1. Information Processing: Part I MKT 750 Professor West

2. Overview Models & Managerial Implications Prior Need/Opportunity Post Beliefs Recognition Search Evaluation Choice Choice Fishbein Attitude Models Satisfaction & Retention Awareness & Availability Decision Rules

3. What’s to come? How knowledge is acquired and used Information Processing Memory (storage & retrieval) Managerial Implications Brands Pricing

4. Consumer Information Processing Stimuli Exposure Attention Comprehension Acceptance Retention Purchase

5. McGuire’s Model for Advertising Stimuli Exposure p(e)~p(e) Attentionp(a)~p(a) Comprehensionp(c)~p(c) Acceptancep(y) ~p(y) Retentionp(r)~p(r) Probability of purchase = f{p(e)  p(a)  p(c)  p(y)  p(r)}

6. Assume p=.8 at each level: Stimuli Exposure p(e)~p(e) 80 Attentionp(a)~p(a) 64 Comprehensionp(c)~p(c) 51 Acceptancep(y) ~p(y) 41 Retentionp(r)~p(r) 33 Probability of purchase < 33%

7. Gaining Exposure This occurs when there is physical proximity to a stimulus Message exposure: Vehicles (media: radio, TV, newspapers, magazines, internet) Consumers deliberately try to avoid our attempts to interact with them (selective exposure): Advertising, Direct mail, Telemarketing

8. Gaining Exposure What’s a marketer to do? Make your message involving “Brewing romance” campaign Product exposure: Distribution & Visibility Nontraditional vehicles: Elevators, Airports, Buses BMW Z3 Campaign

9. Case Study: BMW Z3 A nontraditional product launch

10. Emotional Decision Making Visibility/Exposure “Buzz” Word of Mouth Missionary Advocacy Virtuous Cycle of Excitement for the Brand Word-of-Mouth Infatuation Sales/Purchase

11. Emotional Decision Making Desired End-State: Purchase Possible End-State: Brand forgotten Time Phase IPhase II Generating excitement, buzz, visibility Point of “infatuation” Excitement  

12. Overexposure Habituation When a stimulus becomes familiar it loses it’s attention getting power Ads lose half their effectiveness after accumulating 1,000 GRPs Products are less attractive when everyone else owns one

13. Overexposure Avoid overexposure through Limited availability (scarcity) Harry Potter Use different ad executions carrying the same message Absolut Vodka

14. Turning Exposure Into Attention Attention can occur when there is activation of one or more of our five senses. Each of our sensory receptors has an activation threshold Weber’s Law: JND The amount of change necessary to be noticed is systematically related to the intensity of the original stimulus

15. Pre-attentive Processing Subliminal Messages Vicary’s claimed a 58% sales increase when “Eat Popcorn” and 18% sales increase when “Drink Coke” were embedding in a message for 1/3000 of a second. The message “I am honest. I won’t steal.” is broadcast in more than 1,000 stores in the US to prevent shoplifting.

16. Pre-attentive Processing Findings: Increased preference for previously seen information (Schacter 1987) Attitude toward an ad, and brand are more favorable when unconsciously processed than unfamiliar (Shapiro & Krishnan 2001)

17. Pre-attentive Processing Findings: When primed with words related to rudeness versus politeness, those primed with rudeness were more likely to interrupt a conversation. When primed with words related to the elderly, subjects walked more slowly from one room to another and recalled fewer details of the room they had been in (Bargh & Chartrand 1999).

18. Attention This refers to the conscious allocation of processing capacity to a stimulus. Voluntary Attention– Occurs when a stimulus is in line with current goals or needs Such attention is selective due to the plethora of messages we are exposed to.

19. Selective Attention This ad is likely to attract mothers with small children and it reminds them of their special dental needs.

20. Attention Involuntary Attention – Occurs due to built in “novelty monitoring” Evolutionary hypothesis – survival was best insured by attending to unusual events in the environment Size, Color, Contrast, Motion are noticed Appeals to our hedonic side (food & sex) are also noticed

21. Examples: Novelty

22. Examples: Color

24. Examples: Contrast

25. Examples - Motion

27. Examples: Size

28. Examples: Isolation

29. Examples: The Surprise Factor VW Commercial

30. Is Getting Attention Enough? Attention may be short lived You have to use attention well once you have it Attention should be used in the service of building the brand, or attaining other strategic goals

31. Comprehension Refers to the meaning we assign to a sensory stimulus The most crucial process in CB because… What consumers perceive determines their actions! Perceptions are a reflection of our attitudes and preferences

32. Comprehension What is perceived is not necessarily truth Colas - 70% confuse Pepsi and Coke Beer & Wine - blind taste test results diverge from labeled Coffee - over 50% couldn’t distinguish best from worst, or regular from instant (Consumer Reports)

33. Comprehension Perceptions are often the heart of marketing issues/problems. Olay – P&G faced issues with “Oil of Olay” being perceived as oily and old

34. Comprehension Gestalt Principles: Closure – we have a tendency to complete a figure, or fill in the gaps Processing effort – the effort devoted to interpreting a stimulus leads to better comprehension and memory Figure/Ground – perceptions differ depending upon what the individual sees as figure (dominant) versus ground (background).

35. Illustrations of Closure

37. Summary Familiarity breeds liking while tedium invites argumentation and criticism Use attention well (to build your brand) once you have it, or it will be short lived Advertising is often used to set expectations which influence our experiences A brand’s message must remain the “figure” and shouldn’t be overshadowed by other elements Exposure Attention Comprehension

38. Assignment Read Chapters 9, 14 & 16 Be sure to sign up for a team meeting Keep up the work on your project!