CHAPTER 4 PART II CONSUMER LEARNING Memory & Nostalgia

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1 MKTG 407: CH4 (Learning, Memory, & Nostalgia) [Ioannis Kareklas] Slide #1 Slide Title: WSU Online Title Slide Title: Consumer Learning, Memory, & Nostalgia Speaker: Ioannis Kareklas Music Slide #2 Slide Title: Slide 2 4 Consumer Learning, Memory, & Nostalgia OpenMentis.com copyright Open Mentis 2007 MYCBBOOK.COM In this chapter, we are going to discuss consumer learning. Specifically, we are going to describe four different ways that consumers learn and we are also going to discuss sensory, short-term and long-term memory. Next, we are going to discuss new product innovations and some of the desirable characteristics of innovations and finally, we are going to cover consumer nostalgia. Slide #3 Slide Title: Slide 3 [Diagram Figure 4.1 FOUR MODEL OF LEARNING] Consumer As A Learner MYCBBOOK.COM Human Pursuit of Happiness in the World of Goods Copyright Open Mentis

2 Learning means acquiring a response to a stimulus. Once we acquire a response, we can then use it automatically in similar future situations. Learned responses can be mental or they can be behavioral. For example, when we see a shirt with a Dolce & Gabbana logo on it, then our response might be to think of an image of a well-made fashionable piece of clothing. In other words, this is a mental response. Alternatively, when we hear that our favorite singer is coming to town, then we may quickly go and buy tickets for the show before they run out. This is an example of a behavioral response. An important aspect of learning is that it is adaptive. This means that learning can help us to respond better to our environment. For example, a child that holds a hot light bulb for the first time learns never to make that mistake again. Similarly, a consumer who buys a substandard product from a mail order catalog learns never to buy anything from a mail order catalog again or at least to never buy anything from that company again. In contrast, a consumer who is initially concerned about the authenticity of ebay sellers may change her or his mind after receiving a product that was just as expected. In this case, the consumer has learned to trust ebay sellers or at least some of them. In other words, the ones with lots of good reviews. There are four mechanisms of consumer learning, which we all use on a daily basis. We call these the four models of learning and they are shown here on this slide. They include classical conditioning, instrumental learning, modeling and cognitive learning. We are going to describe each one of them in the next few slides. Slide #4 Slide Title: Slide 4 Unconditioned Stimulus (UCS) Unconditioned Response (UCR) Constant Pairing Response Transfer Conditioned Stimulus (CS) Conditioned Response (CR) PROCESS: Autonomic, Mindless Low Involvement RESPONSE can be > Brand Image > Brand Liking > Brand purchase MYCBBOOK.COM Human Pursuit of Happiness in the World of Goods Copyright Open Mentis

3 First, let s talk about classical conditioning. This is a process of learning by extending a preexisting response from one stimulus onto another through exposure to the two stimuli at the same time. Ivan Petrovich Pavlov was a Russian psychologist, also a Nobel prize winner in physiology who studied the human learning process by experimental on other animals. Specifically, Pavlov experimented with dogs. In his famous experiments, he gave dogs meat powder and observed the dogs salivating. Salivating when presented with meat powder is an inherent response for dogs. He then rang a bell just before giving the dogs more meat powder and repeated this sequence several times. The dogs salivated every time. Once conditioned, dogs would salivate at nearly the ringing of the bell without getting any meat powder. In other words, the dogs had learned the salivating response to the bell. Kind of an interesting personal example I have conditioned one of our dogs to ring a bell that is tied to our door when she wants to go outside. I did this by ringing the bell every time before letting her out to pee while she was little. Now, she does it every time she needs to go outside. Let s now talk about some of the specifics of classical conditioning. First, an unconditioned stimulus denoted by the letters UCS refers to a stimulus to which the consumer already has a pre-existing response like dogs salivate when presented with meat. A condition stimulus denoted by CS is a stimulus to which the consumer either does not already have a response or has a pre-existing response that marketers might want to change. In other words, the marketers would like to condition a new response such as a purchase response. For classical conditioning to work, the key is constant pairing of a brand with a stimulus that is already associated with a desired image the marketer wants to project for the brand. For example, the colors that are used in an ad, the look and feel of the ad, the scenery, the music, the spokesperson and so on. All of these stimuli are strategically chosen so as to portray the desired image for the brand that they are paired with, such as the brand is perceived to be stylish or pro-environmental or is seen as a luxury versus a safety car and so on. All of these dimensions depend on the stimuli that they are paired with. Now, in terms of process, classical conditioning is considered a low involvement process. Once conditioned, the response become autonomous and consumers do not even think about what they are doing, but rather they develop an automatic response, one that has already been previously prepared. In other words, the desired response that has already been conditioned. Slide #5 Slide Title: Slide 5 3

4 INSTRUMENTAL CONDITIONING Learn to do something because doing it is instrumental to getting a reward Extrinsic vs. Intrinsic PROCESS: Mindful High Involvement (motivated to get reward) What is Learned? A Behavior Examples: Repeat purchase/use Brand loyalty MYCBBOOK.COM Human Pursuit of Happiness in the World of Goods Copyright Open Mentis 2012 Next, we are going to talk about instrumental conditioning. Instrumental conditioning is also known as instrumental learning or operant conditioning. Please write down the synonym terms as they do not appear on this slide. Once again, instrumental conditioning is also known as instrumental learning or operant conditioning. Instrumental conditioning is a process whereby one learns a behavior because it is rewarding. In other words, we learn a response because it is instrumental to getting a desired reward. For example, adults often tell children to first eat their vegetables before they can have desert. This mode of learning was first described by B.F. Skinner who experimented with pigeons. Skinner built two doors in a cage where he had his pigeons, a fake door and a real door. When the pigeons pegs on the real door, food grains poured out. After a few trials, the pigeons learned to peg on the right door and ignore the fake one. Marketers make use of this method as well. For example, by rewarding consumers who buy their brands. We may give a prize or may give an opportunity to win a prize or we may reward consumers frequent flier miles for flying with the same airline. The rewards themselves come in two forms. They can be extrinsic or they can be intrinsic. Extrinsic rewards are external to the product. These include coupons, sweepstakes, rebates and loyalty programs such as frequent flier or frequent hotel stay rewards. Intrinsic rewards are rewards that are built into the product itself. Consumers learn to buy and use the product because they find the product itself intrinsically rewarding. For example, we learn to buy new CDs from our favorite musicians because we like their previous music or we learn to go to a 3D IMAX movie theater because we have had such a great time there 4

5 in the past. The distinction between extrinsic and intrinsic rewards is a very important one for marketers. This is because if the product is not in itself rewarding to the consumer or if it is not any more rewarding than competitor s products, then to get consumers to buy their products, marketers have to always offer extrinsic rewards such as coupons and rebates. However, the benefits of such giveaways do not last a very long time. So, rather than focusing on attracting consumers through constant rebates and other promotions, marketers should instead focus on making their products more intrinsically rewarding to consumers. For example, by increasing the quality or by adding more features. Unlike classical conditioning, instrumental conditioning is not a mindless process but rather it is a high involvement mindful process. In this case, consumers are involved because they are motivated to attain the reward. Slide #6 Slide Title: Slide 6 Modeling Monkey See, Monkey Do Imitate someone we admire (celebrities, role models) What is Learned Preferences/Tastes Act Examples: Brand Choice PROCESS: Mindful High Involvement (motivated to be like the model) The third mode of learning is modeling, which is a process whereby learning occurs by observing others. Children learn much of their social behavior by observing and imitating adults. As adults, we learn from our teachers, our co-workers, from our role models, which we admire and we try to emulate and even from celebrities. Marketers use this learning mechanism as well. For example, by sending product samples to influential and well respected people hoping that their followers will adopt the product when they see their leaders and role models using it. Just like instrumental conditioning, this mode of learning is also mindful and high involvement. 5

6 However, in this case, consumers are not motivated to receive the reward, but rather they are motivated to try and be more like their role models. Slide #7 Slide Title: Slide 7 COGNITITVE LEARNING Learning of information Rote Memorization & Problem Solving Low Involvement Learning High Involvement Learning Brand name, Product Jingles, benefits; Long Slogans, message Package recognition; content; Discuss: last week, what did you learn about any brand in low involvement cognitive mode? And in high involvement mode? Finally, cognitive learning refers to learning by acquiring new information from written or oral communications. When we acquire information about something, whether incidentally and passively or deliberately and actively, we learn cognitively. For example, when reading your CB book and when you are listening to my lecture, you are learning cognitively. Much of our learning about products also happens the same way. Before we purchase technical products for example, we tend to read product brochures, talk to salespeople, ask questions, we examine product features and we read expert review online. Cognitive learning occurs on two different levels: rote memorization and problem solving. With rote memorization, we rehearse the information until it gets firmly logged in our long-term memory. It can result from active rehearsal or from passive repeated exposure to the information. A great deal of advertising aims simply to create a rote memory of the brand or the slogan through repeated presentation. With problem solving, we actively process information to reach certain judgments. For example, suppose you are wondering whether you should purchase the new ipad. You may look at information about its features, weigh that information in your mind and then say to yourself, Now I understand what the new ipad is and what it can do for me. Our book says that this fourth model of learning is unique to humans because only we have the 6

7 capability to process information. So, only humans have the capacity for cognitive learning. I personally believe this is a very bold statement. I think that we don t know enough about how other animals process information to make such extreme statements. While the other three models of learning are either low or high involvement, cognitive learning can be of both types. Under low cognitive involvement learning, the product is relevant, but not much is at stake, such as when purchasing a low priced item of routine use such as salt. In this case, we want to learn the brand name and possibly its most relevant feature, but that is all the information we want to know. Consumers are unwilling to work hard to read an ad for a low involvement product so ads for these products should be simple, featuring a visual and maybe a line or two of text, if at all. In contrast, under high involvement learning, the product is very important to consumers and a lot is at stake such as when buying an expensive product such as a car or a house or a home theater projector or even cereal if we are very health conscious. In other words, we can be highly involved with inexpensive purchases as well. In this case, consumers want to make sure and choose the right product and the right brand and therefore they try to learn all that they can about the brand s features by reading package labels, searching the web for information, and watching ads very attentively. Please discuss on Angel what you have learned last week about brands under high versus low involvement mode and how that relates to the current lecture. Slide #8 Slide Title: Slide 8 Stimulus Generalization A process wherein a consumer extends a learned response for one stimulus to another stimulus Example: Store brands use a look-alike package Stimulus Discrimination A process wherein a consumer perceives two stimuli to be different and consequently does not apply the same response to both. Example: Maxwell House and Folgers packages are designed to look different As consumers, we do not have to learn how to respond all over again every time we encounter a new stimulus. We are actually able to quickly and instinctually repeat the response that we learned in the past for other similar stimuli. For example, if you have never really liked reality 7

8 shows, you don t have to waste time trying to figure out the premise of each new one. Rather you just tend to change the channel. Stimulus generalization occurs when we extend a learned response for one stimulus to other similar stimuli. Stimulus discrimination in contrast occurs when we perceive two stimuli to be different and consequently do not apply the response we learned from one stimulus onto another. Marketers utilize these two concepts to obtain favorable consumer responses. For example, when a product is new, but they want it to be seen as being of the same high quality as the company s other brands; they give the new product the appearance of the familiar liked brands. Store brands make their products resemble manufacturer s brands hoping that consumers will engage in stimulus generalization. In contrast, when marketers want to attract a new set of customers, they may give their new brand a different and unique brand name and look. In this case, they are hoping for stimulus discrimination. Slide #9 Slide Title: Slide 9 MEMORY Sensory Memory Short Term Memory Long Term Memory How Short is STM How Long is LTM -Duration -Duration *Current *Lifelong -Capacity -Capacity *7+/-2 *Virtually Unlimited [Clipart of a human brain with a duck in it] Next, we are going to talk about memory. Memory is the place in the human brain where information is both processed and stored. This is an important point as students often think that memory is only where information is stored, but rather memory is also where we process information. You can think of memory like a large data warehouse that holds everything you know and everything you will ever know in your lifetime. Furthermore, memory refers to both 8

9 the storage area, but also its stored contents and is subdivided into three parts sensory, shortterm and long-term memory. First, sensory memory. This refers to the ability of our senses to keep information alive very briefly. For example, while watching advertisements on TV, only the sounds will register on your auditory senses and only the visuals will register on your visual senses. And only these sensory features of the entire ad will be processed by your sensory memory, not any associated messages or the respective meanings. These features remain in sensory memory for less than a second, which as it turns out is just long enough for us to decide whether or not we are going to pay any attention. If we decide not to pay any attention, then this information vanishes from our sensory memory, which explains why we often do not remember some ads even though we were previously exposed to them. If you do decide to pay attention to these sensations, then the information will enter your shortterm memory, which is the part of your brain where information that we are currently using is being held and processed. Short-term memory has two characteristics. First, limited capacity. It can only hold about 7 bits of information, plus or minus 2 bits of information. So, we can keep 5 to 9 digits or 5 to 9 names in our short-term memory. The other characteristic of short-term memory is its limited duration. It can hold information for just a few seconds. Therefore, short-term memory is also known as working memory because it holds the information we are currently working with. All new information enters from our senses first into short-term memory. Here, we decided to memorize it, file it, use it for some imminent decision or action or discard it all together. Finally, long-term memory is the part of the brain where information we do not currently need is stored away. Information is stored in our long-term memory in a very organized way so that we can quickly access it again when we need it in the future. We place information in our longterm memory so that our minds are not constantly preoccupied with the vast amounts of information and knowledge that we constantly acquire. Long-term memory has two characteristics. First, it has a virtually an unlimited capacity so it can hold the names and faces of everyone you have ever met, events you have ever experienced in your life, events you have read about, the lyrics to hundreds of songs and so on. The second characteristic is its efficient organization. Information is stored in long-term memory in a very systematic way for efficient access in the future when needed. In sum, short-term memory is active memory and long-term memory is passive memory. Slide #10 Slide Title: Slide 10 9

10 How do STM and LTM talk to each other? [Diagram Figure 4.2 HOW INFORMTIOAN TRANSFERS BETWEEN LONG-TERM and SHORT-TERM MEMORIES] Here is a graphical depiction of how information flows between our short-term and long-term memory. All external information that enters long-term memory must first go through shortterm memory and all the information that is stored in our long-term memory must be brought back into short-term memory when we need to use it. An appropriate analogy here is that of a theater. You can think of long-term memory as the backstage where all the performers and the props are assembled and wait there to be called and under this analogy our short-term memory is the front stage where performers are currently playing out their roles. The process of moving the information from short-term to long-term memory is called encoding whereas the process of withdrawing information from long-term memory back into short-term memory is called retrieving or simply remembering. Slide #11 Slide Title: Slide 11 [Diagram Figure 4.3 TWO WYAS TO KEEP INFORMATION ALIVE IN SHORT TEMR MEMORY] When we receive new information about a product, this information is received through sensory memory into our short term memory. If we judge this information to be useless, we discard it. If instead we decide that we may need it for some immediate task, then we try to keep it alive in our short term memory, which means we try to keep it alive in our consciousness. This can be 10

11 done in one of two ways the first is rote rehearsal. This involves repeating information in our heads mechanically without thinking about it. For example, you may repeat a web link to a product that looks interesting or the 800 number that you need to call. You can repeat this information until you find a piece of paper and you can then write it down. The other way in which we can keep information alive in our consciousness is through quick coding. Quick coding identifies some surface feature of the information that can help you to remember it in the future. For example, if the brand name is PAL, you could quick code it by thinking of your best friend, you pal. All consumers have their own tricks that work best for them when they try to quick code information. Slide #12 Slide Title: Slide 12 [Diagram FIGURE 4.4 THREE WAYS OF ENCOING INFORMATION IN LONG TERM MEMORY] [Image of an ad for Yellow Tail wine depicting a mermaid with a yellow tail] Next, we are going to talk about encoding, which is the process that involves assigning meaning to new information and storing it in a category of similar things in our long term memory. There are three ways of encoding information: repetition, the use of mnemonics and elaboration. A forth way is chunking, which was discussed in the YouTube video you saw earlier. First, let s talk about repetition. Repetition is when you say something again and again, hearing it often, observing the stimulus, touching it again and again or smelling it time after time and doing so with the intent to memorize it. In other words, with the intent of placing it in our long term memory. This is similar to rehearsal, which we discussed in the previous slide. Rehearsal is the way we use to keep information alive in short term memory. The difference between repetition and rehearsal is that with repetition, the rehearsal itself needs to be repeated several times at different intervals, perhaps a day apart or a week apart and so on. Furthermore, with repetition, our goal is to place the new information in long-term memory, so we would be repeating the stimulus with more focused attention. Repetition, but not rehearsal can occur without the consumers intent and effort. For example, by simply being exposed to 11

12 the same stimulus time after time such as being exposed to the same ad many times. Next, we have mnemonics. Mnemonics are memory devices that help us to understand and remember information because they rely on associations between easy to remember constructs which can then be related back to the data that we are trying to remember. Marketers often utilize the power of mnemonics to help consumers remember their products or their brands. A good example is Yellow Tail, which is a brand of wine that is featured on the right side of this slide. Finally, we have elaboration. Elaboration is the active processing of information in conjunction with other information that we already have stored in our memory so as to identify meaning in the new information. For example, suppose you wanted to remember the phone number , you might recognize that 1986 is the year you were born and that is also the year that the U.S. Declaration of Independence was 210 and years old. Now, all you have to do is add the number 5 before the numbers 86 and 210 by thinking about your 5 cats and this number will now be lodged in your long-term memory. This is certainly a strange example, but it effectively illustrates the process of elaboration. Please discuss on Angel other personal examples for either repetition, mnemonics or elaboration that you use yourself. I am especially interested to read about any mnemonics that you guys use on our daily basis. Slide #13 Slide Title: Slide 13 [Diagram Figure 4.5 AN ASSOCIATED NETWORK OF MEMORY] Information Structure: How Memory is Organized Semantic Episodic Elaboration results in knowledge that is being developed and stored as an associated network. An associated network is a network of various concepts that is organized and stored in memory. A concept is a name or label that is given to any object or quality of an object or person or situation or idea that we have in our memory. These concepts are depicted as notes interconnected by lines as shown here in figure 4.5. These 12

13 lines represent the connections among those objects or qualities. When one of those links or notes is activated, for example, when you encounter a SEGWAY HT, the activation then spreads to other notes and linkages bringing them into our consciousness, in other words, bringing them into our short term memory. Psychologists call this process spreading activation. For example, thinking of SEGWAY may from now on remind you of your CB class. All knowledge is of two types: semantic and episodic. Semantic knowledge consists of information about objects and their properties. Episodic knowledge consists of descriptions of events. Correspondingly, we have semantic and episodic memories. Semantic memories are memories for objects and other properties and episodic memories are memories for events, but those that have happened in your life and those you have witnessed. For example, last year s superball. Slide #14 Slide Title: Slide 14 Desirable Characteristics of innovations Relative Advantage Perceived Risk Complexity Communicability Compatibility Behavioral Value Trialability [Image of an electronic scooter] [Image of glasses with headphones] Next, we are going to switch gears and talk about product innovations. One of the most challenging tasks for marketers is to get consumers to buy new products. To achieve this very difficult task, marketers must understand how consumers decide whether or not an innovation is worth adapting. First, let s define innovation. An innovation is a product or an idea that is new to the consumer. There are two factors that together determine whether a product will be considered an innovation by consumers. First is uniqueness, which refers to how different the product is from existing products in the 13

14 marketplace. Second is age or how long the product has existed in the marketplace. What matters more than the products chronological age, in other words, how long the product has existed in the marketplace is when the consumer was first exposed to the produce. For example, the product may have existed in the marketplace for many years already, but if the consumer was just now exposed to it for the first time then for that consumer that product could be considered an innovation. Some of the desirable characteristics of product innovations are listed here on this slide. Let s briefly talk about each one of them. Relative advantage this is what consumers consider first and foremost. In essence, how much better is the innovation compared to the current product options, which it is a substitute for. Perceived risk refers to the uncertainty about whether a relative advantage would accrue and whether any unanticipated harm will occur. Consumers will obviously be less likely to adopt innovations, which they perceive to be of high risk. For example, when laser eye surgery was first introduced, about 2 percent of consumers who had this procedure where blinded by this surgery. This is a great example of the perceived risk of new product innovations. Complexity this refers to the difficulty in understanding the innovation. This was one of the main problems that TiVo faced when he was first introduced. At that time, most consumers could not understand how they could possibly pause or rewind live television. Communicability refers to the extent to which an innovation is socially visible or is otherwise easy to communicate. Taboo topics such as person hygiene products tend to have very low communicability. Compatibility consumers desire products that are compatible with both their behaviors and their values. Behavioral compatibility means that consumers will not have to change their behavioral routines to use the product. For example, behaviorally incompatible products will include products like big trucks that do not fit in a consumer s garage. If consumers are used to parking their vehicles in their garage, then a large truck that doesn t fit in their garage would be behaviorally incompatible. Value compatibility means consistently with consumers deeply held values. Incompatible products might include contraceptives for consumers whose religious values prohibit contraception. Finally, we have trialability, which refers to the extent to which it is possible to try out the innovation on a small scale before adapting it. This was another issue that TiVo faced when it was first introduced. TiVo addressed this issue by setting up their revolutionary technology in Best Buy and Circuit Cities around the country, which the consumers the opportunity to try out TiVo in the stores before buying a unit for their houses. Trialable innovations are typically adapted more readily than those that are not trialable. For example, a new brand of toothpaste might be promoted by offering free samples to dentists, which they can then share with their patients. Slide #15 14

15 Slide Title: Slide 15 Consumer Nostalgia Reminiscing about personal past Desire to experience a past era Share your nostalgia: What are you most nostalgic about? [Image of a Gambler s Girl poster] [Image of a Darling, I hate you poster] [Image of an antique car decorated for a wedding] Finally, today we are going to talk about consumer nostalgia. Nostalgia is defined as longing for the things and lifestyles of the past. Typically, nostalgia arises from one of two different motives. The first is reminiscing about your own personal past. We all have some fond memories of our past, which may include the places we grew up in, our friends of the time, and the activities we engaged in. Often times, products are an integral component of these memories. Therefore, when consumers have a chance to reconsume these products today, they can obtain pleasure from these familiar experiences. The second motive is re-experiencing a desirable historical era, perhaps one the consumer never experienced in the first place. Many of us are fascinated with particular eras of the past. Some people want to experience, even for a little while, what it was like living in the medieval times. Others find the liberating 1960s and 1970s captivating and may wish they were part of these historic times of change. Experiencing past eras allows consumers to escape from their everyday lives, which may now be mundane and allows them to live out their fantasies. For example, consumers may visit a medieval village or they may dine at a retro restaurant where they can be served dinner by James Dean or Elvis Presley. Satisfying these two motives provides consumers with the nostalgia they desire. Please discuss on Angel personal examples of nostalgia. What are you most nostalgic about? Make sure to clarify whether your nostalgia stems from personal memories or from the desire to experience a historic era you were never a part of. 15

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