1 Module 2 – Channel Institutions

2 Module 2 – Channel Institutions

INTRODUCTION
If consumers are to register any message after being exposed to an ad, an Instagram photo of a
product, a package on the store shelf, or some other marketing element, they must pay attention to it, use their
sense to determine its properties, and make sense of it. When the Great Harvest Bake Company in Temple,
Arizona, offers customers a free slice of bread from a warm loaf just out of the oven, it’s appealing to four
senses: vision, smell, taste, and touch. The bakery plays classic rock music in the background, adding the
sensory appeal of sound. A variety of factors affect the four-step process of exposure, attention, perception,
and comprehension, which also plays a role in and is influenced by knowledge store in memory.

As you saw in Lesson 1, once we are expose to a stimulus (like the Apple brand or logo) and attend to
it, we use our senses to perceive and comprehend it (the apple brand stands for well designed, playful
electronics, not fruit or stuffy machines) Sensory input is the starting point of memory and knowledge. We can
store inputs such as a brand name, a logo (like the Apple), or an advertising image in memory for some period
of time, ranging from moment to years, to be retrieved for later use.

Memory may be explicit or implicit, depending on whether we are aware of trying to retrieve information
from it. The content of our knowledge and the way we structure knowledge and memory influence our ability
to relate information to what we already know our ability to retrieve memory. Finally, memory retrieval can be
enhanced in a variety of ways, thus improving our ability to call on knowledge in memory during any part of
the decision –making process.

This module is divided into two lessons, namely:

Lesson 1 From Exposure to Comprehension
Lesson 2 Memory and Knowledge

MODULE LEARNING OUTCOMES

In this module, you should be able to:
1. discuss why marketers are concerned about consumers’ exposure to marketing stimuli and what tactics
they use to enhance exposure;
2. discuss what memory retrieval is how it works, and the ways in which marketers can try to affect it; and
3. Explain Memory and retrieval.

Lesson 1:
From Exposure to Comprehension

SPECIFIC LEARNING OUTCOMES

In this lesson you should be able to:
1. explain the characteristics of attention and how marketers can try to attract and sustain consumer’s
attention with products and marketing messages;
3 Module 2 – Channel Institutions

2. describe the major sense that are part of perception and outline why markers are concerned about
consumers ’sensory perception; and
3. discuss the process of comprehension, and outline how marketing-mix elements can affect consumer
inference about products and brands.

PRE-ASSESSMENT
INSTRUCTION: Write True if the statement is correct and False if the statement is wrong.

__________1. Before an ad, a tweet, a product sample, or a store display can affect consumers, they must be
exposed to it.
__________2. Consumers can be exposed to marketing stimuli at any stage of the decision-making process.
__________3. The position of an ad within a medium can affect exposure.
__________4. Exposure to commercials is higher when they air at the beginning or end of a commercial break
within a program, because consumers are still involved in the program or are waiting for the
program to resume.
__________5. Consumers avoid ads for product categories they do not use (indicating that the ads are
irrelevant to them); they also tend to avoid or mentally block out ads they have seen before
because they know what these ads will say.
__________6. Consumers' avoidance of marketing stimuli is a major challenge for marketers.
__________7. With zapping, consumers avoid ads by switching to other channels during commercial breaks.
__________8. Cord-cutting further challenges how marketers plan for ad exposure, in part because audiences
are more fragmented among multiple entertainment sources
__________9. While exposure reflects whether consumer encounter a stimulus, attention reflects how much
mental activity they devote to it.
__________10. Consumers cannot possibly attend to all stimuli in the environment, even if they would want to
see everything.

LESSON MAP

From Exposure to
Comprehension

Exposure and Attention and Perception and

Consumer Consumer Consumer
Behavior Behavior Behavior
Figure 1 shows the flow aspects of From Exposure to Comprehension
4 Module 2 – Channel Institutions

CORE CONTENTS

ENGAGE: CASE ANALYSIS

The Nike swoosh may be one of the most recognized logos in the world of sports, but the Under
Armour logo (an interlocking U and A) is increasingly in the spotlight as the company gets noticed on and off
the field. Founded in 1996 by Kevin Plank, once a member of the University of Maryland's football team,
Under Armour designs apparel and gear to help athletes feel and do their best in hot or cold weather, in
sports arenas or on the track. How can a latecomer to a fast-growing industry dominated by global giants
such as Nike get noticed?

A little-known brand name was only one of Under Armour's early challenges. Another was that many
of its first products (such as undershirts that wick away moisture) were not actually visible to onlookers. In
contrast, the logos of competing brands were visible and often prominent on athletic shoes, shirts, and caps.
So, the company initially positioned itself as "a brand for the next generation of athletes." Whereas Nike was
sponsoring well-known, established athletes, Under Armour's sponsorships went to up-and-comers known
for their dedication and athleticism. Its first endorsement deal was with a Dallas Cowboys football player who
had been at University of Maryland with Under Armour's founder. More recently, the company's performance
apparel has been spotted on endorsers such as Heather Mitts (soccer), Cam Newtown (football), and Derrick
Williams (basketball).

As its sponsored athletes do well, and their teams win games and even championships, Under
Armour's brand gains attention and visibility. Although not every rising star becomes a sports legend, the
brand still gets exposure as these athletes receive media coverage, become established in their sports, and
appear in Under Armour ads. Now that the company rings up more than $1 billion in yearly revenue from the
sale of clothing, footwear, and accessories for men, women, and children, it can also afford some high-profile
deals, such as being endorsed by Tom Brady of the New England Patriots.

The Under Armour website features the brand mission-"Make all athletes better"-and puts its
“Universal guarantee of performance” in a conspicuous position, offering a full refund if customers are ever
dissatisfied with a product for any reason. The diversity of models and athletes on the Under Armour site
and in its ads, often shown participating in a sport, invites a broad range of consumers to identify with the
brand.

The close ties between Under Armour and the University of Maryland have led to additional
opportunities for brand and product exposure. To grab attention and sell more team merchandise, college
and professional football teams are switching to more fashionable uniforms and gear, with flashier color and
styles. As part of this trend, Under Armours has designed 32 different items for football players at the
University of Maryland to wear. Fans, competing teams, and the media can’t help but notice the eye-catching
combinations of shirt, pants, and helmets worn by team members on different days-with Under Armour’s
now-familiar logo on each item.

What's ahead for Under Armour? The company is expanding into Europe and beyond, relying on
distribution and marketing communications to reach more consumers, both casual and serious athletes. It is
using social media such as YouTube, Twitter, and Facebook to engage consumers, showcase its sports
endorsers, and increase brand and product visibility. Just as important, new products are in the pipeline,
along with new technology that enhances Under Armour's differentiation.

Activity 1
1. What will Under Armour do to make its brand personally relevant, surprising, and easy to process?
___________________________________________________________________________________
___________________________________________________________________________________
___________________________________________________________________________________
___________________________________________________________________________________
___________________________________________________________________________________
5 Module 2 – Channel Institutions

2. What role does objective and subjective comprehension play in Under Armour's ability to market its
products by sponsoring up-and-coming athletes?
___________________________________________________________________________________
___________________________________________________________________________________
___________________________________________________________________________________
___________________________________________________________________________________
___________________________________________________________________________________

3. Why would Under Armour want to be sure that consumers can clearly see different models as well as
its mission and guarantee on the brand's website?
___________________________________________________________________________________
___________________________________________________________________________________
___________________________________________________________________________________
___________________________________________________________________________________
___________________________________________________________________________________

EXPLORE: READING CONCEPTS

EXPOSURE AND CONSUMER BEHAVIOR
Before an ad, a tweet, a product sample, or a store display can affect consumers, they must be exposed
to it. Exposure means coming into physical contact with a stimulus Marketing stimuli contain information about
products or brands and other offerings communicated by either the marketer (via ads, Facebook messages,
Vine videos, salespeople, brand symbols, packages, prices, and so on) or by nonmarketing sources (e.g .,
news media, word-of-mouth, and consumer reviews of a product).

The best products and services fail to be successful if consumers are not aware of them, and exposure
is a precondition to this. Consumers can be exposed to marketing stimuli at any stage of the decision-making
process. To some extent, they can select what they will be exposed to and avoid other stimuli, as you know
from your own experience. Because exposure is critical to influencing consumers' thoughts and feelings,
marketers want consumers to be exposed to stimuli that portray their offerings in a favorable light or at a time
when consumers may be interested in such products.

Factors Influencing Exposure

• The position of an ad within a medium can affect exposure.
o Consumers' exposure to online ads is more likely when the ads appear high on the search list.
o Exposure to magazine ads is greatest when they appear on inside cover (next to the table of
contents) or on the back cover because the ads are in view whenever the magazine is placed
face down.
o Also, consumers are most likely to be exposed to ads placed next to articles or within TV
programs that interest them.
6 Module 2 – Channel Institutions

o Exposure to commercials is higher when they air at the beginning or end of a commercial break
within a program, because consumers are still involved in the program or are waiting for the
program to resume.
o Some advertisers sponsor commercial-free TV programs in which the company gets product
placement within the show or airs a single ad before or after the show.
o Also, advertisers are placing product images and videos in Facebook news feeds, on Pinterest
boards, as pre-roll ads to YouTube videos, and on Twitter, where social-media users will be
exposed to them (and, in the case of Pinterest, consumers can click to buy).
• Product distribution and shelf placement affect consumers' exposure to brands and packages.
o The more stores carry the product or brand, the higher the likelihood that consumers will
encounter it.
o Likewise, the product's location (eye-level) or the amount of shelf space allocated to it can
increase exposure to a product.
o Sales of some products increase because of their higher exposure in displays at checkout
counters in supermarket, automotive stores, and restaurants.
o With growing interest in mobile checkout, which reduces or eliminates the time customers must
wait to pay for purchases, traditional distribution and shelf position strategies are being re-
evaluated with an eye toward target exposure.

SELECTIVE EXPOSURE
While marketers can work hard to affect consumers' exposure to certain products and brands, ultimately
consumers control their exposure to marketing stimuli. In other words, consumers can and do actively seek
out certain stimuli and avoid or resist others. One reason consumers want to avoid ads is that they are exposed
to so many that they cannot possibly process them all. Consumers avoid ads for product categories they do
not use (indicating that the ads are irrelevant to them); they also tend to avoid or mentally block out ads they
have seen before because they know what these ads will say. When consumers avoid stimuli they find
distracting-such as online ads located near content they want to focus on-they are likely to form negative
attitudes toward those brands.

Consumers' avoidance of marketing stimuli is a major challenge for marketers. During an ad airing on
cable or broadcast TV, consumers can mentally block it out, do something else, leave the room, or avoid it by
zipping and zapping.
• With zipping, consumers record TV shows with a DVR (digital video recorder) and fast-forward through
the commercials when viewing the shows later. Consumers zip through up to 75 percent of the ads in
recorded shows-yet they can still identify the brand or product category in many of the ads.
• Consumers can also skip pre-roll commercials in online channels, such as YouTube. If such skipping
or zipping occurs, an ad with extensive brand information in the center of the screen can have a positive
influence on brand attitude. Also, despite skipping and zipping, prior exposure to an ad improves
consumers' recall of the message but increases consumers' tendency to avoid previously seen ads.
• With zapping, consumers avoid ads by switching to other channels during commercial breaks.
Approximately 20 percent of consumers zap at any one time; more than two-thirds of households with
7 Module 2 – Channel Institutions

cable TV zap regularly. Men zap more than women do. People are more likely to zap commercials at
the half-hour or hour mark than during the program itself.
• Beyond skipping, zipping, and zapping, a growing number of consumers are "cutting the cord" by
dropping cable or satellite television subscriptions in favour of streaming services such as Netflix,
Amazon Prime Video, and Hulu.
• Cord-cutting further challenges how marketers plan for ad exposure, in part because audiences are
more fragmented among multiple entertainment sources. Moreover, cord-cutter tend to have different
media habits, viewing entertainment on computer screens or on mobile device rather than on TV and
viewing on demand, sometimes binge-watching multiple episodes of a series in quick succession.

From Exposure to Comprehension

Before you can pay attention to a marketing stimulus, you must be exposed to it. By allocating mental
resource to a stimulus, you can perceive it and, finally comprehend what it is, in the context of what you
already know.
Exposure Attention Perception Comprehension
• Selective • Focal, • Sensory processing • Source
exposure nonfocal, • Perceptual thresholds identification
• Gaining preattentive • Perceptual • Message
exposure • Habituation organization comprehension
• Consumer
interference

ATTENTION AND CONSUMER BEHAVIOR

While exposure reflects whether consumer encounter a stimulus, attention reflects how much mental
activity they devote to it. A certain amount of attention is necessary for information to be perceived –for it to
activate people’s senses. After consumers perceive information, they may pay more attention to it and continue
with the higher-order processing activities.

Characteristics of Attention
Three key characteristics of attention. Attention is:
• Limited;
• Selective; and
• Can be divided

Attention Is Limited
Consumers cannot possibly attend to all stimuli in the environment, even if they would want to see
everything. However, consumers can attend to multiple stimuli (such as products on store shelves) if
processing them is relatively automatic, well-practiced, and effortless.
8 Module 2 – Channel Institutions

Attention Is Selective
Because attention is limited, consumers need select what to pay attention to and simultaneously what
not to pay attention to. Being surrounded by a potentially over whelming umber of stimuli, we pay less
attention to things we have seen many times before. Attention can also be affected by goals: If we look
at a package with the goal of learning how to use the product, we may be more likely to read the
directions than to read about its ingredients. If we repeatedly pay selective attention to a particular
product and not to certain other products, we are more likely to choose the product that has captured
our attention in the past, and reject those products we have previously ignored.

Attention Can Be Divided

We can divide our attention resources over time, by allocating some attention to one task and some to
another, or by very rapidly switching attention between task. At the same time, we can become
distracted when one stimulus draws attention from another: if we are distracted from an ad, we devote
less attention to it.

Focal and Nonfocal Attention

These three characteristics of attention raise questions about what happens when we focus on
a stimulus (focal attention) while simultaneously being exposed to other stimuli (nonfocal attention). For
example, can we process any information from a roadside billboard in our peripheral vision if we are
carefully focusing on the traffic on the road ahead of us? This example is about the information
processing that can take place during nonfocal attention.

To the extent that we can process information from our peripheral vision even it we are not
aware of doing so, we are engaged in preattentive processing. With perattentive processing, most of
our intentional resources are devoted to one thing, which is the focus of attentive processing, leaving
limits resources for something else

Consequently, marketers often take steps to attract consumers attention by making the stimulus
(1) personally relevant, (2) pleasant, (3) surprising, and/or (4) easy to process. They can use various
research methods to gauge consumers’ attention to ads, packages, and products.
1. Make stimuli personally relevant. Stimuli are personally relevant when they appeal to our needs,
values, emotions, or goals.
2. Make stimuli pleasant. Because people tend to approach things that are inherently pleasant,
marketers can increase consumers’ attention to marketing stimuli by:
➢ Using attractive model. Ads containing attractive models have a higher probability of being
noticed because the models arouse positive feelings or basic sexual attraction
➢ Using music. Familiars’ songs and popular entertainers attract us in pleasant ways.
➢ Using humor. Humor can be effective attention getting device.
3. Make stimuli surprising. Consumers are likely to process a stimulus when it is surprising by:
9 Module 2 – Channel Institutions

➢ Using novelty. We are more likely to notice any marketing stimulus that is new or unique,
because it stands out relative to other stimuli.
➢ Using unexpectedness. Unexpected stimuli may not necessarily be new to us, but their
placement or content differs from what we are used to, arousing curiosity and causing us to
analyze them further to make sense of them.
➢ Using a puzzle. Visual rhymes, antitheses, metaphors, and puns are puzzles that attract
attention in ads, because they require resolution.
4. Make stimuli easy to process. A marketers can enhance attention by boosting consumers ability
to process the stimuli. Four characteristics make a stimulus easy to process.
➢ Prominent stimuli. Prominent stand out relative to the environment because of their intensity.
The size or length of the stimulus can affect its prominence. For example, consumers are more
likely to notice larger or longer ads than smaller or shorter ones.
➢ Concrete stimuli. Stimuli are easier to process if they are concrete rather than abstract.
Concreteness is defined as the extent to which we can imagine a stimulus.
➢ Limited number of competing stimuli. A stimulus is easier to process when few things
surround it to compete for sour attention. You are more likely to notice a billboard when driving
down a deserted rural highway than when in a congested, sign-filled city, just as you are more
likely to notice a band name in a visually simple ad then in one that is visually cluttered.
➢ Contrast with competing stimuli. Contrast captures attention. Color newspaper ads stand out
because they are surrounded by black and white, just as black-and-white TV ads stand out
during TV shows broadcast in color.

Customer Segments Defined by Attention.

If we do pay attention to things that are relevant, pleasant, surprising, and easy to process, can
we identify consumer segments that are more affected by relevance, pleasantness, surprise, and ease
of processing? The answer appears to be yes. Researchers have identified a segment of consumers
who paid minimal attention to an ad because the elements were not relevant to them. A second segment
focused on visually pleasant elements of the ad, such as the picture. The third and last segment spent
the longest time looking at the ad and devoted equal time to the picture, package, headline, and body
text, perhaps because they viewed the product as personally relevant and its purchase as potentially
risky. Hence, the consumers needed sustained attention to properly evaluate the ad's information.

Habituation
When a stimulus becomes familiar, it can lose its attention-getting ability, a result called
habituation or wear-out. For example, think about the last time you purchased something new for your
living room (such as a picture or vase). For the first few days, you probably noticed the object every
time you entered the room: Over time, however, you probably noticed the item less and less, as you
became habituated to it. It has ceased to be part of the foreground, and became part of the background.

In the same way, consumers become habituated to ads, packages, and other marketing stimuli.
To counter this, marketers can alter the stimulus periodically. For example, many companies develop
10 Module 2 – Channel Institutions

multiple ads that communicate the same basic message but in different ways and different media.
Habituation also explains why marketers sometimes change packaging to attract consumers' attention
anew. Kellogg is now marketing breakfast cereals in single-serve pouches, an unusual type of
packaging for this category, to meet the needs of on-the-go consumers and to capture their attention
at the store level.

PERCEPTION AND CONSUMER BEHAVIOR

After we have been exposed to a stimulus and have devoted at least some attention to it, we are in a
position to perceive it. Perception is the process of determining the properties of stimuli using one or more of
our five senses: Vision, hearing, taste, smell, and touch. For instance, consumers judge how much soft drink
a can will contain based on its width and height, how much food a plate contains based on the size, which car
will drive fastest based on the color (red or green) and the engine's sound (low pitched or high pitched), which
fabric softener will make clothes softest based on its smell and color, and so on. Consumer constantly and
mostly automatically determine such properties of marketing stimuli using their senses and knowledge of the
world.

Perceiving Through Vision

What arouses our visual perception? All of the following factors can combine to impact the
beauty or aesthetic qualities of a product or package.

Size and Shape

Consumers perceive that package in eye-catching shapes contain more of a product. When product or
package size is changed, consumers are less sensitive when the change involves only one dimension
(height or length or width) than when the change involves all three dimensions.

Lettering
The size and style of the lettering on a product sot in an ad can attract attention and support brand
recognition and usage. The distinctive, curly Coca-Coca scripts, for instance, is not only eye-catching
but also is instantly identified with the soft-drink brand and express its classic meaning.

Image Location on Package

Where product images are located on a package can influence consumers’ perceptions and
preferences. Images allocated near the package top, on the left side, or at top-left add to the perception
of a product as “lighter”. One packages of products where “lighter” is perceived positively-such as
healthy snacks-the images should be placed in these “lighter” locations.

Color
Color is a crucial factor in visual perception. A color can be described according to hue, saturation, and
lightness. Hue is the pigment contained in the color. Colors can be classified into two broad categories
of hues: warm color such as red, orange, and yellow and cool colors such as green, blue, and violet.
11 Module 2 – Channel Institutions

Saturation (also called Chroma) refers to the richness of the color, leading to distinctions such as pale
pink or deep, rich pink. Lightness refers to the depth of tone in the color.

Diagnostic colors are important for attention and perception, such as pink for skincare or blue
for the Nivea brand of skincare products. These help consumers to quickly determine the product and
brand being advertised, even when the message is shown very fast, in the visual periphery, or with
many competing ads."

Color also can influence our physiological responses and moods: Warm colors generally
encourage activity and excitement, whereas cool colors are more soothing and relaxing. Thus, cool
colors are more appropriate in places such as spas or doctors' offices, where it is desirable for
consumers to feel calm or to spend time making decisions. Warm colors are more appropriate in
environments such as health clubs and fast-food restaurants, where high levels of activity are desirable;
Red appears to arouse an aggressive response and to elicit higher bid increments when used as the
background color of an online auction screen.

Finally, colors can have a great effect on consumers' liking of a product. Defying the stainless
steel trend in kitchen appliances, General Electric recently introduced two bright new refrigerator colors
with retro appeal: Cupcake Blue and Red Pepper.68 Interestingly, research suggests that consumers
of multiple racial groups have an inherent preference for the color white versus the color black in
products and advertising messages.

Appearance of Being New or Worn

Research shows that consumers react differently to money-specifically, paper currency-depending on
whether the bills look crumpled and well-worn or crisp and new. Consumers spend worn bills more
readily than new bills, because they are disgusted at the thought of the used money having passed
through so many hands. On the other hand, they will keep fresh, crisp bills because they can feel good
about spending this currency when they are in public.70

Perceiving Through Hearing

Sound represents another form of sensory input. Perception of sound (auditory stimuli) depends
on its intensity. Of course, consumers are more likely to notice loud music or voices and stark noises.
When the announcer in a radio or TV ad speaks more quickly, the faster pace disrupts consumers'
processing of the information; a low-pitched voice speaking syllables at a faster-than-normal rate
induces more positive ad and brand attitudes. When a company uses one person to speak the voice-
over lines during many of its ads or plays the same jingle in many commercials, consumers associate
those sounds with the product or brand. Apple, Skype, Microsoft, and other firms consciously seek to
define a certain sonic identity using specific music or sounds to identify a brand.
12 Module 2 – Channel Institutions

Perceiving Through Taste

Food and beverage marketers stress taste perceptions in their marketing stimuli. For example,
the major challenge for marketers of low-calorie and low-fat products is to provide healthier foods that
still taste good and that, perhaps more importantly, are perceived as such. Yet what tastes good to one
person may not taste good to another, and consumers from different cultural backgrounds may have
different taste preferences. Interestingly, tasting or sampling a product is the in-store marketing tactic
that most influences consumer purchasing, even though standalone, in-store displays-perceived
through vision-are the marketing tactic that shoppers notice the most. "If you see a four-pack of Oogave
sodas on the grocery shelf alongside all the other soda options, you may not put it in your shopping
cart," explains the head of the small Colorado-based company that makes these all-natural drinks
sweetened with agave. "But once you've tried it, you'll go looking for it."

Food marketers also understand how the sensory texture of food being chewed affects calorie
perceptions. Research shows that when consumers taste foods with a hard or rough texture, they
perceive these to be lower in calorie than foods with a soft or smooth texture, perhaps because smooth
is associated with fat and this is associated with calories.8? The next chapter describes such
associations with products and brands in more detail.

Perceiving Through Smell

If you were blindfolded, you (like most consumers) would probably have on a smell.81 hard time
However, identifying consumers many supermarkets also differ in items based their ability to label have
odors. Compared with younger, consumers, the elderly have a harder time identifying smells, and
women in general are better at the task than men are. Marketers are concerned with the effects of
smell on consumers responses, product trial, liking, and buying.
• Effects of smell on physiological responses and moods. Smell produces both physiological and
emotional responses. Some studies show that people can feel tense or relaxed depending on
whether or not a scent is present and what it is. This theory has been key to the development of
aromatherapy. Some of our most basic emotions ae also linked to smell.
• Effect of smell on liking. Retailers, in particular, recognized that smells can attract consumers.
• Effect of smell on product trial. Smell (often in combination with other sensory perceptions) can
entice consumers to try or buy a food product. Research suggests that scents in the air can be
effective stimuli when related to the product being sold- yet the fit between scent and product is
crucial.
• Effects of smell on buying. Proving a pleasant-smelling environment can have a positive effect
on shopping behavior by encouraging more attention to relevant stimuli that consumers encounter,
and encouraging consumers to linger longer.

WHEN DO WE PERCEIVE STIMULI

Our senses are exposed to numerous inputs at any given time
To perceive each and every one would be over whelming and extremely difficult. Fortunately our
sensory processing is simplified by the fact that many stimuli do not enter our conscious awareness.
13 Module 2 – Channel Institutions

For us to perceive something, it must be sufficiently intense. The intensity of a smell can be measured
by the concentration of the stimulus in a substance or in the air. Stimulus intensity of sounds can be
measured in decibels and frequencies, and stimulus intensify of colors can be measure by properties
like lightness, saturation, and hue.

Absolute Threshold
The absolute threshold in the minimum level of stimulus intensity needed for a stimulus to be perceived.
In other words, the absolute threshold is the amount of intensity needed for a person to detect a
difference between something and nothing. Suppose you are driving on the highway and a billboard is
in the distance. The absolute threshold is that point at which you can first see the billboard. Before that
point, the billboard is below the absolute threshold and not sufficiently intense to be seen.

Differential Thresholds
Whereas the absolute threshold deals with whether or not a stimulus can be perceived, the differential
threshold refers to the intensity difference needed between two stimuli before people can perceive that
the stimuli are different. Thus, the differential threshold is a relative concept; it is often called the jus
noticeable difference.

Weber's law, outlined by psych physiologist Ernst Weber, states that the stronger the initial stimulus,
the greater the additional intensity needed for the second stimulus to be as different. Imagine that a
marketer finds, through testing, that one ounce would need to be added to a 10-ounce package before
consumers notice that the two packages contain different amounts. The marketer has a 50-ounce bow
and wants to know how much to add before consumers detect a difference. According to Weber's law,
K = 1/10 or 0.10. To determine how much would need to be added, the marketer uses this formula:

Subliminal Perception
"Limen" is the Latin word for threshold, and "sub" means below, as in submarine. Subliminal stimuli are
presented below the threshold level of conscious awareness. If such stimuli still have an effect, this is
evidence of subliminal perception. Subliminal perception is different from preattentive processing. In
the case of preattentive processing, we process information which is outside the focus of our attention-
for instance, we may pre-attentively process an ad in the visual periphery of an article that we are
reading on a webpage. In principle, we could be made aware of the ad in periphery, namely, by looking
there: Stimulus exposure is not subliminal. In the case of subliminal perception, our attention is directed
squarely at the stimulus, but the stimulus is being presented subliminally. Subliminal stimuli are
presented so quickly or are so degraded that the very act of consciously perceiving is not possible,
even if you try hard.

HOW DO CONSUMERS PERCEIVE A STIMULUS?

Consumers tend not to perceive a single stimulus in isolation; rather, they organize and integrate it in
the context of the other things around it. Also, many stimuli are really a complex combination of numerous
simple stimuli that consumers must organize into a unified whole using perceptual organization. This process
14 Module 2 – Channel Institutions

represents a somewhat higher, more meaningful level of processing than simply having stimuli register on our
sensory receptors. Four basic principles related to perceptual organization are figure and ground, closure,
grouping, and preference for the whole.

The principle of figure and ground suggests that people interpret stimuli in contrast to a background.
The figure is well defined and, in the forefront, -the focal point of attention-whereas the ground is indefinite and
in the background. Military personnel may use camouflage clothing to blend in with their background, and
remain unnoticed. Advertisers should plan for important brand information to be the figure, and not let the
background muddle the figure.

Closure refers to the fact that individuals have a need to organize perceptions so that they form a
meaningful whole. Even if a stimulus is incomplete, our need for closure will lead us to see it as complete. The
key to using the need for closure is to provide consumers with an incomplete stimulus.

Grouping refers to the fact that we often group stimuli to form a unified picture or impression, making
it easier to process them. We view similar or nearby objects as belonging together. Marketers can influence
the image or perception of an offering by grouping it with other products

Preference for the whole means that consumers perceive more value in the whole of something than
in two or more parts that are equivalent to the whole. Thus, you are more likely to make a $20 purchase if you
have two $5 bills and a $10. In contrast, if you have a single $20 bill, your preference for the whole makes you
less willing to spend it.

COMPREHENSION AND CONSUMER BEHAVIOR

So far, we have been exposed to a marketing stimulus, focused our attention on it, and used our senses
to perceive it. Now, we have to identify what it is and understand the message it conveys. These are the two
critical elements in comprehension, which is the process of extracting higher-order meaning from what we
have perceived in the context of what we already know. Sometimes it is immediately clear that a stimulus to
which we are exposed is an ad for a car brand, but the message the car brand wants to convey may be less
clear. In that case, the message comprehension is challenged. But increasingly, it may be hard to identify
whether the stimulus that we are exposed to is an ad or something else, which represents a challenge of source
identification.

Source Identification
Source identification is the process of determining what the stimulus that we have detected actually is.
Imagine opening a magazine and quickly looking at a page. Source identification is the rapid, perhaps
automatic process of determining what a scene, such as a page in a magazine or on a website,
contains. When exposed to a page in a magazine, people almost automatically ask themselves the
question: "Is it an ad, or something else?" And if it is an ad, they naturally try to determine the brand or
product being advertised. Such identification processes are useful because they help consumers to
rapidly determine which of the numerous stimuli in their environment are relevant to them (is the ad for
15 Module 2 – Channel Institutions

ice cream or broccoli?). Research shows that consumers are remarkably good at identifying the
products and brands in ads-when the ads are typical for the category. In fact, after only 100 milliseconds
(just a brief, single glance) consumers already know that something is an ad rather than editorial
information (such as an article). And if the ad is typical, they know which product category and even
which brand is being advertised. Ads that are atypical for the product category require more than a
single glance to communicate what they are for, which is why marketers try to retain consumers'
attention long enough to allow for source identification.

Because of techniques such as product placement (arranging for a product to be shown in a movie, TV
show, or digital game), it is not always easy to know whether something is really a marketing message
or not. Such blurring of the lines occurs in other media, as well. Is that magazine article actually an
advertorial (advertising that takes the form of editorial content) or a story unconnected with a sponsor?
Is that TV program an infomercial (a long-form commercial sponsored by a marketer) or a news story
about a product or brand? Is a social-media message consumer-generated or marketer-sponsored?
Commercial stimuli try to look noncommercial because that may increase their credibility-although that
compromises source identification by consumers. The U.S. Federal Trade Commission (FTC) requires
that advertorials, infomercials, and sponsored tweets be clearly labeled as such, but these disclosures
generally attract less attention than the rest of the message.

Message Comprehension
Once we have identified the source as a marketing message and determined what product or brand is
involved, we can start to comprehend which message it brings us to make sense out of it-on a number
of levels. In particular, marketers are concerned with:
1. objective and subjective comprehension of messages
2. the possibility of miscomprehension
3. the effect of motivation, ability, and opportunity on comprehension
4. the effect of culture

Objective and Subjective Comprehension

• Objective comprehension refers to whether the meaning that consumers take from a message
is consistent with what the message actually stated.
• Subjective comprehension is the different or additional meaning consumers attach to the
message, whether or not these meanings were intended.
• Whereas objective comprehension reflects whether we accurately understand what a sender
intended to communicate, subjective comprehension reflects what we understand, accurate or
not.
• Marketing mix elements such as price and advertising have a powerful influence on what we
think a message is saying.
• You may infer that a dental gum is as powerful at whitening teeth as whitening toothpastes
because the package art has white sparkles, the model in the ad has very white teeth, and the
package displays phrases like "whitening agent."
16 Module 2 – Channel Institutions

• Yet the product may not be an effective whitening agent, and the words on the package may not
actually say that it is, as you will see later in this chapter.

Miscomprehension
• Miscomprehension occurs when consumers inaccurately construe the meaning contained in a
message, that is, when their subjective comprehension is incorrect.
• Several studies have found a surprisingly high level of miscomprehension of TV and magazine
ads.
• The estimated rate of objective comprehension was only about 70 percent for TV ads and 65
percent for magazine ads.
• Moreover, the rates of miscomprehension for directly asserted information and implied
information were fairly equal, as were miscomprehension rates for programming, editorial
material, and advertising.
• In addition to miscomprehending advertising messages, consumers sometimes miscomprehend
product descriptions and usage instructions.
• The insurance company Aflac (American Family Life Assurance Company) changed its
advertising messages after research showed that consumers misunderstood some of its
offerings.
• The famous duck that quacks the company's name is still in Aflac ads, but now the ads focus
on features and benefits. The "One. Day Pay" feature is promoted because "Millennia’s are a
generation of instant gratification, and with this initiative, they are able to get their claims
processed and paid within just a day," explains Aflac's chief marketing officer.

Effect of MAO
• Consumers may not comprehend a marketing message when they have low motivation and
limited opportunity to process it, when the message is complex or shown for only a few seconds,
or when the message is viewed only once or twice.
• Experts are better able to comprehend information about a highly innovative product when
prompted by marketing messages that help them make the connections and tap existing
knowledge in more than one category.
• Regarding ability, one study found that although consumers want to see nutritional information
packaging (implying high motivation to process it) Still comprehension may improve with
expertise and ability, which is the reason that adults often better comprehend the finer points of
a message than young children do.
• Also, marketers should carefully plan written marketing message to match the reading ability of
the target audience.

Effect of the Culture

• Consumers in low-context cultures such as those in North America and northern Europe
generally separate the words and meanings of a communication from the context in which the
17 Module 2 – Channel Institutions

message appears. In these cultures, consumers place more emphasis on what is said than on
the surrounding visuals.
• But in high-context cultures (such as many in Asia), much of a message's meaning is implied
indirectly and communicated nonverbally rather than stated explicitly through words.
• The message sender's characteristics, such as social class, values, and age, also play an
important role in message interpretation.
• Language differences further raise the possibility of miscomprehension, as does the meaning
that consumers in different cultures attach to words.
• For example, in the United Kingdom, a billion is "a million million," whereas in the United States,
a billion means "a thousand million."
• Finally, marketing messages can encourage positive product attitudes when they portray the
progression of time in the way people from that culture visualize it.
• Thus, in cultures where people read from left to right, placing product images horizontally to
suggest the past at left and the future at right-especially in the context of how the product helps
consumers improve over time-will lead to more positive evaluations.

CONSUMER INFERENCES
Specific elements of the marketing mix can affect the correct or incorrect inferences consumers make
about an offering during comprehension. Inferences are the conclusions that consumers draw or interpretations
that they form based on the message. Such inferences may lead to conclusions such as (1) if brand A contains
attribute 1 then it will also contain attribute 2 (congruent) or (2) if brand A contains attribute 1 then it will not
contain attribute 2 (incongruent). Here, we look at the effect of brand names and symbols, product features
and packaging, price, message wording, and retail atmospherics and display.

Brand Names and Symbols

Subjective comprehension of a marketing communication can be based on the inferences consumers
make from a brand symbol. For example, the Pillsbury Doughboy has slimmed down over the years
because the company's marketers were afraid that consumers would infer that he was fat from eating
Pillsbury products. Google changed the typeface of its brand not long ago to give it a modern look,
enable animation, and make it more readable on smaller screens such as smart watches.

Brand names themselves can create subjective comprehension and inferences. For example,
alphanumeric brand names like BMW's X6 tend to be associated with technological sophistication.

Descriptive names can also create inferences. Brand names such as Speedo for bathing suits may
create inferences about the particular brand's benefits, 146 Marketers sometimes use old or retired
brands to launch new products or enter new markets, banking on recognition and inferences from the
past. Nissan, for instance, used to market low-priced vehicles worldwide under the Datsun name before
discontinuing the brand in the 1980s. Decades later, Nissan reintroduced the Datsun brand on low-
priced cars in India, Russia, and other emerging markets. Exposure to brands can also influence how
18 Module 2 – Channel Institutions

we behave. One study showed that video-game players drove faster and more recklessly in a racing
game when exposed to the Red Bull llogo.

Product Features and Packaging

Consumers may subjectively comprehend aspects of an offering based on inferences they make from
the product and the way that it is packaged. For example, consumers may infer that a product with a
low repair record also has a long warranty. As another example, a consumer who encounters a large,
multipack item may use prior knowledge about the correlation between price and package size to infer
that the large-sized brand is also a good buy.

Consumers make taste inferences based on nutritional information presented about food products,
inferences that affect their buying and consumption decisions. Some research shows that consumers
who are given nutritional information about a product are more likely to see it as healthier than when
they are not given nutritional information. However, they will also infer that the healthier product will not
taste as good as an unhealthier product. Moreover, consumers infer those products with unusual
flavours or color names are better than products that use common flavors or color names.

Package characteristics can also stimulate inferences. Although consumers may make inferences
about one brand if its packaging looks much like that of the market leader, they do not necessarily react
negatively to the copycat brand. As bargain-hunting consumers increasingly seek out cost-effective
store brands, more retailers are redesigning their packaging to point out the differences between store
and national brands. Walgreens, for example, has renamed and repackaged its store-brand
merchandise to stand out and look more distinctive next to national brands.

Price
Consumers sometimes (but not always) make inferences about an offering's quality based on its price.
182 They may know from prior experience that price and quality tend to be correlated in a particular
product category, and then infer that a high-priced product is also high in quality. 183 Consumers often
make this inference when they believe that brands differ in quality, when they perceive that choosing a
low-quality product can be risky, and when they have no information about the brand's quality before
they buy it. 184 When consumers use price as a shortcut to infer quality, they may overestimate the
relationship between price and quality. Note that some consumers may infer that a low price means
poor quality, whereas others may infer that a low price means good value. thoughts) as they shop.
When relying on one's feelings, the ease of perceiving rounded prices feels good, and this transfers to
the product.

Offering a product with no price (meaning free, as in a gift with purchase) can increase the consumer's
willingness to pay for the product after the promotion expires. The reason is that consumers perceive
little or no devaluation of the free product, especially in the purchase context of a high-priced item,
because they use the price of the expensive product to estimate the value of the freebie. Method of
payment affects inferences about pricing, as well. When consumers have been primed for cash, they
19 Module 2 – Channel Institutions

focus more on costs in evaluating the product. On the other hand, when they have been primed for
credit cards, they tend to focus more on the product's benefits.

Price plays an important role in marketing of medications. According to research, consumers infer that
lower-priced medications are more available to people who need them, and this feeling of
accessibility increases perceptions of self-risk, resulting in higher consumption. Inferences about
higher-priced medications have the opposite effect, decreasing perceptions of self-risk and lowering
consumption.

Message Wording
Consumers draw inferences from the way marketing messages are worded. Suppose a product's
warranty period is promoted in terms of months (such as 60 months) rather than in terms of years (five
years). Here, consumers will focus on the numbers, not the units of measure, which will lead them to
perceive greater differences between products that describe warranty periods in terms of larger
numbers.193 Inferences related to the unit of measure come into play in other situations, such as when
consumers perceive that a delivery period of "1-2 weeks" seems longer than "7-14 days" because they
focus on the magnitude of the measure of time (weeks seem longer than days).194 If consumers
mentally "rehearse" message wording about prices and discounts, the mere sounds of numbers can
influence and distort perception of the numerical magnitude on a nonconscious level.

Retail Atmospherics, Displays, and Distribution

Comprehension can be influenced by retailers' marketing tactics. The inferences you make when
walking into a warehouse-type store like Costco are likely to be different from the inferences you make
entering a more upscale, service-oriented store like Nordstrom. Atmospherics are a major tool used to
develop, elaborate, and change store images. The Duane Reade drug store in New York City's financial
district is nothing like the typical drug store, urban or suburban, Housed in a former bank building with
marble walls and vaulted ceilings, this store has a two-story lobby and a holographic "greeter" who talks
up special features such as the stock ticker, manicure center, and sushi stations.196 Whether the retail
environment is organized or not is another factor, because consumers tend to have lower self-control
in a disorganized environment, which affects impulse purchasing.197 When consumers are in an
unstructured setting, they seek out structure by showing a preference for retail environments, products,
and brand logos that are tangibly or intangibly bordered.

The context of a product display is also important. In particular, it may lead consumers to rely more on
external cues-meaning that a brand's positioning could be undermined by a store's inappropriate retail
display decisions.

Moreover, consumers may draw inferences from the way an offering is distributed. For example, food
trucks have not traditionally been associated with innovative, top-quality meals or snacks. These days,
however, consumers expect novel tastes when they approach one of the many gourmet food trucks
crisscrossing streets from Portland, Oregon, to Portland, Maine.
20 Module 2 – Channel Institutions

EXPLAIN: DEEPEN YOUR UNDERSTANDING

INSTRUCTIONS: Answer the following questions below.
1. How do skipping, zipping, zapping, and cord-cutting affect consumers’ exposure to marketing stimuli
such as products and ads?
___________________________________________________________________________________
___________________________________________________________________________________
___________________________________________________________________________________
___________________________________________________________________________________

2. What is attention, and what are its three key characteristics?

___________________________________________________________________________________
___________________________________________________________________________________
___________________________________________________________________________________
___________________________________________________________________________________

3. In what ways do prominence and habituation affect consumer attention?

___________________________________________________________________________________
___________________________________________________________________________________
___________________________________________________________________________________

4. What is perception, and what methods do we use to perceive stimuli?

___________________________________________________________________________________
___________________________________________________________________________________
___________________________________________________________________________________
___________________________________________________________________________________

TOPIC SUMMARY

In this lesson, you learned that:

• For a marketing to have an impact, consumers must be exposed to it, allocate some attention to it, and
perceive it.
• Consumers need a basic level of attention to perceive a stimulus before they can use additional mental
resources to process the stimulus at higher levels.
• Exposure occurs when the consumer is presented with a marketing stimulus. Attention occurs when
the consumer allocates mental activity to the stimulus.
• Attention is limited, selected, and can be divided, and may be focal or nonfocal.
• Consumers perceive a stimulus by using one or more of their five senses.
• Perceptual thresholds determine the point at which stimuli are perceived. Consumers can sometimes
perceive things outside of their conscious level of awareness, a phenomenon called subliminal
perception.
21 Module 2 – Channel Institutions

• Perceptual organization occurs when consumers organize a set of stimuli into a coherent whole,
affected by the principles of figure and ground, closure, grouping, and preference for the whole.
• Comprehension is the process of extracting higher-order meaning from what consumers have
perceived in the context of what they know.

REFERENCES

• Hoyer, Wayne D. et.al, Consumer Behavior 7th edition. Cengage Learning Asia Pte Ltd., 2018.
• Hoyer, Wayne D. et.al, consumer Behavior in the 21st Century. Cengage Learning Asia Pte Ltd., 2012.
• com/project/consumer-behaviour-solved