eLearning Sessions

After completing this chapter, you should be able to:

1. Describe the relationships among consumer experience, learning, memory, and knowledge and the distinctions between these concepts.
2. Discuss the different kinds of consumer experiences, their relationship to other kinds of consumer behavior, and marketing implications.
3. Explain the role of anticipated consumption and provide examples and details.
4. Describe the different ways that consumers learn and understand the marketing implications.
5. Distinguish between the two types of behavioral theories - classical conditioning and operant conditioning - and apply these concepts to consumer behavior settings.
6. Appreciate the intricacy and diversity of human memory and relate memory concepts to marketing actions.
7. Appreciate the role of context in shaping consumer memory and knowledge and describe the ways that context influences consumer behavior.

• People experience everyday life, and most try to learn from these experiences. Knowledge is on outcome of our learning, and this knowledge, in turn, influences our future perceptions and experience.
• Experience, learning and knowledge are the focus of this chapter; and it makes sense to think of the three as progressing in an order - from experience to learning to knowledge. There is a dynamic interplay among them and of course, some experiences we don't learn from and some knowledge doesn't come from experience.
• People's environment influences what we experience and what is important to know, and these things are constantly changing. In this sense, consumer knowledge is a moving target. Some of us adapt better to changing patterns of information than others do, but all of us try to fit our new experiences with prior knowledge.
• Sometimes people find it easy to put things in familiar categories; in other cases the experience is so unique or the product so different that it doesn't really fit in and existing category.
• Sometimes we find it easy to put things in familiar categories. In other cases, the experience is so unique or the product so different that it doesn't really fit in an existing category.
• People also create unique groupings of things (people, objects, places, etc.) that serve a particular goal-goal-based categories. For example, a mother might have a category called "things for children to do on a rainy day," and a college student might have a category called "good places to eat close to campus." Conflicting goals and ambiguous (uncertain or unknown) goals change how we group objects and make choices. For instance, consumers sometimes use unusual, creative categories to help them resolve goal conflicts or clarify goals.
• Learning requires both forward and backward thinking. Sometimes we engage in backward reasoning to understand our actions, and in other situations, we look forward and anticipate likes and dislikes based on our previous experiences. Thus, actions are partly a response to our preferences-feeling and beliefs about what we like and dislike. But actions also help us identify and predict new preferences. Sometimes we have firm and stable preferences, but more often, we are comparing new alternatives with old favorites, or finding that because of our own changing circumstances, we require different things. We use context and other cues to help us guess what we will like and dislike.
• Here again, categories, concepts and the stories we build around them are important in how and what we describe about the past. In this sense, remembering is constructive. The past is filtered through our recent understandings to create and rework our social worlds. Telling stories helps consumers make sense of events and actions in their lives.
• Brain research confirms that when we remember a particular episode, the neurons that were active together during the episode are reactivated, recreating a representation of the event.
• Feelings and emotions are an important part of experience, learning, and knowledge. To disavow them as somehow "irrational" is a big mistake. Emotion and reason can't be separated. In fact, we can define emotion as the combination of a mental evaluative process (that can be very simple or very complex) with dispositional responses to that process that result in an emotional body state, but also result in additional mental changes.
• As we have observed in previous chapters, experience, learning, and knowledge are related to our self-concept, perceptions, motivations and involvement's, and, of course, to the cultures, social groups, and families in which we live our lives. What we experience, learn and know influences our attitudes and decisions, and also reflects our attitudes and decisions.

• Consumer experiences are at the heart of consumer behavior. Marketers need to remember that consumers buy products and services hoping they will contribute to how they (and others consumers they care about) experience life.
• Whether extraordinary or mundane, experience has an important impact on what consumers learn and remember. Positive experiences lead to repeat behaviors. Negative experiences may lead to avoidance behaviors.

1. The New Experience Economy
• Some industry experts argue that economic value now turns on more than a high quality product, or good service delivery, it turns on engaging consumers in a memorable way - offering them an experience, or even better, transforming them by guiding them through experiences.
• These experts argue that economic value increases as offerings move from commodities to transformations. In Chapter 3 we talked about how adventure tourism such as white-water river rafting is frequently viewed and valued as a transformational experience, that is, it changes how consumers think and feel about themselves and the world around them. Exhibit 12.1 illustrates this revised economic pyramid. Notice that when marketers shift the economic offering from commodities toward experiences and transformations they also alter the way they view consumers. Many aspects of the offering change along with this shifting perspective. For example, when offering experiences marketers are concerned with staging the experience--making if memorable and personal. When the offering is transformational the buyer (aspirant) is the product. The marketer only succeeds if the individual is changed. Many product and service promotions are organized around promising a transformation. A classic example would be fashion magazines that portray a "before" and "after," inferring that you too can be transformed.

The Economic Pyramid (50.0K)

• In many parts of the world, a great deal of effort goes into designing the best store layout, so that consumers' shopping experiences will be positive and rewarding. At the same time, Web designers attempt to construct Web pages so that consumer search experiences will be efficient and fun. Shopping experiences also include the mental and emotional states surrounding purchase events.
• For some product categories (e.g., a snack food) the consumption experience is over very quickly. Other consumption experiences stretch out long after the time of actual purchase. For instance, when consumers purchase some entertainment services such as a concert or a sporting event, then the allocation (and expenditure) of time is perhaps more important than the allocation of money. Many service experiences (e.g., taking a vacation, attending a concert) stretch out over a long period of time.
• Transformational experiences typically unfold over time and must be sustained through time. Losing weight, stopping smoking, changing personal patterns through therapy, all are potentially transforming but also arduous, effortful investments.
• As shown in Exhibit 12.2, experiences related to consumer behavior can be classified into four groups: a) anticipated consumption (including search behavior), b) the actual purchase of the good or service, c) consumption experiences, d) remembered consumption (experiences that are relived over a period of days or weeks or months), and/or retold to others.
Classification of Consumer Experiences (50.0K)
2. Anticipated Consumption
• Anticipated consumption experiences include prepurchase search that occurs in response to the activation of a consumption problem or desire.
• Anticipated consumption can also include thought, feelings, and sensory images that surround the upcoming event. Imagined consumption is an important element.
• Anticipated consumption may begin a long time before actual purchase. For example, many parents begin college funds for their children even before those children are born, and young boys in the U.S. start anticipating car purchases well in advance of when they are old enough to drive or rich enough to sustain car payments.
• Anticipated consumption is related to consumers' aspirations, which, in turn are based around their environment, knowledge and experiences. The relationship between anticipated consumption and consumer knowledge is important to pay attention to.
• Consider as an example the transitional economies of Eastern and Central Europe. Many consumers in these environments are experiencing an increasing aspiration gap - a disparity between the consumption level they earnestly desire and strive for and the level actually attainable. The explosion of media and consumer goods that promote a new consumption standard create disillusionment and frustration for many consumers who view these things as unattainable.
• Marketers can influence consumers by changing their aspirations or the perceived aspiration gap.
3. A Typology of Consumer Experiences
• Two key dimensions distinguish our experiences - level of skill and level of challenge. For instance, when skills and challenges are low, our experiences are boring. When skill levels are high and challenges are low, we have relaxing experiences.
• Consumer experiences are effective appeals to use in an ad campaign. From this perspective, Exhibit 12.3 provides a useful framework for listing the kinds of experiences that advertisers might want to use in their campaigns. For example, some ads show consumers how to escape boredom and apathy. Relaxation can be an effective appeal. The prospect of flying long distances on an aircraft may evoke hassles for some, or it may evoke boredom for others.
• When challenges are high and skill levels are moderate, we have arousing experiences. Learning is one example of such arousal. Our favorite activities are classified as flow experiences. As shown in Exhibit 12.3, flow results when both skills and challenges are at their maximum. This is what makes flow experiences our favorite activities. Some examples of flow experiences include the pilot of a test aircraft, a doctor performing surgery, a professor teaching a class, the process involved in making social contacts and forging intimate relationships, playing a video game, climbing a mountain, and participation in a professional conference. Remember a flow experience for one consumer may be boring or irritating to another consumer-it depends on their skills and challenges. When challenges and skills required are low, then negative human emotions result. For instance, apathy comes when challenges and skills are at their lowest levels. Worry comes even when skills are low and challenges are moderate. Boredom comes when skills are moderate and challenges are low (see Exhibit 12.3).

Flow A Combination of Challenge and Skill (50.0K)

• The activities and emotional states shown in Exhibit 12.3 could be used as appeals in advertising. For example, flow would make an effective advertising appeal for some kinds of brands. Look at the ad for Nike shown here. Tiger Wood's flowing figure, as he strikes the ball, evokes the flow concept.

This Nike Ad Uses a Flowing Figure to Evoke the Experience of Flow (50.0K)

• Only a small fraction of consumer experiences can be classified as flow activities. Nonetheless, flow activities are pivotal because they represent peak experiences. To a large extent, flow experiences may come to dominate leisure time.
• From a marketing perspective, it is difficult to under-estimate the importance of the experiences that consumers have with products and services.

• Consumers hold many everyday beliefs about the world and how it works. But how do consumers learn these rules about buying and consuming? In this section, we provide an overview of learning, learning experiences, and learning theories.

1. What is Learning?
• People know learning when we see it, but a precise definition is more difficult. It's actually a mysterious and challenging concept even for neuroscientists.
• Learning is complicated because it involves object definition and generalization in a world that is not pre-labeled by any a priori scheme. Moreover, consumers can learn, retain, and act on information via conscious and implicit learning processes that are hard to identify and poorly understood.
• We define consumer learning as connecting categories to behaviors that have adaptive value in terms of consumer goals. Fundamental to this definition is that learning is adaptive and determined by the value systems, desires, and needs of the learner. Also, of course, it depends on what the learner already knows. That is, new information is assessed in terms of existing beliefs and past experiences.
• Although learning plays a fundamental role in many consumer theories and models, it is seldom investigated directly. Only a few studies have looked at the basic ways in which consumers learn. That research suggests that we can think of consumers as generating guesses or hypotheses about the way the world works in order to make adaptive choices that move them toward their goals. Sometimes these guesses may be unconscious or implicit; sometimes they are so much a part of consumers' cultural background that the guesses are completely taken for granted.

A Simplified Model of Consumer Learning (50.0K)

• The model provided in Exhibit 12.4 suggests that as consumers are exposed to events that seem to require explanation they trigger a search from prior experiences and among existing beliefs to develop a hunch about what might be going on. Their exposure to evidence, encoding of evidence and integration of evidence with prior beliefs depends on their familiarity with other thing that they believe relate, their motivation to learn, and characteristics of the information environment. Encoding evidence is the process by which consumers select a word or visual image to represent a perceived object. Integration is how they relate that evidence to other information and beliefs. Both encoding and integration rely on learned cultural categories as well as individual experiences. How people encode and integrate information also depends on other factors such as gender and age.
• A few comments are appropriate. First, consumers only generate guesses when objects or events are unexpected, novel, or block goals. Much of the time consumers just apply already "good enough" learned rules to make decisions and take action. Second, previous experience can interfere with generating new guesses or recognizing new diagnostic evidence. Third, when consumers scan through what they know to decide what to do in a new situation, they often make guesses by drawing on their familiarity with unexpected domains. Marketers can't always determine inferences consumers will make to formulate guesses and achieve goals. Finally, the information environment can have a dramatic impact on consumers' exposure, encoding, and integration of evidence to accomplish goals.
2. Types of Learning
• Consumers can learn from description. This is a very efficient way to learn and includes listening to, observing, and remembering what other people tell us. Parents, teachers, books, friends, TV, billboards, magazines, sales representatives, Internet web sites, package labels, and instruction manuals are just a few of the ways that we learn by description.
• Through repetition, we learn lots of things almost by accident. This type of learning is referred to as incidental learning. In fact, advertising information may be most likely to influence consumers when they are not aware of its influence. Learning by description includes acquiring information from vicarious or indirect encounters. For marketers, advertising is a primary tool for teaching consumers and relies on learning by description. For example, advertisers use celebrity spokespersons in their campaigns to provide consumers with opportunities for vicarious learning. A cartoon character can also serve this purpose, as can an appealing advertising model who is not necessarily a well-known entity but with whom the consumer can identify.
• Consumers also learn from first-hand, direct experience. Learning from experience differs from indirect or vicarious leaning because of its interactive character, and because consumers tend to privilege conclusions drawn from experience. Experiences are easier to remember because they are more vivid and concrete, they are also more credible than someone else's reported experiences and are likely to be more involving and motivating. A paradox of experiential information is that while it is learned fast, it is also the most fragile, context-dependent and subject to distortion.
• It would be a mistake to think that experience provides a perfect match between action and consequence making it easy to learn what to do next time. Much experience is ambiguous.
• Some research has shown that consumers rely on the consumption experience when evaluation brand of the experience is unambiguous, but rely on prior opinions or advertising claims when the experience is ambiguous.
• In addition, it would be a mistake to think that experiences are recalled just the way they happened. For example, research has also shown consumers' recollections of product or service expeicnces can be influenced and shaped by marketing communications following the experiences. The mental procedures used in putting together a memory rely as much on constructive processes as on retrieval.
• Much of how we make sense of things happens after the fact, sometimes a long time after the fact. Consumers are very vulnerable to hindsight bias, the "I knew it all along" effect. After experiencing a product or service, consumers tend to falsely believe that they knew the outcomes in advance of their experience.
3. Behavior Learning Theories
• Two behavioral learning theories, typically reviewed at length in several other academic courses but briefly discussed here, are classical and operant conditioning.
• Classical and operant conditioning both take a "behaviorist" approach to learning. Under the behaviorist approach, consumers operate on the environment (e.g., people do things). In turn, consumers experience consequences from the environment (e.g., rewards, punishments, pairings of stimuli). These consequences determine the probabilities of future behavioral responses.
1. Classical Conditioning Theory
• Classical conditioning is a specific procedure that creates a learning environment, but other learning processes may operate simultaneous with this procedure. Classical conditioning became well known from the Russian psychologist, Ivan Pavlov. Pavlov is most famous for his experiments with dogs. When he administered meat powder to dogs, they would naturally salivate. Every time that he administered the powder, he would sound a bell. Through repetition, the dogs learned to associate the sound of the bell with the coming of food. Eventually, the dogs would salivate upon hearing the sound of the bell, even when the meat powder was not present. In this way, Pavlov took a neutral object (the bell) and, over time, associated it with a meaningful object (the meat powder). An important part of this procedure is tht the bell and the meat powder occur close together in time as opposed to far apart in time.
• The temporal contiguity principle states that stronger associations are learned when events occur close together in time as opposed to far apart in time. This principle has been used to explain why people spend more freely using credit cards than cash. Credit cards separate the joy of consuming from the pain of paying by at least 30 days, whereas with cash the costs and benefits occur close together.
• The classical conditioning procedure can be applied in a media or an advertising environment. An important feature of classical conditioning is that it does not require conscious attention or involvement of the audience. Consider the popular Steven Speilberg movie JAWS. In this film, the man-eating shark (presumable hungry for beachgoers) is paired with a signature piece of music. This pairing takes place repeatedly throughout the film. By the movie's end, the music itself elicits fear and anxiety. This happens even though the audience wasn't really paying attention to the music. This example is shown pictorially in Exhibit 12.5. Advertisers today try to accomplish the same purpose.
An Example of Classical Conditioning Steven Speilbergs Jaws (50.0K)
• Classical learning research helped generate early understanding of stimulus generalization. Stimulus generalization refers to the tendency of stimuli that are similar to evoke similar responses. That is, consumers make a leap, of sorts. They make a judgment that one stimulus is similar enough to another that it warrants a similar response. Pavlov's research drew our attention to the power of stimuli generalization.
• Marketers use stimulus generalization to devise branding and product strategies. These strategies include family branding, brand extensions, licensing, and look-alike packaging. Family branding is the practice of using a company name (or umbrella name) on a set of brands. For example, Heinz puts its name on catsup, canned tomatoes, mustard, pickles, and many other food products. Simarlily, Kellogg's is a family brand for cereals. However, within this family brand, there are recognized individual brand names, such as "Rice Krispies" and "Apple Jacks."Brand extension refers to the practice of using a pre-existing brand name to promote new products. The new product may be in the same category as the original brand, or it may be in a very different category. Licensing means lending an established brand name to a new venture. For example, Kellogg's could license its name to a toy manufacturer, who would then include small facsimiles of Kellogg's cereals as part of a child's cooking set. As the name implies, look-alike packaging means introducing a package that appears to be very similar to existing packages. The hope is that consumers will make an inference that the brand with the similar package will have all of the traits of the original brand, whose package was imitated. For all four of these strategies, (family branding, brand extensions, licensing, and look-alike packaging), the perceptual process of stimulus generalization is crucial. All four strategies depend upon the consumer perceiving a new stimulus to have very similar to an existing stimulus (that evokes positive response). Because of this perception, consumers will respond favorably to the new brand (the new stimulus).
2. Operant Conditioning
• Operant conditioning, also called instrumental conditioning occurs as consumers shape their behaviors to respond to rewards and punishments in the marketplace. Under operant conditioning, the frequency of occurrence of a behavior is modified by the consequences of the behavior. That is, frequency of behavior is conditioned by the extent of reinforcement associated with that behavior. Responses are made deliberately, as opposed to the involuntary responses illustrated by classical conditioning. Under operant conditioning, consumers' satisfaction with purchases serves to reinforce future behavioral responses in terms of repeat purchases. Under this framework, the stream of associations that occur during consumption (e.g., imagery, daydreams, and emotions) may also serve as important reward mechanisms.
• The American psychologist, B.F. Skinner, is the social scientist who did a lot of the early work to discover and support the operant conditioning model of learning. His original work used pigeons as subjects. He placed them in a "Skinner Box" where, among other things, the pigeons could peck (appropriate objects) to receive rewards. In some experiments, pigeons would learn to peck a lever multiple times in order to receive a reward (food). In other experiments, pigeons would be rewarded for pecking other objects. In contrast, the same kind of mental processes in humans are often available to conscious thought.
• Operant conditioning has several important implications for our understanding of consumer behavior. Three key components are discussed here - shaping, reinforcement, and reinforcement schedules.
• Shaping. Under shaping, the desired behavior is learned over time, as intermediate actions are rewarded. For example, a new retail store may offer several activities opening week for visitors, encouraging them to enter the store. Next, the retail store may encourage a purchase by offering a discount, encouraging visitors to buy.
• Reinforcement. Both positive reinforcement (the presence of reward) and negative reinforcement (the absence of punishment) strengthen or increase the probability of a target response. Marketers make use of many different rewards such as coupons, trading stamps, loyalty programs, rebates, and prizes. However, in some countries, some or all of these tactics are considered unfair marketing practice and prohibited. An example of both shaping and positive reinforcement that is widely used in the U.S. and parts of Europe (where it is legal) is the use of gifts offered in some cosmetic departments and describes in Consumer Chronicle 12.1. Learning occurs faster through continuous reinforcement, when a reward is given each and every time the response occurs, however partial reinforcement,where the reward is given only some of the time the response occurs, causes learning to persist for longer after the reinforcement is discontinued.

The Free Gift (50.0K)

• Punishment. Punishment weakens the probability of a target response. When consumers have a bad product or service experience they may feel punished for their product choice, they may explain this punishment in terms of the choice rule they used, saying "that's what happens when you buy the cheapest brand."

• Very few consumers' decisions are based just on the information in the environment. Almost all consumer decisions include some memory component. For example, seeing some brands may remind consumers of other brands or products that are then searched for. With regard to brand selection, although the package may contain lots of relevant information, consumers rarely examine this information, perhaps relying more on memory to make their decisions. In this section, we outline the very broad and fundamental topics of memory and knowledge.

1. What is Memory?
• A crucial piece in the puzzle of how and what we learn is memory. Memory begins as an internal experience: an image, a fragment of recalled conversation, a vivid scene. It travels outward and returns to the privacy of one's mind. People build up neutral pathways for memories and the more often a particular memory is invoked, the stronger that neural pathway becomes. Memory depends on a variety of neural activities that converge to create recollections. How and what we remember depends on a host of factors: our brain, the specific clue that triggers a particular search for memory, how old we are, how we took in the information in the first place, how much time has elapsed since the original experience, how frequently we have recalled the memory, and what we are doing and feeling at the moment of recall. These are just some of the factors that influence the quality and precision of a particular act of recollection.
• Recent years have brought great advances in what we know about memory. For example, we know that the neural mechanisms that lead to memory are very similar to the neural mechanisms used for imaging things. Research now shows that each time people say or imagine something from their past they are putting it together from bits and pieces that may have, until now, been stores separately.
• Research on cultural differences in how people organize information implies that how we think about what we are doing influences the process of remembering. In addition, cultural differences impact whether and how we recall the past. One study compared autobiographical narratives-- stories about the self-- of 4-6 year old Korean, Chinese, and U.S. youngsters. The research suggested that although all the children were equivalent in their overall memory capacity, they differed in what they recalled.
2. The Social Nature of Memory
• The more we know about the physiological and social bases for memory the more we are left in awe and bewilderment when trying to explain our own live, shifting and vivid recollections. Memory must be understood as a kind of dynamic interplay between inner and outer settings. Memories are shaped by the complex and potent settings that involve other people. Moreover, memories are both private and public.

Doonsbury Cartoon (50.0K)

• People talk about collective and shared memories. Many times, people feel vividly familiar with events they never actually experienced. They are able to construct an image, scene, or constellation of information that serves as a kind of vicarious memory. These vicarious memories are an important source of individual meaning as well as cultural life. The cartoon shown in Exhibit 12.6 illustrates vicarious memory of activities common to a time. Moreover, even when people share the common experience of an event they do so from their own particular reference point. Consumer Chronicles 12.2 illustrates that these accounts of what happened may be at odds with a formal record of what happened.

British Psychologists Try to Remember (50.0K)

• As people tell and trade stories around an event or a time in history, they communicate what is idiosyncratic and private, but they also exchange and build on shared versions of what happened. Consumers' idiosyncratic reference points can provide a richer and more complex picture of an event. For example, one study asked husbands and wives to remember long lists of information. In each list, some of the information drew on the woman's experience and some drew on the man's expertise. The couple acted as a team, each spontaneously taking responsibility for the terms they would most easily remember. This type of collaborative remembering is referred to as transactional memory. In trying to accomplish household consumption tasks (preparing meals, grocery shopping, getting the children to soccer practice) it is quite likely that collaborative remembering plays a significant role.
• The influence of others on memory is startlingly powerful. In fact, there are now a number of studies suggesting that people can be led by others to remember what they have not really experienced. In everyday consumer life, beyond the courtroom or therapy session, remembering and reminiscing are consequential, influencing how others see us, our relationship with others, others' behavior including the memories they share, and the stories others share yet with others.
3. Is Memory like a Computer?
• Many people use a computer metaphor to describe the sequence involved in remembering. Some useful ideas can be gained from using the computer metaphor. Using this metaphor, memory is viewed as occurring in three stages: input, storage, and output.
1. Input
• The form and organization of the input of an experience has a strong impact on how, how long, and how well you recall something. Experiences can be input as words, sensations, images, or stories.
• Experiences can be organized into groups or as a random list. For example, one of the most primary and natural ways to organize and retain an experience is in the form of sequences or scripts. Consumer learn many scripts at an early age, such as a script for grocery shopping, going to a fast-food restaurant, eating dinner at home and so on. These scripts affect their expectations and the way they make choices and behave. A script is a special form of schema-a schema about how to do things. Consumers have a variety of other schemas, stored networks of associations about objects or topics.
• If incoming information can be associated with knowledge that is already in memory, then the new information has a better chance of being retained. To cite a marketing example, it is beneficial if the brand name is linked to the physical characteristics of the product category. For instance, the name of the communications company, Bell South, may remind many consumers about the bell that rings to signal that someone should answer the telephone.
2. Storage and Output
• After input comes storage. Scientists still don't know exactly what it means to say that a memory stays in the brain. This remains a black box in memory research. Most of what we know about storage is inferred from what we have learned about output or "retrieval." However, we also know that what is available in memory is different from what is accessible from memory. Memories are not like copies of experiences "on deposit" in some sort of memory bank. Rather, memories are constructed at the time of withdrawal. That is, memories are "reconstructed," in a split second. At the time of recall, we use logical inferences to fill in missing details.
• Memory can be differentiated in terms of short-term and long-term memories. Short-term memory is very short indeed-a few minutes at most, and storage capacity for short-term memory is very small. A significant amount of research suggests that consumers can only hold an average of seven units or chucks of information (plus or minus two) in short-term memory. In fact, that's why U.S. telephone numbers are seven digits long. Similarly, advertisements might summarize or chunk a variety of different pieces of information to facilitate retrieval. Commercials are most effective when visual and verbal cues work together.
• Memory researchers distinguish a particular category of short-term memories called sensory memories. This information is stored only a few seconds and doesn't require us to pay attention to it or to try to store it.
• Anything that is retained for more than a few minutes becomes long-term memory. Researchers have identified two different types of long-term memories: semantic and episodic. Semantic memory refers to things you recall without any sense of when you learned them. Semantic memory is often thought of as knowledge. Consumer knowledge is one type of semantic memory that includes the structure and content of information related to aspects of purchase and consumption. Consumers have vast amounts of information about brands, market environments, consumption experiences, and so on that have been acquired over time, often without knowing when or how.
• Consumer knowledge includes many different types of information including: 1) knowledge about terminology (e.g., the consumer knows what "partially hydrogenated vegetable shortening" means on a package); 2) knowledge about specific brands and products (e.g., "Pert shampoo is for bouncin' and behavin' hair."); and 3) knowledge about the rules to use when evaluating a brand (e.g., "never buy pastries that contain partially hydrogenated vegetable shortening").
• One important feature of knowledge structures is that they enable a consumer to perceive differences in the features of a stimulus object and to make fine distinctions between that object and others. This ability to make distinctions is called cognitive differentiation.
• Consumers also have episodic memory, memories that come tagged with information about when and where they happened. Because episodic memory focuses on things that happened to us, it is sometimes termed autobiographical memory. In real life, many of consumers' memories are a blend of semantic and episodic memory.
• One type of knowledge that marketers are especially interested in is consumer thoughts about brands. Brand image is the perceptions about a brand as reflected by the associations held in consumer memory. Consumers have a variety of different associations with brands.
• For both semantic and episodic memories, the question arises of what is remembered and what is not. We may remember certain things and not others for a variety of reasons including the mood we're in when we recall them, their uniqueness, or because we have rehearsed them a number of times. Several characteristics of consumers influence what they recall. For example, being in a positive mood can enhance recall both by encouraging elaboration and by affecting rehearsal of information. However, mood congruency is also important so if we are in a negative mood we are more likely to recall negative information. Expertise also affects what we recall. Even the existence of categories makes it easier to encode new information.
• Of course, marketers are very interested in enhancing consumer memory for their own products and services and may be interested in interfering with consumer memory for competitive products and services. Marketers are also very interested in learning and measuring what consumers remember. Consumers recall using aided recall. Here, consumers are given cues to recall slogans and brand names. Free recall exists when consumers can recall something from memory without any cues to help.
4. Information Overload and Simplifying Strategies
• There is information overload in many consumer environments. There is so much that we have to know to live our daily lives effectively. We are continually asked to make choices - choices about important life events (e.g., what college to attend), choices about what products and brands to buy, choices about when to stop one activity and start another. In brief, consumers are overwhelmed with information and overwhelmed with choices. There are coping strategies that consumers can use to help them access relevant information.
• Some of these are related to memory constraints that can sometimes lead consumers to make less than optimal decisions. However, these decision shortcuts are also adaptive in many situations. Another important coping strategy for dealing with information overload involves the use of technology to sort and categorize information. We will also touch on this topic in a slightly different way in Chapter 15 when we talk about interpersonal influence.
1. Memory Constraints
• Memory related constraints have a strong impact on judgment and decision-making. In this section, we outline a few of the ways that memory influences consumer decision-making.
• Much of the research on memory constraints has emphasized how consumers are led astray in their beliefs and behaviors. Nevertheless, many of these memory effects are also highly adaptive. For example, research shows that most of us overestimate our ability to achieve a goal, but our environment helps motivate us and increases our chances of succeeding. In many cases, memory distortions are regulating mechanisms that help us get through the day.

Context Effects

• Consumers making evaluations and decisions use pieces of information, objects, and other issues that happen to be present at the time even when they are irrelevant to the judgment task. This is termed context effects. Context effects relate to what information is gathered. The most common context effects are contrast, assimilation, and framing. A contrast effect occurs when consumer judgment is changed because of a contextual reference point. Real estate agents have learned that by first showing a not-so-nice house at the lower end of a consumer's price range, and then a house at the high end of consumer's price range, they can get the consumer to shift her reference point toward the high end of a price range. The assimilation effect is almost the opposite. In this case, when two very similar objects or issues are compared, perceived similarity tends to be greater than actual similarity. A framing effects is a shift in judgment that occurs when a consumer focuses on different possible reference points. Many charities and not-for-profit organizations attempt to take advantage of setting different reference points. Research has shown that choices differ dramatically when the problem is framed in terms of losses instead of framed as gains (even if the net value is the same). We will talk more about this particular framing effect, the prospect theory, in Chapter 13.
• Consumer's' judgments are biased not only by what information is gathered and used as relevant, but also by simplifying strategies consumers' use to reduce the effort required to make an evaluation or decision. These simplifying strategies are referred to as cognitive heuristics. Four common ones are representativeness, availability, simulation, and anchor-and-adjust.
• The representativeness heuristic has to do with assigning characteristics to an object based on similarity to another object. In many situations, consumers guess about the performance or characteristics of objects, people, situations, consumer's guess about the similarity to what the consumers already know. Of course, this is one of the reasons that brand extensions can be so successful. In addition to occasionally leading consumers astray, this kind of learning by analogy is also an important tool for understanding and dealing with unfamiliar things. We can think of analogical learning as using a familiar domain to understand a novel domain. E-commerce companies rely heavily on analogical learning-just flip through any e-company or e-shopping magazine.
• The availability heuristic has to do with making predictions by using what comes easily to mind from memory. Unfortunately, memories are influenced by a lot more than absolute frequency of particular events. For example, events that have occurred more recently are more memorable than those that occurred long ago. All of these memory influences, and more, can lead consumers to erroneous predictions.
• The simulation heuristic relates to the fact that simply imagining an event increases the perception that the event will occur. Good stories, or convincing imagery, can be powerful in leading consumers to believe in the possibility of an event or a sequence of events. However, the actual possibility of such an event or sequence of events may be relatively remote. Recall what you learned in statistics about conjunctive probabilities, even if two events are relatively likely (.5), the likelihood of their joint occurrence is much lower (.25). Consumers often play out consumption events in their mind, rehearsing how things will be, and they are quite likely to be disappointed, because it relies on a sequence of events unfolding exactly as planned.
• The anchor-and-adjust heuristic has to do with using an initial estimate and then modifying it to account for a different, unknown event. Again, it is easy to see how this strategy is related to fundamental memory processes of searching through memory for something similar to the target problem and then adjusting to try to take into account the differences.
2. Partnering with Technology
• As the information accelerates, life doesn't seem to get any simpler. Often, it seems, technology makes our life more complicated rather than making it simpler. As in many areas of modern life, we may turn to technology to solve the problem. A pressing need is to provide consumers with useful tools to help them navigate through the morass of information that has become available through satellite, cable, and the World Wide Web. Ideas that a short number of years ago were just possibilities are rapidly becoming realities. One alternative for information weary consumers is a "knowbot," a type of robot. A knowbot may serve to screen out and organize the flood of information that bombards us every day. Thus, it has the potential to reduce information overload. The knowbot serves as a buffer between the consumer and the commercial world. Advertisers will have to design commercials to appeal to mechanical intermediaries.
• Of course, such screening already takes place on the World Wide Web when consumers use search engines. Web page designers try to include key words that will be popular when consumers conduct a particular search.
• Researchers argue that consumers need help on at least three fronts: formulating preferences, finding and organizing relevant information, and evaluating attractive alternatives and choosing among them. Good Practice 12.3 summarizes the goals of electronic agents.
Goals of an Electronic Agent (50.0K)