How does psychology apply to marketing? Every year, companies spend thousands of dollars trying to understand what motivates the consumer to purchase their product! Whether you are in business or not, this courses teaches the fundamentals of how psychology can be used to increase sales, what to watch out for when listening to a sales representative, how companies deter people from purchasing competitors products, how to provide an environment customers want to purchase in, and much more.
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See Below: *Extract from our Marketing Psychology Course
*Thoughts on Memory and Marketing
Extract from our Marketing Psychology Course:
- Discuss consumerism in the context of marketing.
- What is a Consumer?
- There are many and varied definitions of what a consumer is.The following points may all be subsumed under the definition:
- A consumer has to choose between all the products that are offered to them and invariably do so with greater frequency and enthusiasm.
- It is a way of expressing one’s views and lifestyle etc. non-verbally.
- Consumerism can be seen as an act of exploration, though in western society this takes place in safe shopping centres, with air-conditioning or heating, toilets, cafes and so on.
- People are defined by what they buy and what they buy as gifts.
- This is enjoying pleasure without feeling guilty about it.This attitude is promoted in our society because of the need for manufacturers to sell plenty of goods to maintain a prosperous economy.
- Consumers can be viewed as manipulated and exploited to a greater or lesser extent by advertisers and manufacturers.It may simply be overpricing of goods or it could be more hazardous, such as faulty cars.
- Consumers can use products in a different way, or alter them to give them a different meaning than that given by the manufacturer.
- Consumer activists promote the interest of consumers as groups and may have a political element.
- This is a political concept.The consumer citizen is aware of all the proce3sses that occur in the production and sale of goods.They are also aware of the behaviour of other consumers and may join consumer activists on political rallies and so on.
- A Brief History of Consumerism
- The ‘co-operative movement’ in the UK in 1844 was the first consumer movement of its kind.It was set up in response to the often slave-like conditions that employees worked under in the factories that emerged from the industrial revolution.Workers united and ‘co-operated’ in order to regain some control over their lives, which they had previously relinquished to the wealthy factory owners.
- They realised that not only did their labour produce the goods, but also that they were the consumers.The idea was that profits were shared out amongst the workers or members.It has had a good deal of success and similar organisations still exist throughout the world.
- The USA consumer movement was boosted in 1962 by the introduction of the “Consumer Bill of Rights” presented to Congress by President Kennedy in 1962.
- This bill contained four rights:
- 1.The right to safety
- ie. people are protected against products or services that are hazardous.
- 2.The right to be informed:
- protection against fraudulent, misleading or deceitful information in advertising or elsewhere.
- 3.The right to choose
- Assurance of reasonable access to a variety of products and services wherever possible.
- 4.The right to be heard
- the right to come back to the supplier and have consumers interests given fair and sympathetic consideration.
- Since this bill was introduced, both consumer awareness and the nature of the marketplace have changed considerably in the USA, and over time, those changes have reverberated throughout much of the developed world.
- In more recent times, focus has come upon two further rights: the right to a clean environment; and the right to privacy.
- Changes in the Consumer Experience
- The consumer environment has changed greatly in recent decades, and even now, continues to change. Change is in fact endemic to human behaviour –everything changes!
- In studying human behaviour though, we tend to try to discover patterns, and in doing so, build models which will allow predictions to be made. There is a conflict here: on one hand we are attempting to predict consumer behaviour: but at the same time, we are acknowledging that the same behaviour is continually changing.
- In reality, the issue is more complex.
- Aspects of behaviour do change, but other aspects tend to follow a predictable pattern.
- The Supplier
- Through the 1970’s, a trend developed which continues today …for the supplier (eg. retailer, service provider) to focus on the needs of the customer. This philosophy is talked about a lot and widely encouraged by the “experts”, but in reality, it is not practiced as much as it is preached.
- Efficient supply of goods and services is often seen to be best achieved by mass production and improving efficiency. These things however may lead to an erosion of service or quality.
- Quality control has been given higher status by some producers than others.
- For many suppliers, financial profit, or simply financial survival, has become a higher priority than service.
- Often these things are viewed as being poles apart.
- Many suppliers would consider that in order to provide optimum service, they must accept less profitability. Other employers (commonly a minority) would consider service as number 1, and that by providing better service, they increase their profitability.
- Business Ethics
- Many people would consider business ethics as a contradictory term. They would say that in Business, ethics is at best, irrelevant.
- The issue of business ethics has been highlighted by events in the latter part of the 20th century.
- Unethical practices in the pursuit of short-term financial gain have resulted in many businesses collapsing. As a result, large numbers of people became unemployed. That led to less consumers able to purchase from suppliers. It also made people who still had jobs, less confident of their future. As a result, spending overall declined and business activity declined. This caused a severe recession in the late 1980’s and a low level of consumer confidence in the following years. This process has been repeated in various countries throughout the 1990’s.
- There are tree types of activities referred to as business ethics:
- *Codes of Ethics
- Organisations, professional bodies and/or industries, develop codes to define acceptable behaviour within their industry.
- *Changes to Boards of Directors
- Directors are being increasingly appointed from outside the business world to reflect social concerns (not just business concerns), in an attempt to bring balance to decisions.
- *Social Marketing
- Organisations modifying their traditional marketing to a more socially responsible approach.
- The Market Place
- The nature of the marketplace is heavily affected by political changes.
- This is most readily seen in the affect of decisions by government (eg. regulating what, how, when or where things can be purchased).
- In many countries, a “free market” ideology has surfaced. Some countries have introduced changes to foster equity (eg. equity in access to markets, equity in ability to compete, etc). Price fixing, environmental & health issues etc are just some of those things influenced by governments.
- Shopping trends continue to evolve.People are influenced by mass media today: in the 1920’s, the mass media simply did not exist as it does today. Large regional shopping malls are often patronised more than “main street” shops, which were prominent in past decades. Buying over the Internet; electronic banking, and credit cards are all relatively new to consumerism.
- Branding of products is another issue which has become increasingly significant in the psychology of the consumer.
- Consumer Action
- Consumers can, and do increasingly take action, if they perceive themselves to have been mistreated by a supplier. Action in the first instance is likely to be a direct approach on a personal level. More serious action may involve boycotts, organised complaints (eg. a petition) or legal action.
- The majority of dissatisfied customers still take no action; however the amount of action being taken is overall on the increase.
- Consumer Groups
- There are certain groups of people who are being influenced increasingly by specific issues
- Green Consumers are those who choose what they buy according to environmental issues.
- Ethical Investment is all about putting your money into investments (including financial services) which will use that capital in an ethical fashion. An ethical Investment institution would avoid investing funds purely according to what brings the best dividend. They would invest in things which will be supporting constructive, morally and environmentally sound activities
- The Exchange Economy is an attempt to deal with increasing unemployment, by establishing systems whereby people barter (or swap) goods and services. Trading is done without any money changing hands.
- SET READING
Text book supplied – Chapters 18 & 19
- SET TASK
- Look in newspapers and magazines and find examples of deceptive advertising.
- Cut them out & write an analyse of them.
- (Do at least 2; no more than 4)
- 1.What is an industry that you think is more sensitive to consumer needs? Why?
- 2. What is an industry that you feel is relatively insensitive to consumer needs? Why would you say this?
- 3.How can direct action by consumers affect the psychology of marketing within a
supplier of goods or services?
- Give an example if you prefer; or answer this as you choose.
- 4.Why do public perceptions of a particular product’s consumer often vary from
the reality which can be much more diverse?
- 5.Report on your set task –submit cut outs of the ads
Thoughts on Memory and Marketing
There are a number of techniques that have relevance with regard to memory and product advertising.
TV commercials usually last 30 seconds or more and normally involve repetition of the brand name. This is just enough time for the product to enter long-term memory.
This method is not foolproof. Only those consumers who are already motivated will remember the product. Also, information is lost with each repetition. Finally, it may be a futile form of advertising when there is a lot of competition within the same field.
It would seem that brand names are more readily learned if they have a memorable image to accompany them.
It has been found that reference to the self and to people’s own lives also increases the likelihood of them remembering products
This refers to techniques used to remember information by forming associations, creating rhymes, and simplifying information. We can make things easier to learn by dividing them into smaller groups or lists and so on.
All of these techniques provide us with ‘meaningfulness’. That is, we can make information easier to learn by using patterns, keys, associations and so on. We organise our memories into ‘schemas’. It is these schemas that marketers wish to exploit.
A further extract from the Marketing Psychology course lesson notes:
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