Weber's Law and Sensory Thresholds

Lecture 1

• Marketing involves activities for creating, communicating, delivering, and exchanging valuable offerings for stakeholders; it encompasses monetary and non-monetary exchanges between sellers and buyers
• Good marketing creates value, maintains relationships, and focuses on long-term profits.
• Customer value is a perceived, subjective benefit that can be functional, monetary, social, psychological, or experiential.

Traditional vs. Current Marketing

• Traditional marketing focuses on product features and showcasing tangible benefits.
• Current marketing is customer and value-based, emphasizing "What’s in it for me?" by aligning product development with the needs and scope of the target consumer

Consumer Behavior Definition

• Consumer behavior includes emotional, psychological, and behavioral responses before, during, and after consumer activities like acquiring, using, and disposing of offerings.
• Understanding consumer behavior helps businesses determine the reasons behind consumption choices.

Contrasting Perspectives of Consumer Behavior

• The neoclassical view states product preferences are driven by physical properties, with people acting rationally to maximize utility.
• The current view states consumers buy products for multiple reasons, beyond just physical properties, so people do not always act rationally.

Benefits of Studying Consumer Behavior

• Helps to exceed customer needs
• Select the right target segment
• Promote products effectively

Lecture 2 & 3

• Firms conduct research on consumers to predict their wants, design products they love, optimize marketing strategies, and stay ahead of trends.
• Relying solely on self-reports from consumers has its problems

Reasons to not rely on Self-reports

• Consumers may be forgetful
• Consumers may be unwilling to share, especially on sensitive topics, even with anonymous surveys
• Consumers may not know what is possible
• Consumers may not be able to articulate what they want
• Consumers do not always know why they do what they do
• Social Desirability Bias: overclaiming positive behaviors and underclaiming negative behaviors.
• Demand effect: consumers respond with an intention to support or go against the hypothesis, as they know they are being observed.
• Affective forecasting error: inaccurate predictions of the intensity and duration of future emotions related to positive and negative experiences

Reasons for Affective Forecasting Error

• Focalism: focusing on one piece of information while ignoring other factors when making predictions.

• Immune neglect: underestimating the future ability to recover

• Projection bias: predictions of future behavior based on the current state

• Acquiescence Effect: tendency to agree with statements.

• Central Tendency Bias: tendency to choose neutral options, especially without strong opinions.

• Volunteer Bias: those who participate in studies differ from the general population.

Types of Exploratory Research (Qualitative)

Observational Research

• Employs new technology (geolocation, store heat maps, RFID) and allows for higher quality data
• Pros: unobtrusive, provides rich data, and insightful information for managers
• Cons: small and non-representative samples, lacks quantitative data, can be subjective, and is sometimes expensive

Focus Group

• Useful for ideation
• Pros: richness of data, flexibility, and impact on managers
• Cons: non-representative sample, artificial environment, expensive, and subject to conformity bias, which increases with group size

Individual Interviews

• Allow for more in-depth information
• Pros: in-depth analysis, non-verbal behaviors are coded, and less conformity bias
• Cons: non-representative sample and high expense for scaling

Types of Quantitative Research

Survey Method

• Includes binary (Yes/No), Likert scales, Semantic Differential scales, rankings, and free responses

Experimental Design

• Helps to understand causal ambiguity, cause and effect
• Correlation is when X and Y happen together, but one does not cause the other
• Causation is when X causes a change in Y.
• Correlation does not equal Causation

Causal Ambiguities of Correlations

• Reverse causality
• Coincidence
• Confounding Variables

Establishing Causality

• Three factors are needed to establish a causal link:
  • Correlation
  • Temporal antecedence: cause must come before effect
  • No third factor driving both.

Variables

• X variable is the manipulated Independent Variable
• Y variable is the Dependent Variable, which measures the effect of the manipulated IV
• Main effect: one variable directly affects another.
  • Interaction effect: two variables combine to create a different impact than their individual effects.

Creating a Good Experiment

• Must eliminate potential confounds
• Environmental confound: create similar groups, with the one different being the IV
• Participant confound: random assignment to control and treatment groups
• Random assignment: participants are selected after, randomly assigned
• Random sampling: randomly selecting participants for a representative sample

Steps to start an experiment & Types of experiment designs:

• Step 1: start with a broad research question.

• Step 2: formulate testable questions.

• Step 3: define independent and dependent variables, then design the experiment.

• Between-subject: participants are randomly assigned to only one condition. Pros: no order effect or demand effect Cons: individual differences

• Within-subjects: participants are exposed to all treatments Pros: diminishes individual differences and requires fewer participants Cons: can have order and demand effects

Validity

• Internal validity: ensuring study results are truly due to the tested variables.
• External validity: determining whether experimental results can be applied to other situations, people, or settings. Types of Validity:
• Population generalizability
• Ecological validity
• Temporal validity
• Cross-cultural validity

Lecture 4

• Understanding consumer motivators is important e.g. New Coke backlash due to missing emotional connection.
• Motivation is the driving force behind consumer actions.
• High motivation occurs when there is tension caused by disequilibrium between one's current ideal states
• Needs are never permanently fulfilled due to evolving life circumstances and new norms.
• Needs can be internally or externally aroused
• Needs within a person can be conflicting

Types of Conflicts

• Approach-approach: choose between two equally appealing options
• Approach-avoidant: faced with a single option with positive and negative aspects where you provide rationale
• Avoidance-avoidance: choose between two undesirable options so you find an attribute that is better than the other one

Understanding of Needs

• Needs can exist in hierarchy such as Maslows (however it may be inaccurate)
• Brands that address higher needs increase connection
• Needs are non-negotiable to sustain well-being
• Needs can be unconscious, can relate to latent needs
• Needs can be utilitarian, for functional benefits (e.g. quality, convenience)
• Needs can be hedonic, concerning emotional benefits e.g. enjoyment
• Needs change based on context

Impact on Consumers

• Appealing to multiple needs & high-order leads to greater success

• Subtle framing leads people to priorities different needs

• Type of Goals:

  • Promotions-focus: aspirational
  • Prevention-focused: avoid undesired outcomes

• Factors that affect effort towards goals: level of perceived importance and interest.

• Goal-gradient theory: motivation increases the closer consumers "feel" they are to the goal.

• How to increase perceived velocity? use sub-goals at the start

• Motivations: Success & Failures Other goals Visualization

• People that have very high motivations may be limited by ability (e.g. income. education, age etc.) and by opprotunity

• laddering: builds questions on one another so we are able to reach a deeper understanding of consumers

Lecture 5

• Perception refers to how individuals organize and interpret sensory information.
• Process: exposure, attention, and interpretation.
• Receiving external stimuli through sensory stimulus
• Absolute Threshhold: point you notice something

Weber's Law

• The stronger the initial stimulus, the greater a change must be for us to notice it.

• Differential Threshold: The minimum difference you can notice

• Why is sensory marketing important:

• Influence of thoughts based on bodily sensation

• Consumers being resistant as they are unaware

• Vision: significantly influenced by colors; red increases willingness to pay in auctions but decreases WTP.

• Smell: triggers feelings

• Haptic: touch leads to higher level of ownership

• Sound: triggers memories

Sensory Signature, Fluency and Exposure

• Sensory signature: unique combination of sensory elements makes exposure more effective

• Processing fluency: exposure more effective because things are processed easily

• Repeated exposure (mere exposure effect): repeated powerful creates preferences

• Attention: processing activity devoted to a particular stimulus despite sensory overload.

• Voluntary: choose to focus

• Reflexive: automatically pulled by something

• Features of attention:

  • Limited
  • Selective: focuses on only certain things and blocked the rest
  • Broad Bent's model
  • Cocktail party affect
  • Treisman Attenuation Model: weakens unimportant stimuli.

• being able to divide attention between multiple things however less likely to be productive

• interpretation is the next step meaning interpretation is the next step

• behavior is the take after

Explore Weber's Law, Just Noticeable Difference (JND), and absolute threshold concepts. Understand how these principles apply to business strategies like product sizing and logo redesigns. Also, explore qualitative research methods such as observational and exploratory research.