Behavioral the customer) impacts the view of its value,

Behavioral learning is established and developed mainly by Skinner. It claims that behavior which is rewarded or punished will probably recur; notwithstanding, it relies upon how it is reinforced1.     

 

As indicated by Rothschild and Gaidis, one of the best application of behavioral learning might be in the improvement of promotional strategies. Promotions can be used to reward buyers for purchasing the brand and increase the probability of repetition. In this manner, three fundamental elements: shaping, extinction, and reinforcement scheme can be used to explain the connection between the behavioral learning model and marketing2.  

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Shaping happens when an incentive is utilized to shape the desirable response. Extinction for the most part happens when the reward is gone, causing the termination of the desirable response, and reinforcement scheme is about timing (instantaneous versus postponed) and continuation (continual or occasional) of the reinforcement.

 

As behaviors cannot be reinforced unless they initially happen, shaping refers to the greatest potential in determining new behaviors. Deals may be used to provoke consumer response and shape their behavior. A vast collection of behavioral research shows that the way in which a deal is confined (how the deal is imparted to the customer) impacts the view of its value, buy intent, and search intent3.         

 

Rothschild and Gaidis conducted a small experiment to see how sales promotions shaping behaviors. In the experiment, a free sample of a product is given to potential buyers. The product sample contains a coupon providing a big discount which can be used in the next purchase. If customers using that coupon at a retail store, he or she will receive another coupon for the next purchase. However, the second coupon which comes along with the product is smaller that the coupon of the sample. The aim of this practice is to habituate consumers through consecutive phases.

 

According to behavioral learning theory, reinforcements are most effective if they immediately follow the behavior. However, it is not always the case in the reality. For instance, it maybe takes time for a consumer to redeem a coupon to the seller in order to get the premium. If the premium is valuable to the consumers, it is still likely that the consumers will continue to purchase that brand in the future, and the behavior is still shaped. Nevertheless, if the process of reinforcing is delayed, the learning from the behavior will be faded out, and ultimately result in the termination of the buying behavior. Rothschild and Gaidis admonish the misapplication of discounts. Overuse of discounts will risk the potential purchases due to promotion elasticity4.

 

In a later study of Rothschild, it was found that the loyalty level to a brand will be enhanced if it is constantly reinforcing to customers. Furthermore, Rothschild believed that price-promotions are detrimental to the brand, and he applied behavior learning theory to explain his belief:

 

A consumer learns to try a new kind of beverage of his favorite brand because of a 10% discount from the public price. The discount encourages purchase due to the reduction in risk (lower price), the brand will be repurchased if the product itself or the umbrella brand offer the consumer a unique value. That is, the consumer perceives that the product is worth trying. However, if the product is not standing out from the similar beverages available in the market, the consumer will choose the brand which maximizes their utility by preferring the brand with the deal, not the quality. The consequence is that the deal produces the unexpected effect and habituates consumers to look for bargains. The model in figure 4 illustrates the process in which how a coupon may become the shaping stimulus.

 

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