Consumer Behavior

Hussain A. Al Awami, B.Sc. Pharm., M.Sc., MBA

Consumer Learning

Hussain A. Al Awami, B.Sc. Pharm., M.Sc., MBA

Target Cycle

Company expand Their product line Brand extension

Good product as perceived by customer

Customer re-purchase The product & reward the company

Why Consumer Learning is Important?

What Learning Means?

We know that we learn.. But HOW? No single universal theory of how people learn. Two major theories: Behavioral Learning Theory & Cognitive Learning Theory

Definition

Process Continuous Change (because of knowledge)

Clarification

Change

Continuous

Elements of Learning
Motivation Cues Response Re-inforcement

Motivation
The degree of relevance or Involvement. e.g., look at yourself in term of interests in different time series.

Cues
Cues are the stimuli that give direction to specified motives. Its the opportunity to try or use the product. Marketers should be careful to provide the right environment (e.g., dont put prestigious product in low level store).

Response
How individual react to a drive or cue How they behave Response might not result in sale now, but it could provide opportunity in future (e.g., car advertisement)

Reinforcement
Reinforcement increases the likelihood that a specified response will occur in the future as the result of particular cues or stimuli.

Example of reinforcement

Behavioral Learning Theory

Classical Conditioning

Instrumental Conditioning

Modeling or Observational Learning

Behavioral Learning Theories

Also called stimulus-response theories.

Stimulus Stimulus

Consumer Consumer

Response Response

Consumers Black Box

Classical Conditioning
Classical conditioning theorists regarded all organisms as relatively passive entities that could be taught certain behaviors through repetition (i.e., conditioning)

Ivan Pavlov
Conditioning learning results when a stimulus that is paired with other stimulus that elicits a known response serves to produce the same response when used alone. e.g., dog with meat and bell

Explanatory diagram
Unconditioned stimulus Unconditioned Response Salivation Conditioned stimulus

Conditioned stimulus

Conditioned Response Salivation

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Explanatory diagram

The same with other example

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In the consumer behavior context

Class exercise
Think about the following brands:
Geant Kudu Vs Al Sambook Rest Microsoft ATLAS Pharmacies SAMA Airlines

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The link to cognitive learning

Some Behavioral scientists view classical conditioning as the learning of associations among events that allows the organism to anticipate and represent its environment. Not acquisition of new reflex, its the acquisition of new knowledge

Optimal conditioning
1. 2. 3. 4. 5.

Forward conditioning (CS precede US) Repeated pairing They should be logically belong together CS that is novel and unfamiliar US that is biologically or symbolically salient

Its called Neo-Pavlovian conditioning

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Concepts in classical conditioning

Concepts in classical conditioning

Repetition

Stimulus Generalization

Stimulus discrimination

Concepts in classical conditioning

Repetition: repeated pairings Stimulus generation: same response to different stimuli Stimulus discrimination: selection of specific stimulus among similar stimuli

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Repetition
Repetition increases the strength of association Repetition is more effective for familiar brand comparing unfamiliar brands

Usually follow this curve

9 8 7 6 5 4 3 2 1 0 0 1 2 3 4 5 6 7

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Advertising wearout
Cosmetic variations in the adz (using different backgrounds, different print types, different advertising spokesperson)

Advertising wearout, continue

Substantive variations are changes in adz content Substantive seems to be more effective and more resistance to competitor attacks

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2 TV adz of AXE effect!

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Repetition
No ideal repetition! Some marketers believe in three-hit theory
Awareness Relevance Remind about benefits

The higher the competitive adz, the lower is the response due to interference

Stimulus generalization
Consumers respond to stimulus near to the original stimulus. Stimulus generalization might explain metoo products succeeded in the market (negative effect). Product extension (positive effect).

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Positive effect

Negative effect

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Licensing
Allowing other company to use the brand name for agreed fees.

Thats why Brands have real value

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Counterfeiting problem
Products just look like original! Causing severe loss to original company. Branded companies try to use regulatory as well as technology to avoid this problem.

Stimulus Discrimination
Its opposite to generalization which is the selection of specific stimulus from other similar stimulus. Positioning and product differentiation utilizing the product attributes.

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Instrumental Conditioning

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Definition
They use the same concept of stimulus and response; however, it concentrate in learning concept of stimuli. Learning occurs through Trial & Error process, with habits formed as a result of rewards received for certain responses or behaviors.

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Reinforcement of Behavior
Positive reinforcement
Positive effect when using particular product

Negative reinforcement
Negative effect when NOT using particular product

Extinction Vs Forgetting
Extinction
Happens when learned response is no longer reinforced.

Forgetting
Happens when customer did not used the product for long time.

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Strategic application of instrumental conditioning

Examples
Upscale beauty saloons offers coffee Upscale Hotels offers fruits or chocolates Kellogg's offers gifts after certain number of purchases

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Relationship Marketing
Developing close personalized relationship like assigning customer service representive for specific customers

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Reinforcement Schedules
Total (continous)

Systematic (fixed ratio)

Random (variable ratio)

Shaping
Defined as reinforcement performed BEFORE the desired consumer behavior takes place. Examples:
Some retailers offers loss leaders Test drive for Automobile companies

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Modeling or observational learning

Defined as the process through which individuals learn behavior by observing the behavior of others and the consequences of such behavior. Utilizing famous characters using the product.

Cognitive Learning Theory

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Cognitive learning theory

People learn from thinking and problem solving situations. People search for informations to take purchase decisions. Cognitive theory involves complex mental processing of information.

Information Processing
Brain uses inputs (informations) and process them to get certain output just like the computers. Different people have different cognitive ability and utilization is different. Experienced people in using the product learned even faster and deeper.

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How consumers store, retain, and retrieve information

Rehearsal & Encoding

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Cognitive learning

Involvement Theory

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Measures of Involvement

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Measures of Involvement, continue

Measures of Involvement, continue

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Measures of consumer behavior

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