Memory BA Fall 2000

What do we know about the general properties of memory? n Memory structure – Short-term (working) memory – Long-term memory – External memory – Declarative vs. procedural n Memory is constructive - e.g., eyewitness testimony, recall of ad sponsorship (Energizer bunny)

Hot New Research I - is consumer memory reconstructive? (Kathryn A. Braun, “Postexperience Advertising Effects on Consumer Memory,” Journal of Consumer Research, 1999, 25, ) n Braun argues that memory is often reconstructive - that is, people reconstruct the past based upon fragments of the past and current salient information. Thus, we may remember the past differently than it “really” was. This can affect not only eyewitness testimony or “false” memories, but memories for consumer experiences. In particular, Braun argues that current ads can influence the way we remember a previous product experience! n Braun gives different groups of people a sample of a “new” orange juice that is either bad (doctored), medium, or good based on pilot testing. Some of the people later are exposed to a favorable ad for the new juice. n People are then given five samples of juice and asked to identify which one matched the one they had previously tasted. People who saw the ad systematically rate their previous taste higher (that is, they pick a “matching” juice that is better in taste than the juice they actually tasted). Thus, current ads can influence the way we recall previous product experiences.

Hot New Research II - can ads change memory for the past? (Kathryn A. Braun, Rhiannon Ellis, and Elizabeth F. Loftus, “Can Advertising Change Memory for the Past?,” Unpublished working paper, 2000) n Braun and her colleagues investigate whether showing people ads with autobiographical references can cause people to misremember childhood experiences. n In one study, consumers are shown ads for Disney suggesting that they shook hands with Mickey Mouse as a child. The ad increased reports that such an event had actually occurred to them, relative to a control group. n In another study, ads suggesting impossible events (e.g., shaking hands with Bugs Bunny at Disney) led to increased reports that such an event had occurred. n The implication is that memory for even one’s own autobiography is potentially pliable and reconstructive!

What are some of the most important memory issues for consumer behavior? n Use of recall vs. recognition – Memory cues – Differences in children’s preferences – Ad diagnostics n Visual vs. verbal memory n Autobiographical memory (next slide) n Music and memory (following slide) – Jingles – Effects

Why are autobiographical memories special? n Emotion-laden n Our research shows autobiographical memories lead to more feelings, more favorable attitudes (but need to be linked to the product) n Nostalgia (e.g., Necco)

What role does music play in ads? n Jingles are extremely memorable n Music can make ad more memorable, increase attitude toward the ad, increase feelings, decrease skeptical reactions, but distract from the message (figure-ground issues) n Old songs in ads encourage ties to prior experiences, emotions - like autobiographical memory, need to link to product

Decision Making BA Fall 2000

What are the important stages in consumer decision making? n How do consumers recognize there is a problem? n How much do consumers search for information? – Costs vs. benefits – Effects of the internet on search costs and competition – Examining detailed search patterns and designing web sites n How do consumers evaluate their alternatives? n What do consumers learn from their choices?

What are important concepts for understanding consumers' choices? n Consumers' choices are based on their subjective perceptions, which may not be complete for all brands n Consumers have limited processing resources and hence simplify n Consumers' choices are constructive and contingent n People's preferences are also constructive – Predictions of future preferences, consumption, and desire for variety not always accurate - durability bias, immune neglect – Evaluation of experiences – Contingent valuation

What affects consumers' choices? n Context matters - what is salient, what options are available, etc. (Simonson) n Choice goals approach (accuracy, effort, avoid negative emotion, justification) n Number of alternatives (elimination strategies - mutual funds example) n Format (next slide) n Time pressure - coping strategies n Context - asymmetric dominance, added features, separate evaluations vs. comparisons n Framing and loss aversion n Emotion (e.g., caregiver tradeoffs)

How can the way information is presented be used to influence choices? n People often process information the way it is presented, without transforming it (concreteness) n Structure information so that the kind of processing you want is easier – Unit prices – Brand comparisons – Warnings and usage instructions (P&G Helidac instructions) – Using default options

Hot New Research I - what are the effects of the type of default alternative? (C. Whan Park, Sung Youl Jun, and Deborah J. MacInnis, “Choosing What I Want Versus Rejecting What I Do Not Want: An Application of Decision Framing to Product Option Choice Decisions,” Journal of Marketing Research, 2000, 37, ) n Park et al. examine two ways of setting up a default alternative: a loaded model that you subtract from vs. a base model that you add to. n Using a loaded model default which consumers then adjust to fit their preferences yields higher prices paid and more options added for the final alternative selected. n This is an instance of anchoring and adjustment - consumers anchor on the default and don’t adjust enough. It also shows the effects of loss aversion. n The higher initial list price for a loaded default may deter people from initially considering the brand, however.

How can decision aids be used to help consumers make choices? n Consumers may delegate some decisions (e.g., using agents on the net). Giving information to the agent may be an issue. n If consumers delegate to an expert for a high-stakes decision, they want the expert to use compensatory strategies using tradeoffs n Issues of trust are critical in using agents (reputation managers, epinions.com) n Some decision aids use elimination strategies (e.g., for cell phones on point.com or for mutual funds) n What would an ideal consumer choice aid look like on the net? Existing aids use cutoffs, weighted scores, comparison matrices.

Hot New Research II - how can we help consumers shop online? (Gerald Häubl and Valerie Trifts, “Consumer Decision Making in Online Shopping Environments: The Effects of Interactive Decision Aids,” Marketing Science, 2000, 19, 4-21) n Häubl and Trifts examine the use of interactive decision aids. Consumers often make choices in phases, first eliminating options to get to the most promising alternatives, then comparing those alternatives in more detail. n To help in eliminating options, they employ a recommendation agent using consumers’ attribute importance weights and minimum acceptable attribute levels to provide a personalized list of recommended alternatives. The length of the list can be controlled. n They then display a comparison matrix containing the attribute information for the recommended alternatives that can be sorted on any attribute. n In an experiment, they manipulate whether the recommendation agent and comparison matrix are available to consumers or not. They find that the presence of these aids leads to smaller consideration sets of higher quality options and improves the quality of the purchase decision. Thus, the decision aids enable consumers to make better decisions with less effort.

If preferences are constructive and contingent, how do we measure them? n When prediction is the goal, context match (duplicate major features of the task environment such as format, time pressure, the context of competitive options) n When design is the goal (e.g., for public policy) – Consider multiple options, objectives – Design formats carefully – Encourage tradeoffs – Use multiple methods, pretests and manipulation checks, sensitivity analysis n Really new products combine design, prediction