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Models of Consumer Behaviour - PowerPoint 2 by 1XuPRpwp


									            Information processing

                      Week 3 – 14 May 2003

Consumer Behaviour and Food                  1
    Marketing – AE 613
    Information processing and
   • What are the mechanisms that lead to
     recognition and judgement?
   • What is the objective evidence of value
     and probability and how does the
     consumer process it into utility and
     subjective probability?
   • What is the relevance of information
     processing in decision making?
   • How can attention be influenced?

Consumer Behaviour and Food                    2
    Marketing – AE 613
                Marketing outcomes
   • Calibration of advertising

Consumer Behaviour and Food          3
    Marketing – AE 613
Consumer Behaviour and Food   4
    Marketing – AE 613
         Mechanisms and meaning
   • Recognition
   • Mere exposure
   • Response to thought and feeling
   • Schemata
   • Heuristics

Consumer Behaviour and Food            5
    Marketing – AE 613
                          1. Recognition
   • The process of determining whether a
     stimulus has or has not been
     encountered before.
   • In psychology, thinking and recognition
     are described as a chain of internal
     responses, each stimulating the next
   • The speed of recognition depends on the
     extent that one path of responses
     dominates the others
Consumer Behaviour and Food                    6
    Marketing – AE 613
                    Ambiguous stimuli
   • Recognition is slower when stimuli are:
         –   Novel
         –   Changeable
         –   Surprising
         –   Incongruous
         –   Complex
         –   Indistinct
   • But attention increases in such
Consumer Behaviour and Food                    7
    Marketing – AE 613
   • The process by which an individual
     allocates part of his or her mental
     activity to a stimulus.

Consumer Behaviour and Food                8
    Marketing – AE 613
      Call out the colour of this
               object (1)

Consumer Behaviour and Food         9
    Marketing – AE 613
      Call out the colour of this
               object (2)

        Red CocaCola Can

Consumer Behaviour and Food         10
    Marketing – AE 613
              Response competition
   • Response competition involves one
     response interfering with or
     competing with another.

Consumer Behaviour and Food              11
    Marketing – AE 613
                  Stimuli and arousal
   • Arousal is high under:
         – Overstimulation
         – Understimulation (Boredom)
   • People prefer intermediate/low
     levels of arousal

Consumer Behaviour and Food             12
    Marketing – AE 613
       Advertisement of arousal
   • Stimuli generating
     conflict/response competition are:
         – Liked when the level of arousal is low
         – Disliked when the level of arousal is

Consumer Behaviour and Food                         13
    Marketing – AE 613
         Television advertisement
   • The advantage of stimuli creating
     response competition is that they
     are given more attention.
   • But what are the arousal condition
     for a specific TV program?
         – Low: conceptual conflicts are welcome
         – High: the product may be disliked

Consumer Behaviour and Food                        14
    Marketing – AE 613
                              2. Exposure
   • Exposure is the process by which
     the consumer comes in physical
     contact with a stimulus

Consumer Behaviour and Food                 15
    Marketing – AE 613
                         Mere exposure
   • Repeated exposure to a new
     stimulus make people like it more
   • Mere exposure does not involve any
   • Harrison (1968) argued that the
     stimulus is liked more because
     recognition is easier with repetition

Consumer Behaviour and Food              16
    Marketing – AE 613
           Mere exposure and
        scheduling of advertising
   •      Advertising campaign strategies
         1. Steady
              –     Constant pressure over the whole period
         2. Flight
              –     Strong pressure alternate to silence
         3. Burst
              –     Extreme pressure very limited in time

Consumer Behaviour and Food                                 17
    Marketing – AE 613
        Steady (drip) advertising
   • Lower levels of advertising weight
     spread over a long period of time.
         – Increases the percentage of people
           remembering the ads (but the marginal
           effect decreases as expositions
         – Decreases the decay speed (time
           necessary to forget the ad)
         – Support brand/store loyalty
Consumer Behaviour and Food                    18
    Marketing – AE 613
                Flight (intermittent)
   • Intermittent bursts of heavy
   • Periods of silence
         – Maximise the memory effect
         – Minimise the wearout effect
         – Helps recognition

Consumer Behaviour and Food              19
    Marketing – AE 613
         Burst (pulse) advertising
   • High levels of advertising are
     scheduled over a short period of
         –   The “memory ratio” is higher
         –   The “duration effect” is lower
         –   Risk of rising the level of arousal
         –   Helps positioning of new products

Consumer Behaviour and Food                        20
    Marketing – AE 613
    3. Response to thought and
          feeling stimuli
   • Do we need to “recognise” before
   • Zajonc shows that the “feeling”
     aspect of thinking is processed
     faster than the “knowledge”
   • Marcel experiment with words

Consumer Behaviour and Food             21
    Marketing – AE 613
             Recognise this picture

Consumer Behaviour and Food           22
    Marketing – AE 613
                              4. Schemata
   • Schema: an abstract knowledge
     structure helping to structure and
     interpret new information/stimuli
         – Cognitive category
         – Stereotypes
         – Relations

Consumer Behaviour and Food                 23
    Marketing – AE 613
        Schemata and processing
           of new information
   • Repositioning of products
   • “Subvertising”
   • Classification under a different

Consumer Behaviour and Food             24
    Marketing – AE 613
Consumer Behaviour and Food   25
    Marketing – AE 613
                              5. Heuristic
   • Ideas that are more readily
     accessible tend to be given a greater
     probability or weight by people
   • Some probabilities can be
     overestimated because we hear
     more about them (publicity)

Consumer Behaviour and Food                  26
    Marketing – AE 613
    Example: judgment of risk

Consumer Behaviour and Food   Fischoff et al.(1981)   27
    Marketing – AE 613
         Problems with heuristics
   • Favour remedial practice rather
     than preventive practice
   • More support to the status quo
   • Relies too much on hindsight to
     support a case
   • It is more difficult to sell intangible
     services and public goods
   • Avoid solving difficult problems
Consumer Behaviour and Food                    28
    Marketing – AE 613
              Value and probability
         Objective Value      Objective Probability

    Subjective (individual)   Subjective probability

Consumer Behaviour and Food                            29
    Marketing – AE 613
                                                            When our perceived
                                                             utility lies below the
                        The value-utility                     actual value (as it
                                                           happens for gains), we

                                                           tend to avoid risks and
                                                               get what is safer

      As we move towards                        Value
      negative values, our                                    Risk aversion
    perceived loss marginally

                                                        As the value increase,
                                                         our perceived gain
      Losses                                                      Gains
                                                         marginally decrease

 On the other hand, we may Risk    preference
  perceive losses as worse
than they actually are, so it is
     Consumer Behaviour and Food                                          30
 worth risking to avoid them
          Marketing – AE 613
                       Risk and hazard
   Risk:is the probability associate with
      a (negative) event
   E.g. Probability of contracting salmonella from

   Hazard:is the intensity of the
   E.g. Severity of the salmonella resulting illness

Consumer Behaviour and Food                            31
    Marketing – AE 613
                      Prospect Theory
   •  The utility of a potential choice is
      structured into two stages
   1. Framing and editing
         •     Choices are restructured into outcomes
               w.r.t. a reference point
         •     Complex choices are simplified
   2. Evaluation stage
         •     Each choice is given a value based upon
               framed utility and subjective probability
Consumer Behaviour and Food                                32
    Marketing – AE 613
     The relevance of framing:
            an example
   • A program for reducing food
   Every year in the UK about 600 people die because
     of infectious intestinal disease. Most of the cases
     are due to food poisoning
   PROGRAM A: 200 people will be saved
   33% of probability: 600 people saved
   67% of probability: 0 people saved
Consumer Behaviour and Food                            33
    Marketing – AE 613
           Alternative formulation
   PROGRAM A: 400 people will die
   33% of probability: 0 people will die
   67% of probability: 600 people will die

Consumer Behaviour and Food              34
    Marketing – AE 613

                                           Risk aversion

  Lives                                      Lives
  lost                                       saved

                       Risk preference
Consumer Behaviour and Food                        35
    Marketing – AE 613
                  Application to food
   • To advertise a discount, choose the
     largest figure between:
         – Percentage discount
         – Absolute value discount

   E.g. a) 20% off (on £ 10)
        b) £ 20 off (on £ 200)

Consumer Behaviour and Food                36
    Marketing – AE 613
            The dissonance theory
    • Cognitive dissonance is a condition of
      arousal occurring when personal beliefs
      do not fit together - Leon Festinger (1957)
    • When people committed themselves to an
      action inconsistent with their behaviour or
      beliefs, or which later proved to have
      undesirable consequences – Brehm and
      Cohen (1962)
    • Insufficient justification

Consumer Behaviour and Food                    37
    Marketing – AE 613
Consumer Behaviour and Food   38
    Marketing – AE 613
         Cases in food marketing
   • High-involvement purchases
   • Uncertainty about the benefits
          A very expensive bottle of wine
   • Receptivity to information after purchase
     (post-purchase re-evaluation)
   • Impact on brand-reputation
   • Effectiveness of ads in the post-purchase
Consumer Behaviour and Food                  39
    Marketing – AE 613
     Festinger and Carlsmith
   example (forced compliance)
   • Paid their student to make them tell
     others that a task not boring (lying)
   • $ 1 – High cognitive dissonance (it is not
   • $ 20 – Low cognitive dissonance (enough
     for lying)
   • Students lying for $1 tended to see the
     task as less boring than those lying for

Consumer Behaviour and Food                   40
    Marketing – AE 613
   • “I must like it because I bought it”
   • Reinterpretation of Festinger and
     Carlsmith experiment (Bem, 1967)
         – I said it was not boring just for $1, so…
         – Who would not say that lie for $20?

Consumer Behaviour and Food                        41
    Marketing – AE 613
               Arousal and change in
  • Cognitive dissonance leads to
  Average ratings of subjects in favour of a pardon for ex-
    president Nixon under different conditions (31 point
    scale) – Cooper et al. (1978)
No drug, no essay              Tranquilizer   Placebo   Stimulant
 control sample

         7.9                       8.6         14.7       20.2

  From East (page 181)
 Consumer Behaviour and Food                                        42
     Marketing – AE 613
     Implications for marketing
• Limited effects of cognitive dissonance
  in purchasing
     – There must be arousal
     – Consumer attributes arousal to purchase
• Calibration of advertisement
     – It is necessary to create
       dissonance/arousal focusing on the
       issues on which change is sought
Consumer Behaviour and Food                 43
    Marketing – AE 613

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