The Changing Consumer

MAD100

Sensations

The immediate response resulting from basic stimuli activating sensory receptors, leading to perception.

Perception

Process by which sensation are selected, organised, and interpreted to give meaning

3 stages:

Exposure (stimuli), Attention (sensation), Interpretation (perception)

Stages of Perceptual Process

1) Primitive Categorisation

• Brain first notices basic features of stimulus

• Registering “there’s something there”

2) Cue Check

• Analyse features to figure out what it is

• Brain searches for a schema (organised collection of beliefs and feelings)

3) Confirmation Check

• Settle on a schema that fits

4) Confirmation Completion

• Categorisation is finalised

• Perceive and respond to it as that thing

Brands invest heavily in consistent visual identity (colours, logos, shapes) so perceptual process is faster for consumers. The more familiar the cues, the faster brain confirms the schema.

Perceptual Process Example

Walking down supermarket aisle and noticing red and white can

1) Primitive Categorisation: notice red can, white lettering, cylindrical shape, silver rim

2) Cue Check: Brain cross-references the cues, searches memory for matching schema

3) Confirmation Check: “is this Coca-Cola” - selects Coca-Cola schema and checks if cues align with the schema

4) Confirmation Completion: “yes, this is Coca-Cola” — brain instantly recognises brand without having to read the label

Sensory Marketing

• When companies deliberately engage one or more of the five senses to influence how consumers feel about product/brand — ultimately drive consumer behaviour

• Sight (colours, lighting, design), Sound (jingles, music), Smell (scent in store), Taste (free samples), Touch (product/packaging texture and feel)

• Brands bypass rational thinking by triggering emotional and physical responses through the senses. Buying with your body not your brain.

Sensory Marketing Example

Abercrombie and Fitch — famously combine 4 sense in-store

Sight: dim, moody lighting

Sound: loud, upbeat music

Scent: heavy cologne through vents

Touch: very soft fabrics on display

• Creates an immersive brand experience that makes you feel something

• Keeps you in the store for longer — more likely to buy something

Virtual Influencers and Sensory Marketing

• Only exist on screen, so they’re naturally restricted to senses that digital media can reach

• CAN:

  • Sight — full control over lighting, colour, aesthetics. Can create a perfect and consistent visual identity every time

  • Sound — through videos: use jingles and brand sounds to reinforce emotional connection

• CANNOT:

  • Can’t reach beyond the screen — smell, taste, touch

• VIs excel at visual and aspirational sensory marketing, but lack the physical, in-store sensory richness.

• Works best for categories that are heavily sight-driven (fashion, beauty, and lifestyle brands)

Sensory Threshold

The minimum level of stimulation a person can detect through their senses.

1. Absolute Threshold

   • Lowest level of a stimulus a person can detect

   • If marketing is below this threshold, it goes completely unnoticed

   • e.g. a billboard with tiny text nobody can read. Falls below absolut threshold, message is lost entirely

2. Differential Threshold

   • The minimum difference between two stimuli that a person can detect (JND - Just Noticeable Difference)

   • e.g. brand shrinking crisp packet to cut costs. If size reduction is below differential threshold, customers won’t notice. Otherwise feel cheated.

   • Below = for price inc/size reduction

   • Above = for positive change, “New & Improved!”

What is : Principles of Interpretation: Gestalt

People perceive things as a whole picture rather than individual parts.

Brain automatically organises visual info to make sense of it.

The Three Principles of Interpretation: Gestalt

1. Figure & Ground

   • Naturally separate image into a focal point and background

   • e.g. Apple’s minimalist ads — product pops as figure is against a plain white background, drawing attention to it.

2. Grouping

   • Brain figures out what belongs together

   • Similarity — similar-looking items feel related

   • Proximity — items close together feel like a group

   • Continuity — our eye follows a flowing line or pattern

   • e.g. Tesco’s own-brand products: logo on range of products but brain groups it as one coherent brand family through Gestalt similarity. Through colour scheme, font, packaging style.

   • Building brand recognition = trustworthy & consistent

3. Closure

   • Mentally complete incomplete images to see a whole

   • e.g. WWF panda logo — unfinished but brain automatically fills missing lines

When sensory marketing works and when it backfires — Article

Sensory marketing works depending on whether brand is sincere (trustworthy/consistent) or exciting (unique/attention-getting)

• When product feels differently than it looks, consumers’ reactions are tied to their perception of the brand

• Exciting brands can exploit consumer perception by conjuring surprise through sensory mismatch — surprise feels authentic to the brand

• whereas sincere brands, sensory mismatch may not serve them — surprise feels like a betrayal of trust

• e.g. Apple (young, exciting), Nokia (sincere, down to Earth)

  • In this study sensory mismatch involoving Apple ok, but did not like when same changes introduced by Nokia

Intrinsic vs Extrinsic Motivation

Motivation = Process that cause people to behave as they do. Occurs when need is activated, which consumers want to satisfy.

1. Intrinsic — driven by personal enjoyment, interest, or satisfaction

   • Buying running gear bc you genuinely enjoy running. Activity itself is the reward

   • Creates long-term customer brand relationships

2. Extrinsic — Behaviour driven by an outside reward or pressure

   • External pressures: rewards, discounts, social approval, avoiding punishment

   • Buying running gear bc of discount, loyalty points scheme, or impress others on social media

   • short term brand relationship, may not build true loyalty

Drive Theory

A biological imbalance or internal tension (a drive) pushes a consumer to take action to restore balance

• Feeling thirsty from running (need), creates an urge to drink (drive), buy water from store (behaviour), thirst quenched (goal)

• Brands identify consumer drives (hunger, loneliness, insecurity) and position their product as a solution to restore balance

• Once drive satisfied, motivation stops. Brands try to satisfy drive or keep it alive — always need latest iPhone

Classification of Needs

AAPU

1. Need of achievement

   • Drive to accomplish goals, succeed, excel

   • Buy MacBook pro to achieve higher productivity

2. Need for affiliation

   • Drive to belong, connect, and be accepted by others

   • Football scarf

3. Need for power

   • Drive to control, influence, have impact on others

   • Buy luxury car to demand respect

4. Need for uniqueness

   • Drive to standout, express individuality

   • Buying limited edition items to feel one of a kind

Maslow’s Hierarchy of Needs

“Please Stay By Every Star”

People are motivated by needs in a pyramid order, needing to satisfy lower needs before moving up to higher.

1. Physiological

   • Survival — food, water, sleep, shelter

   • Tesco

2. Safety

   • Security — job security, health, safe environment

   • Insurance company

3. Belonging

   • Social — love, friendship, community

   • Coca-Cola, “share a coke”

4. Esteem

   • Ego — status, respect, achievement, recognition

   • Rolex

5. Self-actualisation

   • Fulfilment — reaching full potential, personal growth

   • Patagonia (purpose & values)

Goal Valence

A goal has valence (can be positive/negative, sought/avoided)

• Positive valence: goal is desirable and attractive — motivated to approach it

  • Wanting to get a promotion - higher pay & pride

• Negative valence: goal is undesirable - motivated to avoid it

  • Studying to avoid failing an exam

Motivational Conflict

1. Approach - Approach

   • Two positive outcomes

   • Holiday in Paris or Madrid

2. Avoidance - Avoidance

   • Two negative outcomes

   • Repair my phone or buy a new one

3. Approach - Avoidance

   • Both positive and negative aspects

   • Want a burger but it’s unhealthy

Types of involvement

Involvement: The motivation to process information

PMS

Higher involvement = more thinking before buying

1. Product involvement — level on interest in a product

   • Increased by sales and customisations (building own Nike shoe)

2. Message-Response involvement — interest in processing marketing communications

   • Print = high involvement (actively read)

   • TV = low involvement (passively watch)

3. Situational Involvement — same product, different context changes involvement level

   • Buying a gift for boss vs casual friend — same act diff thought

Functional Theory of Attitude

Attitude: lasting, general evaluation of people, objects, ads, or issues. Guide out behaviour

Functional theory = Attitudes exist because they serve some purpose for the person — determined by a person’s motives. UVEK

1. Utilitarian Function

   • Attitude based on reward or punishment

   • Like McDonalds because its cheap and quick / Coke Zero: same taste no high sugar

2. Value-Expressive Function

   • Attitude expresses personal values or identity

   • Patagonia bc care about sustainability

3. Ego-Defensive Function

   • Attitude protects self-esteem from insecurities

   • Buy expensive brands to feel confident and successful

4. Knowledge Function

   • Attitude helps organise and simplify the world

   • Always buy Apple bc I know and trust it — no need to research

ABC Model of Attitudes

Attitudes are made up of 3 components that shape how consumers feel and behave towards a product/brand

Affect — the way a consumer feels about an attitude object

• I like Crest as a toothpaste

Behaviour — involves the person’s intentions to do something with regard to an attitude object (intention does not always result in behaviour)

• I intend to buy Crest

Cognition — the beliefs a consumer has about an attitude object

• Crest prevents cavities

High involvement: Think → Feel → Do (research first)

Low involvement: Do → Think → Feel (buy first, eval later)

Experiential: Feel → Do → Think (emotion drives action)

Theory of Cognitive Dissonance

Uncomfortable feeling when thoughts and actions don’t match

E.g. believe eating healthy is important, but then eat junk food. mismatch = uncomfortable. To rid mismatch:

1. Change behaviour — start eating healthy

2. Change attitude — eating junk food isn’t bad

3. Justify — it’s fine, I had a stressful day

Balance Theory

People like their opinions to be consistent, motivated to change otherwise

• Alter attitudes to remain balanced

• e.g. You like celebrity, celebrity endorses Nike, you don’t → imbalance

  • Start liking Nike, or decide friend has bad taste

• Exactly why celebrity endorsements work — brands use positive relationship consumers have with celebrities to build positive attitude towards their product

Multi-Attribute Attitude Model

Consumers attitude towards a product based on multiple attributes

• Companies identify which attributes consumers care most about and improve weak attributes

Fishbein model = most influential multi-attribute model

1. Beliefs: what they think about each attribute: Nike has great quality

2. Evaluation: how important the attribute is to them: quality means a lot

3. Attitude = Belief * Evaluation

Changing Attitude

Persuasion: active attempt to change attitudes

Communications model: captures all elements marketers consider to connect with customer

1. Source credibility — enhanced by expertise and trustworthiness

• eg use dermatologist for skincare ad

2. Source attractiveness — enhanced by applying similarity and likability

• eg draw attention to ads with physically attractive people

Structuring arguments:

1. One-sided message: only positive attributes/benefits (when target already holds favourable opinion)

2. Two-sided message: presents both good/bad points

   • Refutational argument, humor appeal, fear appeal, scarcity appeal (sale), repetition.

Elaboration Likelihood Model of persuasion (ELM)

Two routes to persuasion depending on how much mental effort they’re willing to put in

Companies must decide which route is appropriate for their product

1. Central Route: High involvement (cars)

   • Consumer motivated and able to process info deeply, evaluating facts, arguments, logic

   • Results in long lasting attitude change

   • “researched 10 laptops before buying”

2. Peripheral Route: Low involvement (drinks/snacks)

   • Not motivated to think deeply, persuaded by surface cues

   • Influenced by celebrity, music, attractive visuals, humour

   • Results in weak, temporary attitude change → buying smt bc the ad looked cool

To determine route: motivation, knowledge, how much time to process

Types of Consumer Decisions

Extended problem-solving: lots of time, research and effort put in

• Expensive/unfamiliar/risky purchases (car or house)

• Central route of ELM

Limited problem-solving: Some research, not extensive

• Familiar product category but unfamiliar brand (new shampoo)

Habitual decision making: low involvement - little to no conscious thought

• routine, repeat purchases driven by habit or brand loyalty

• Peripheral route of ELM (Grabbing usual coffee)

Break habitual → free sample or promotions to interrupt routine

Encourage limited → use shelf placement and packaging

Convert extended → use detailed info, reviews

Steps in consumer decision-making process

1. Problem recognition — realise fed up with his TV

   • Quality of consumer’s actual state moves up (running out of milk) — need recognition

   • Consumer’s ideal state moves up (desiring new TV) — opportunity recognition

1. Information search — talk to friend about buying a new TV

   • Pre-purchase search: explicit search for specific info

   • Ongoing search: stay aware of changes in product categories

   • Internal search: info from long-term memory

   • External search: info from friends, ads, people-watching

2. Evaluation of alternatives — compare several models in the store

   • alternatives a consumer knows about = evoked set; actually considers = consideration set

   • aware put not considering = inept set; products not entering consideration set = inert set

3. Product choice — choose one model with appealing features

   • lexicographic rule: brand with best attribute is selected

   • elimination-by-aspect: must have specific feature

   • conjunctive rule: processes products by brand

   • compensatory decision rules: weigh the good and bad points

4. Outcomes — brings home the TV to enjoy purchase

Fast vs Slow thinking

Fast: automatic, intuitive, effortless

• emotional, unconsciously, prone to errors

• grabbing familiar brand without thinking — logos, colours, jingles to trigger fast responses

Slow: deliberate, analytical

• logical and rational, consciously, for complex decisions

• comparing 5 laptops before buying

Social Power

Capacity to alter the actions of others

1. Referent power — member of aspirational reference group (celebrity)

2. Legitimate power — power by social agreement authority (government)

3. Expert power — person uniquely qualified due to specialised knowledge (dermatologist)

4. Information power — person controls access to smt others want to know (editors of trade publications)

5. Reward power — person who provides positive reinforcement (loyalty points)

6. Coercive power — influencing someone with social/physical intimidation (seatbelt or fined)

Reference groups

Actual or imaginary individual/group conceived of having significant relevance on evaluations/aspiration/behaviour

Strong vs weak influence on product = luxury vs necessity

Strong vs weak influence on brand = public vs private

1. Formal group: structured group influence from roles/rules

2. Informal group: casual unstructured from interactions/norms

1. Membership/associative groups: groups you’re part of

2. Aspirational groups: groups you want to belong to

3. Dissociative (avoidance) groups: actively don’t want to associate with

Conformity

Change in beliefs or actions as a reaction to real/imagined pressure

Reasons for conformity:

1. Cultural pressure: following those around you on unwritten rules

2. Commitment: once joining a group, conform to maintain

3. Fear of deviance: exclusion, punishment

4. Group unanimity: law of large numbers

5. Susceptibility to interpersonal influence: need to have others think highly of them

Family Life Cycle

Explains how people’s spending and needs change over time based on their stage of life and family situation — marketers target products based on life stage

1. Families before children

   • Newly married, expecting parents, dual income

   • holidays, home furnishing, dining out

2. Families with young children

   • Infants, preschool kids, school kids, high family spending but more stable finances

   • Pampers, family SUV, education, sports

3. Families with grown up/dependent children

   • With teenagers, with adult dependents, higher income, children more independent

   • home upgrades, luxury items

4. Families with independent/no children

   • With adult independents, empty nesters, solitary survivors, more disposable income

   • focus on self, healthcare plans, leisure (golf or cruises)

STEPPS Principles for Word of Mouth

The more STEPPS a campaign triggers the more likely consumers are to talk about and share it organically — reduce paying for advertising

1. Social Currency — share things that make us look good

   • First to discover hidden restaurant

2. Triggers — talk about thinks that are top of mind

   • Seeing/smelling coffee reminds you of Starbucks

3. Emotion — share things that make us feel something

   • This ad made me laugh — had to share it

4. Public — imitate what we can see others doing

   • Apple logo faces outward on laptops so others see it

5. Practical value — share things that are useful to others

   • this product solved this problem

6. Stories — share narratives not just information

   • Subway’s Jared weight loss story — viral

Social Class

Refers to a group of people with similar levels of prestige and esteem. Sharing beliefs, attitudes, and values that they express in their thinking and behaviour

Social Stratification: the creation of artificial divisions in society

Components: occupational prestige, wealth, education

• e.g. Being a certified public accountant, having high credit score, graduated from prestigious university

Income and Social Class

• SC: predicts symbolic purchases. Income: predicts major expenses (appliances)

• SC and Income together: expensive and symbolic products

• Don’t always match

Mobility: changing social class

• Horizontal (same SC, diff group = diff spendings); Downward mobility, Upward mobility

Culture

A society’s personality — accumulation of shared meaning, rituals, norms, traditions. ‘lens’ through which people view products

Hofstede’s Dimensions of National Culture

6 dimensions that explain how cultural values influence consumer behaviour in diff societies.

“Pretty Interesting Men Usually Like Ireland”

1. Power Distance — degree people accept unequal distribution of power

   • High = hierarchy accepted (Malaysia), Low = equality expected (Denmark). High power distance countries respond better to authority figures in ads

2. Individualism vs Collectivism — prioritise themselves or their group

   • Ind: USA, Collect: Pakistan. Collectivist cultures respond better to family messaging in ads

3. Masculinity vs Femininity — social values: achievement or caring

   • Masc: competition, success, status (China); Fem: quality of life, relationships (Sweden). Masc cultures respond to status-driven ads

4. Uncertainty Avoidance — degree of comfort with ambiguity and risk

   • high = prefer rules and certainty (Greece); low = comfortable with change (Denmark). High UA countries need reassurance and guarantees

5. Long-term vs short-term orientation — focus on future rewards or present values

   • LT: saving, persistence (China); ST: tradition, quick results (USA).

6. Indulgence vs Restraint — allow enjoyment and gratification

   • Indulgent = pursue fun and leisure freely (Ireland); Restrained = stricter norms (Russia). Indulgent respond to fun, pleasure-driven campaigns

Dimensions of Culture

“Every Society is Interesting”

Ecology → adapt products to local env (sell raincoats in ireland)

Social Structure → target the right household decision maker

Ideology: what is normal, desirable, or taboo

• Enculturation → leading own culture from birth, use familiar cultural symbols and traditions in ads

• Acculturation → learning a new culture, adapt campaigns for multicultural audiences

Cause-Related Marketing (CRM)

CRM: strategy that aligns a company/brand with a social issue to generate business and societal benefits

Corporate Social Responsibility (CSR): commitment to acting ethically and contributing positively to society — Patagonia donating 1% of sales to env causes

Cancel Culture: when consumer boycott/call out brand for failing to align with social values (Volkwagen ‘clean diesel’ scandal)

CRM — “TMI about good causes”

1. Transactional Programs — For every unit sold, share of proceeds go to cause (TOMS, buy one, donate one)

2. Message Promotion Programs — Use platform to promote a social cause (Dove’s Real Beauty Campaign, body positivity)

3. Issue Focused Programs — directly tackle social issue (Always’ #LikeAGirl campaign against gender stereotypes)

AI and Deepfake Concerns

AI powered Deepfakes: hyper-realistic audio or video representations of individuals created without consent — a celebrity’s face used to endorse a product they never agreed to

• growing ethical concerns about how they influence customers. Misleading viewers into scams

• VIs: AI created personalities to market products (Lil Miquela)

• Manipulation: AI can hyper-personalise ads to exploit consumer vulnerabilities (Targeting someone with addiction with gambling ads)

Ethical Principals of AI Systems: “Every Fair Robot Protects”

1. Explicability — transparent and understandable (know targeted by AI)

2. Fairness — treat all consumers equally without bias/discrimination (AI ad targeting shoudn’t discriminate by race/gender)

3. Respect for Human Autonomy — should empower to make free choices not manipulate (consumers always feel in control of their decisions)

4. Prevention of Harm — must not hurt or exploit consumers (no misinfo in deepfakes)

Five Types of Perceived Risk

1. Monetary Risk

   • Losing money on a bad purchase → money back guarantees

2. Functional Risk

   • Won’t perform as expected → reviews and ratings

3. Physical Risk

   • Risk of product causing bodily harm → safety certifications

4. Social Risk

   • Judgement and embarrassment from others → social proof/influencers

5. Psychological Risk

   • Risk that purchase will conflict with values or self image → brand purpose and values