THEORIES
Utility...A particular theory of value aimed at explaining consumer choice.
Works very well to explain certain things, such as situations like
‘diminishing marginal utility’.
Constitutes the fundament of ‘mainstream’ economy and consumer
choice research.
Behavioural economics traditionally assumed that people are, (x-bar/high-
n), rational.
Rationality assumes optimal choice making.
Simon nuanced this assumption...
Introducing the concept of
‘bounded rationality’
Rather than thinking of consumer choices as ‘optimizing’, Simon
suggests that they should be thought of as aiming towards ‘satisficing’.
An Inquiry Into the Nature and Causes of the
Wealth of Nations
The Theory of Moral Sentiments
“It is not from the benevolence of the butcher,
the brewer, or the baker that we expect our
dinner, but from their regard to their own
interest.”
– Adam Smith, The Wealth of Nations
It seems that lack (manque) does drive desire (désir) but fulfilling a lack
does nothing to quell desire, rather, it simply redirects it.
The role of the marketer thus becomes, not to help consumers meet
“needs” but to direct “desire” towards new objects.
Human beings derive “enjoyment” (joissance) from following their desires,
but here enjoyment does not have to be a positive or enjoyable thing.
This alternative understanding provides a wealth of explanatory power,
negotiating the borders of belief/disbelief, action/inaction and many other
factors that are central in marketing.
...Lacan assigns meaning to many terms that are central to his work that
differ somewhat from their dictionary definition.
CONSUMER BEHAVIOUR:
“Do not spoil what you have by desiring what you have not;
remember that what you now have was once among the things you only
hoped for.” - Epicurus
“Demand: (noun) willingness and ability to purchase a commodity or
service...[]
[]...Demand: (verb) to call for something in an authoritative way” -
Merriam Webster
Let’s review some basic concepts of the microeconomics approach to
demand:
The higher the price of a good, the less people will buy of it... and
vice versa.
Demand is not linear, but the utility derived from a good decrease
along with the quantity consumed.
The demand for a specific good might be more or less sensitive to
price.
Demand for a good interacts with the price of other goods that
can act as substitutes for that good.
Neo-classical economics operates under a set of assumptions to reduce the complexity of
what goes on in the world:
Consumers are rational agents seeking to maximize utility and can accurately assign
value to goods.
Consumers act independently based on full and relevant information.
Firms are rational agents seeking to maximize profits.
“I believe that the assumptions of neo-classical economics are accurate
representations of how the world actually works” – No one.
PERCEPTIONS AND SYMBOLISM:
Perception is the process by which physical sensations such as sights, sounds, and
smells are selected, organised, and interpreted. The eventual interpretation of the
stimulus allows it to be assigned meaning.
Perceptual Process:
What are Schemas?
A schema is a network of associations with a product, brand, shop or another
object
i.e. images, characteristics, functions, values & feelings
Schemas that influence the perception of incoming information are
called‘frames’ or observational schema
A frame is a window or filter in the mind
Selective and Transformed Perception
Schemas facilitate information processing (the intake, storage in memory,
recognition & recall of information)
Marketing communications aim at developing positive schema about brands &
company names
Perceptual Selection
Consumers are often in a state of sensory overload, exposed to too much
information and are unable or unwilling to process all of the information at
their disposal.
Perceptual selectivity occurs when people attend to only a small portion of the
stimuli that they are exposed to.
PERCEPTUAL SELECTION AND CONSUMER BEHAVIOUR:
Exposure
Consumers will often concentrate on certain stimuli, ignore some
messages while being unaware of others
Selective exposure i.e. filtering perceptions based on past
experiences.
Perceptual vigilance – we become aware of stimuli that relate to our
current needs •
Adaptation – consumers become adapted to certain information
when exposed to them repeatedly
Attention
represents the degree to which focus is on a particular stimuli
Countering advertising clutter – dominating the advertising space to
address the sensory overload from competitors
Creating contrast - Creating unpredictable clutter, something radically
different from what competitors are doing
PERCEPTUAL PRINCIPLES FOR ORGANISING STIMULI:
People derive meaning from the totality of a set of stimuli rather than from any one
individual stimuli.
GESTALT PRINCIPLES OF CLOSURE
Consumers tend to perceive an incomplete picture as complete, filling in the blanks based on
previous experience.
GESTALT PRINCIPLES OF SIMILARITY
Principle of similarity – consumers tend to group together objects that share similar physical
characteristics.
GESTALT PRINCIPLES OF FIGURE GROUND
Figure ground principle – explains where one part of the stimulus dominates while others
recede into the background.
SYMBOLISM AND CONSUMER RITUALS
