1. Chapter 5 Consumer Learning and Memory

2. Why Marketers are Concerned about How Consumers Learn Marketers want to “teach” consumers about their products  product attributes  where to buy them  how to use and dispose of them They want to know how effective they have been in communicating with the consumer  directly, through advertisements  Indirectly, through product appearance, packaging, price and distribution channels

3. What is Learning? Generally, learning is a process by which changes occur in the content or organization of an individual’s long-term memory From a marketing standpoint, learning can be thought of as the process by which individuals acquire the purchase and consumption knowledge and experience that they apply to future related behavior

4. Range of Learning Situations Learning occurs at various levels of consumer involvement Low-level involvement: consumers have little or no motivation to process the information High-involvement learning: consumers are highly motivated to process the information

5. Learning Theories There are many theories about how people learn They fall into two general categories: 1. Behavioral learning theories 2. Cognitive theories

6. Behavioral Learning Theories Are also referred to as stimulus-response theories because based on premise that observable responses to specific external stimuli signal learning has taken place When a person responds in a predictable way to a known stimulus, he or she is said to have learned There are two behavioral theories with relevance to marketing: 1. Classical conditioning 2. Instrumental/operant conditioning

7. Classical Conditioning The theory that conditioned learning results when a stimulus that is paired with a stimulus that elicits a known response serves to produce the same response when used alone

8. Classical Conditioning Schematic Presentation of Classical Conditioning Conditioned Stimulus (CS) Unconditioned Stimulus (US) Unconditioned Response (UR) Elicits Comes to Elicit

9. The use of a well-known, admired individual to advertise a product can condition consumers to have positive feelings about the product “Cause marketing”

10. Strategic Applications of Classical Conditioning Three basic concepts derive from classical conditioning 1. Repetition 2. Stimulus generalization 3. Stimulus discrimination

11. Increases the strength of the association between a conditioned stimulus and an unconditioned stimulus (learning) It is used by advertisers when scheduling media exposure for an advertising campaign Too much repetition can lead to advertising wearout Consumers may become annoyed with repetitive ads and develop a negative image of the product as a result 1. Repetition

12. 2. Stimulus Generalization Learning relies not only on repetition, but on peoples’ ability to generalize--that is, respond in the same way to slightly different stimuli Explains why some manufacturers try to make their generic/store brands similar in appearance to name brands

13. Marketers use this principle to take advantage of a well-known and trusted brand in a number of ways 1. Product line extensions 2. Product form extension 3. Product category extension Referred to as the halo effect

14. 3. Stimulus Discrimination Opposite of stimulus generalization Results in the selection of a specific stimulus from among similar stimuli Forms the basis for marketers’ positioning strategy Permits marketers to differentiate their product from competitors’ (through, e.g. different features, colors, ingredients, etc.)

15. Operant (Instrumental) Conditioning B.F. Skinner Learning occurs through trial and error Habits are formed as a result of rewards for certain behaviors Consumers who try different brands, models, styles until they find the one that “fits” are engaged in instrumental learning

16. Operant Conditioning Specific Behavior Reinforcement or Punishment Increased or Decreased Probability of Response Schematic Presentation of Operant Conditioning

17. Reinforcement A reward given to acknowledge a desired behavior and increase the probability it will be repeated 1. Positive reinforcement  Events that strengthen the likelihood of a specific response 2. Negative reinforcement  A negative outcome that also serves to encourage a specific behavior  Fear appeals

18. Punishment Punishment discourages behavior as opposed to encouraging behavior to avoid a negative result

19. Extinction When a learned response is no longer reinforced, it diminishes to the point of extinction—i.e., there is no longer a link between the stimulus and the expected reward

20. Strategic Applications of Instrumental Conditioning Customer Satisfaction In order to keep its customers, a marketer or business must maximize positive reinforcement This can be done through the product itself Can also be done with other elements of the purchase situation

21. Reinforcement Schedules The pattern in which reinforcements are given Marketers have found that while product quality needs to remain high to satisfy consumers, non-product positive reinforcement does not have to be offered every time

22. Three types of reinforcement schedules: 1. Continuous/total (every time) 2. Systematic/fixed ratio (every “nth” time) 3. Random/variable ratio

23. Time Behavior Maintenance Reinforcement Schedules & Forgetting Forgetting occurs more quickly Forgetting occurs gradually over time and the residual effects of learning persist Continuous ReinforcementIntermittent Reinforcement

24. Cognitive Learning Theory Learning based on mental activity (i.e. thinking and problem-solving) Unlike simpler organisms, we learn not only by trial and error, but by  searching for information  evaluating the information, and  making a decision about what is best for us

25. Marketing Implications of Cognitive Learning Theory Primary implication is to emphasize the importance of providing information to consumers Providing information can be a promotional strategy as well

26. Cognitive Associative Learning Also called Neo-Pavlovian theory Learning involves not only the acquisition of new reflexes; it is the acquisition of new knowledge about the world Under this theory, consumers are viewed as information seekers who use logical and perceptual relations among events, along with their own preconceptions, to form a sophisticated representation of the world

27. Implications for Marketers Marketers draw on both cognitive and operant conditioning theories Providing information about a product (e.g., eggs are OK to eat) draws on cognitive theory Providing rewards (e.g., frequent flyer miles, coupons, etc.) draws on classical conditioning theory

28. Vicarious (Observational) Learning The process through which individuals learn behavior by observing the behavior of others and the consequences of such behavior Role models tend to be people consumers admire because of traits such as appearance, accomplishment, skill, or social class

29. Another alternative form of observational learning involves representation of negative consequences of not using the advertised product

30. Brand Loyalty A consumer’s consistent preference for and purchase of a specific brand 1. In high-involvement purchases (e.g., a car) it reduces risk and facilitates selection 2. In low-involvement purchases (e.g., tissues) it saves time and effort Brand loyalty generally results from consistent positive experiences with a company and/or its products

31. There has been a recent decline in brand loyalty 1. Boredom or dissatisfaction with the products 2. Variety-seeking 3. Increased concern with price To counter these actions, marketers have adopted a number of programs (e.g., frequent flyer) that reward brand loyalty