “grazing”)

–Day after recall

–Some marketers try to overcome channel

Physiological Measures

surfing during commercials by roadblocking (i.e. playing the same commercial simultaneously on competing channels) Psychological Noise

•Things that impair reception of a message, such as competing advertising messages or distracting thoughts

•Physiological measures track bodily responses to stimuli

•Sophisticated physiological techniques can be used to measure the degree of consumer arousal and involvement…

•…but do not assess the reasons behind their

•To overcome psychological noise, a sender can:

levels of engagement with the messages tested

–Repeat exposure to the message –Use contrast –Use teasers –Use customized ads –Shift advertising from TV to internet

Attitudinal Measures

•The most effective way to ensure that a promotional message stands out and is received and decoded appropriately by the target audience is through effective positioning and a unique selling proposition Feedback: The Receiver’s Response

•The ultimate test of marketing communication is the receiver’s response –Only through feedback can the sender determine if and how well the message has been received

•Feedback should be gathered: –Promptly –Accurately

•Generally, researchers use attitudinal measures, placed within copy pretests or posttests to assess whether respondents:

–like the message –understand it correctly –regard it as effective and persuasive

•Researchers are also interested in measuring the emotions and feelings evoked by the ads Designing Persuasive Communications

•Communications strategy –Must include objectives •The sponsor must first establish the primary

communications objectives such as generating awareness, promoting sales, and encouraging certain practices/behavior

–Includes cognitive models

•An advantage of interpersonal communication •For a long time, the cognitive models were is the ability to obtain immediate feedback through verbal as well as non-verbal cues –Permits rapid adjustment of the message –This adaptability is what makes personal selling so effective

•Feedback is also important for impersonal or mass communication because of its expense –The organization that initiates the message needs some method for determining whether its mass communication is: •being received by the intended audience •understood in the intended way •successful in achieving the intended objectives

•Unlike interpersonal communications, mass

communications feedback is rarely direct; it is usually inferred –Receivers buy (or do not buy) the advertised product; they renew (or do not renew) their magazine subscriptions, etc.

•Another type of feedback that companies seek from mass audiences is the degree of consumer satisfaction or dissatisfaction with a product purchase Advertising Effectiveness Research

•Media and message exposure measures –How many consumers received the message

used to describe the communications process

–Newer models •Today, other models are gaining popularity •One example is a model based on the key

factors of perception, experience and memory

•Media Strategy –Consumer profile •First, the sponsor should develop a consumer profile of the target market

–Audience profile •Next, a medium with an appropriate audience

•Selective binding possible •High quality production •High credibility •Long message life •High pass-along rate •Long lead time •High clutter •Delayed and indirect feedback •Rates vary based on circulation and selectivity Persuasive Capabilities and Limitations of Major Media (Television)

•Low costs per contact •Long lead time •High clutter •Short message life •Viewers can avoid exposure with zapping, etc. •Day-after recall tests for feedback •Large audiences possible •Appeals to many senses •Emotion and attention possible •Demonstration possible •Very high costs overall Designing Persuasive Communications

•Message Strategy –The message is the thought idea, attitude, image or other information that the sender wishes to convey to the intended audience

–Senders must recognize what they are trying to say and audience’s characteristics so they can encode the message appropriately

–Involvement theory •Suggests that individuals are more likely to

devote active cognitive effort to evaluating the pros and cons of a product in a high-involvement purchase situation, and more likely to focus on peripheral message cues in a low-involvement situation •Led to ELM (Elaboration Likelihood Model) central and peripheral routes Designing Persuasive Communications

•Resonance •Message framing •Comparative advertising •Order effects •Repetition

profile needs to be selected –Before selecting a specific medium, the advertiser needs to select a general media category that will enhance the message –Once marketers have identified the appropriate media category, they can then choose the specific medium/media in that category that reaches their intended audiences –The web is an advertising medium, and using it to communicate effectively with customers is a challenge to marketers

1. Resonance. Wordplay

Persuasive Capabilities and Limitations of Major Media (Magazines)

product

•Highly selective

•Used to create a double meaning when used with a relevant picture 2. Message Framing. Positive framing: –stress the benefits to be gained by using a specific product

•Negative framing: –stress the benefits to be lost by not using the

–One-sided messages: tell consumers only the

good points/benefits –effective if audience is friendly, initially favors the communicator’s position, not likely to hear an opposing argument •Two-sided: tell consumers both good points/benefits and bad points/disadvantages –effective when the target audience is critical or unfriendly, if well-educated, or likely to hear opposing claims 3. Comparative Advertising. Marketer claims product superiority over another brand (explicitly or implicitly identified) –on overall basis or on selected product attributes •Useful for: –product positioning –target market selection –brand positioning strategies 4. Order Effects

Emotional Advertising Appeals Fear Humor Abrasive advertising Sex in advertising Audience participation Impact of Humor on Advertising Humor is more effective with existing products than with new products. Humor attracts attention. Humor is not more effective at increasing persuasion. Humor does not enhance source credibility.

Humor that is relevant to the product is superior to humor that is unrelated to the product.

Order Effects

•Communications researchers have found that the order in which a message is presented affects audience receptivity

•On television, the position of a commercial in a commercial pod can be critical –Commercials shown first are recalled best, those in the middle the least

•Magazine publishers recognize the impact of order effects by charging more for ads on the front, back and inside covers of magazines than for the inside magazine pages because of their greater visibility and recall

•Order is also important in listing product benefits within an ad –If interest is low, the most important point should be made first to attract attention –If interest is high, it is not necessary to pique curiosity and so product benefits can be arranged in ascending order

•When both favorable and unfavorable information are to be presented, placing the favorable material first often produces greater tolerance for the unfavorable news –It also produces greater acceptance and understanding of the total message 5.

persuading less educated audiences

Humor enhances liking.

•Primacy •Recency •Order of benefits •Brand name

Repetition

•Important factor in

–Emotional appeals are more effective in

learning

–Frequency of the ad affects: •persuasion, ad recall, brand name recall, and

brand preferences –Multiple message exposures give consumers more opportunity to: •internalize product attributes •develop more or stronger cue associations and more positive attitudes •increased willingness to resist competitive counter persuasion efforts Advertising Appeals

•Factual and emotional appeal effectiveness varies with the circumstance and the audience

–Reason-why appeals are more effective in persuading educated audiences