CHAPTER III: INTRODUCTION TO AFFECT AND COGNITION

CONSUMER BEHAVIOUR AND MARKETING STRATEGY

by

J. Paul Peter & Jerry C. Olson

Fifth Edition

Irwin McGrawhill Companies

Copyright 1999

United States
CHAPTER III: INTRODUCTION TO AFFECT AND COGNITION

“Everyday” Affect and Cognition: Greg Macklin Goes Shopping

Along with million of other consumers, Greg Macklin makes a weekly trip to a local supermarket to buy groceries. On this sunny Saturday morning, Greg drives to the Giant supermarket with his three years old daughter, Angela. As he walks through the front doors of the store, Greg enters one the most complex information environments a consumer can face.

A Supermarket is loaded with information. The average American grocery store stocks some 10,000 items and some very large stores may carry as many as 20,000. Large supermarkets offer many alternatives in each product category. For instance, one large store offers 18 brands of mustard in a variety of sizes. Moreover, most product packages contain lots of information. The average package of breakfast cereal, for example contains some 250 individual pieces of international.

Despite this complexity, Greg (like most of us) feels no particular uneasiness or anxiety about grocery shopping. He isn’t particularly excited either, because this is familiar territory. During the next 45 minutes (the average time consumers spend in store on a major shopping trip), Greg will process a great deal of information. He will make numerous decisions during the time it takes to fill his grocery cart. Most of his choices will be made easily and quickly seemingly with little effort. Some choices through will involve noticeable cognition (thinking) and may require a few seconds. And a few of his choices may require substantial cognitive processing and several seconds, perhaps even minutes. How does Greg Macklin move through this complex informational environment so easily, buying dozens, perhaps hundreds of product? The affective and cognitive processes that make this possible are the subject of this chapter.

Exhibit 3.1

The Wheel of Consumers Analysis

This apparently simple, everyday example of shopping for groceries actually involves rather complex interactions between various aspects of the supermarket environment, marketing strategies, Greg Macklin behavior and his affective and cognitive systems. In this chapter we begin our examination of the affect and cognition portion of the wheel of Consumer Analysis. We will describe consumers affective and cognitive systems present a cognitive processing model of consumer decision making and discuss the knowledge structures that consumers learn and store in memory. Our goal is to understand consumer’s affective responses to their experiences, their cognitive interpretations of those experiences, and how these responses influence consumers interpretations of new experiences and choice of behaviors to achieve their consumption goals.

Components of the Wheel of Consumer Analysis

In Chapter 2 you learned that consumer behavior situations such as Greg Macklin’s grocery shopping trip can be analyzed in terms of four elements behavior, environment, marketing strategies and the internal factors of affect and cognition. We organized these four factors into a model called the Wheel of Consumer Analysis (see Exhibit 3.1). Because these factors interact and influence each other in a continuous, reciprocal manner, no factor can be fully understood in isolation. Therefore, we begin our analysis of affect and cognition by first analyzing Greg Macklin’s shopping trip in terms of the four elements in the wheel model.

Environment

What is the supermarket environment like? Well on a Saturday morning the market is likely to busy, with many people crowding the aisles. The store is likely to be somewhat noisy. Because Greg is shopping with Angela, her chattering adds to the commotion. These social aspects of the environment will influence Greg’s affect and cognition and his overt behavior. The store layout, the width of the aisles the special sale signs on the shelves, the product displays at the ends of the aisles and elsewhere in the store, the lighting and other physical aspects of the supermarket environment may also have an effect. Other environmental factors such as the temperature, background music playing and the wobbly wheel on his shopping cart may have important effects on Greg’s affect, cognition and behavior.

Behavior

What kinds of behavior occur in this situation? Greg is engaged in a large number of behaviors, including walking down the aisles, looking at products on the shelves, picking up and examining packages, talking to Angela and a friend he met in the store, steering the wobbly cart and so on. Although many of these behaviors may not seem to be of much interest to a marketing manager, some behaviors have important influences on Greg’s affect and cognition and his eventual purchases. For example, unless Greg walks down the aisle containing breakfast cereals, he cannot notice and buy a package of Kellogg’s Raisin Squares. Typically marketers are most concerned about purchase behavior. In the supermarket environment, this means picking up a package, placing it in the cart and playing for it at the checkout counter.

Marketing Strategies

Much of the store environment Greg experiences is due to marketing strategy decisions made by the retailer and the manufacturers whose products are carried by the store. In fact, a grocery store is a very good place to observe marketing strategies in action. The huge number of products sold in such stores requires an equally large number of marketing strategies. For instance, a firm’s distribution strategy (place products only in upscale stores) determines whether that product is even present in a particular store. A variety of pricing strategies (reduced price On Oreo cookies) and promotion strategies (free samples of cheese) are evident in a supermarket environment. Package designs (easy opening milk containers) and specific product characteristics (low calorie frozen entrees) are also marketing strategies. Finally, specific environmental details such as point of purchase displays (a stack of Pepsi six packs near to the store entrance) are important aspects of marketing strategy. All of these marketing strategies are environmental stimuli that are meant to influence consumers affect and cognition their behavior.

Affect and Cognition

Greg’s affective and cognitive systems were active in the supermarket environment. Indeed, consumer’s affective and cognitive systems are active in every environment, but only some of this internal activity is conscious, whereas a great deal of activity may occur without much awareness. For instance, Greg may feel a bit angry about getting a cart with a wobbly wheel. He also pays attention to certain aspects of the store environment and ignores other parts. Some products capture his attention while others do not. He interprets a large amount of information in the store environment from aisle signs to brand names to price tags to nutrition labels. In addition, he evaluates some of the products in terms of meeting his needs and those of his family. He remembers what products he still has on hand at home and what he has run out of and needs to replace. He makes choices from among some of the 10,000 to 20,000 items available in the store. In addition he makes decision about other specific behaviors. Should he go down aisle 3 or skip it this week? Should he stock up on canned peaches or buy just one can? Should he give Angela a cookie for being good? Should he take the wobbly cart back and get another one? Should he pay with cash or by check? Should he get paper or plastics bags?

In sum, Greg’s grocery purchasing behavior on this particular Saturday morning is a complex function of his social and physical environment the marketing strategies intended to influence him, his own behavior and the processes of his affective and cognitive systems. Each factor interacts with and reciprocally influences the others.

About 45 minutes after entering the Giant supermarket, Greg emerges with five bags of groceries containing 48 different products. Given our analysis of his shopping trip, we might be somewhat surprised to find that he has a smile on his face and does not feel at all tried. In fact, he is already looking forward to his tennis match. How did Greg’s affective and cognitive systems accomplish so much so quickly with such apparent ease? How do we all perform similar cognitive feats while shopping?

Affect and Cognition as Psychological Responses

Affect and cognition are rather different types of psychological responses consumers can have in situations such as grocery shopping. Affect refers to feeling response, whereas cognition consists of mental (thinking) responses. Consumers can have both affective and cognitive responses to any element in the Wheel of Consumer Analysis the environment, behaviors, and even other affective and cognitive responses. Affect and cognition are produced by the affective and cognitive systems, respectively. Although the two systems are distinct they are richly interconnected, and each system can influence and be influenced by the other.

 Exhibit 3.2

Types of Affective Responses

Type of Affective Responses	Level of Physiological Arousal	Intensity or Strength of Feeling	Examples of Positive and Negative Affect
Emotions Specific feelings Moods Evaluations	Higher arousal and activation Lower arousal and activation	Stronger Weaker	·      Joy, love ·      Fear, guilt, anger ·      Warmth, appreciation, satisfaction ·      Disgust, sadness ·      Alert, relaxed, calm ·      Blue, listless, bored ·      Like, good, favorable ·      Dislike, bad, unfavorable

In distinguishing affect from cognition, you can think of affect as something people are or something people feel (I am angry; Linda is in a good mood; Joe feels bored). Because people experience affect in their bodies, affect seems to be a part of the person at the time they experience it. In contrast, people have cognitions, thoughts or beliefs (your mother believes Diet Pepsi is not fattening; Susan knows where the grocery store is; your think your interview suit is stylish). As mental states, cognitions are not usually.

Types of Affective Responses

People can experience four broad types of affective responses: emotions, specific feelings, moods and evaluations. Exhibit 3.2 identifies these affective responses and gives some example of each type. Each type of affect can involve positive or negative responses. Feelings for example can be favorable (Joan was satisfied with her T-shirt) or unfavorable (John was disgusted with the service has received). Moods can be positive (relaxed) or negative (sad).

The four types of affect differ in the level of bodily arousal or the intensity with which they are experienced. The stronger affective responses, including emotions such as fear or anger, may involve physiological responses (that are felt in the body) such as increased heart rate or blood pressure, perspiration, dry mouth, tears, rushes of adrenaline, or butterflies in the stomach. Specific feelings involve somewhat less intense physiological reactions (Jennifer was sad when she sold her old guitar). Moods, which involve lower levels of felt intensity, are rather diffuse affective states (Robert was bored by the long shopping trip). Finally evaluations of products or other concepts (I like Colgate toothpaste) often are rather weak affective responses accompanied by low levels of arousal (sometimes, one hardly feels anything at all).

The Affective System

Affective responses are produced by the affective system. Although researches are still studying how the affective system operates, they generally agree on five basic characteristics. One important property is that the affective system is largely reactive.

Highlight 3.1

Automatic Affective Responses to Color

All living creatures have certain innate responses to the environment and the responses to color are one of the most important of these. The first thing people react to in evaluating an object (a product or building) is its color and their automatic affective response can account for as much as 60 percent of their acceptance of the object. Your affective response to color can influence other emotions and feeling as well as your cognitions and behaviors. Colors can attract or distract you; colors can make feel good or bad; colors can draw you toward other people or repel you; colors can make you want to eat more or less.

A person’s affective response to color involves automatic reactions of the eye, optic neurons, parts of the brain and various glands. Consider people’s responses to red. When the eyes sees primary red, the pituitary gland embedded in the brain is stimulated to send out a chemical signal to the adrenal medullae (located above the kidneys) which secrete epinephrine or adrenaline that activates and arouses the body. People emotions such as anger and fear are enhanced by this automatic reaction to red this is why danger signals are usually red. Affective feelings of excitement are generated by red. Thus, cosmetics such as lipstick and rouge are based on red. In the presence of red, people also tend to eat more; which is why red is a popular color for restaurants.

People’s affective systems have similar automatic reactions to other colors. For instance, a particular shade of vivid pink causes the brain to secrete nor epinephrine, a chemical that inhibits the productions of epinephrine. Thus pink is useful color for places where angry people must be confronted (a principal’s office, certain areas of a prison, or the complaint center in a department store).

Yellow is the fastest color for the eye to see because the electrochemical reactions that produce vision work fastest in response to yellow stimulation. Thus yellow is an excellent color to command attention (traffic warning signals and Post it notes are examples). Placing a yellow car in the auto showroom will attract more attention from passing motorist than a car of a different color. Although many people think of yellow as cheerful and sunny, the yellow kitchen they often request may increase anxiety and loss of temper.

People’s reactions to favorite colors tend to vary by socioeconomic status (income and education level). Lower income people tend to like primary colors that are pure, simple and intense. Primary colors can often be described in two words sky blue, forest green. Upper income people tend to prefer more complex colors that require three or more words for description (a sort of grayed green with a little blue in it). To lower income people such colors seem “muddy” or washed out; simple colors that are bright and clean have a higher appeal to this group.

According to the experts, there are sex based preferences for certain colors. The eye sees all colors as having either a yellow base or a blue base. Thus, red can be yellow based (tomato red) or blue based (raspberry). Men inherit a preference for yellow based reds, whereas most women like blue based reds. Thus when women buy cosmetics that look good to themselves or their female friends, they usually gravitate toward the blue based reds. However most men tend to react more favorably to a woman wearing yellow based red make-up.

Finally blue is the stated favorite color of 80 percent of Americans. Blue is thought to be a calming color, but a very strong sky blue is much more calming than other shades. In its presence the brain sends out some 11 tranquilizing chemicals to calm the body. Some hospitals use this color in the cardiac unit to calm fearful patients. In contrast, a very pale sky blue encourages fantasy and therefore might be a good color for the creative department in an ad agency.

Source: Adapted from Carlton Wagner, “Color Cues,” Marketing Insights, spring 1990, pp. 42-46.

That is the affective system cannot plan make decisions or purposefully try to achieve some goal. Rather a person’s affective system usually responds immediately and automatically to significant aspects of the environment. An obvious example is color. Most people immediately have a positive affective response when they see a favorite color on a car an item clothing (See Highlight 3.1).

A related characteristic of the affective system is that people have little direct control over their affective responses. For instance, if you are insulted by a rude sales clerk, your affective system might immediately and automatically produce feelings of frustration and anger. However people can have indirect control over their affective feelings by changing behavior that is triggering the affect or moving to another environment. For instance, you might complain about the rude clerk to the manager which could reduce the negative affect you felt and create a new feeling of satisfaction. As another example consumer who have negative affective reactions to a crowded clothing shop (feeling of discomfort, frustration or even anger) might leave the store to shop in a less crowded environment which stimulates more positive affective feelings.

A third feature of the affective system is that affective responses are felt physically in the body. Consider the butterflies in the stomach associated with the excitement of making an important purchase such as a new car or a house. These physical reactions can be powerful feelings for the people experiencing them. People’s body movements often reflect their affective states (they smile when happy, frown when disturbed, clench fists in anger sit up straight in anticipation, or slouch in boredom) and communicate their emotional states to other people. Thus, successful salespeople read the body language of their prospects and adapt their sales presentations accordingly.

Fourth the affective system can respond to virtually any type of stimulus. For instance, consumers can have an evaluate response to a physical object (I love my Techniques stereo system) or a social situations (I disliked talking to the salesperson in the electronic store). Peoples affective systems can also respond to their own behaviors (I enjoy playing my stereo system). Finally consumer’s affective systems can respond to thoughts produced by their cognitive system (I like to think about stereo systems).

Fifth, most affective responses are learned. Only a few basic affective responses such as preferences for sweet tastes or negative reactions to loud, sudden noises seem to be innate. Consumers also acquire many affective responses through early socialization experiences as young children. Because affective responses are learned, they may vary widely across different cultures, subcultures or other social groups. Thus people’s affective systems are likely to respond in rather different ways to the same stimulus.

What is cognition?

Human beings have evolved a highly sophisticated cognitive system that performs the higher mental processes of understanding, evaluating, planning, deciding and thinking.

·         Understanding-Interpreting or determining the meaning of specific aspects of one’s environment.

·         Evaluating-Judging whether an aspect of the environment or one’s own behavior is good or bad, positive or negative, favorable or unfavorable.

·         Planning-Determining how to solve a problem or reach a goal.

·         Deciding-Comparing alternative solutions to a problem in terms of their relevant characteristics and selecting the best alternative.

·         Thinking-The cognitive activity that occurs during all of these processes.

Exhibit 3.3

Types of Meanings Created by the Cognitive System

Cognitive Interpretations of Physical Stimuli This sweater is mode of lambs wool. This car gets 28 miles per gallon. Cognitive Interpretations of social stimuli The salesperson was helpful. My friends think Pizza Hut is the best. Cognitive Interpretations of affective responses I love Dove (Ice cream) bars. I feel guilty about not sending mom a birthday card. I feel mildly excited and interested in a new store.

Cognitive Interpretation of Symbolic meanings This car is sexy. This style of dress is appropriate for older women. Wearing a Rolex watch means you are successful. Cognitive Interpretation of Sensations Colors on a box of breakfast cereal. Sound of a soft drink can be opened and poured. Sweet taste of chocolate chip cookies. Smell of your favorite cologne. Feel of your favorite pair of jeans. Cognitive Interpretations of Behaviors I drink a lot of Diet Pepsi How to pay with a credit card.

In this book we use the term cognition broadly to refer to all of these mental processes as well as the thoughts and meanings produced by the cognitive system.

A major function of People’s cognitive system is to interpret, make sense of and understand significant aspects of their personal experiences. To do so the cognitive system creates symbolic, subjective meanings that represent our personal interpretations of the stimuli we encounter; for instance, Greg Macklin made may cognitive interpretations during his shopping trip. Our cognitive system are capable of interpreting virtually any aspect of the environment (That is one of the early Beatles tunes). We also can interpret our behavior (why did I buy that CD?) and our own affective states (Do I really like this sweater?). Cognitive interpretations can include the deeper symbolic meanings of products and behaviors (Having a pager makes me feel in control). Finally, people can interpret the meaning of their own cognitions or beliefs (What does it mean that Hills department store has “every day low prices?”). Exhibit 3.3 list some of the interpretations consumers cognitive systems can create”?).

A second function of our cognitive systems is to process (think about ) these interpretations or meanings in carrying out cognitive tasks such as identifying goals and objectives, developing and evaluating alternative courses of action to meet those goals, choosing a course of action and carrying out the behaviors. The amount and intensity of cognitive processing varies widely across situations, products and consumers. Consumers are not always engaged in extensive cognitive activity. In fact, many behaviors and purchase decisions probably involve minimal cognitive processing.

Relationship between Affect and Cognition

The relationship between affect and cognition remains an issue in psychology? Several Researches consider the affective and cognitive system to be (at least some what) independent. Others argue that affect is largely influenced by the cognitive system. We believe that some degree of independence is plausible because the affective and cognitive areas appear to involve different parts of the brain. However these affective and cognitive areas are richly connected by neural pathways, so we must recognize that each system can influence the other.

Exhibit 3.4
The Relationship between the Affective and Cognitive Systems

For understanding consumers, it is more useful to emphasize the interactions between the affective and cognitive system than to argue about which system is more important or dominant. Exhibit 3.4 presents a simple model to illustrate how the two systems are related. Note that each system can respond independently to aspects of the environment and each system can respond to the output of the other system. For affective system in reaction to stimuli in the environment can be interpreted by the cognitive system (I wonder why I am so happy; I don’t like the insurance agent because she is too serious). These cognitive interpretations, in turn might be used to make decisions (I won’t buy insurance from this person).

We also know that consumer’s affective reactions to the environment can influence their cognition during decision making. For instance, if you go grocery shopping when you are in a good mood influences cognitive processes during shopping so that you are more likely to think about the favorable qualities of things to buy. As another example, your cognitive interpretation of a TV commercial can be influenced by your affective reactions to the material in the preceding program.

In contrast consumers cognitive interpretations of information in the environment can trigger affective reactions (Oh is that a Honda CRX? I like it). We know that’s people affective system can be influenced by their cognitive interpretations of their experiences in a situation. For instance, if you interpret a salespersons behavior as pushy you probably will have a favorable affective response if you interpret the salespersons behavior as helpful.

Marketing Implications

Both affect and cognition are important for understanding consumer behavior. Consider, for instance the cognitive and affective components of consumer satisfaction a major goal of marketing strategy. Satisfaction has elements of both affect (feeling pleased, liking the product or service) and cognition (knowing why the product is liked). Likewise a brand image includes knowledge and beliefs (cognitions) about brand attributes, the consequences of brand use and appropriate consumption situations as well as evaluations, feelings and emotions (affective responses) associated with the brand. Marketers need to understand both affective and cognitive responses to marketing strategies such as product design, advertisement and store layout. For some marketing purposes consumers affective responses are more important in other cases cognition is key.

Highlight 3.2

Affective and Cognitive Reactions to New Style Slot Machines

Slot machine playing is the fastest growing segment in the gambling industry worth about $16 billions in 1996. But the technology of slot machines has not changed much since about 1960 when electronic innards were added that actually spin the reels. Since than innovations such as multigame machines incorporating high resolution graphics, touch screen and CD quality stereo sound have not been widely accepted. For instance, when machines using cashless tokens were installed at the MGM Grand Hotel and Casino in Las Vegas revenue per Machine dropped by 50 percent. People seem to like the noise of the coins clinking together.

In thousands of casinos around the country, consumers can slip a coin into an old fashioned slot machine and take a gamble by yanking on a large handle on the side. Pulling the arms length handle makes a satisfying loud a “ka-chunk” sound while spinning three reels inside the machine. Innovators in the industry would love to have gamblers spin the reels of a slot machine by pressing an electronic button placed conveniently in front of the machine. If people would use such a device, they could “play the slots” more easily and faster, thus bringing more profit to the casinos. But most people are having none of it. Consumers like Melvyn Hughes, foundry owner from England, say that the old fashioned one armed bandit gives them “more of the feeling of gambling”. People’s affective reactions to the traditional slot machines influence their feelings and beliefs about gambling and their gambling behavior too.

International Game Technology, the dominant producer of slot machines controlling about 85 percent of the U.S. market has virtually ignored the high tech innovations, yet its earnings are growing at 20 percent per year. To complete with IGT, smaller companies have tried to introduce high tech innovative slots, but they have been frustrated by the negative affective and cognitive reactions of gamblers like Melvyn. Perhaps the demographics of the typical gambler have an influence. The average age of the Las Vegas visitor is 49, approximately 40 percent have a high school education or less and about 25 percent are retired.

Source: Christina Binkley, “Gambler Prefer One Armed Bandits that have Arms,” The wall street journal, February 3, 1997, pp. B1, B5. Reprinted by permission of the wall street journal, ©1997 Dow Jones & Company, Inc. All Rights Reserved. Visit the MGM Grand Web site http://www.mgmgrand.com (click on Gaming and then Slots) to see the featured slot machines.

Affective responses are especially important for so called feeling products. These include certain foods (doughnuts, snacks, pizza), beverages (soft drinks, beer, wine), greeting card, fragrances skin care products and sport cars. For instance, consider consumers affective responses to ice cream. For most people, eating ice cream is a highly sensory experience and they associate the product with affective feelings of happiness, fun and excitement, even sensual pleasure. When Haagen Dazs, the Amerixcan maker of super premium ice cream, noted for its high butterfat content and intense flavors, expanded into Europe, the company promoted people’s affective, sensual reactions to ice cream. One British ad portrayed a seminude couple feeding ice cream to each other. The product was very successful in England, France and Germany where sales grew from $2million to $30 million in just two years. (Highlight 3.2 discusses consumers affective and cognitive reactions to a product that has a high feeling component.) In the remainder of this chapter, we consider the cognitive system and the knowledge it creates.

Cognitive Processes in Consumer Decision Making

The most important aspect of consumer behavior for marketers to understand is how consumers make decisions. Consumers make decision about many types of behavior:

·         What product or brand should I buy?

·         Where should I shop?

·         What TV shows should I watch to night?

·         Should I pay for this purchase with cash or a credit card?

·         How much money should I borrow?

·         Should I read this ad carefully?

·         Which friend should I consult?

·         Which salesperson should I buy from?

Consumers use information to make such decisions. Of course, people’s internal affective responses and their own behaviors constitute information that can be interpreted by their cognitive system. In addition, most aspects of the environment are potential information. In a supermarket, for instance marketing strategies such as a price tag, a coupon, sale signs in a store window, or a tasting demonstration of a new product provide information to consumers. If this information is to influence consumers decisions, it must be processed (taken in, interpreted and used) by their cognitive systems. To explain how the cognitive system processes information researches have developed information processing models. These models identify a sequence of cognitive processes in which each process transforms or modifies information and passes it on the next processes, where additional operations take place. The decisions that underlie many human actions can be understood in terms of these cognitive processes.

Reduced to its essence, consumer decision making involves three important cognitive processes. (1) Consumers must interpret relevant information in the environment to create personal knowledge or meaning. (2) Consumers must combine or integrate this knowledge to evaluate products or possible actions and to choose among alternative behaviors. (3) Consumers must retrieve product knowledge from memory to use in integration and interpretation processes. All three cognitive processes are involved in any decision making situation.

A Model of Consumer Decision Making

Exhibit 3.5 presents a model of consumer decision making that highlights these cognitive processes of interpretation, integration and product knowledge in memory. We provide an overview of this decision making model here, and in subsequent chapters we discuss each element of the model in more detail.

Consumers must interpret or make sense of information in the environment around them. In the process they create new knowledge, meanings and beliefs about the environment and their place in it. Interpretation processes require exposure to information and involve two related cognitive processes attention and comprehension. Attention governs how consumers select which information to interpret and which information to ignore. Comprehension refers to how consumers determine the subjective meanings of information and thus create personal knowledge and beliefs. We discuss exposure, attention and comprehension processes in chapter 5.

In this book we use the terms knowledge, meanings and beliefs interchangeably to refer to the types of personal and subjective interpretations of information produced by interpretation processes. Exhibit 3.5 shows that knowledge meanings and beliefs may be stored in memory and later retrieved from memory (activated) and used in integration processes. Later in the chapter we discuss how consumers may organize these meanings and beliefs into knowledge structures.

Exhibit 3.5

Cognitive Processes in Consumer Decision Making

More Characteristics of the Cognitive System

Several aspects of the cognitive system influence decision making by consumers. Activation for instance refers to the process by which product knowledge is retrieved from memory for use in interpreting and integrating information. Activation of knowledge in memory is often automatic in that little or no conscious effort is involved. Consumers typically experience activated knowledge as thought that just come to mind.”Daydreaming is a good example of activation various bits of knowledge such as the location of a particular shop in the mall, the salesperson’s name, or the price of that black sweater. People sometimes try to remember such knowledge by giving themselves cues that might activate the desired knowledge (Let’s see, I think her name begins with a “B”).

The product knowledge in consumer’s memories can be activated in various ways. The most common way is by exposure to objects or events in the environment. Seeing something such as the distinctive BMW grille, can activate various meanings (You might think about sportiness or that this is a rich person’s car). Because marketers control certain aspects of the environment, they have some influence on consumer’s cognition. People’s internal affective states also can activate knowledge. For instance, positive knowledge and beliefs tend to be activated when a person is in a good mood, whereas more negative meanings are activated when the same person is in an unpleasant mood. Finally, product knowledge in memory can be activated because it is linked to other activated meanings. Because meanings are associated in memory, activation of one meaning concept may trigger related concepts and activate those meanings as well. Consumers have little control over this process of spreading activation, which occurs unconsciously and automatically. For instance, seeing magazine ad for Jell-O might activate first the Jell-O name and then related knowledge and meanings such as jiggly, tastes sweet, good for a quick dessert and Bill Cosby likes it. Through spreading activation, various aspects of one’s knowledge in memory can spring to mind during decision making.

Another important characteristic of the human cognitive system is its limited capacity. People can consciously consider only a small amount of knowledge at one time. This suggests that the interpretation and integration processes during consumer decision making are fairly simple. For instance, it is unlikely that consumers can consider more than a few characteristics of a brand in forming an attitude or intention to buy the brand. At the same time we know people are able to handle rather complex tasks such as going to a restaurant because cognitive processes tend to become more automatic with experience. That is over time, cognitive processes gradually require less capacity and conscious control (less thinking is necessary). Grocery shopping for instance is routine and cognitively easy for most consumers because many of the interpretation and integration processes involved in choosing food products have become automatic. Highlight 3.3 describes a common example of how automatic processing develops.

Marketing Implications

The simple model of consumer decision making just presented has many implications. Because the next several chapters cover this model in detail, only a few examples are given here.

Obviously it is important for marketers to understand how consumers interpret their marketing strategies. For instance, marketers might have a sale to move a brand that is overstocked, but consumers might interpret the price decrease as an indication that product quality has dropped. Marketers also are highly interested in the knowledge, meanings and beliefs that consumers have for their products, brands, stores and so on.

Highlight 3.3

Increasing Automatic Cognitive Processing Learning to Drive a Car

Practiced subjects can do what seems impossible to both the voice and the theorist. People can achieve dramatic improvements in skill with practice. For instance, consider your experience in learning to drive a car. When you first learned to drive, you probably couldn’t drive and talk at the same time. The task of driving seemed difficult and was probably physically and mentally tiring. Today if you are a skilled driver you can probably drive in moderate traffic, listen to music on the radio and carry on a conversation with a friend. Could you have done this when you first started driving? Probably then you kept the radio off. If anyone tried to talk to you, you ignored them or told them to shut up. Of course, even to day you will probably stop talking if something unfamiliar occurs such as an emergency situation on the road up ahead. At least, we hope you do!

Learning to drive a car illustrates how cognitive processes (and associated behavior) become increasingly automatic as they as learned through practice. However even highly automatic skills such as eating seem to require some cognitive capacity. Perhaps you like to munch on something while you study. You might snack on pretzels (as this author does) or eat an apple while you read this chapter. But if you come upon a difficult passage that requires greater thought, you probably will stop chewing, or you hand with the pretzel may pause in midair, while you interpret the meaning of what you are reading.

Highlight 3.4

Automatic Activation of Meanings from Memory

Awareness of activation. It is difficult to become aware of our own activation processes. You would have to pay special attention to what happens when you are exposed to an object for instance because most activation tends to be automatic and very rapid. Normally we are not conscious of the activation process that retrieves stored information from memory. The meaning just “come to mind.”

Source: The Family Circus “copyright © by Bill Kenne. Reprinted with special permission of King Features Syndicate.

The integration processes involved in forming brand attitudes (Do I like this Brand?) and purchase intentions? (should I buy this brand?) Are critically important for understanding consumer behavior. Marketers need to know what types of product knowledge are used in integration processes and what knowledge is ignored. Because of the limited capacity of the cognitive system, marketers should expect consumers to integrate relatively small amounts of knowledge when choosing brand to buy or stores to patronize.

Activation of product knowledge has many implications for marketing. For instance, the choice of a brand name can be highly important for the success of the product because of the various meanings the brand name can activate from consumer memories. Jaguar is a good name for a sport car because it activates such meanings as speed, agility, exotic, rare, beautiful, powerful and graceful. Another implication is that marketers need to pay attention to differences between consumers because the same stimulus may activate different knowledge in different consumers. The Highlight 3.4 illustrates this point.

Knowledge Stored in Memory

Exhibit 3.5 shows that consumer knowledge in memory influences the cognitive processes involved in decision making. We will discuss consumers’ product knowledge and involvement in the next chapter. In this section we describe two broad types of knowledge that consumers create and we discuss how this knowledge is organized in memory. We also discuss the cognitive learning processes by which consumers acquire knowledge.

Types of Knowledge

The human cognitive system can interpret virtually any type of information and thereby create knowledge, meanings and beliefs. Broadly speaking people have two types of knowledge: (1) general knowledge about their environment and behaviors and (2) procedural knowledge about how to do things.

General knowledge concerns people’s interpretation of relevant information in their environments. For instance, consumers create general knowledge about product categories (compact disks, fast food hamburger restaurants, mutual funds), stores (Sears, Wal-Mart and K-Mart), particular behaviors (shopping in malls, eating ice cream, talking salespeople), other people (one’s best friend, the cute clerk at the 7 Eleven store on the corner, the professor for this course and even themselves (I am shy, intelligent and honest).

General knowledge is stored in memory as propositions that link or connect two concepts:

 

Most propositions are based on same personally relevant connection between the two concepts. For instance, your knowledge that a favorite clothing store is having a sale creates a simple proposition:

The connection or links in propositions are the key to understanding meaning. Knowledge or meaning exist when a concept in memory is linked to another concept via a proposition. Essentially, knowledge or meaning is defined by the connection between concepts. Consider how the meaning changes when the same two concepts are connected by a different link.

Consumers’ general knowledge is either episodic or semantic. Episodic knowledge concerns specific events in a person’s life. For instance, “Yesterday I bought a Snickers Candy bar from the vending machine”or” My last credit card bill had another mistake” are complex of episodic knowledge. Consumers also have semantic knowledge about objects and events in the environment. For instance, the personal meanings and beliefs you have about Snickers candy bars the peanut, caramel and calories it contains; the wrapper design: the aroma or taste are part of your semantic knowledge. When activated from memory, the episodic and semantic components of general knowledge can influence consumer’s decision making and overt behaviors.

Consumers also have procedural knowledge about how to do things. Procedural knowledge is stored in memory as a production. A production is a special type of “if …then…” proposition that links a concept or event with an appropriate behavior.

As the market for sports shoes matured, Nike introduced many different types of shoes, requiring consumers to form more complex knowledge structures. Courtesy Nike, Inc.

Other examples of production include “If the phone rings when you are busy, don’t answer it, say no and leave.”Over a lifetime of experience, consumers obtain a great amount of procedural knowledge, much of which is highly specific to particular situations. When activated from memory, these productions can directly and automatically influence a person’s overt behavior. For instance, Susan has a production: “If the price of clothing is reduced by 50% or more, I will consider buying it. “If this procedural knowledge is activated when susan sees a half price sign in the jeans section she will stop and decide if she needs a new pair of jeans.

Like general knowledge, people’s procedural knowledge is relevant for many everyday situations. Consider the procedural knowledge consumers need to operate high tech equipment such as computers, video cameras and VCRs, stereo receivers and televisions. Many consumers feel such products have become too complex and difficult to operate. For instance, a recent survey found that only 3 percent of total TV viewing time is spent watching shows that have been recorded in advance. Apparently, many people do not have the appropriate procedural knowledge to use the timed recording feature on their VCRs. In recognition that relatively few consumers want and use all the features on their high tech equipment, some manufacturers are simplifying their products to reduce the procedural knowledge necessary to use them. For example, Philips, the giant Dutch electronic firm, developed a group of easy to use clock radios, VCRs and tape players called Easy Line.

Both general knowledge and procedural knowledge have important influences on consumers’ behaviors. Consider the grocery shopping situation described at the beginning of this chapter. Various aspects of Greg Macklin’s general and procedural knowledge were activated as he moved through the grocery store environment. This knowledge affected his interpretation and integration processes as he made numerous shopping decisions.

 Exhibit 3.6
An Associative Network of Knowledge or Schema

Structures of Knowledge

Consumer general and procedural knowledge is organized to form structures of knowledge in memory. Our cognitive system creates associative networks that organize and link many types of knowledge together. Exhibit 3.6 presents an associative network of knowledge for Nike running shoes. In this knowledge structure, the Nike concept is connected to various types of general knowledge including episodic knowledge about past events (Shopping at Wilson’s) and Semantic knowledge about the features of Nike Shoes (their appearance, weight and cushioning). Also included is knowledge of affective responses (memory of one’s feeling after a hard run) and the interpretation of those affective feelings (relaxed and proud). This network of Nike knowledge also contains productions (how to run lightly, wear cushioned socks) and related semantic knowledge about the consequences of these behaviors (avoid sore knees).

Part of this knowledge structure might be activated on certain occasions. For example, some knowledge could be activated by exposure to an athlete wearing Nike shoes on TV or noticing the Nike swoosh symbol on a billboard ad. Other knowledge associated with Nike could be activated by experiencing the pleasant affective feelings of satisfaction and relaxation after a hard workout. Finally, some meanings associated with Nike could be activated through spreading activation as “activation energy” spreads from one meaning concept in the network to related meanings. Whatever Nike knowledge is activated during decision making has the potential to influence consumer’s interpretation and integration processes at that time.

Types of Knowledge Structures

People have two types of knowledge structures schemas and scripts. Each is an associated network of linked meanings, but schemas contain mostly episodic and semantic general knowledge, whereas scripts are organized networks of production knowledge. Both schemas and scripts can be activated in decision making situation, and they can influence cognitive processes. The structure of knowledge in Exhibit 3.6 is a schema that represents one consumer’s general knowledge about Nike running shoes. Marketers should seek to understand consumers’ schemas about brands, stores and product categories.

Whereas consumers experience common situations, such as eating in a fast food restaurant, they learn what behaviors are appropriate in that situation. This knowledge may be organized as sequence of if …then … productions called “a script.” Following is an example of a simple script:

As another example, consumers who frequently go to auctions may develop a generalized script containing production knowledge about how to register with the auctioneer before the sale starts, how to bid, when to use particular building strategies, how and when to pay for one’s purchases and so on. Their cognitive systems may organize this production knowledge into a script. When activated in an auction, situation, the script automatically guides and directs many (but not necessarily all) of the consumer’s overt behaviors. Thus consumers who have a well developed script do not have to make conscious decisions about many auction-related behaviors because those behaviors are controlled by the scripts.

Consumers with lifetimes of experience and learning are likely to have a great many scripts about recurring situations in their lives. For instance, consumers may know how to acquire information about products and services from tests in Consumer Reports, from friends and acquaintances who are “experts,” from the Internet, or from salespeople. Many consumers have scripts for how to access money to pay for purchases (by check, by credit card, or by getting a bank loan). Most consumers know how to shop for products in various types of stores (discount store, department store, boutique stores, from a catalog, via the Internet). Some consumers have scripts for negotiating a purchase (from an automobile dealer, a seller at a flea market, or an appliance salesperson). Exhibit 3.7 presents a simplified script for eating in a “fancy” restaurant.

Exhibit 3.7

A Hypothetical Script of Appropriate Procedures for Dining at a “Fancy” Restaurant

·         Enter restaurant. ·         Give reservation name to maitre d. ·         Wait to be shown able. ·         Walk to be able and sit down. ·         Order drinks when waiter asks. ·         Select dinner items from menu. ·         Order meal when waiter returns. ·         Drink drinks and talk until first course arrives. ·         Eat soup or salad when it arrives.

·         Eat main course when it arrives. ·         Order dessert when finished with dinner. ·         Eat dessert when it arrives. ·         Talk until bill arrives. ·         Examine bill for accuracy. ·         Give waiter credit card to pay for bill. ·         Add tip to credit card form and sign. ·         Leave restaurant.

Source: Reprinted with permission from “Scripts in Memory for Text, ”by Gordon H. Bower, John B. Black and Terrace J. Turner, which appeared in Cognitive Psychology, April 1979, pp. 177-220.

Marketing Implications

To understand consumer’s behavior, marketers need to know what product knowledge consumers have acquired and stored in memory. For instance, marketers may wish to determine how consumers organize a product category into product forms (Do consumers see freeze-dried and instant coffee as separate product forms?). Marketers might want to know the contents of consumer’s product schemas (see Exhibit 3.6 for some examples) or shopping scripts (associative networks of procedural knowledge). In addition, marketers might need to know what types of knowledge are likely to be activated by particular marketing strategies. This could require a detailed analysis of the meanings that are activated when consumers are exposed to a particular color of a car or a certain typeface for a print ad. In the next chapter, we will examine consumer’s product knowledge and involvement.

Cognitive Learning                            

How do consumers learn the general and procedural knowledge in their schema and script structures? In this text, we distinguish between two broad types of learning behavioral and cognitive. Behavioral learning is discussed in section 3 and cognitive learning is discussed here.

Cognitive learning occurs when people interpret information in the environment and create new knowledge or meaning. Often these new meanings modify their existing knowledge structures in memory. Basically consumers come into contact with information about products and services in three ways. Consumers can learn about products and services through direct personal use experience. Marketers use a variety of strategies such as in trials and free samples to give consumers direct experience with the product. Auto dealers encourage consumers to drive the car around the block. Clothing stores provide learning rooms for customers to try on garments and mirrors to evaluate their appearance. Ice cream parlors offer free samples tastes and bedding retailers nearly always set up beds so customers can lie down and experience the feeling of a mattress before buying.

Cognitive learning can also occur through consumers vicarious product experiences. That is, consumers can acquire knowledge indirectly by observing others using the product. Most vicarious observation probably occurs accidently when consumers notice other people using a product or service (seeing people using Rollerblades). Marketers can create vicarious product experiences for consumers through marketing strategies such as using in store demonstrations or paying sports stars to wear certain clothes or shoes. Brands with higher market shares have an advantage over less popular brands because consumers are more likely to observe other people using a best selling brand. Finally, much cognitive learning occurs when consumers interpret product related information from the mass media (news stories, advertising, Consumer Reports, etc.) or from personal sources (friends and family).

Interpreting information about products and services can result in three types or levels of cognitive learning accretion, tuning and restricting. Exhibit 3.8 illustrates how these three types of cognitive learning can create and modify associative networks of knowledge. Marketers may develop strategies to influence each type of cognitive learning.

Accretion Most cognitive learning probably occurs by accretion. As consumers interpret information about products and services, they add new knowledge, meaning and beliefs to their existing knowledge structure “Nike shoes are expensive, Nike shoes have good cushioning” (see Exhibit 3.8). Much learning research has focused on how people form declarative knowledge through accretion learning. However, more complex types of cognitive learning. However more complex types of cognitive learning that involve changes to the structure of the associative knowledge network can also occur.

Turning as consumers gain experience with a product, knowledge structures tend to become larger and more complex through accretion processes. At some point, consumers may adjust their knowledge structures to make them more accurate more generalize able. Most knowledge structures undergo minor changes in meaning as consumers continue to process information from the environment. As shown in Exhibit 3.8 turning can occur when parts of a knowledge structure are combined and given a new overall meaning. For instance, several characteristics of a Nike shoe (lacing pattern, insole, and reinforced heel) might be interpreted to mean “good support.”

Restructuring involves the revision of the entire associative network of knowledge, which might include creation of entirely new meaning structures and/or reorganization of an old knowledge structure. Accretion and sometimes tuning can occur without much cognitive effort or awareness (essentially automatically). In contrast, restructuring usually involves extensive cognitive effort and substantial thinking and reasoning processes. Therefore, restructuring tends to be rare, occurring only when existing knowledge structures become excessively large and cumbersome (and possibly inaccurate). As illustrated in Exhibit 3.8, this may have happened in the athletic shoe market with the proliferation of specialized shoe models and styles introduced in the 1980s and 1990s.

Sometimes the introduction of a new product that is quite different from current products can force consumers to restructure their existing product knowledge to accommodate the new product. For instance, many consumers had to restructure their knowledge about cooking techniques when they began using microwave ovens.

Exhibit 3.8

Three Types of Cognitive Learning

Changes in consumer’s values can also precipitate a restructuring of consumer’s product knowledge. For instance, the increasingly strong environmental values of the late 1980s may have led some consumers to restructure their knowledge about disposable diapers and aerosol containers. Highlight 3.5 describes changes in the credit card business that may require many consumers to tune or restructure their knowledge structures.

Highlight 3.5

Cognitive Learning about Credit Cards

Some people may think that there is only one type of credit card, but in reality people can access their funds using many types of cards. As people learn more about types of card, their knowledge structure will become tuned more closely to reality. As they learn even more, they may have to restructure their knowledge about the various ways they can use “plastic” to buy things. Here are the main types of credit cards available today.

·         Credit cards. Credit cards offer a convenient way to but things now by borrowing the money and paying it back later. When thinking of credit cards the typical consumer thinks of VISA (about 50 percent shares) and MasterCard (about 27 percent shares). Nearly all credit cards set a limit on how much can be borrowed and specify a minimum payment due each month and many cards charge an annual fee. Credit cards charge relatively high interest compared with other ways to borrow money rates can be as high as 15 to 19 percent on the unpaid balance.

·         Charge cards. American Express in the best known change card traditionally targeted at well heeled customers who pay their bills in full, each month. With no preset spending limit, charge cards are particularly useful for business travelers who may incur very large business travel expenses from time to time. There is an annual fee for the basic card, which can rise to $300; the Platinum card, for example, requires a $300 yearly fee.

·         Stored value card. Usually used in amounts ranging from $25 to $100, this card replaces cash. As the cards are swiped through telephones or computerized terminals the amount of the purchase is deducted. When their value is exhausted, the cards are either discarded or additional value can be added to them.

·         Debit card. When using a debit card, the cost of a purchase is deducted instantaneously (sometimes within a day or two) from the cardholder’s checking account. The immediacy of paying seems to have limited the popularity of debit cards.

·         Smart card. This new type of card, embedded with a microchip, can perform many functions. Using information stored in its memory chip, the smart card can act as a credit card, an ATM card, a photo ID, a door key and so forth. Acceptance of these cards has had a slow start, because they require new terminals at the merchant’s places of business.

Sources: Linda Grant, “Why Warren Buffett’s Betting Big on American Express, “Fortune, October 30, 1995, pp.70-79; Stephen E. Frank, “Burned by the Masses, Cards Court the Elite, “The Wall Street Journal, November 5, 1997, pp. B1, B13; the American Express Web site at http://www.americanexress.com.

Marketing Implications many marketing implications are aimed at accretion learning. Marketers often present simple informational claims about their products (Crest has a tartar control ingredient) and hope that consumers will accurately interpret the information and add this knowledge to their knowledge structures. In other cases, marketers may try to stimulate consumers to tune their knowledge structures (You need special Nike shoes for “cross training”). On rare occasions, marketers may wish to encourage consumers to restructure their knowledge (Actually, beef is just as healthful as chicken).

In sum, marketers need to monitor consumers’ knowledge structures and manage that knowledge. Marketers need to consider what types of meanings they want consumers to form and provide the appropriate information for consumers to process. The next chapter presents several ideas for analyzing consumer’s product knowledge.

Greg Macklin

To summarize what we have covered in this chapter and to review the cognitive processing model, let’s return to our friend Greg Macklin doing his weekly grocery shopping. Consider what happened as Greg walked down the aisle containing breakfast cereal. We have divided this purchase occasions into smaller, discrete events and related each one to the appropriate part of our cognitive processing model. As you work through this example, consider how the various pieces and parts of the model fit together to help explain each event. (You may want to refer to Exhibit 3.5)

Environmental behavioral event

Cognitive and affective processes

·         Greg noticed a bright orange shelf tag with an arrow and the words “Unadvertised Special.” ·         The sign reminded him that the supply of breakfast cereal at his house was getting low. ·         He looked at the package more closely. ·         He saw that product was a Kellog’s cereal, Raisin Squares. ·         He thought to himself that he likes most Kellog’s cereals and that his wife likes raisins. ·         He picked up a package and read “provides 11 essential vitamins and minerals.” ·         As he turned the package around, he noticed more nutritional information. This reminded him of things he knows about nutrition. ·         Greg quickly noticed that Raisins Squares has the standards 25 percent RDA of most vitamins and minerals and it has no added salt. He understood what most of this nutritional information meant. ·         Based on this information, Greg was favorably disposed toward Raisin Squares. ·         He then looked at the price on the shelf $1.99 for 16.5 ounces. ·         Greg considered all this information and decided to buy a package to see whether his wife would like it. ·         He tossed a package of Raisins Squares into the grocery cart and continued shopping. ·         When Greg got to the checkout counter, he paid fro the Raisin Squares and the other products.

Exposure to information and initial attention; slightly positive affective response Activation of stored knowledge More attention Simple comprehension interaction with stored knowledge Activation of additional stored knowledge about affective states Comprehension interaction with activated knowledge Attention and more activated knowledge Attention and comprehension; interaction with activated knowledge Integration and attitude formation with midly positive affect Attention and comprehension Integration processes:   Form an intention to buy   Purchase goal Choice behavior Purchase behavior

Summary

This chapter has presented a number of concepts and ideas that will be used in later chapters. In particular, we introduced the important internal factors of affect and cognition and the affective and cognitive systems. We identified four types of affective responses ranging from emotions to specific feelings to moods to evaluations. We also described the cognitive system and the various types of meanings it constructs. We emphasized that these two systems are highly interrelated and the respective outputs of each can elicit responses from the other. We believe this interactive view is the most useful for understanding consumer behavior.

Next we presented a model of the cognitive processes involved in consumer decision making. The model has three basic components knowledge (also called meanings and beliefs) in memory and two board cognitive processes interpretation and integration. An important feature of this model is the close reciprocal interaction between knowledge structures and cognitive processes that both create and use this knowledge.

We discussed the content and organization of knowledge as associative networks or knowledge structures. We described how meaning concepts are linked together to form propositions and productions that represent general knowledge (episodic and semantic knowledge) and procedural knowledge (how to perform behaviors). Then we described two types of knowledge structures schemas and scripts that contain general and procedural knowledge, respectively. Schemas and scripts can be activated to guide cognitive processes and influence overt behaviors.

Key Terms and Concepts

Accretion                                                        General Knowledge

Activation                                                       Information Processing Models

Affect                                                             Integration Processes

Associative network                                       Interpretation Processes

Automatic processing                                     Knowledge, Meanings and Beliefs

Cognition                                                        Limited Capacity

Cognitive learning                                           Procedural Knowledge

Product Knowledge and Involvement                       Script

Restructuring                                                  Spreading Activation

Schema                                                            Tuning

Review and Discussion Questions

1.      Describe the four broad types of affective responses that are produced by the affective system and give an example of each.

2.      What is cognition? Give an example that illustrates the distinction between information (stimuli) and cognition that represents the information.

3.      How are the cognitive and affective systems different? How are they interrelated?

4.      Consider a product such as an automobile or a perfume. Describe at least three types of meanings that consumers might construct to represent various aspects of the product. Discuss how marketers might try to influence each meaning.

5.      Give an example of how a marketing strategy could cause spreading activation within a consumer’s associative network of product knowledge.

6.      What stores do you know about that attempt to create a certain affective mood for customers? What things does the store do to create that mood? How does that mood interact and influence consumers’ cognitions (beliefs and meanings)? How might that mood influence consumer behavior within the store, including purchase behavior?

7.      Think of a purchase decision you recently made. Using this purchase decisions as an example, list the main influence factors, your affective responses, your cognitions, your behaviors. Describe the reciprocal interactions that occurred among some of these factors. Describe of three main cognitive processes (see Exhibit 3.5) occurred in your decisions.

8.      Using a topic that you know something about (e.g., basketball, movies, college), contrast your general and procedural knowledge and discuss how they are related. Why might marketers be interested in each type of knowledge?

9.      Highlight 3.5 describes how credit card companies have developed many types of cards by which consumers can access funds and make purchases. Companies like VISA, Master cards and American Express have targeted college students among many other segments. Visit the American Web site at http://www.americanexpress.com (click on the student and the cards). Describe the types of cards American Express has created for the student market. Do you think these cards would “fit” within a single knowledge structure about cards in general, or would they be separate schemas? Do you think consumers need separate scripts to use each type of card?

Marketing Strategy in Action

Polo by Ralph Lauren

Ralph Lauren one the most successful designers in the United States, has a unique approach. Other designers create product lines, but Lauren first designs lifestyles and then develop a wide range of products to reflect those themes. He creates romantic worlds where handsome, long limbed families ride to hounds, play lawn tennis with wooden rackets, or dress for dinner on safari. They wear crested blazers and trousers of crisp linen while watching polo matches in Palm Beach. They sip cognac, nestled in a Navajo blanket by the fireplace of a chalet. “He takes an American fantasy of a lifestyle and he creates a Ralph Lauren world and he does it better than anyone else,” according to Phyllis Posnick, executive fashion editor of vogue.

The world where Ralph Lauren grew up was quite different. Born Ralph Lifsitz in a Bronx neighborhood, he was clothes conscious at an early age. He wore canvas jackets and button down shirts to school in contrast to the typical student in jeans and a black leather jacket. At 22 Laurent want to work for a Boston necktie manufacturer, travelling to meet his customers dressed in tweeds and driving a Morgan sports car. His first designs were 4 inch wide ties to replace the narrow 2 -inch ties then in fashion. Lauren selected the name Polo for his line of ties because the word connected to him a lifestyle mood of athletic grace and discreet elegance with an image of men who wore well tailored, classic clothes with style. Printed on vibrant Italian silk, his creations were priced at $15 (double the typical price). He sold $500,000 worth in 1967, his start up year.

In 1968 Lauren began producing an entire menswear line called Polo by Ralph Lauren, including wide collar shirts and wide lapel suits. He used only the finest fabrics to create the Lauren look distinctive, innovative, but classic and refined at the same time. His suits combined the Ivy League natural shoulder look with the fitted shape and expensive fabrics of the best European custom tailored clothing. His shirts were all cotton and richly patterned.

Over the years Ralph Lauren chairman and chief executive officer of Polo by Ralph Lauren, has created many product lines targeted at different markets and different consumer segments. You a complete timeline of his new product introductions. In 1971 he introduced a line of women’s clothes with an image of understated elegance and femininity. He introduced a sportswear line called Polo University Club targeted at college students and young professional men who were beginning to form their work wardrobes. In 1983 he created a collection of home furnishings, including bedding, towels, rugs and wall coverings. The collection expanded in 1986 to include furniture designed to reflect a particular lifestyle look. The collection was marketed using ads that portrayed entire coordinated rooms. In 1994 Ralph Lauren introduced a new line of woman’s clothing called RALPH. In 1995 Lauren was busy introducing several products, including Purple Label, a line of expensive, partially handmade men’s suits; Polo Jeans; a collection of interior paints called Ralph Lauren Paint Collection; and a line of clothing for infants and toddlers. In 1997 he introduced Ralph Lauren Intimate Apparel for men and women. Other companies under license make most of these products, a highly profitable arrangement for Lauren.

In 1978 Ralph Lauren introduced two successful fragrances Polo (for men) and Lauren (for women). He has added several new fragrances since then to his line, including Polo Crest in 1989, Safari for women in 1990, Safari for men in 1991, Polo Sport for men in 1994 and Polo Sport for women in 1996. Besides describing the fragrances and featuring some current promotions, the company Web site also includes several rather long and involved stories about people who use the Ralph Lauren fragrances. Each drama vividly portrays the lifestyle vision that Ralph Lauren has for his different fragrance brands, while it also shows how and when these types of people use various Ralph Lauren fragrances.

By the late 1980s, Ralph Lauren was an international presence in the fashion world. His Polo clothing was distributed in Italy, Japan, Canada, Hong Kong, Singapore, Taiwan, Malaysia, Korea, Panama, Mexico, Germany, Austria, Belgium, Brazil, Uruguay the Netherlands, Luxembourg, Scandinavia, Switzerland, Spain, England and France. He had free standing stores and boutiques in department stores all over the world, but his showcase store was in New York City. In 1986, Lauren converted the Rhinelander mansion on Madison Avenue into the ultimate showcase for the Lauren lifestyle image. He remodeled the five story limestone structure at a cost of $14 million and fitted it with hand carved mahogany wood work, oriental rugs and fine antique furniture. With the clothing displays sharing the space with saddles, trophies, top hats and billiard cues, the place felt more like a London club than a retail store. (Interestingly, Ralph Lauren was not the first to use such a retailing strategy. In 1863, department store magnate A. T. Stewart chose an oriental motif for the interior of a store he built at Broadway and Tenth Street in New York City. The store had “luxurious hassocks…Soft Persian rugs…and fairylike frostings of lace draperies.”)

Lauren designs his products to reflect a lifestyle theme. He begins by imaging a lifestyle that he develops like a play, including describing the characters/actors how and where they live and the types of clothing they wear. Based on these rich images, his designers create the costumes (clothing products) and the stage sets (retail displays) for the latest dream world.

“I want only to make the things I love,” Lauren has said repeatedly. “A lot of people have good taste. I have dreams. “To make his dreams a reality, he puts great effort into the advertisements and the retail displays. Nothing is left to chance. From the furniture to the props to the models who portray the characters, each has been carefully chosen to create a very specific look. Each ad and retail display creates a mood and evokes a life style. Every ad invites the reader to share the fantasy and enter the dream world of Ralph Lauren.

Ralph Lauren is a master of mood. His home furnishing arrangements are opulent and luxurious. A bed might have eight pillows, all with ruffles and contrasting fabrics. The idea is that a customer will want to buy the entire package in order to acquire the Ralph Lauren look. In the stores, he surrounds his products with loads of charming and inventive treasures, many of them for sale. Rather than displaying only a blazer or a skirt, he also presents a whole pile of goodies, such as antique tobacco horns and framed pictures of families that complete the picture and establish the lifestyle mood.

By portraying these moods, dreams and fantasies in his stores and advertising. Ralph Lauren offers consumers the opportunity to share his dreams and perhaps acquire new identities by purchasing his carefully orchestrated products. No other American designer has created a product range so wide, a retailing network so extensive, and a marketing image so well defined. By the early 1990s, the Ralph Lauren fashion empire had retail sales approaching $1.5 billion, up over 400 percent since 1981.

Discussion Questions

1.      What types of affective responses to the Ralph Lauren advertisements and retail displays might be created by consumer’s affective systems? How might the cognitive system interpret these responses?

2.      How could consumers’ knowledge about Lauren and Polo be activated? How might the affective system react to these cognitive responses?

3.      The Ralph Lauren Web site at www.ralphlaurenfragrance.com, is devoted to Lauren’s line of fragrances. Visit the Web site and click on fragrances to review the fragrances products marketed by Ralph Lauren. What types of affective and cognitive reactions do you think Ralph Lauren intends men and women consumers to have to these products?

4.      In the Ralph Lauren Web site, click on The Pulse to read several rather long and involved stories about different types of people who use Lauren fragrances. Discuss how these “lifestyle stories” may influence the affect and cognition (and purchase behavior) of consumers who take the time to read them. How might these affective and cognitive reactions influence peoples purchase behaviors?

5.      How are consumer’s scripts relevant for the marketing of Ralph Lauren products?

Source: Adapted from “A dream world Labeled Lauren, “Marketing Insights, June, 1989, pp. 91-95; and Valerie free, “100 Years ago: Through a Distant Mirror, “Marketing Insights, June, 1989, pp. 91-95; and Valerie Free,”100 years Ago: Through a Distant Mirror,” Marketing Insights, Spring, 1990, pp.20-21; and Susan Caminiti,” Ralph Lauren: The Emperor Has Clothes,”Fortune, November 11, 1996, pp.80-92.