Four elements of consumer learning

Consumer Learning

Learning Objectives 5.1 To understand the elements of learning.

5.2 To understand behavioral learning, classical conditioning, and t he roles of stimulus generalization and discrimination in market ing.

5.3 To understand instrumenta l condit ioning and t he object ives and met hods of reinforcement .

5.4 To understand observational learning.

5.5 To understand how consumers process information.

5.6 To understand cognit ive learning as a form of consumer decision-making.

5.7 To understand the impact of involvement and passive learning on purchase decisions.

5.8 To understand how to measure the outcomes of consumer lea rning.

EARNING is applying past knowledge and experience to present circumst ances and behav- ior. For example, w hat comes into your mind when

--you see an ad for avocados? For consumers who are familiar with and love avocados, seeing an ad is fol- lowed by thoughts of a very tasty, creamy texture, yet fatty fruit. Li ke any successful brand, the advertiser- in th is case, Avocados from Mexico, a b rand made up of the Mexican Hass Avocado Import e rs Associat ion (M HA IA) and The Association of Growers and Packers of Avocados from Mexico (APEAM)-is looking to educate consumers that avocados are a healthy choice. The ad for Avocados from Mexico in Figure 5. 1 is teaching con- sumers that avocados have good fat s, are nutritious, fresh, and have no cholesterol. In positioning avocados

as healt hy, the Avocado from Mexico b rand is relying o n cognitive learning (discussed in t his chapter) by providing information and p redicting that consumers will process and store the information. Furthermore, t he goal of t he market er is to have consumers retrieve the informat ion that avocados are hea lthy when they are food shopping in p laces where avocados are sold. Stil l further, Avocados from Mexico created humorous ad s that were aired d uring the Super Bowl. These ads help to create brand awareness and social media activity around the brand.

The elements of learning-drive, repeated cues, response and rei nforcement-are il lustrat ed t hrough consumers' decisions and choices. In the case of Avoca- dos f rom Mexico, this b rand is perceived as trustworthy

FIGURE 5.1 Mas to Love

learning Applying one's past knowledge and experience to present cir- cumstances and behavior.

CHAPTER 5 • Consum ER LEARning 117

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and t he maker of healthy p roducts; t hese perceptions drive consumers t o purchase t he p roduct. The cues t hat consumers receive from the marketer-repeated mes- sages t hat are informat ive, fun, and attract attent ion- direct the drive and create the mot ivation to buy the b rand advert ised in Figure 5 .1 rather than compet- ing b rands. Repet ition means repeat ed promotions that d ifferentiat e the brand f rom competition in sev- e ral forms-that is, different ads focused around t he producfs image-carried t hroug h various communica- t ion channels. Response means consumers' p urchases of the product aft er being persuaded to do so by it s

advertising. Reinforcement , which is t he f inal element of learning, involves reward ing those w ho try the new product. For consumers, the rewa rd is fee ling the same or even greater p leasu re when eat ing Avocados f rom Mexico t han w hen eating eit her other b rands of avoca- dos o r other f ruits.

Next, we discuss the elements o f learning and apply t hem to developing market ing strat egies aimed at getting consumers t o try and t o continue buying new products. The chapt er concl udes with a d iscussion of the methods used t o measure t he resul t s of learning

. expenences.

The Elements of Consumer Learning Learning Objective 5.1 To und erstand t he

e lement s of learning.

consumer learning The process through which consumers acquire knowl- edge from experiences with products and observations of others' consumption, and use that knowledge in subsequent buying.

Learning is the process by which individuals acquire the purchase and consumption knowl- edge and the experience they apply to future, related behavior. Consumer learning is a process that evolves and changes as consumers acquire knowledge from experience, observa- tion, and interactions with others. This 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 deci- sions about purchasing complex and expensive products.

Not all learning is deliberately sought. Although much learning is intentional (i.e., it is acquired as the result of a search for information), a great deal of learning is incidental, acquired by accident or without much effort. For example, some ads may induce learning-by providing information like in the ad featured in Figure 5.1-without learning being deliberately sought, whereas other ads are sought out and carefully read by consumers contemplating major purchases. Learning consists of four elements: motives, cues, responses, and reinforcement.

118 PART ii • THE Consum ERAs An in DiViDu AL

motivation The driving force within individu- als that impels them to act.

cues stimuli that direct motivated behavior.

response Reaction to a drive or cue.

reinforcement in learning, particularly in instru- mental conditioning, it is a reward, in the form of pleasure, enjoyment, and other benefits, for a desired behavior. in con- sumer behavior, it is the benefits, enjoyment, and uti lities that con- sumers receive from products purchased.

MOTIVES Uncovering consumer motives is the primary objective of marketers who seek to teach consum- ers how they can fill their needs by buying certain products and brands. Unfilled needs lead to motivation, which spurs learning. For example, men and women who want to take up bicycle riding for fitness and recreation are motivated to learn all they can about bike riding and prac- tice often. They may seek information concerning the prices, quality, and characteristics of bicycles and learn which bicycles are the best for the kind of riding they do. These consumers will also read any articles in their local newspapers about bicycle trails and seek online infor- mation about "active vacations" that involve biking or hiking. Conversely, individuals who are not interested in bike riding are likely to ignore all information related to that activity. The degree of relevance, or "involvement," determines each consumer's level of motivation to search for information about a product or service and, potentially, engage in learning.

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 might 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.

Only cues that are consistent with consumer expectations can drive motivation. Thus, marketers must provide cues that match those expectations. For example, consumers expect designer clothes to be expensive and to be sold in upscale retail stores. Thus, high-fashion designers should sell their clothes only through exclusive stores and advertise only in upscale fashion magazines. Each aspect of the marketing mix must reinforce the others if cues are to become stimuli that guide consumer actions in the direction the marketer desires.

RESPONSES In the context of learning, response is an individual's reaction to a drive or a 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, as noted in Chapter 3, a need or motive may evoke a whole variety of responses. For example, there are many ways to respond to the need for physical exercise besides riding bicycles. Cues provide some direction, but there are many cues competing for the consumer's attention. Which response the consumer makes depends heavily on previous learning; that, in turn, depends on how previous, related responses have been reinforced.

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 reinforc- ing future purchases. To illustrate, if a person visits a restaurant for the first time, likes the food, service, and ambience, and also feels he or she received value for the money paid, that customer was reinforced and is likely to dine at the restaurant again. If that person becomes a regular customer, the restaurant's owner should further reinforce the customer's continued patronage by, for example, giving the customer a free drink and recognizing the person by name upon arrival. Of course, the quality of the food and service must be maintained, as they are the key elements reinforcing the customer's continued visits. In contrast, if a patron leaves a restaurant disappointed with the quality of the food or the service or feels "ripped

FIGURE 5.2 Procter & Gamble's Febreze Source: Charles Duhigg, "How Compa- nies Learn Your Secrets," nytimes.com February 16, 2012.

Product introduction contradicted the four elements of learning

P&G launched and positioned Febreze as a

colorless spray for making stinky clothes and rooms' interiors odorless.

P&G assumed that people living with bad smells had a problem/

need for Febreze, which they did not.

Febreze was not selling because people who live with bad smells-such

as smoke or pets' odors- do not notice them.

P&G was trying to teach consumers a new

behavior, but one of the four elements of learning -the cue-was missing

because the targeted consumers did not notice

the bad odors.

CHAPTER 5 • Consum ER LEARning 119

Product introduction was consistent with the

elements of learning

P&G's researchers observed that women cleaning rooms and making beds sprayed

Febreze at the end (for no apparent

reason, since the rooms were already clean).

P&G interviewed women and analyzed the observed behavior according to

the elements of learning.

Drive and Cue: A woman walks into a dirty room.

Response (learned routine): She cleans the room

Reinforcement: She sprays Febreze in the cleaned room and smells it. She feels good

about a job well done. Spraying Febreze at the end rewarded her for her work and therefore

she will use it in the future.

off," reinforcement has not occurred. Because of the absence of reinforcement, it is unlikely that the customer will visit the restaurant again.

Figure 5.2 applies the four elements of learning to Procter & Gamble's introduction of Febreze, a spray that eliminates bad smells. The figure illustrates the effects of Febreze's initial positioning, which did not follow the principles of learning; the product did poorly. When the product was repositioned in a manner consistent with the principles of learning, it sold much better. 1

There is no single, universal theory of how people learn. Broadly, there are two models of learning: behavioral and cognitive. Next, we describe these theories and their applications to consumer behavior. Afterwards, we explain how consumers store, retain, and retrieve information, as well as cognitive learning and how learning is measured.

Classical Conditioning Learning Objective 5.2 To understand

behavioral learning, classical conditioning, and the roles of stimulus generalization and discrimination in marketing.

Behavioral learning is sometimes referred to as stimulus-response learning because it is based on the premise that observable responses to specific external stimuli signal that learning has taken place. Behavioral learning is not concerned with the process of learning, but rather with the inputs and outcomes of learning-that is, in the stimuli that consumers select from the environment and the observable behaviors that result. Three forms of behav- ioral learning with great relevance to marketing are classical conditioning, instrumental (or operant) conditioning, and observational (or modeling) learning. Instrumental (or operant) conditioning and observational (or modeling) learning will be discussed later in this chapter.

120 PART ii • THE Consum ERAs An inDiViDuAL

behavioral learning {stimulus- response learning) The premise that observable responses to specific external stimu li signal that learning has taken p lace.

classical conditioning A form of behavioral learning stating that anima l and human alike, can be taught behav- iors and associations among stimu li through repetition. some describe it as a "knee jerk" (or automatic) response to a drive that builds up through repeated exposure to a stimulus.

message repetition When consumers hear the brand name and brand message over and over within a period of t ime.

Classical conditioning is viewed as a "knee-jerk" (or automatic) response that builds up through repeated exposure and reinforcement. For instance, if Tyler's friends compliment him on his expensive Prada boots, he is likely to save money to buy a pair of Prada sneakers. If he sees an actor he likes in a movie wearing Prada sneakers, Tyler will immediately recall his friends' compliments and feel good about himself and his prior purchase. 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. Pavlov demonstrated what he meant by "conditioned learning" in his studies with dogs. Genetically, dogs are always hungry and highly motivated to eat. In his experiments, Pavlov sounded a bell and then immediately applied a meat paste to the dogs' tongues, which caused them to salivate. After a number of such pairings, the dogs responded the same way-that is, they salivated-to the bell alone as they did to the meat paste.

Applying Pavlov's theory to human behavior, consider the following situation: For sev- eral years during high school, you always binge watched your favorite shows-which begins with the show's musical theme-with your best friend every night at 9:00p.m. Then you and your best friend went to different colleges. After you settled down in your new dorm, at 9:00p.m. you turned on your computer to watch your favorite show and the show's musi- cal theme came on. You immediately thought about your friend and felt sad about watching the show alone. Feeling sad when you think about a best friend from whom you are now separated is a natural, human response and is therefore an unconditioned stimulus (i.e., a stimulus that occurs naturally in response to given circumstances). Furthermore, before you started watching the show with your friend every night, the show's musical theme was a neutral stimulus that elicited neither behavior nor any feelings. Later on, while watching the show alone, the same music triggered a particular response-feeling sad-so it has become a conditioned stimulus (i.e., a stimulus that became associated with a particular event or feeling as a result of repetition). Feeling sad whenever you hear the music is a conditioned response (i.e., a response to conditioned stimulus). The music triggered sadness because of the role of repetition in the process of conditioning. You heard the same musical theme while watching this show with your friend for years, and always at the same time; if you had done so only occasionally, the music would not have triggered sadness. Figure 5.3 depicts Pavlov's model and an analogous example of classical conditioning.

The strategic applications of classical conditioning to consumer behavior are associative learning, repetition, stimulus generalization, and stimulus discrimination.

ASSOCIATIVE LEARNING Contemporary behavioral scientists view classical conditioning as learning the associations among events that enable consumers to expect and anticipate events. Rather than being a reflexive action, this is seen as cognitive associative learning-not the acquisition of new reflexes, but the acquisition of new knowledge about the world. From this viewpoint, the consumer is an information seeker who uses logical and perceptual relations among events, along with his or her own preconceptions, to form a sophisticated representation of the world.

REPETITI0N FORMS ASSOCIATION In advertising, message repetition is the key to forming associations between brands and fulfillment of needs. For example, having a healthy mouth and good oral hygiene are a human need (i.e., unconditioned stimulus), which many consumers associate with the word Crest. Why? Because after more than 50 years of repetitive advertising and uncountable ads, when hearing or seeing the name "Crest," consumers think of a premium product for keep- ing their mouth and teeth healthy and protected from bacteria, diseases, and deterioration.

FIGURE 5.3 Classical Conditioning

CHAPTER 5 • Consum ER LEARning 121

Unconditioned Stimulus Meat paste

1-----,

Unconditioned Response .. Salivation

Conditioned Stimulus Bell 1-----'

AFTER REPEATED PAIRINGS:

Conditioned Stimulus .. Bell 1---------...

Unconditioned Stimulus I-----. Dinner aromas

•r

Conditioned Response Salivation

.. Unconditioned Response • Salivation

Conditioned Stimulus 6 o'clock news

1------1

AFTER REPEATED PAIRINGS:

Conditioned Stimulus .. 6 o'clock news

,. Conditioned Response

Salivation

Crest is a conditioned stimulus and the consumers' associations are conditioned responses. Furthermore, consumers associate Crest with scores of versions of toothpaste, toothbrushes, teeth whitening, flossing, and mouth-rinsing products, all marketed under the Crest brand name. Both the conditioned stimulus and the response are results of hearing or seeing Crest's advertisements again and again-in other words, repetitively.

Repetition increases the strength of the association between two stimuli and slows down forgetting this connection. However, the amount of repetition that aids retention is limited. Although repetition beyond what is necessary for the initial learning aids retention, at some point an individual becomes satiated with numerous exposures, and both attention and reten- tion decline. This effect is called advertising wear-out, and marketers reduce it by using different ads expressing the same message or advertising themes.

Although all advertisers use repetition in trying to teach consumers, not everyone agrees on how much repetition is enough. Some marketing scholars believe that just three exposures to an advertisement are needed: one to make consumers aware of the product, a second to show consumers the relevance of the product, and a third to remind them of its benefits. This exposure pattern is called the three-hit theory. Other researchers suggest that as many as 11 to 12 repetitions are needed to achieve the three objectives. One study indicated that email

122 PART ii • THE Consum ERAs An inDiViDuAL

stimulus generalization Responding the same way to sl ightly different stimuli.

product line extensions Additions of related items to an established brand because they are likely to be adopted, since they come under a known and trusted brand name, which is a marketing application of stimu- lus generalization.

advertisements that consumers found relevant influenced their learning and attitudes much more than the number of exposures. 2 Recent research has concluded that up to 10 exposures will maximize advertising effects on attitudes, whereas more exposures are needed to maxi- mize effects on brand recall. 3

STIMULUS GENERALIZATION AND BRANDS' EXTENSIONS According to classical conditioning theorists, learning depends not only on repetition but also on individuals' ability to "generalize." Pavlov, for example, found that a dog could learn to salivate not only to the sound of a bell but also to similar sounds such as jangling keys or coins. Responding the same way to slightly different stimuli is called stimulus generalization.

Stimulus generalization explains why some imitative "me too" products succeed in the marketplace: Consumers confuse them with the original product they have seen advertised. It also explains why manufacturers of private-label brands try to make their packaging closely resemble that of the national brand leaders. They are hoping that consumers will confuse their packages with the leading brand and buy their product rather than the leading brand.

A court battle between two famous designers of women's shoes centered around stimulus generalization. Louboutin's red sole shoes-with a shade named "China Red"-have been popular with the rich and famous and are very expensive. Yves Saint Laurent ("YSL")- another high-end maker of women's shoes-also produced four models of all red shoes with red soles. Louboutin sued YSL saying that no one should be able to use the color red on the sole of the shoe even if the entire shoe is red. In other words, Louboutin was concerned that consumers will "generalize" upon seeing the red soles and assume that YSL's shoes were made by Louboutin. It claimed that the red soles are an iconic trademark that only it could use in order to avoid confusion among the two brands. Following extensive litigation, YSL discontinued making shoes with red soles.4

There are four strategic applications of stimulus generalization to branding and manag- ing product lines: product line extensions, product form extensions, family branding, and licensing. 5

Product line extensions are additions of related items to an established brand; these are likely to be adopted because they come under a known and trusted brand name. 6

For example, what comes to mind when you see the Tide Laundry detergent symbol? The most likely answer is the color orange, clean clothes, and the distinctive container sold in supermarkets. Most consumers associate Tide with clean clothes. However, most consum- ers think of Tide as a product that is used at home or in laundromats for washing clothes in washing machines. So, although most consumers associate Tide with washing clothes in a washing machine, they do not associate Tide with dry cleaning. Why did Procter & Gamble (who owns Tide) "interfere" with consumers' long-established cognitions by introducing Tide Dry Cleaners? Each time consumers go to a Tide Dry Cleaner, they are "rewarded" with clean clothes and superior service. When the new Tide Dry Cleaners are advertised carrying the Tide brand name, consumers are likely to associate them with the many, prior rewarding experiences of using Tide laundry detergent. In learning terms, consumers will apply what they already know about Tide detergent to its new service and probably try the new service. The extension of the Tide line to services is also a form of family branding, which consists of marketing different products under the same brand name. Furthermore, dry cleaners in the U.S . market are one of the few industries that is still dominated by mom and pop stores. It is an industry that is ready for a trusted name brand to change the market.

The two Mr. Clean products shown in Figure 5.4 are examples of line extensions under a brand name that has been a best seller since the 1950s and represented by a mascot that consumers view as a strong, tenacious, competent, dependable, and friendly "person" (see Figure 3.1).

FIGURE 5.4 Mr. Clean's Product Line Extensions

product form extension offering the same product in a different form but under the same brand, which is a mar- keting application of stimulus generalization.

family branding marketing a whole line of products under the same brand name, which is a mar- keting application of stimulus generalization.

licensing An application of stimu lus gen- era lization that contractually allows affixing a brand name to the products of another manufacturer.

CHAPTER 5 • Consum ER LEARning 123

Offering the same product in a different form but under the same brand is a product form extension. For example, Listerine, a mouthwash in the form of liquid and a leading brand, introduced Listerine PocketPacks-a solid form of its product. Clorox Bleach-one of the most recognized brand names among clothing-care products-has been sold only as a liquid since its introduction many decades ago. Building on the brand's universal recognition as a quality product, the company introduced Bleach Gel.

Another strategy stemming from stimulus generalization is family branding, which consists of marketing different products under the same brand name. For example, Campbell's, originally a marketer of soups, continues to add new food products to its product line under the Campbell's brand name, such as chunky, condensed, kids, and lower-sodium soups; fro- zen meals named Campbell's Super Bakes; and tomato juice.

Licensing is contractually allowing a well-known brand name to be affixed to the prod- ucts of another manufacturer. The names of designers, manufacturers, celebrities, corpora- tions, and even cartoon characters are attached, for a fee (i.e., "rented out") to a variety of products, enabling the licensees to achieve instant recognition and implied quality for the licensed products. Some successful licensors include Liz Claiborne, Tommy Hilfiger, Calvin Klein, and Christian Dior, whose names appear on an exceptionally wide variety of products, from sheets to shoes and luggage to perfume.7 For example, the Italian automobile brand, Ferrari, continues to expand with licensing agreements with theme parks (e.g., mega- rollercoaster in Abu Dhabi); Oakley (sunglasses); Puma (clothing and sport accessories); Cobra (golf equipment); Microsoft, Sony Polyphony, and EA (video games); Movado (watches); and LEGO. Licensing is big business. Companies that license their brand names are able to grow their brand awareness with licensing deals . Companies that make products are able to enter into a market with a well-known brand name (e.g., Ferrari) without having to build brand recognition. Figure 5.5. presents the top five companies that license their brand names, along with sales from licensing and examples of branded licensed products.

Corporations also license their names and trademarks to marketers of related products. For example, Godiva chocolates licensed its name for Godiva liqueur. Corporations also license their names and logos for purely promotional purposes: for example, the phrase

124 PART i i • THE Consum ERAs An inDiViDuAL

FIGURE 5.5 Top Five Licensing Companies, 2016 Adapted from "The Top 150 Global Licensors," April I, 2017, by License Global. http://www. licensemag. com/license- global/top-150-global- Licensors-3

stimulus discrimination

- ....

The strategy that is the opposite of stimu lus genera lization aimed at getting consumers to select a specific stimu lus from among similar stimuli, whose objective is to position products and services in such a way that differentiates them effectively from competi- tive offerings.

The Walt Disney Company • Licencing Sales $56.6 B • Examples - Disney princesses, Frozen, Star Wars

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Meredith Corporation • Licensing Sales $22.8 B • Examples- Better Homes & Gardens, EatingWell, Shape and Allrecipes

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PVH Corp. • Licensing Sales $18 B • Examples- Calvin Klein, Tommy Hilfiger

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lconix Brand Group • Licensing Sales $12 B • Examples- Peanuts- based on the iconic comic strip, by Charles Schulz.

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Warner Bros. Consumer Products • Licensing Sales $6.5 B • Examples- Batman, Superman, Wonder Woman, Justice League

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"Always Coca-Cola" is printed on clothing, toys, coffee mugs, and the like, none of which are made by Coca-Cola.

The number of different products affiliated with a given brand--originating in line and form extensions, family branding, and licensing- will strengthen the brand name, as long as the brand's owner ensures that the additions are of high quality and consistent with the brand's image and positioning. Failure to do so will negatively affect consumer confidence and evaluations of all the brand's products. One study showed that brands that include diverse products are likely to offer more successful brand extensions than brands that include similar products. The study also confirmed that consumers' reactions to the brand's extensions are strongly related to the distinct benefits these items provide. 8

STIMULUS DISCRIMINATION AND BRAND DIFFERENTIATION Stimulus discrimination, the opposite of stimulus generalization, is the selection of a specific stimulus from among similar stimuli. The core objective of positioning (see Chapter 4) is to "teach" consumers to discriminate (or distinguish) among similar products (i.e., similar stimuli) and form a unique image for a brand in their minds. Therefore, the objective of marketers' persuasive messages is to convey a brand's unique benefits effectively and differentiate it from competition, which is termed brand differentiation . Unlike the marketers of brands known as imitators- which are often obscure or store brands- who hope that consumers will "generalize" by confusing their brands with well-positioned ones, market leaders' objective is to convince and enable consumers to clearly distinguish ("discriminate") between their products and the imitators.

Most product differentiation strategies are designed to distinguish a product or brand from that of competitors on the basis of an attribute that is relevant, meaningful, and valu- able to consumers. It is always difficult to unseat a brand leader after stimulus discrimination

CHAPTER 5 • Consum ER LEARning 125

has occurred. One explanation is that the leader is usually first in the market and has had a longer period to "teach" consumers (through advertising and selling) to view the brand as the best alternative within a given product category. Apple is a prominent example of differentiating a product. Its early ads explicitly stated that Apple's innovative products represent a distinctive and extraordinary way of thinking. These ads' tagline was "Think Different," and they brilliantly conveyed this notion by featuring famous geniuses, such as Albert Einstein and Jim Henson, who thought "outside the box" and came up with ideas that changed the world.

Classical conditioning theory underpins many ways of influencing consumer behavior through repetition, stimulus generalization, and stimulus discrimination. However, although a great deal of consumer behavior is shaped by repeated advertising messages stressing the unique attributes of various brands, consumers also buy the same brands repeatedly because they are continuously rewarded. The role of reinforcements (or rewards) in shaping learning is discussed next.

Instrumental Conditioning Learning Objective 5.3 To understand

instrumental conditioning and the objectives and methods of reinforcement.

instrumental conditioning (operant conditioning) A form of behaviora l learn- ing 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.

positive reinforcement Rewarding a particular behavior and strengthening the likelihood of a specific response during the same or similar situation in the future.

negative reinforcement Removing an unpleasant stimulus.

Instrumental conditioning (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. 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 rewarded response is the one that is learned. For example, after visiting stores, consumers know which stores carry the type of clothing they prefer at prices they can afford to pay. When they find a store that carries clothing that meets their needs, they are likely to patronize it to the exclusion of other stores. Every time they purchase a shirt or a sweater there that they really like, their store loyalty is rewarded (reinforced), and they are likely to become repeat customers.

The American psychologist B. F. Skinner constructed the model of instrumental condi- tioning. According to Skinner, most learning occurs in environments where individuals are rewarded for choosing an appropriate behavior. In consumer behavior terms, instrumental conditioning suggests that consumers learn by means of a trial-and-error process in which some purchase behaviors result in more favorable outcomes (i.e., rewards) than others. A favorable experience is the instrument of teaching the individual to repeat a specific behavior.

Like Pavlov, Skinner developed his model of learning by working with animals. Small animals, such as rats and pigeons, were placed in his "Skinner box." If they behaved as Skinner desired-such as pressing a particular lever or pecking certain keys-he rewarded them with food pellets. Skinner and his many adherents have done amazing things with this learning model, including teaching pigeons to play ping-pong and even to dance. In a market- ing context, the consumer who tries several brands and styles of jeans before finding a style that fits her figure (i.e., reinforcement) has engaged in instrumental learning. Presumably, the brand that fits best is the one she will continue to buy. This model of instrumental condition- ing is presented in Figure 5.6.

REINFORCEMENT Skinner distinguished between two types of reinforcement that influence the likelihood that a response will be repeated. The first type, positive reinforcement, rewards a particular behavior and thus strengthens the likelihood of a specific response during the same or similar situation. For example, a child receives ice cream when passing an ice cream stand and receives pleasure from eating it. Then, whenever he passes by the stand, he asks for ice cream. Negative reinforcement is the removal of an unpleasant stimulus and it strengthens the likelihood of a given response during the same or similar circumstances. For example, a child

126 PART ii • THE Consum ERAs An inDiViDuAL

FIGURE 5.6 Instrumental Conditioning Try Unrewarded: Brand A Legs too loose

Try .. Unrewarded: Brand B . Tight in seat Stimulus

Situation (Need good·

looking jeans) Try Unrewarded: ..

Brand C .

Baggy in seat

Try .. . Reward: Brand D Perfect fit

Repeat Behavior

has a cold and also hates swallowing pills. Her mother convinces her to take Advil and her cold symptoms go away (i.e., the unpleasant stimulus is removed). The next time she has a cold, most likely the girl will readily agree to swallow a pill, and might even ask specifically for an Advil. Therefore, marketers of headache remedies use negative reinforcement when they illustrate the unpleasant symptoms of an unrelieved headache, as do marketers of mouth- wash when they show the loneliness suffered by someone with bad breath. In each of these cases, the consumer is encouraged to avoid the negative consequences and remove the unpleasant stimulus by buying the advertised product.

Either positive or negative reinforcement can be used to elicit a desired response. How- ever, negative reinforcement should not be confused with punishment, which is designed to discourage behavior. For example, receiving a speeding ticket and having to pay a fine is not negative reinforcement; instead, it is a form of punishment designed to discourage future speeding. But what constitutes "punishment" is tricky. For example, a driver can perceive the fine as "paying" for a bad behavior and continue speeding; this individual apparently believes that each time he speeds he will merely have to pay for his bad behavior. Therefore, in addition to paying fines, speeding drivers receive "points" on their licenses and can lose their driving rights (and the opportunities to speed) if they speed too many times. In a frequently cited study, researchers discovered that when a daycare center started "punishing" parents who picked up their kids late by charging them about $3, late pickups actually increased because parents viewed the fine as the price for being tardy.9 The "pun- ishment" actually legitimized being late and encouraged the behavior it was designed to lessen.

A relatively new application of positive reinforcement is incentivized advertising. In many instances, consumers look for ways to avoid watching advertising (e.g., internet ad blockers, recording TV programs and skipping ads) and marketers are looking for ways to increase viewership of their ads (e.g., product placement and incentivized ads). Incentivized advertising provides consumers with rewards for watching ads. For example, garners can be rewarded with extra lives or game boosters for watching an ad. 10

Product quality must be consistently high and satisfy customers every time they buy the product. Additional rewards do not have to be offered during every transaction however, primarily because occasional rewards often effectively reinforce consumers' patronage. For example, airlines occasionally upgrade a passenger at the gate; here, the possibility of receiv- ing a reward is the reinforcement and incentive for continued patronage. Psychologists have identified three reinforcement schedules: continuous, fixed ratio, and variable ratio. These are presented in Figure 5.7.

Definition

Example

Extinction

Reward is provided every nth time the

product is purchased (say, every third time)

A retailer sends a credit voucher to account holders every three months, based on a percentage of the

customer's purchases during the prior quarter

Consumers tend to continue the behaviour for a short time even

after reinforcement ends.

FIGURE 5.7 Reinforcement Schedules

extinction A phenomenon that occurs when a learned response is no longer reinforced and the link between the stimu lus and the expected reward is eliminated.

forgetting A point at which the link between the stimu lus and the expected reward ceases to exist because of lack of engagement in the applicable purchase situa- tion for a lengthy period.

-

CHAPTER 5 • Consum ER LEARning 127

Reward is provided after each transaction.

A free after-dinner drink is always

Reinforcement Schedule served to regular - Continuous Reinforcement patrons of a restaurant.

Consumers tend to stop the behaviour

soon after the reinforcement ends.

Consumers are rewarded randomly.

Gambling casinos operate on the basis of variable ratios. People

Fixed Ratio Reinforcement

pour money into slot Variable Ratio machines (which are Reinforcement programmed to pay off on a variable ratio),

hoping for the big win.

Consumers tend to engender high rates of desired behaviour and are somewhat

resistant to extinction.

EXTINCTION AND FORGETTING Extinction occurs when a learned response is no longer reinforced and the link between the stimulus and the expected reward breaks down. When consumers become unsatisfied with a service (e.g., at a restaurant), the link between the stimulus (i.e., the restaurant) and expected satisfaction is no longer reinforced and the consumers won't come back. Behavior that is not reinforced becomes "unlearned."

Note that there is a difference between extinction and forgetting. Diners who have not visited a once-favorite restaurant for a long time simply forget how much they used to enjoy eating there and their behavior is "unlearned" because of lack of use rather than lack of rein- forcement. Forgetting is often related to the passage of time, and thus is also called "decay." Marketers overcome forgetting by contacting customers who stopped buying their products and giving them incentives aimed at persuading the customers to start buying their products . agmn.

128 PART ii • THE Consum ERAs An inDiViDuAL

shaping Reinforcement before the desired consumer behavior actu- ally takes place, which increases the probability that the desired behavior will occur.

CUSTOMER SATISFACTION AND RETENTION Savvy marketers reinforce customer satisfaction by consistently providing high quality. Marketers must provide the best value for the money and simultaneously avoid raising consumers' expectations beyond what the products can deliver. Companies must not assume that more attractive prices and broader product lines will make customers more satisfied. Instead, companies that create personal connections with customers, and offer diverse prod- uct lines and competitive prices, will elicit repeat patronage because these are the most effective reinforcements. Most frequent shopper programs are based on the notion that the more a consumer uses the service, the greater the rewards . Another form of reinforcement is rewarding customers who refer other customers. One study discovered that although rewards increased referrals, there was no difference in referral likelihood between smaller and larger rewards. In addition, for existing customers with strong ties to the marketer providing the reward, these incentives did not increase referral likelihood. 11 However, sev- eral studies discovered that satisfied customers are often fickle and disloyal when a lot of competition exists .12

SHAPING Reinforcement performed before the desired consumer behavior actually takes place is called shaping. Shaping increases the probability that certain desired consumer behavior will occur. For example, retailers recognize that they must first attract customers to their stores before they can expect those customers to do the bulk of their shopping there. Many retailers provide some form of preliminary reinforcement (shaping) to encourage consumers to visit their stores. For example, some retailers offer loss leaders-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. By reinforcing the behavior that is needed to enable the desired consumer behavior, marketers increase the probability that the desired behavior will occur. Car dealers recognize that to sell new-model cars, they must first encourage people to visit the showrooms and test-drive the cars. They hope that the test drive will result in a sale. Using shaping principles, many car dealers encourage showroom visits by providing small monetary or other gifts to those who test-drive the cars, as well as present a rebate check upon placement of an order. They use a multistep shaping process to achieve the desired consumer learning.13

MASSED VERSUS DISTRIBUTED LEARNING As illustrated previously, timing has an important influence on consumer learning. Should a learning schedule be spread out over a period of time, which is termed distributed learning, or should it be "bunched up" all at once, which is called massed learning? The question is an important one for advertisers planning a media schedule because massed advertising produces more initial learning, whereas a distributed schedule usually results in learning that persists longer. When advertisers want an immediate impact (e.g., to introduce a new product or to counter a competitor's blitz campaign), they generally use a massed schedule to hasten consumer learning. However, when the goal is long-term repeat buying on a regular basis, a distributed schedule is preferable. A distributed schedule, with ads repeated on a regular basis usually results in long-term learning that is relatively immune to extinction.

Observational Learning Learning Objective 5.4 To understand observa-

tiona l learning.

Observational learning (modeling) is the process through which individuals learn behav- ior by observing the behavior of others and the consequences of such behavior. For this type of learning to occur, reinforcement must take place. For example, Joe-a commuter-notices that more and more train riders are using e-readers, so he buys one to try it out, knowing that

observational learning (modeling) Learning that occurs when people observe and later imitate observed behaviors.

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he has 30 days to return it. Then, a conductor whom Joe knows and sees daily compliments him on the purchase and also asks questions about the device. Joe's purchase was the result of observational learning. Because the conductor's compliments reinforced his purchase (and also because he likes the device and it works well), Joe decides to keep the device.

Advertisers recognize the importance of observational learning in selecting the people they feature in advertisements, whether celebrities or unknowns. If a teenager sees an ad that depicts social success as the outcome of using a certain brand of shampoo, she will want to buy it. If her brother sees a commercial that shows a muscular young athlete eat- ing Wheaties-"The Breakfast of Champions"-he will want to eat it, too. Indeed, a lot of advertising is based on observational learning. Many ads feature likeable models achieving positive outcomes to common problem situations through use of the advertised product. Children learn much of their social and consumer behavior by observing their older siblings and parents. They imitate the behavior of those they see rewarded, expecting to be rewarded similarly if they adopt the same behavior. In addition, many companies post product use or assembly directions on YouTube in order for consumers to be able to see how to use or assemble a product.

Information Processing Learning Objective 5.5 To understand how

consumers process information.

sensory store A location in the brain where the sensory input lasts for just a sec- ond or two. if it is not processed immediately, it is lost.

FIGURE 5.8 Information Processing

A lot of learning occurs through consumer thinking and problem solving. Sometimes we resolve purchase-related dilemmas instantly. In other situations, we search for information and carefully evaluate what we learned. This kind of learning, called cognitive learning, consists of mental processing of data rather than instinctive responses to stimuli. Therefore, we examine the structure and components of information processing, which are diagrammed in Figure 5.8, before explaining cognitive learning.

The human mind processes the information it receives. Consumers process product infor- mation by attributes, brands, comparisons between brands, or a combination of these factors. The number and complexity of the relevant attributes and available alternatives influence the intensity or degree of information processing. Consumers with higher cognitive abilities acquire more product information and consider more product attributes and alternatives than consumers with lesser ability.

The more experience a consumer has with a product category, the greater is his or her ability to make use of product information. Greater familiarity with the product category also increases learning during new purchase decisions for items within the same category. The components of information processing are storing data , encoding data , and retrieving and retaining information .

STORING DATA The human memory is the center of information processing. Information processing occurs in stages and in three sequential "storehouses" where information is kept: the sensory, short- term, and long-term stores.

The sensory store is the mental "space" in the human mind where sensory input lasts for just a second or two. If it is not processed immediately, it is lost. All data come to us

Sensory Input

.. Sensory Store

Forgotten; lost

Rehearsal

Working Memory (Short-Term

Store)

1

Forgotten; lost

Encoding Long-Term

Store

Forgotten; unavailable

Retrieval

130 PART ii • THE Consum ERAs An inDiViDuAL

data rehearsal The process that information in the short-term store undergoes, in the form of silent, menta l repetition of information, after which the information is trans- ferred to the long-term store.

encoding Assigning a word or visual image in order to represent an object during communications.

through our senses, but the senses do not carry whole images, like a camera. Each sense receives a piece of information (such as the smell, color, shape, or feel of a flower) and transmits it to the brain in parallel, where the perceptions of a single instant are synchronized and perceived as a single image for only a brief moment. Because consumers are constantly bombarded with stimuli from the environment, they subconsciously block out a great deal of information that they do not need or cannot use. For marketers, this means that although it is relatively easy to get information into the consumer's sensory store, it is difficult to make a lasting impression. Furthermore, the brain automatically and subconsciously "tags" all per- ceptions with a value, either positive or negative. This evaluation, added to the initial percep- tion in the first microsecond of cognition, tends to remain unless further information is processed. This explains why first impressions tend to last and why it is hazardous for a marketer to introduce a product prematurely into the marketplace.

The short-term store is where information is processed and held for just a brief period. Anyone who has ever been told someone's name at a party and doesn't use it immediately knows how briefly information lasts in short-term storage. If information in the short-term store undergoes the process known as data rehearsal, which is the silent, mental repetition of information, it is then transferred to the long-term store. The transfer process takes from 2 to 10 seconds. If information is not rehearsed and transferred, it is lost in about 30 seconds or less. The amount of information that can be held in short-term storage is limited to about four or five items.

An interesting experiment illustrated how the short-term store operates. A researcher walked over to a pedestrian and asked for directions. While the pedestrian was responding, two workmen carrying a large door walked between the researcher and the respondent; while hidden by the door being moved, the researcher switched places with another per- son. Only about half the pedestrians noticed that they were talking to a different person afterward. 14

The long-term store is the mental "space" where information is retained for extended periods of time. This is in contrast to the short-term store, where information lasts only a few seconds. Although it is possible to forget something within a few minutes after the informa- tion reaches long-term storage, it is more common for data in long-term storage to last for days, weeks, or even years. A study of three generations of automobile consumers discovered that people's earliest memories and experiences regarding cars defined what car brands meant to them and affected their brand preferences later in life. 15

ENCODING DATA The amount of information available for delivery from short-term storage to long-term storage depends on the amount of rehearsal. Failure to rehearse an input, either by repeating it or by relating it to other data, can result in fading and eventual loss of the information. Information can also be lost because of competition for attention. For example, if the short-term store receives a great number of inputs simultaneously from the sensory store, its capacity may be reduced to only two or three pieces of information.

The purpose of rehearsal is to hold information in short-term storage long enough for encoding to take place. Encoding is the process by which we select a word or visual image to represent a perceived object. Marketers help consumers encode brands by using brand symbols. Kellogg's uses Tony the Tiger on its Frosted Flakes; the Green Giant Company has its Jolly Green Giant. Dell Computer turns thee in its logo on its side for quick name recogni- tion, and Apple uses its stylish and distinctive insignia.

Processing and remembering a picture takes less time than learning verbal information , but both types of information are important in forming an overall mental image. A print ad with both an illustration and body copy is more likely to be encoded and stored than an illustration without verbal information. High-imagery copy produces greater recall than low- imagery copy, and marketers realize that almost every ad should include some form of an illustration. In one study, consumers were given goals and then asked to memorize ads. The

information overload A situation that occurs when consumers receive too much information and f ind it d ifficu lt to encode and store it.

data chunking The process during which con- sumers recede what they have already encoded, which often results in recall ing additional rel- evant information. "Chunks" are groupings of information.

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study found that an ad-memorization goal enhanced attention to the body text, pictures, and brand design. A brand-learning goal produced attention to the body text, but also inhibited attention to the pictorial design. One may conclude that text-dominant ads activate brand learning and pictorial-dominant ads activate ad appreciation. 16

Encoding of commercials is related to the context in which they are featured. For exam- ple, while watching TV, some parts of a program may require viewers to commit a larger por- tion of their cognitive resources to processing (e.g., when a dramatic event takes place versus a casual conversation). When viewers commit more cognitive resources to the program than the ads, they encode and store less of the information conveyed by a commercial. This sug- gests that commercials requiring relatively little cognitive processing may be more effective within or adjacent to a dramatic program setting than commercials requiring more elaborate processing. Viewers who are very involved with a television show respond more positively to commercials adjacent to that show and have more positive purchase intentions. Recent exposure to related information also facilitates encoding. A study found that publicity about advertising campaigns before they were started facilitated better recall of brands featured in subsequent advertising. 17

When consumers receive too much information and then have difficulty encoding and storing it, information overload occurs. For example, in product categories where several strong brands are heavily promoted, consumers do not remember product information fea- tured in ads that promote new brands. Consumers can also become cognitively overloaded when they receive a lot of information in a limited time. Such overload leads to consumer frustration, confusion, and poor purchase decisions. Consumers who are searching for infor- mation about products online can tap into a great deal of available information, such as online product reviews. Although it is expected that the availability of consumer reviews of online would lead to information overload, surprisingly, consumers are able to manage this vast amount of information without experiencing overload. 18

RETRIEVING AND DATA Information does not merely remain in long-term storage waiting to be retrieved. It is con- stantly organized and reorganized, as new chunks of information are received and new links among those chunks are created. For example, a memory of a product's name may be acti- vated by relating it to the spokesperson appearing in its advertising.

Product information stored in memory is brand based, and consumers interpret new information consistently with the way in which it has already been organized. One study demonstrated that "brand imprinting"-messages that merely establish the brand's identity- if conducted before presentation of the brand's benefits, facilitated consumer learning and retention of information about the brand. 19 Studies also showed that a brand's "sound sym- bolism" (a theory suggesting that the sounds of words convey meanings) and the brand's "linguistic characteristics" (e.g., unusual spelling) affected the encoding and retention of the brand name. 20

A key component of retention is called data chunking, defined as the process during which consumers group information together into smaller more memorable chunks, or pieces of information. Marketers have studied the kinds and numbers of groupings (or "chunks") of information that consumers can handle. It is generally accepted that it is easier for consumers to remember five (plus or minus two) chunks of information. Marketers assist consumers by chunking their information into five (plus or minus two) bits. Figure 5.9 is a screen shot from an advertisement from the Swedish Tourist Association. In order to celebrate the 250th anni- versary of the abolishment of censorship in Sweden, and to increase tourism in Sweden, the advertising agency, Ingo Stockholm-an agency owned by WPP, a large global communications services parent company-created the advertising campaign, "The Swedish Number." Anyone may call the number and random Swedes will answer and speak to the caller about Sweden. They may discuss whatever they want-no censorship! Notice that the phone number is chunked into groups of two and three for easier memory. 21

132 PART ii • THE Consum ERAs An inDiViDuAL

FIGURE 5.9 Chunking Aids Memory

data retrieval The process by which people recover information from the long-term store, that is fre- quently triggered by external cues.

Data retrieval is the process by which people recover information from the long-term store; it is frequently triggered by external cues. For example, when you see a product in the store or on TV, you automatically retrieve the applicable information your brain has stored. If the brand is distinctive and heavily advertised, or if you had a memorable experience using it, the retrieval will be quicker than that for less sought-after brands.