CONSUMER BEHAVIOUR UNIT IV PERCEPTION & LEARNING 01

UNIT IV • CONSUMER BEHAVIOUR PART A — PERCEPTION How consumers notice, organize and give meaning to market stimuli. 04

UNIT IV • CONSUMER BEHAVIOUR Meaning of Perception Perception is a highly individual process: identical stimuli may produce different meanings for different consumers. Perception is the process of acquiring, interpreting, selecting and organizing sensory information. In consumer behaviour, the individual selects, organizes and interprets environmental stimuli into a meaningful and coherent picture. INDIVIDUAL Needs, values and expectations shape what the consumer notices and how the stimulus is understood. SELECTIVE Consumers cannot process every stimulus; they selectively expose themselves, attend and interpret. MEANING Perception converts raw sensory input into a meaningful judgement about a product, brand or experience. 05

UNIT IV • CONSUMER BEHAVIOUR The Perception Process Three linked stages transform sensory input into consumer meaning. 1 SENSATION SENSATION Immediate and direct response of sensory organs to stimuli. 2 ORGANISATION ORGANISATION Stimuli are grouped and connected with categories and memory. 3 INTERPRETATION INTERPRETATION Meaning, liking, value and judgement are attached to the stimulus. Consumer example: a pizza is sensed through taste, smell and touch → organized with earlier pizza experiences → interpreted as good/bad, familiar/different and valuable/not valuable. 06

UNIT IV • CONSUMER BEHAVIOUR Stage 1 — Sensation Sensation is the immediate and direct response of sensory organs to a stimulus. SEE Eyes Colour, shape, size, visual design HEAR Ears Music, voice, sound, silence SMELL Nose Fragrance, food aroma, product scent TOUCH Skin Texture, temperature, surface feel TASTE Mouth Flavour, sweetness, bitterness Sensitivity depends on the quality of receptive organs and the intensity of the stimulus. Adaptation can reduce awareness of a repeated stimulus—for example, becoming accustomed to railway noise or the smell of fish. 07

UNIT IV • CONSUMER BEHAVIOUR Stage 2 — Organisation Consumers do not experience selected stimuli as isolated fragments; they organize them into unified objects. GROUPING Similar sensory inputs are grouped into meaningful units rather than processed as separate fragments. MEMORY LINK The sensed stimulus is compared with similar object categories already stored in memory. CATEGORY The consumer classifies the experience as similar to, or different from, earlier experiences. Example: taste + smell + touch of a pizza → comparison with prior pizza experiences → perception of a particular pizza type. 08

UNIT IV • CONSUMER BEHAVIOUR Stage 3 — Interpretation Interpretation attaches meaning to the organized stimulus. Interpretation depends on previous experience, possible explanations, current motives and interests, and expectations. EXPERIENCE What happened before? EXPECTATIONS What did the consumer anticipate? MOTIVES What matters now? INTEREST What is relevant to the consumer? Interpretation is therefore not purely objective: the same product experience can produce different judgements among consumers. 09

UNIT IV • CONSUMER BEHAVIOUR Factors Affecting Perception Three broad sources shape how a consumer perceives a stimulus. STIMULUS CHARACTERISTICS Sensory qualities and information content of products, brands, shops, people and communications. CONTEXT The social, cultural and organisational setting in which the stimulus is received. CONSUMER CHARACTERISTICS Prior knowledge, experience, feelings and expectations carried by the individual. Perception is produced by the interaction of stimulus × context × consumer. 10

UNIT IV • CONSUMER BEHAVIOUR Stimulus Characteristics Marketers first need attention; then they need meaningful information processing. SENSORY CHARACTERISTICS Bright colours, loud sounds and strong smells can attract attention. Packaging, point-of-purchase displays and novel advertising elements can help the stimulus stand out from clutter. Unity of product design influences aesthetic response and product preference. INFORMATION CONTENT Once sensory attention is achieved, product features and consumer benefits become important. Clear information supports organisation and interpretation. For industrial products especially, information content can differentiate the offer and support loyalty. 11

UNIT IV • CONSUMER BEHAVIOUR Context and Consumer Characteristics The same stimulus can be perceived differently because the surrounding situation and prior expectations change meaning. CONTEXT The setting includes social, cultural and organizational surroundings. Blind taste studies show that brand labels can influence taste perception. The brand name can become part of the perceptual context surrounding the product. CONSUMER CHARACTERISTICS Prior experience and knowledge create expectations. Expectations bias perception: consumers can end up seeing what they expect to see. A positively recommended restaurant may be perceived more favorably than the same restaurant described negatively. 12

UNIT IV • CONSUMER BEHAVIOUR Selection in the Perceptual Process Consumers manage information overload by selecting what enters and remains in conscious processing. SELECTIVE EXPOSURE Only some marketing communications achieve actual exposure. SELECTIVE ATTENTION Initial attraction does not guarantee continued processing. SELECTIVE INTERPRETATION Incoming information may be distorted to fit expectations and protect beliefs. SELECTIVE BLOCKING Consumers may simply tune out unwanted or excessive stimuli. 13

UNIT IV • CONSUMER BEHAVIOUR Selective Exposure vs. Selective Attention Both are selective, but they operate at different points in the perceptual process. SELECTIVE EXPOSURE The consumer decides which messages, displays, salespeople or information sources to encounter. Internet search and specialised media allow consumers to collect information relevant to their immediate needs. Also described as gate keeping. SELECTIVE ATTENTION The consumer may encounter a message but still ignore it. Initial stimulus characteristics may attract attention, but continued processing depends on personal interest in the product or service. Targeted media placement can improve attention. 14

UNIT IV • CONSUMER BEHAVIOUR Selective Interpretation and Selective Blocking Perception does not end when the consumer notices a stimulus. SELECTIVE INTERPRETATION Consumers may seek information that reassures them after an important purchase. Negative information that threatens the consumer's ego may be distorted or discounted. This is referred to as perceptual distortion or perceptual defense. SELECTIVE BLOCKING Consumers protect themselves from excessive stimulation by tuning out. A familiar example is switching channels during unwanted television commercials. Blocking reduces conscious exposure to stimuli considered irrelevant. 15

UNIT IV • CONSUMER BEHAVIOUR Perceptual Thresholds Thresholds describe the level at which sensory input becomes noticeable or a change becomes detectable. SENSORY INPUT ───────────────────────────────────────────────────────► ABSOLUTE THRESHOLD Lowest level at which a person can experience a sensation; the point between “something” and “nothing”. DIFFERENTIAL THRESHOLD Minimum difference between two stimuli that can be noticed; also called Just Noticeable Difference (JND). SUBLIMINAL PERCEPTION Stimulus presented below conscious awareness. The source notes limited evidence for indirect attitude effects but no confirmation of persuasive purchase action. 16

UNIT IV • CONSUMER BEHAVIOUR Absolute Threshold and Sensory Adaptation Consumers can become less sensitive when exposure to a stimulus is prolonged. ABSOLUTE THRESHOLD The lowest level at which a sensation can be experienced. Example: the initial coldness of swimming-pool water is strongly perceived. After continued exposure, the coldness becomes less noticeable. ADAPTATION IN MARKETING Repeated print or television advertisements may become invisible to consumers through sensory adaptation. Marketers respond by changing campaigns, increasing sensory input, reducing input through empty space or silence, or using unusual media. 17

UNIT IV • CONSUMER BEHAVIOUR Differential Threshold — Weber’s Law The size of change needed to be noticed depends on the starting level of the stimulus. JND (Just Noticeable Difference) = the minimum additional stimulus required for most people to perceive a difference between the original and changed stimulus. BASE: 3 INCHES A 0.5-inch reduction is relatively large compared with the original quantity. The change is more likely to be noticed. BASE: 6 INCHES The same 0.5-inch reduction is smaller relative to the starting quantity. The change is less likely to be noticed. MARKETING USE Improvements should exceed the JND to be noticed. Price, pack-size and content reductions may be kept below perceptible levels when firms seek gradual change. 18

UNIT IV • CONSUMER BEHAVIOUR Subliminal Perception Stimuli below conscious awareness occupy a controversial position in marketing. Subliminal stimuli are too weak or brief to be consciously seen or heard, yet may be registered by some receptor cells. WHAT THE SOURCE REPORTS Reports exist of subliminal messages being used to influence consumption behaviour. EVIDENCE The module notes that many studies found no evidence that subliminal advertising persuades consumers to buy goods and services. MARKETING IMPLICATION Some evidence suggests indirect effects on attitudes or feelings, but no confirmation of effects on consumption motives or actions. 19

UNIT IV • CONSUMER BEHAVIOUR Perceptual Organisation — Gestalt Perspective Consumers organize selected stimuli into meaningful wholes; the module identifies three basic principles. FIGURE & GROUND A clear focal stimulus stands out against its background. GROUPING Separate stimuli are grouped into a unified picture or impression. CLOSURE Consumers mentally complete incomplete patterns or messages. Gestalt principle: the whole is experienced as more than the isolated parts. 20

UNIT IV • CONSUMER BEHAVIOUR Figure–Ground and Grouping Visual emphasis and association help consumers process brand communications. FIGURE & GROUND The figure is perceived as solid, defined and in the foreground; the ground is less definite. Advertisers must ensure that the intended focal stimulus remains the figure rather than an unintended background element. Poor figure–ground clarity can waste communication expenditure. GROUPING Consumers group stimuli into unified impressions. Grouping supports memorization and recall. Example from the module: repeated association of Thums Up with youth and adventure creates a desired meaning around the brand. 21

UNIT IV • CONSUMER BEHAVIOUR Closure — Completing the Message Consumers often fill in missing elements to create a complete perceptual picture. Incomplete pattern WHY IT WORKS Need for closure encourages consumers to mentally complete an incomplete stimulus. Incomplete promotional messages can increase involvement and recall because the consumer participates in completing the meaning. MEDIA APPLICATION The module gives an example of using the audio track of a familiar television commercial on radio. Consumers may mentally reconstruct the missing visual content from memory. 22

UNIT IV • CONSUMER BEHAVIOUR Perceptual Interpretation and Distortion Interpretation becomes especially important when stimuli are weak, ambiguous or incomplete. WHY DISTORTION OCCURS Poor visibility Brief exposure High background noise Constant fluctuations Different viewing angles Changing illumination When ambiguity is high, consumers may interpret the stimulus in ways that fulfil personal needs, wishes and interests. MAJOR INFLUENCES Physical appearance Stereotypes First impressions Jumping to conclusions Halo effect These influences can shape meaning before the consumer has examined all relevant information. 23

UNIT IV • CONSUMER BEHAVIOUR Four Important Interpretation Effects Interpretation can be shaped by shortcuts and pre-existing expectations. PHYSICAL APPEARANCE Attractive models may be perceived as more successful or persuasive; the model should fit the product category. STEREOTYPES Mental pictures of people, objects and situations create expectations that guide subsequent perception. FIRST IMPRESSIONS Early product experiences can remain influential; a poor first use may be difficult to correct. JUMPING TO CONCLUSIONS Consumers may form judgements from the opening part of an advertisement or from package size and shape. 24

UNIT IV • CONSUMER BEHAVIOUR Halo Effect A positive or negative impression of one dimension can influence perceptions of other dimensions. Established perceptions can extend beyond the original attribute, product or brand. PERSON Attractive people may be judged as having more desirable personalities or skills. CELEBRITY Celebrities may endorse products even when they have no expertise in evaluating them. BRAND A strong product or brand can create positive perceptions of other products in the same range. The module cites Apple’s iPod as an example of positive spillover to perceptions of other Apple products. 25

UNIT IV • CONSUMER BEHAVIOUR Perception and Marketing Strategy Perception affects product design, brand names, packaging, displays, print advertising and television commercials. PRICE Price can act as a quality cue. COUNTRY OF ORIGIN Consumers may carry quality stereotypes about countries. CORPORATE IMAGE A company’s perceived meaning can create interest, share of mind and brand equity. Perception is therefore a strategic marketing variable—not merely a psychological phenomenon. 26

UNIT IV • CONSUMER BEHAVIOUR Price Perception and Price–Quality Relationship Consumers may use price as a signal of quality, especially when quality is difficult to evaluate directly. PREMIUM PRICE A relatively high price may be perceived as a sign of good quality, particularly for complex or experiential products and services. REFERENCE PRICE Consumers carry a reference price and a latitude or acceptable price band. Below the minimum may appear substandard; above the maximum may appear too expensive. GOLDILOCKS & ODD PRICING A premium option can make the next option look more reasonable. Odd prices such as ₹99 or ₹199 may be perceived as below the next round-number threshold. 27

UNIT IV • CONSUMER BEHAVIOUR Country of Origin and Corporate Image Perceptions are socially constructed and can change over time. COUNTRY OF ORIGIN Consumers may hold fixed perceptions about product quality associated with different countries. Such perceptions are not permanent: the module notes how Japanese products moved from a poor-quality image in the early 1960s to a high- quality image later. CORPORATE IMAGE Corporate image is the generally accepted perception of what a company stands for. It is shaped by marketing and public relations, but also by news media, journalists, labour unions, environmental organisations and NGOs. A strong image can support share of mind, brand equity and sales. 28

UNIT IV • CONSUMER BEHAVIOUR PART B — LEARNING How motivation, experience, cues and reinforcement shape future consumer behaviour. Unit 4 • Perception & Learning 29

UNIT IV • CONSUMER BEHAVIOUR Meaning of Learning In the module, learning is described as a change in the content of long-term memory. Learning involves the acquisition and development of memories and behaviours, including skills, knowledge, understanding, values and wisdom. It ranges from simple habituation to complex problem solving. MOTIVATION Provides the spur to learning. CUES Stimuli that give direction to motives. RESPONSE How the consumer reacts to a cue or stimulus. REINFORCEMENT Increases the likelihood of repeating a response. 30

UNIT IV • CONSUMER BEHAVIOUR The Learning Sequence in Marketing Motivation creates readiness; cues direct it; responses become learned through experience and reinforcement. MOTIVATION Need / goal CUE Direction RESPONSE Behaviour REINFORCEMENT Future likelihood Example: interest in cricket → advertisement for a cricket camp → consumer enrols or searches → positive experience increases the chance of future action. 31

UNIT IV • CONSUMER BEHAVIOUR Cognitive Learning Learning can occur through acquiring information, not only through direct behavioural conditioning. ROTE LEARNING Focuses on memorisation and recall through repetition. Advertisers may seek top-of-mind brand awareness by repeatedly presenting a brand name. INFORMAL LEARNING Develops through everyday experience, family interaction, play and exploration. Brand preferences can be learned through ordinary life experiences. FORMAL LEARNING Occurs within a teacher–student relationship such as school or college. The broader lesson: information can be acquired through structured communication as well as experience. 32

UNIT IV • CONSUMER BEHAVIOUR Classical Conditioning Associative learning occurs when a previously neutral stimulus is repeatedly paired with a meaningful stimulus. NEUTRAL STIMULUS Bell UNCONDITIONED STIMULUS Food UNCONDITIONED RESPONSE Salivation Repeated pairing CONDITIONED RESPONSE After repeated pairing, the formerly neutral cue can evoke the learned response. Marketing application: brands can be paired with likeable celebrities, music or prestigious settings so that associated feelings transfer to the brand. 33

UNIT IV • CONSUMER BEHAVIOUR Operant / Instrumental Conditioning Behaviour changes because its consequences influence the likelihood of repeating it. POSITIVE REINFORCEMENT A favourable stimulus follows a response and increases that behaviour. NEGATIVE REINFORCEMENT An unpleasant stimulus is removed after a response, increasing that behaviour. POSITIVE PUNISHMENT An aversive stimulus follows a response and decreases that behaviour. NEGATIVE PUNISHMENT A favourable stimulus is removed after an undesired response, decreasing that behaviour. 34

UNIT IV • CONSUMER BEHAVIOUR Operant Conditioning — Marketing Applications Marketers can use consequences to strengthen desired consumer responses. REWARDS Coupons, sweepstakes and rebates can increase purchase behaviour when the product itself has no clear intrinsic advantage over competitors. LOYALTY PROGRAMMES Frequent-flier programmes accumulate mileage toward future free redemption and encourage repeat behaviour. EXPERIENCE A positive product or service experience can reinforce a future purchase; an unsatisfactory experience can reduce repeat usage. 35

UNIT IV • CONSUMER BEHAVIOUR Modeling / Observational Learning Consumers can learn by observing people they regard as suitable models. AGE / GRADE People superior in age or grade hierarchy. SOCIAL STATUS People perceived as socially superior. INTELLIGENCE People ranked higher in knowledge or intelligence. TECHNICAL SKILL Superior technicians or experts in a field. The choice of model varies by culture; the module notes stronger age-hierarchy imitation in many Eastern contexts and other forms of hierarchy in Western contexts. 36

UNIT IV • CONSUMER BEHAVIOUR Characteristics that Strengthen Learning The module identifies six factors that influence the strength and durability of learned responses. IMPORTANCE Value placed on the information. MESSAGE INVOLVEMENT Interesting plots, surprise and uncertainty can increase involvement. MOOD Positive mood can enhance information absorption. REINFORCEMENT Consequences can increase the speed and duration of learning. REPETITION Repeated exposure increases the likelihood of learning. IMAGERY Brand names, pictures and congruent music create memorable mental images. 37

UNIT IV • CONSUMER BEHAVIOUR Extinction, Generalisation and Discrimination Learned responses can weaken, spread to similar stimuli, or become more selective. EXTINCTION Forgetting what has been learned. It occurs when reinforcement is withdrawn, the response is no longer used, or the consumer is no longer reminded. Stronger original learning generally slows extinction. STIMULUS GENERALISATION A response to one stimulus is elicited by a similar but distinct stimulus. The module connects this “rub-off” effect with brand extensions. STIMULUS DISCRIMINATION Consumers learn to respond differently to similar but distinct stimuli. Marketers can emphasise specific brand differences through communication and product differentiation. 38

UNIT IV • CONSUMER BEHAVIOUR Response Environment and Memory Retrieval What is learned is not always immediately retrievable; retrieval is affected by learning strength and context. STRENGTH OF ORIGINAL LEARNING Stronger original learning makes relevant information more likely to be retrieved when needed. Repetition, importance, reinforcement and imagery can contribute to stronger learning. MATCH THE PURCHASE CONTEXT Retrieval improves when the environment at retrieval resembles the environment in which learning occurred. Therefore, marketers should know when and where consumers make brand or store decisions. 39

UNIT IV • CONSUMER BEHAVIOUR Psychology of Simplification Consumers reduce the mental effort of repeated decisions by routinising familiar solutions. REPEATED PROBLEM The same market problem is encountered repeatedly. ROUTINISATION The consumer relies on prior experience instead of making a new decision. HABITUAL PURCHASE The same brand is purchased again; habit becomes one underlying source of brand loyalty. In a marketplace with too many choices, consumers often reduce rather than expand their active alternatives. 40

UNIT IV • CONSUMER BEHAVIOUR Psychology of Complication Consumers redefine problems when familiar solutions no longer feel satisfactory or relevant. BOREDOM Repeated exposure reduces utility and creates a desire for variety and novelty, especially for products with sensory or emotional value. MATURATION Consumers outgrow old tastes as life status, self-concept, reference groups or expectations change. FORCED IRRELEVANCE External changes make previous solutions obsolete—through marketers, organisations or government action. 41

UNIT IV • CONSUMER BEHAVIOUR Complication in Detail: Maturation Change in consumer life status can create entirely new needs or modify existing solutions. LIFE STATUS Moving location, marriage, divorce, birth, death, appointment or promotion can change consumption needs. SELF-CONCEPT A change in reference groups can change the products and styles a consumer considers appropriate. RISING EXPECTATIONS As consumers become satisfied with previous products, expectations may rise and make older solutions unsatisfactory. Source: Unit 4, section 4.13, p. 120 42

UNIT IV • CONSUMER BEHAVIOUR Forced Irrelevance of Current Solutions External forces can make previously acceptable consumer solutions obsolete. MARKETERS Phasing out products, inadequate retail stock or leaving the market can force consumers to seek alternatives. BUSINESS ORGANISATIONS Changes such as employee medical- insurance arrangements can force individuals to change their existing solution. GOVERNMENT Regulations such as restrictions on smoking in public places or product bans can make previous choices irrelevant. Source: Unit 4, section 4.13, p. 121 43

UNIT IV • CONSUMER BEHAVIOUR Integrated Consumer Behaviour View Perception determines what is noticed and understood; learning shapes what is remembered and repeated. PERCEPTION Stimulus enters through the senses. The consumer selectively exposes, attends, interprets and blocks information. Gestalt principles organize the stimulus. Interpretation is shaped by experience, expectations, motives and biases. LEARNING Motivation creates readiness. Cues direct the motive. Response produces behaviour. Reinforcement affects future repetition. Repetition, imagery, mood and involvement strengthen learning. EXPERIENCE 44