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Consumer learning

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Consumer learning is vital in creating Brand loyalty and Brand equity. In this presentation you will come to know about how people learn and what you should do as a company to make consumers learn about your product.

Published in: Business, Technology

Consumer learning

  1. 1. CONSUMER LEARNINGBy Balachandar K
  2. 2.  “Learning is defined as the process by which individuals acquire the purchase and consumption knowledge and experience that they apply to future related behavior” “It is a relatively permanent change in behavior caused by experience” Learning is a process. It’s the result of Knowledge or Experience. It serves as the feedback and affects future behavior. Learning can be intentional or incidental.
  3. 3. ELEMENTS OF LEARNING Motivation: Unfulfilled needs leads to motivation. Motives serves to stimulated learning. Cues: Stimulus that directs the motives. Marketers must provides cues that don’t upset their expectation. Response: How individual react to drive or cue – how they behave – constitute their response. Reinforcement: Reinforcement increases the likelihood that a specific response will occur in the future as the result of particular cues or stimuli.
  4. 4. LEARNING THEORIES Behavioral Learning Cognitive Learning
  5. 5. BEHAVIORAL LEARNING THEORIES Classical Conditioning:-  IVAN PAVLOV EXPERIMENT
  6. 6. DIAGRAMMATIC REPRESENTATION OF CLASSICALCONDITIONING
  7. 7. CONSUMER BEHAVIOR APPLICATION Unconditioned Stimulus – Brand Name Unconditioned Response – Previously acquired Consumer Perception Conditioned Stimuli – Versions (product or service) of the same brand. Conditioned Response – Consumer Trying the product. Examples: Amul, Tata, Birla group, Microsoft.
  8. 8. COGNITIVE ASSOCIATIVE LEARNING From this viewpoint, classical conditioning is not reflexive action, but rather the acquisition of new knowledge. Optimal Conditioning – Creating strong association between the conditioned stimulus(new product from same brand) and unconditioned stimulus(Brand name).
  9. 9. HOW IT SHOULD BE DONE:- Step 1:- Forward conditioning – CS should precede US. Step 2:- Repeated pairing of CS and US. Step 3:- CS and US should logically blend together Step 4:- CS that is novel and unfamiliar Step 5:- US that is biologically or symbolically salient.This model is called Neo Pavlovian Conditioning
  10. 10.  In Neo Pavlovian theory, consumers are viewed as Information seekers (who use logical and perceptual relationship among events). They do have preconceptions. Conditioning is the learning that results from exposure to relationship among events. Exposure creates expectations.
  11. 11. STRATEGIC APPLICATIONS OF CLASSICALCONDITIONING Repetition Stimulus Generalization Stimulus Discrimination
  12. 12. REPETITION HSBC AD 1 HSBC AD 2 More repetition will lead to Advertisement wear out. Substantive Variations should be given to consumers.  For same products develop two ads stressing two different attributes in a product.
  13. 13.  Three hit theory: Three repetitions are required  To make consumer aware of the product/ service.  To show consumers relevance to the product  To remind benefits Repetition depends on the competitive ads. If more competitors are there, consumer may forget your product.
  14. 14. STIMULUS GENERALIZATION Learning depends not only by repetition but also on the ability of individuals to generalize. Marketing Applications:-  Product Line, Form and Category Extensions.  Family Branding  Licensing
  15. 15. PRODUCT FORM EXAMPLEDove Shampoo and Conditioner, Colgate Paste andMouthwash. Laptop and Desktops
  16. 16. PRODUCT LINE EXAMPLE – P&G
  17. 17. PRODUCT CATEGORY EXTENSION
  18. 18. FAMILY BRANDING
  19. 19. LICENSING
  20. 20. STIMULUS DISCRIMINATION Opposite to Stimulus Generalization and that results in the selection of specific stimulus from among the similar stimulus. It’s key in developing positioning strategy. To create a distinctive image in the minds of the customers about your product.
  21. 21. PRODUCT DIFFERENTIATION
  22. 22. OPERANT CONDITIONING Learning occur through trail and error basis. VIDEO. According to B.F.Skinner, “Individual learning occurs in a controlled environment in which individuals are rewarded for choosing an appropriate behavior”.
  23. 23. REINFORCEMENT OF BEHAVIOR Positive reinforcement – Events that strengthen the likelihood of a specific response.  Ex: Using Shampoo – if you feel good, you will buy it again. Negative reinforcement – Unpleasant or Negative outcome that also serves to encourage a specific behavior.  Ex: The Atlantic – Are you missing what is important?  The Economist – Get a world view.
  24. 24. FEAR APPEAL IN ADS VIDEO Ads related to toothpaste, mouthwash, headache use negative reinforcement. Punishment should not be confused with negative reinforcement.
  25. 25. EXTINCTION AND FORGETTING Extinction – When a learned response is not longer reinforced, it diminishes to the point of extinction.  Eg) UTI bank to Axis bank. Where extinction is highly necessary. Forgetting is often related to passage of time.  Eg) Visited a restaurant long back.
  26. 26. MARKETING APPLICATIONS Customer Satisfaction:  Relationship Marketing. Reinforcement Schedules  Total ( or Continuous)  Systematic ( or Fixed Ratio) – every nth time.  Random (or Variable) – lotteries, sweepstakes, gambling. Shaping – Reinforcement performed before the desired consumer behavior actually takes place.  Eg) Test drive, Discounts for few products in the showroom which tends people to buy non discounted products.
  27. 27. MASSED VS DISTRIBUTED LEARNING
  28. 28. OBSERVATIONAL LEARNING Also called as Modeling or Vicarious Learning
  29. 29. EXAMPLES OF LEARNING IN DAILY LIFE Classical Conditioning – Soap, Paste, Food. Operant Conditioning  Positive reinforcement – Dad buys a cycle for getting first mark.  Negative reinforcement – Dad ask you to get good marks or study well else you will not get good college or job.  Punishment – Dad beats you for coming late to home. Observational Learning  You want to wear dress like the hero who comes in the movie.
  30. 30. COGNITIVE LEARNING THEORIES Information Processing:-  Sensory Store  Short term store  Long term store  Rehearsal and Encoding  Retention  Retrieval
  31. 31. INFORMATION PROCESSING MODEL
  32. 32. SENSORY STORE - EXAMPLES Retains in the memory for 2 – 3 seconds. Using new soap, paste, advertisement music, pamphlet, fragrance of a retail shop.
  33. 33. SHORT TERM STORE Looking phone number while dialing. If the Short term memory does rehearsal then it reaches Long term memory. Transfer process takes 2 – 10 seconds, and lost in 30 seconds if not Rehearsed.
  34. 34. WHICH ONE IS EASY TO LEARN?
  35. 35. MEMORIZE THESE LETTERS IN 15 SECONDS –ENCODING & CHUNKING EXAMPLE BGI TAE LTE GDO ETLNow try this one,BIG EAT LET DOG THEEncoding makes it easy to retain information. ( E in Dell, McD in McDonald.)Chunking is recoding the information which was encoded earlier.
  36. 36. RETENTION Information is stored in long-term memory  Episodically: by the order in which it is acquired  Semantically: according to significant concepts Total package of associations is called a schema
  37. 37. CONSUMER INVOLVEMENT AND PASSIVE LEARNING  High involvement consumer  Low involvement consumer CENTRAL AND PERIPHERAL ROUTES OF PERSUASION HEMISPHERIC LATERALIZATION
  38. 38. OUTCOMES AND MEASURES Measurement:-  RECOGNITION TEST– AIDED  RECALL TEST – UNAIDED
  39. 39. BRAND LOYALTY AND BRAND EQUITY Brand loyalty factors:-  Personal degree of risk aversion or variety seeking  Brand reputation and availability of substitutes  Social group influences. Loyalty types:  No loyalty  Covetous loyalty – no purchase/ strong association  Inertia loyalty - purchase/ no strong emotional attachment  Premium loyalty – high attachment and high purchase
  40. 40. BRAND EQUITY Brand equity refers to the value inherent in a well known brand name. Well known brand names are referred to as Megabrands. Co branding – two brand names featured on a single product.

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