Topic 3

CUSTOMER BEHAVIOR: A MANAGERIAL PERSPECTIVE
CUSTOMER BEHAVIOR: A MANAGERIAL PERSPECTIVE

PART 2: Foundations of Customer Behavior
PART 2: Foundations of Customer Behavior
CHAPTER 4
The
TheCustomer
Customeras
asaa
Perceiver
Perceiverand
andLearner
Learner
Copyright 2002
All rights
reserved.
The Internal Influences on

Customer Behavior
Determinants of Customer Behavior: Personal Factors and Market
Environment
PART 2
CHAPTER 4
Perception
Learning
Copyright 2002
All rights reserved.
Copyright 1999 by Thomas
Perception and Learning

PART 2

Environment
CHAPTER 4
Stimulus
Characteristics
Learning
Cognitive learning
Classical conditioning
Instrumental conditioning
Modeling
Copyright 2002
Buyer
User
Perception
Sensation
Organization
Interpretation
Context
Characteristics
Payer
Customer
Characteristics
The Customer as a Perceiver

Environment
PART 2
CHAPTER 4
The customers perception of a product or

a brand is what matters
Perception is the process by which an
individual selects, organizes, and interprets
the information he or she receives from the
environment
Copyright 2002
The Process of Perception

Environment
PART 2
CHAPTER 4
Sensation
Organization
Interpretation
Copyright 2002
Factors that Shape Perception

Environment
PART 2
CHAPTER 4
Stimulus characteristics
The nature of information from the

environment
Context characteristics
The setting in which the information is

received
Customer characteristics
Copyright 2002
Personal knowledge and experiences

Stimulus Characteristics
Environment
PART 2
CHAPTER 4
Sensory
Stimulates any of the five senses
Information content
Copyright 2002
Moves the perceptual process beyond

sensation or stimulus selection towards
organization and interpretation
Context Characteristics
Environment
PART 2
CHAPTER 4
In perceiving a stimulus with a given set of

characteristics, customers will also be
influenced by the context of the stimulus
Copyright 2002
Example: blind-taste test studies
Customer Characteristics
Environment
PART 2
CHAPTER 4
Perceptions are influenced by what customers

already know and feel about the stimuli
Such prior knowledge and feelings become
expectations
Expectations influence perceptions in that we
often end up seeing what we expect to see
Copyright 2002
Since customer expectations color the perception of

reality, users, payers, and buyers are also likely to see
a product or service differently
Biases in the Perceptual Process

Environment
PART 2
CHAPTER 4
Customers become selective, thus

biasing their perceptions of incoming
information through three processes:
Copyright 2002
Selective exposure
Selective attention
Selective interpretation
10
Perceptual Threshold
Environment
PART 2
CHAPTER 4
The minimum level or magnitude at which

a stimulus begins to be sensed
The just noticeable difference (j.n.d.).
The magnitude of change necessary for the

change to be noticed
Webers law
Copyright 2002
The magnitude of change needed for it to be

noticed depends on the base quantity
11
Managerial Uses of the

Perceptual Process
Environment
PART 2
CHAPTER 4
Three special areas of managerial concern

where customer perceptual processes are
complex and highly consequential are:
Copyright 2002
The psychophysics of customer price

perceptions
Country-of-origin effects
Managing the corporate image
12
Psychophysics of Price
Perceptions
Environment
PART 2
CHAPTER 4
The psychophysics of price refers to how

customers psychologically perceive prices
Reference price
Assimilation and contrast
This principle states that customers have a latitude of

acceptance and rejection
Price as a quality cue
Copyright 2002
The price that consumers expect to pay
A basis for making inferences about the quality of the

product or service
13
Country of Origin Effects

Environment
PART 2
CHAPTER 4
Country-of-origin effects refer to the bias

in customer perceptions of products and
services due to the country in which these
products and services are made
This perception of country-of-origin can
vary across cultures and across processing
conditions
Copyright 2002
14
Perceived Corporate Image

Environment
PART 2
CHAPTER 4
Corporate image refers to the public perception of

a corporation as a whole
Customer perceptions of corporate image affect
everything a firm does
Companies are known to be:
Copyright 2002
Producers of high or low-quality products or healthy

products
Users of high-pressure tactics or soft-selling approaches
Socially conscious or utterly selfish merchants
15
The Customer as a Learner

Environment
PART 2
CHAPTER 4
Learning is a change in the content of

long-term memory
Human learning is directed at acquiring a
potential for future adaptive behavior
Copyright 2002
16
Consumer Navigation Behavior

Environment
PART 2
CHAPTER 4
Flow - a cognitive state occurring during

network navigation
Experiential activity
Goal-directed activity
Copyright 2002
When the customer is surfing the net without a

purposive goal, flow produces latent learning
When the customer surfs the net to complete a
particular task, flow leads to more informed
decisions
17
Mechanisms of Learning
Environment
PART 2
CHAPTER 4
Cognitive learning
Modeling
Copyright 2002
18
Cognitive Learning
Environment
PART 2
CHAPTER 4
Acquiring new information from written or

oral communication
Rote memorization
Problem solving
Copyright 2002
Information is rehearsed until it gets firmly lodged

in long-term memory
Actively processing information
19
Classical Conditioning
Environment
PART 2
CHAPTER 4
The process in which a person learns an

association between two stimuli due to their
constant appearance as a pair(i.e., Pavlovs dog)
Unconditioned stimulus (UCS)
Conditioned stimulus (CS)
Copyright 2002
A stimulus toward which a customer already has a preexisting specific response, so the response to it does not have
to be conditioned
A stimulus to which the customer either does not have a
response, or has a pre-existing response that needs
modification, so a new response needs to be conditioned
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Instrumental Conditioning
Environment
PART 2
CHAPTER 4
We learn to respond in certain ways because a

response is instrumental to obtaining a reward
Behaviorism theory (B.F. Skinner)
Marketers use this learning mechanism most

effectively by making the product its own intrinsic
reward
Copyright 2002
Coupons
Sweepstakes
Rebates
Frequent flier programs
21
Modeling
Environment
PART 2
CHAPTER 4
We learn by observing others

Four classes of people likely to be imitated
by others:
Copyright 2002
Persons superior in age-grade hierarchy

Persons superior in social status
Persons superior in intelligence ranking
system
Superior technicians in any field
22
The Psychology of Simplification

and Complication
PART 2

Environment
PSYCHOLOGY OF
SIMPLIFICATION
Problem solving
Habitual purchasing
Desire to limit decision
problem
CHAPTER 4
PSYCHOLOGY OF
COMPLICATION
Boredom
Maturation
Forced irrelevance
of current
alternatives
Copyright 2002
23
Customer Acceptance of Change:

The Ultimate Learning Experience
Environment
PART 2
CHAPTER 4
Innovation Adoption
Customer response to new products and
services
Copyright 2002
Customers adopt an extensive process of

deliberation, sometimes actively resisting the
new product
Customers do not rush to purchase these
products, no matter how promising they look
24
Innovation
Environment
PART 2
CHAPTER 4
A product is an innovation if it is new in some

sense
Newness has two dimensions:
Uniqueness: How different it is from existing

products
Age: How long it has existed in the marketplace
Copyright 2002
what matters more than the absolute newness is whether the

customer perceives it as unique
what matters more than the products chronological age is
when the customer was first exposed to it
25
Categories of Adopters
PART 2

Environment
CHAPTER 4
Some customers are quick to adopt

Some customers are very slow to adopt
2 %
Innovators
13 %
34 %
34 %
Early adopters Early majority Late majority
Copyright 2002
16 %
Laggards
Time of Adoption of Innovations
26
Innovators and Opinion Leaders

PART 2

Environment
Innovators
Risk takers
Variety seekers
Upper socioeconomic status
Product interest
Less well integrated with
other members of the society
More individualistic and
independent in their thinking
Copyright 2002
CHAPTER 4
Opinion Leaders
High product involvement
Recognized as leaders
Socially well integrated
More exposed to a variety of
media sources, especially
news and information media
programs
Leaders and formal office
holders in social, political and
community organizations
27
Illustrative Measures of
Opinion Leadership
Environment
PART 2
CHAPTER 4
Q. Compared to your friends, are you more likely to be asked, less likely to be
asked, or about as likely to be asked about ____?
Q. During the past six months, how many people have you told about ___?
a) Told no one ___. b) Told a number of them.
Q. In your discussions with your friends and neighbors about ___, are you
more likely to
a) give information/receive information?
b) be used as a source of advice/not used as a source of advice?
Q. My friends and neighbors often ask my advice about ___ (agree/disagree).
Q. I influence the types of ___ my friends by (never/sometimes/often).
Q. I look to my friends for advice on ___.
Copyright 2002
28
Illustrative Measures of
Innovativeness
Environment
PART 2
CHAPTER 4
INNOVATIVENESS (YES OR NO?) On a five point agree/disagree scale

I like to take a chance
I like to try new and different things.
When it comes to taking chances, I would rather be safe than sorry.
I like to wait until something has been proven before I try it.
If people quit wasting their time experimenting, we would get more
accomplished.
When I see a new brand on the shelf, I usually pass right by.
In general, I am the first (last) in my circle of friends to buy a new ___
when it appears.
I like to buy new ___ before others do.
Copyright 2002
29
Innovators Among Business

Customers
Environment
PART 2
CHAPTER 4
Lead Users
Copyright 2002
Lead users use the products of today in ways

that predict how those products should be
modified to meet the needs of tomorrow
Lead users use existing products to their
maximum capacity with some unmet needs
Marketers can study these users and their
needs, and implement innovations in those
products
30
Adoption Process
Environment
PART 2
CHAPTER 4
AIDA
Awareness
Interest
Desire
Action
The customers active mental processing:
Copyright 2002
Exposure
Information gathering
Evaluation
Trial adoption
Acceptance or rejection
31
Desirable Characteristics of
Innovations
Environment
PART 2
CHAPTER 4
Relative Advantage
Perceived Risk
Complexity
Communicability
Compatibility
Trialability
Copyright 2002
32
Innovation Resistance
PART 2

Environment
CHAPTER 4
Risk
Low
1. NO RESISTANCE INNOVATIONS
H
A
B
I
T
Weak
(New and improved versions of established

products; fads and fashions)
2. HABIT RESISTANCE INNOVATIONS
Strong
Copyright 2002
(Continuous and replacement innovations)
High
3. RISK RESISTANCE INNOVATIONS
(Discontinuous and replacement
innovations)
4. DUAL RESISTANCE INNOVATIONS

(Social programs)
33
The Perceptual Process Among

the Customer Roles
PART 2

Environment
PROCESS
USER
PAYER
CHAPTER 4
BUYER
PERCEPTION PROCESS
General Process
Usage experience biased

by prior expectations
based on brand name,
price, or consumption
situation.
The price-value
perception depends on
brand-name and store
contexts.
Perceptions of alternative
brands biased by price,
brand name, store, etc.
Store distance
perceptions are often
biased.
Just noticeable difference

(JND )
New and improved

products must cross the
JND barrier.
Price variations below

JND are not noticed.
Package size reductions

below JND are not
noticed.
Assimilation and contrast
Distance to destinations,
wait in service settings,
etc., are assimilated or
contrasted.
Price discrepancies from

expected levels may be
assimilated (acceptable)
or contrasted (not
acceptable).
Store distances and

customer service
variations may be
assimilated or contrasted.
Copyright 2002
34
The Learning Process Among

the Customer Roles
PART 2

Environment
PROCESS
USER
PAYER
CHAPTER 4
BUYER
LEARNING PROCESS
Cognitive Learning
User learns about the use of

products and services by
reading about them.
Payer learns about used-car

prices from the NADA usedcar price book.
Buyers learn about new stores

by word of mouth and about
brand ratings from Consumer
Reports.
Food preferences are acquired

in early childhood.
Perceived fairness of price

levels is classically
conditioned.
Buyers are conditioned

through continued patronage
of the same vendors.
Instrumental conditioning
Users adopt new products and

services if they find them
beneficial.
Payers buy cheap at first,

then experience shoddy
performance and learn to
invest more.
Buyers learn they can get

better terms by changing
vendors.
Modeling
Users model their clothing and

car choices after people they
admire.
Budgeting decisions mirror

those of admired companies.
Payers learn norms for tipping
by observing others.
Buyers may switch preferences

to stores and vendors that are
trendy.
Adoption of innovation
Users adopt product and

service feature innovations.
Payers adopt financing

innovations (e.g, leasing, debit
cards).
Purchasers adopt purchase

procedure innovations (e.g.,
buying through the Internet).
Copyright 2002
35

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CUSTOMER BEHAVIOR: A MANAGERIAL PERSPECTIVE

CUSTOMER BEHAVIOR: A MANAGERIAL PERSPECTIVE

The Internal Influences on

All rights reserved.

Copyright 1999 by Thomas

Perception and Learning

Determinants of Customer Behavior: Personal Factors and Market

All rights reserved.

Copyright 1999 by Thomas

The Customer as a Perceiver

The customers perception of a product or

All rights reserved.

Copyright 1999 by Thomas

The Process of Perception

All rights reserved.

Copyright 1999 by Thomas

Factors that Shape Perception

The nature of information from the

The setting in which the information is

All rights reserved.

Personal knowledge and experiences

Stimulates any of the five senses

All rights reserved.

Moves the perceptual process beyond

Copyright 1999 by Thomas

In perceiving a stimulus with a given set of

All rights reserved.

Example: blind-taste test studies

Copyright 1999 by Thomas

Perceptions are influenced by what customers

All rights reserved.

Since customer expectations color the perception of

Biases in the Perceptual Process

Customers become selective, thus

All rights reserved.

Copyright 1999 by Thomas

The minimum level or magnitude at which

The magnitude of change necessary for the

All rights reserved.

The magnitude of change needed for it to be

Managerial Uses of the

Three special areas of managerial concern

All rights reserved.

The psychophysics of customer price

The psychophysics of price refers to how

Assimilation and contrast

All rights reserved.

This principle states that customers have a latitude of

Price as a quality cue

The price that consumers expect to pay

A basis for making inferences about the quality of the

Copyright 1999 by Thomas

Country of Origin Effects

Country-of-origin effects refer to the bias

All rights reserved.

Copyright 1999 by Thomas

Perceived Corporate Image

Corporate image refers to the public perception of

All rights reserved.

Producers of high or low-quality products or healthy

Copyright 1999 by Thomas

The Customer as a Learner

Learning is a change in the content of