Key Psychological Processes

by

Anoop Kumar Gupta MAIMS

Psychological Processes
1. The starting point for understanding consumer behavior is the stimulusresponse model. 2. Marketing and environmental stimuli enter the consumer's consciousness. A set of psychological processes combine with certain consumer characteristics to result in decision processes and purchase decisions. 3. The marketer's task is to understand what happens in the consumer's consciousness between the arrival of the outside marketing stimuli and the ultimate purchase decisions.

Stimulus-Response Model

Model of buying behavior

Marketing Stimuli
Product Price Place Promotion

Other Stimuli
Economic Political Cultural

Buyer Black Box

Buyer Buyer Characte Decision ristics Process

Buyers Responses
Product Choice Brand Choice Dealer Choice Purchase Timing Purchase Amount

Technological

Factors influencing behavior

Psychological Processes
Four key psychological processes:

1) Motivation 2) Perception 3) Learning 4) Memory

fundamentally influence consumer responses to the various marketing stimuli.

1. Motivation
1. A person has many needs at any given time. Some needs are biogenic; they arise from physiological states of tension such as hunger, thirst, or discomfort. Other needs are psychogenic; they arise from psychological states of tension such as the need for recognition, esteem, or belonging. A need becomes a motive when it is aroused to a sufficient level of intensity. A motive is a need that is sufficiently pressing to drive the person to act. 2. Three of the best-known theories of human motivationthose of Sigmund Freud, Abraham Maslow, and Frederick Herzbergcarry quite different implications for consumer analysis and marketing strategy.

One of the most fundamental questions that companies must answer about consumer behavior is, Why do people buy our product? Answering this question requires understanding consumer motivation.

Consumer Motivation
It represents the drive to satisfy both physiological and psychological needs through product purchase and consumption Gives insights into why people buy certain products

Stems from consumer needs: industries have been built around basic human needs

Model of the Motivation Process

Learning Needs wants, and desires Goal or need fulfillment

Tension

Drive

Behavior

Cognitive processes

Tension reduction

Freud Theory
1. Freud assumed that the psychological forces shaping people's behavior are largely unconscious, and that a person cannot fully understand his or her own motivations. 2. When a person examines specific brands, he or she will react not only to their stated capabilities, but also to other, less conscious cues. Shape, size, weight, material, color, and brand name can all trigger certain associations and emotions. 3. Motivation researchers often collect "in-depth interviews" with a few dozen consumers to uncover deeper motives triggered by a product. They use various projective techniques such as word association, sentence completion, picture interpretation, and role playing.

Maslow's Theory
1. Abraham Maslow sought to explain why people are driven by particular needs at particular times. 2. Why does one person spend considerable time and energy on personal safety and another on pursuing the high opinion of others? Maslow's answer is that human needs are arranged in a hierarchy, from the most pressing to the least pressing. 3. In order of importance, they are: 1. physiological needs, 2. safety needs, 3. social needs, 4. esteem needs 5. self-actualization needs.

Maslow's Hierarchy of Needs

Maslow's Theory
1. People will try to satisfy their most important needs first. When a person succeeds in satisfying an important need, he or she will then try to satisfy the next-most-important need. 2. For example, a starving man (need 1) will not take an interest in the latest happenings in the art world (need 5), nor in how he is viewed by others (need 3 or 4), nor even in whether he is breathing clean air (need 2); but when he has enough food and water, the next-most-important need will become salient. 3. Maslow's theory helps marketers understand how various products fit into the plans, goals, and lives of consumers.

Herzberg's Theory
1. Frederick Herzberg developed a two-factor theory that distinguishes: 1) Dissatisfiers (factors that cause dissatisfaction) and 2) Satisfiers (factors that cause satisfaction). 2. The absence of dissatisfiers is not enough; satisfiers must be present to motivate a purchase. For example, a computer that does not come with a warranty would be a dissatisfier. Yet the presence of a product warranty would not act as a satisfier or motivator of a purchase, because it is not a source of intrinsic satisfaction. Ease of use would be a satisfier.

Herzberg's Theory
1. Herzberg's theory has two implications. 2. First, sellers should do their best to avoid dissatisfiers (for example, a poor training manual or a poor service policy). Although these things will not sell a product, they might easily un-sell it. 3. Second, the seller should identify the major satisfiers or motivators of purchase in the market and then supply them. These satisfiers will make the major difference as to which brand the customer buys.

2. Perception
1. The process by which an individual selects, organizes, and interprets stimuli into a meaningful and coherent picture of the world 2. How we see the world around us 3. It is a highly individual process based on each persons needs, values and expectations

2. Perception
1. A motivated person is ready to act. How the person acts is influenced by his or her perception of the situation. 2. Two people with the same motivation and in the same situation may act quite differently because they perceive the situation differently. 3. Why do people perceive the same situation differently? 4. All of us learn by the flow of information through our five senses: sight, hearing, smell, touch and taste. However, each of us receives, organizes and interprets this sensory information in an individual way. Thus perception is the process by which people select, organize and interpret information to form a meaningful picture of the world.

2. Perception
In marketing, perceptions are more important than the reality, as it is perceptions that will affect consumers' actual behavior. People can form different perceptions of the same stimulus because of three perceptual processes: 1. Selective Attention 2. Selective Distortion 3. Selective Retention

Selective Attention
1. It has been estimated that the average person may be exposed to over 1,500 ads or brand communications a day. Because a person cannot possibly attend to all of these, most stimuli will be screened outa process called selective attention. 2. Selective attention means that marketers have to work hard to attract consumers notice. The real challenge is to explain which stimuli people will notice.

Selective Attention
Here are some findings from various studies and research : 1. People are more likely to notice stimuli that relate to a current need. A person who is motivated to buy a computer will notice computer ads; he or she will be less likely to notice DVD ads. 2. People are more likely to notice stimuli that they anticipate. You are more likely to notice computers than radios in a computer store because you do not expect the store to carry radios. 3. People are more likely to notice stimuli whose deviations are large in relation to the normal size of the stimuli. You are more likely to notice an ad offering $100 off the list price of a computer than one offering $5 off. Although people screen out much of the surrounding stimuli, they are influenced by unexpected stimuli, such as sudden offers in the mail, over the phone, or from a salesperson. 4. Marketers may attempt to promote their offers intrusively to bypass selective attention filters.

Selective Distortion
1. Even noticed stimuli do not always come across in the way the senders intended. 2. Selective distortion is the tendency to interpret information in a way that will fit our preconceptions. Consumers will often distort information to be consistent with prior brand and product beliefs. 3. A stark demonstration of the power of consumer brand beliefs is the typical result of product sampling tests. In "blind" taste tests, one group of consumers samples a product without knowing which brand it is, whereas another group of consumers samples the product knowing which brand it is. Invariably, differences arise in the opinions of the two groups despite the fact that the two groups are literally consuming exactly the same product]

Selective Distortion
1. When consumers report different opinions between branded and unbranded versions of identical products, it must be the case that the brand and product beliefs, created by whatever means (e.g., past experiences, marketing activity for the brand, etc.), have somehow changed their product perceptions. Examples of branded differences can be found with virtually every type of product. 2. For example, one study found that consumers were equally split in their preference for Diet Coke versus Diet Pepsi when tasting both on a blind basis. When tasting the branded versions, however, consumers preferred Diet Coke by 65 percent and Diet Pepsi by only 23 percent (with the remainder seeing no difference).

Selective Distortion Selective distortion can work to the advantage of marketers with strong brands when consumers distort neutral or ambiguous brand information to make it more positive. In other words, beer may seem to taste better, a car may seem to drive more smoothly, the wait in a bank line may seem shorter, and so on, depending on the particular brands involved.

Selective Retention
1. People will fail to register much information to which they are exposed in memory, but will tend to retain information that supports their attitudes and beliefs. Because of selective retention, we are likely to remember good points about a product we like and forget good points about competing products. Selective retention again works to the advantage of strong brands. It also explains why marketers need to use repetition in sending messages to their target marketto make sure their message is not overlooked.

3. Learning
When people act, they learn. Learning involves changes in an individual's behavior arising from experience. Most human behavior is learned. Learning theorists believe that learning is produced through the interplay of drives, stimuli, cues, responses, and reinforcement. A drive is a strong internal stimulus impelling action. Cues are minor stimuli that determine when, where, and how a person responds. Suppose you buy a Dell computer. If your experience is rewarding, your response to computers and Dell will be positively reinforced. Later on, when you want to buy a printer, you may assume that because Dell makes good computers, Dell also makes good printers. In other words, you generalize your response to similar stimuli.

3. Learning
A countertendency to generalization is discrimination. Discrimination means that the person has learned to recognize differences in sets of similar stimuli and can adjust responses accordingly. Learning theory teaches marketers that they can build demand for a product by associating it with strong drives, using motivating cues, and providing positive reinforcement. A new company can enter the market by appealing to the same drives that competitors use and by providing similar cue configurations, because buyers are more likely to transfer loyalty to similar brands (generalization); or the company might design its brand to appeal to a different set of drives and offer strong cue inducements to switch (discrimination).

Memory
1. All the information and experiences individuals encounter as they go through life can end up in their long-term memory. 2. Cognitive psychologists distinguish between short-term memory (STM)a temporary repository of informationand long-term memory (LTM)a more permanent repository. 3. Memory encoding refers to how and where information gets into memory. Memory encoding can be characterized according to the amount or quantity of processing that information receives at encoding (i.e., how much a person thinks about the information) and the nature or quality of processing that information receives at encoding (i.e., the manner in which a person thinks about the information). 4. Memory retrieval -refers to how information gets out of memory.

Understanding Consumer Behavior

1. 2. 3. 4. Who buys our product or service? Who makes the decision to buy the product? Who influences the decision to buy the product? How is the purchase decision made? Who assumes what role? 5. What does the customer buy? What needs must be satisfied? 6. Why do customers buy a particular brand? 7. Where do they go or look to buy the product or service? 8. When do they buy? Any seasonality factors? 9. How is our product perceived by customers? 10. What are customers' attitudes toward our product? 11. What social factors might influence the purchase decision? 12. Do customers' lifestyles influence their decisions? 13. How do personal or demographic factors influence the purchase decision?

Successive Sets Involved in Consumer Decision Making

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