Consumer learning

Elements , Behavioral Learning, Classical Conditioning, Instrument Conditioning, Observational Learning, Consumer Involvement, Hemispheric Lateralization, Brand equity and CL

1. Consumer Learning By: Shivika Malhotra & Jagdeep Singh

2. Learning Objectives 1. To understand the elements of learning in the context of consumer behavior. 2. To understand behavioral learning, classical conditioning, and the roles of stimulus generalization and discrimination in developing and branding new products. 3. To understand instrumental conditioning and the objectives and methods of reinforcement. 4. To understand the role of observational learning in consumer behavior. 5. To understand the elements of information processing, including receiving, storing, and retrieving consumption-related information. 6. To understand cognitive learning as a framework for consumer decision-making. 7. To understand consumer involvement and passive learning, and their impact on purchase decisions and the retention and recall of promotional communications. 8. To understand how to measure the results of consumer learning.

3. Let us understand the concept

4. For consumers who are familiar with SNICKERS®, seeing the ad is followed by thoughts of a rich, very tasty, and satisfying chocolate bar and the pleasure associated with eating it. Like any successful company, Mars, the company that makes SNICKERS®, is always looking to expand its product line and target new markets, and introduced a new Mars product—SNICKERS® Peanut Butter Squared. The ads are aimed at peanut butter enthusiasts and carry the same message: If you like peanut butter and chocolate, you’ll love SNICKERS® and peanut butter. Peanut butter packages, such as cups and jars, are round, just like small wheels. The reference to “training wheels” subtly tells peanut butter lovers to “move on” and try SNICKERS® Peanut Butter, which, unlike round peanut butter cups, come in individually wrapped squares. Mars cleverly named the new product “peanut butter squared,” which tells consumers that peanut butter does not have to be round and can come in squares.

5. Definition Learning is the process by which individuals acquire the purchase and consumption knowledge and experience they apply to future, related behavior. Consumer learning is a process that evolves and changes as consumers acquire knowledge from experience, observation, and interactions with others and newly acquired knowledge affects future behavior. It ranges from simple and often reflexive responses to marketing stimuli (such as packaging, product colors, and promotional messages), to learning abstract concepts and making decisions about purchasing complex and expensive products. Learning consists of four elements: motives, cues, responses, and reinforcement.

6. The Elements Of Consumer Learning Motiv es : Uncovering consumer motives is the primary objective of marketers, who seek to teach consumers how they can fill their needs by buying certain products and brands. Unfilled needs lead to motivation, which spurs learning. The degree of relevance, or “involvement,” determines the consumer’s level of motivation to search for information about a product or service and, potentially, engage in learning.

7. Cues : Cues are stimuli that direct motivated behavior. An advertisement for an exotic trip that includes bike riding may serve as a cue for bike riders, who may suddenly “recognize” that they “need” a vacation. The ad is the cue (or stimulus) that suggests a specific way to satisfy a salient motive. In marketing, price, styling, packaging, advertising, and store displays are cues designed to persuade consumers to fulfill their needs by buying specific products.

8. Responses : In the context of learning, response is an individual’s reaction to a drive or cue. Learning can occur even when responses are not overt. The automobile manufacturer that provides consistent cues to a consumer may not always succeed in stimulating a purchase. However, if the manufacturer succeeds in forming a favorable image of a particular automobile model in the consumer’s mind, it is likely that the consumer will consider that make or model when he or she is ready to buy a car. A response is not tied to a need in a one-to-one fashion. Indeed, a need or motive may evoke a whole variety of responses.

9. Reinforcement: Reinforcement is the reward—the pleasure, enjoyment, and benefits—that the consumer receives after buying and using a product or service. For the marketer, the challenge is to continue to provide consumers with an ongoing positive product or service, thus reinforcing future purchases. Lets talk about a case of PROCTER & GAMBLE’s case I feel like a queen

10. BEHAVIORAL LEARNING CLASSICAL CONDITIONING INSTRUMENTAL CONDITIONING OBSERVATIONAL LEARNING

11. CLASSICAL CONDITIONING A form of behavioural learning stating that animal and human alike,can be taught behaviors and associations among stimuli through repetition. Some describe it as a “knee jerk”(or automatic) response to a drive that builds up through repeated exposure to a stimulus. Ivan Pavlov, a Russian physiologist, developed the concept of classical conditioning. Pavlov maintained that conditioned learning results when a stimulus that is paired with another stimulus that elicits a known response produces the same response when used alone.

12. Models of Classical Conditioning

13. Analogous Model of Classical Conditioning

14. Strategic Applications of Classical Conditioning Increases the association between the conditioned and unconditioned stimulus Slows the pace of forgetting Although some overlearning aids retention, at some point an individual can become satiated with numerous exposures, and both attention and retention will decline. Basic Concepts Repetition Stimulus ge n eralization Stimulus di s crimi n ation

15. Strategic Applications of Classical Conditioning Having the same response to slightly different stimuli Useful in product extensions Basic Concepts Repetition Stimulus ge n eralization Stimulus di s crimi n ation

16. Strategic Applications of Classical Conditioning Selection of a specific stimulus from among similar stimuli This discrimination is the basis of positioning which looks for unique ways to fill needs Basic Concepts Repetition Stimulus ge n eralization Stimulus di s crimi n ation

17. Instrumental Conditioning Instrumental conditioning (or operant conditioning) is based on the notion that learning occurs through a trial-and-error process, with habits formed as a result of rewards received for certain responses or behaviors.

18. Reinforcing behavior Positive Reinforcement Negative Reinforcement

19. Extinction & Forgetting

20. Customer satisfaction and retention

21. Shaping Retailers offer popular products at severely discounted prices to the first hundred or so customers to arrive, because those customers are likely to buy more products at the store rather than only the discounted items. Loss leaders A test drive may turn into a sale

22. Massed v/s Distributed learning Research shows that  distributed practice  has far more impact on your consumer  than  massed practice . On average, retailers who have undertaken  distributed practice  achieved 15%  higher  than who had only completed  massed practice

23. Observational Learning Observational learning (or modeling) is the process through which individuals learn behavior by observing the behavior of others and the consequences of such behavior. For this type of learning to occur, reinforcement must take place. Advertisers recognize the importance of observational learning in selecting the models they feature in advertisements, whether celebrities or unknowns Consumers imitate the behavior of those they see rewarded, expecting to be rewarded similarly if they adopt the same behavior

24. Information Processing Information processing is related to both the consumer’s cognitive ability and the complexity of the information to be processed. Consumers process product information by attributes, brands, comparisons between brands, or a combination of these factors. Consumers with higher cognitive ability apparently acquire more product information and are more capable of integrating information on several product attributes than consumers with lesser ability.

25. Information Processing and Memory Stores

26. Information Rehearsal and Encoding

27. Facebook launched a short film underscoring the power of connections, and its brand belief that people can do ‘More Together’ than alone. The creative concept introduces 'duality' to highlight the contrasting flavors of sweet and salty in one biscuit.

28. Consumer Involvement and Hemispheric Lateralization Consumer involvement is the degree of personal relevance that the product or purchase holds for the consumer High-involvement purchases are very important to the consumer (e.g., in terms of perceived risk) and thus provoke extensive problem solving and information processing. Low-involvement purchases are not very important, hold little relevance, have little perceived risk, and provoke limited information processing

29. Hemispheric Lateralization Hemispheric lateralization (split-brain theory) stems from medical research done in the 1960s; its premise is that the human brain is divided into two distinct cerebral hemispheres that operate together, but “specialize” in processing different types of cognitions. Strong visuals in TV commercials and in-store displays generate familiarity with the brand and induce purchase behavior. Pictorial cues are more effective at generating recall and familiarity with the product, whereas verbal cues (which trigger left-brain processing) generate cognitive activity that encourages consumers to evaluate the advantages and disadvantages of the product.

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31. Outcomes and Measures of Consumer Learning Recognition and Recall Measures: Recognition tests are based on aided recall, whereas recall tests use unaided recall. In a recognition test , the consumer is shown an ad and asked whether he or she remembers seeing it and can remember any of its salient points. In a recall test , the consumer is asked whether he or she has read a specific magazine or watched a specific television show, and, if so, whether he or she can recall any ads or commercials seen, the product and brand advertised, and any notable points about the offerings promoted.

32. Brand Loyalty Marketers agree that brand loyalty has two components— behaviors and attitudes —and that both must be measured . Attitudinal measures gauge consumers’ overall feelings about the brand, including their future purchase intentions. Behavioral measures focus on observable, factual behaviors, such as the quantity purchased, purchase frequency, and repeated buying.

33. There are three types of brand loyalty: Covetous brand loyalty includes no consistent purchase of a given brand, in spite of strong attachment to it. Inertia brand loyalty is purchasing the brand because of habit and convenience, but without any emotional attachment to it. Premium brand loyalty means high attachment to the brand and repeat purchase

34. Brand Equity The term brand equity represents the intrinsic value of a brand name. This value stems from the foundations of brand loyalty: The consumer’s perception of the brand’s superiority, the social esteem that using it provides, and the customer’s trust and identification with the brand.

35. Summary Learning is the process by which individuals acquire the purchase and consumption knowledge and experience they apply to future, related behavior. Consumer learning is a process that evolves and changes as consumers acquire knowledge from experience, observation, and interactions with others and newly acquired knowledge affects future behavior. It ranges from simple and often reflexive responses to marketing stimuli (such as packaging, product colors, and promotional messages), to learning abstract concepts and making decisions about purchasing complex and expensive products. The elements of learning are motives (drives), cues, responses, and reinforcement.

36. Thank you !