Journal of Marketing Volume 53 Issue 2 1989 (Doi 10.2307/1251410) Stephen J. Hoch and John Deighton - Managing What Consumers Learn From Experience PDF

Managing What Consumers Learn from Experience
Author(s): Stephen J. Hoch and John Deighton

Source: Journal of Marketing, Vol. 53, No. 2 (Apr., 1989), pp. 1-20
Published by: American Marketing Association
Stable URL: http://www.jstor.org/stable/1251410
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Stephen J. Hoch & John Deighton
ConsumersLearn
ManagingWhat
from
Experience
The authors argue that what consumers learn from the experience of using products is not a simple
matter of discovering objective truth. They frame the problem of learning from experience as a fourwith three moderating factors (familstage process (hypothesizing-exposure-encoding-integration)
iarity with the domain, motivation to learn, and the ambiguity of the information environment). The
framework is used to identify where learning from product consumption experience is most open to
managerial influence. The authors discuss strategic tools for managing experiential learning and consider
applications to the simulation of learning in concept and pre-test-market product testing.
The best salesmanfor the productis the productitself

(Beckmanand Davidson 1967).
If we do not learn from experience, this is largely
because experienceoften gives us very little informationto learnfrom (Brehmer1980).
All experience,usingthe wordin the widestpossible
sense, is either enjoyed or interpretedor both, and
very little of it escapes some degreeof.interpretation
(Ogdenand Richards1923).
LEARNING about products from sources other than
the product itself, such as advertising or information displays, is a major theme in marketing. Prescriptions for managing this kind of learning abound,
backed by a substantial body of research including much
of persuasion research and the mainstream consumer
learning tradition (Ray 1973).
In contrast, there are few prescriptions for the
management of learning from direct experience. The
of Marketing
andBehavioral
StephenJ. Hochis AssociateProfessor
ScienceandJohnDeighton
is AssistantProfessor
of Marketing,
UniGraduate
Schoolof Business,Centerfor Decision
versityof Chicago,
Research.
Thefirstauthoracknowledges
thesupportof the Bozell,Jacobs, Kenyon& Eckhardt
Fundat the Graduate
FacultyEndowment
Schoolof Businessandthesecondauthoracknowledges
from
support
theTuckAssociates
Dartmouth
Program,
College.
Journal of Marketing
Vol. 53 (April 1989), 1-20.
product experience tends to be regarded as beyond the

reach of managerial influence. Common sense holds
that "the proof of the pudding is in the eating": the
merit of a product is inescapably manifest to all who
try it. Advertising lore claims that "good advertising
kills a bad product" (Schudson 1984). Economic theory, particularly pure information economics in the
tradition of Nelson (1970, 1974), posits that because
product quality is unambiguously revealed in the act
of using the product, advertising a poor quality product affords no long-term advantage. Even economists
who recognize the existence of credence (unknowable) product qualities (Darby and Karni 1973) assume that consumers appreciate what can and cannot
be learned from experience.
We argue a contrary position. Learning from selfgenerated experience with a product or service is not
a simple process of discovering objective truth. It is,
to a greater or lesser extent, open to influence and the
consumer's confidence in the objectivity of such
learning can be illusory. We specify under what conditions learning from experience is most unreliable and
on what dimensions managerial intervention contributes to that unreliability.
We offer a simple four-stage model of the beliefupdating process: hypothesizing-exposure-encodThis model isolates the points at
ing-integration.
which consumer learning from experience is fallible
ManagingWhatConsumersLearnfrom Experience/ 1
and thereforeopen to influence. We identify three influences on learning. Two are internalpsychological
factors, the consumer's familiarity with the domain
and his or her motivation to learn, and one is an external factor, the ambiguity of the informationenvironment.'These factors serve to classify consumer(or
segment) learning situations. We then lay out strategies for managingwhat consumerslearn from product
experience. In addition to the three factors just mentioned, we condition our remarkson a fourth factor,
the competitive status of the target brand as a "topdog" or an "underdog."In general, we argue that underdogs gain by facilitating learningwhereas topdogs
benefit by impedinglearning. Finally, we consider the
applicationof these findings to the simulation of experiential learning in the context of copy testing and
pre-test-marketproductevaluation.
To illustratethe utility of the framework,imagine
thata small-sharebrandin the analgesicmarket,Datril,
wants regularusers of the market leader, Tylenol, to
learn that the two brands are indistinguishableboth
chemically and in terms of performance.Datril might
classify the learning situation as one in which consumershave highfamiliarity(extensiveexperiencewith
the product category), low motivation to learn (they
think they know as much as they need to know to get

by),
and an ambiguous information environment
(product performanceis difficult to evaluate). Datril

is classifiedcompetitivelyas an underdogbrand.These
four contingencies define a difficult learningenvironment, in which advertising is likely to be relatively
unsuccessful for the underdog. Datril's limited resources may be leveraged more effectively if (at least
initially) it uses channel tactics and sales promotion
to facilitate experiential learning directly ratherthan
depending on education.
How and What Do Consumers

Learn?
We conceptualize learning as an intuitive hypothesistesting process whereby consumersadapttheir beliefs
to make sense of new data (Bower and Hilgard 1981).
Beliefs take the form of working hypotheses about
consuming;for example, "If you use honey, cakes turn
out nice and moist." They exist at different levels of
detail, similarto the elementsof learningtheorymodels
of attitudes (Fishbein and Ajzen 1975): (1) the kinds
and levels of attributespossessed by products, (2) the
relationbetween productattributesand outcomes, and
(3) the relation between outcomes and affect.
'Our review of the psychological literature is selective, with a clear

focus on learning from experience. For a more exhaustive treatment
of other forms of consumer learning, see Alba and Hutchinson (1987).
Research on consumer learning has tended to define learningrathernarrowly. It has been much more
concernedwith what Russell (1948) called knowledge
by description, informationfrom vicarious or indirect
encounters such as verbal description, depiction, or
modeling, than with what he called knowledgeby acquaintance, obtained by first-hand or direct experience. For example, consumer response to new products often has been simulatedby exposure to written
descriptionsof the experience(Scott and Keiser 1984).
What distinguishes learning by acquaintance, however, is its interactivecharacter.The stimulus acts on
the subject, as in message learning, but the subject
acts on the stimulus, too. The actions of the learner
affect the content of the experience.
Learning by Education
When marketersset out to influence consumers, they
tend to think first of methods that implantknowledge
by description. Advertising is the principal tool, but
personal selling, instruction manuals, toll-free hotlines, and package labels also are used. Other information vehicles include press reports, home economics classrooms, cookbooks, consumer information
services, and government agencies. These tools appeal to marketingmanagersbecause messages can be
controlled and repeated. From the consumer's perspective, learning from education is effective and efficient;consumersneed to rememberrules that "work"
and discard ones that do not (Campbell 1966). They
are well socializedto the educationalprocessafteryears
of experiencewith school lessons, books, and lectures
and overall are very proficient.
However, the disadvantagesof descriptive methods aremany. Becausethe interestsof marketers(profit)
may conflict with the interestsof consumers (a good
buy), the marketeras educatormay lack source credibility or believability.,Forewarnedof persuasive intent (McGuireand Papageorgis1963), consumersoften
resist this intentionalpedagogy. They may lack motivation to learn or involvement in the topic and the
effects may not endure unless sustained by multiple
costly exposures.
Learning from Experience
If managerscould influencewhatconsumerslearnfrom
personalacquaintance,many of these problemswould
fall away because consumerstend to grantspecial status to conclusions drawn from experience (e.g., "experience is the best teacher"). They do so for several
reasons. First, motivationand involvement tend to be
higher and exposure is self-selected. Control of the
usage situation and context may render the learning
experience more germane. Second, consumers often
take pride in such learning and form internalattributions about personal efficacy. Source credibility is
2 / Journalof Marketing,April1989
typically higher, as the interestsof the source and the

consumer are the same.2 Experience also promotes
better memory because informationis more vivid and
concrete (Paivio 1971) and because experience requires more elaborative internal rehearsal and selfgeneration (Slameka and Graf 1978). Like the discovery method used in early education, learningfrom
experience is self-paced, affordingthe consumer better control over informationflow. Finally, information learnedfrom experience is likely to have a greater
directiveinfluenceon behavior(Fazio and Zanna 1981;
Smith and Swinyard 1982).
The managerialdrawbackof relying on consumer
learningfrom experience seems obvious: lack of control over the content of learning. A systematic analysis of the process of self-generated learning, however, suggests that it is wrong to conclude that such
learningis beyond managerialcontrol. We argue that
learning from experience can be difficult for consumers in many environmentsand is seldom efficient.
The sense of control that consumersfeel as they learn
to operate within a decision environmentmay be illusory (Langer 1975) and a sense of competence may
well be acquired prematurely.Whether intentionally
or not, managersand the legislators of public policy,
to the extent that they have power to shape a learning
environment, can (and do) control learning from experience.
Consumer Learning:
Stages and Influences
For expository purposes, we partition the learning
process, the transition from prior to revised beliefs,
into four discrete stages as shown in Figure 1: hyWe
pothesizing-exposure-encoding-integration.
recognize, however, that the process is iterative and
the stages are neither independentnor necessarily in
a fixed linear sequence. Within stages, we consider
the influence of three factors: the consumer's familiarity with the domain, his or her motivationto learn,
and the ambiguity of the informationenvironment.
*Familiarity. Following Alba and Hutchinson (1987), we
refer here to the number of product-related experiences
accumulated by the consumer. "Familiarity" serves as
an umbrella term and is related, though not perfectly, to
other important constructs including consumer expertise, prior knowledge, and strength of belief. Familiarity
is necessary though not sufficient for the development
of expertise, the ability to perform product-related tasks
successfully. In general, consumers with greater famil-
2Consumerswho considerthemselvesproductnovices may realize

that they lack the ability to judge qualityand consequentlydefer to
the more "expert"marketer.We argue,however,thatconsumersdo
not find the evaluationof most everydayproductsvery intimidating
and thereforetrusttheirown judgment.
FIGURE1
A Four-Stage Model of Consumer Learning
Consumer
Motivation
to Learn
Consumer
Familiarity
with the
Domain
Prior
Beliefs
Hypothesis
Generation'
Exposure to
Evidence
'
Encoding
of Evidence
Integration
of Evidence
and Prior
Beliefs
Revised
Beliefs
I
Ambiguity of
the Information
Environment
iarity have a richer store of prior knowledge. It is manifest in more finely differentiated, hierarchically organized knowledge structures, with well-developed
consumption rules and more firmly entrenched beliefs
and expectations about product experience.
* Motivation. Motivation refers to both the direction (goals)
and intensity of the consumer's learning behavior
(Bettman 1979). What is to be learned (the goal) may
be product knowledge, brand knowledge, attribute
knowledge, or indeed anything relevant to consumption.
* Ambiguityof the informationenvironment.We argue that
many information environments afford little opportunity
for learning from experience, both because of institutional (retail, distribution) arrangements that constrain
information availability and because products sometimes
offer equivocal qualities (Weick and Daft 1983). Product ambiguity refers to the potential for multiple interpretations of quality (Ha and Hoch 1988; Hoch and Ha
1986), implying that experience per se is not completely
revealing. Ambiguity can arise at different stages in the
evaluation process: during attributeidentification if consumers selectively perceive different subsets of attributes from occasion to occasion, during the encoding
and evaluation of attributes that are fuzzy or subjective
(Sabini and Silver 1982), and during information integration if consumers cannot consistently apply an attribute-weighting strategy.
At various points in the development, we contrast

our descriptive model with Bayes' Theorem. Our intent is not to set up Bayesian inferenceas a strawman,
as its descriptive shortcomingshave been well documented (e.g., Kahneman,Slovic, and Tversky 1982).
Instead, we view it as a navigationaldevice; Bayesian
updatinghighlightswhat informationconsumersshould
look for and how it should be integratedwith existing
beliefs. As such, it representsa manner of learning
not open to outside influence, thus providing a clear
point of comparisonwith how we believe consumers
learn from experience.
1. The Consumer Speculates:

Hypothesis Formation
Before belief updatingcan occur, the consumer must
have hypotheses available for testing. We begin by
examining why consumers speculate at all and, when
WhatConsumers
LearnfromExperience
Managing
/ 3
they do speculate,why they considerone set of hunches

or suppositions ratherthan another. These questions
do not arise in most normative theories; the set of
competing explanations for a datum is determined
outside the model. Evidence, however, can suggest
many questions. If the choice of questions is open to
exogenous influence, learning also is open to influence.
Peirce (1958) introducedthe term "abduction"to
refer to the moving ("leading away") from a puzzling
or incompletelyunderstoodset of facts to a hypothesis
that accounts for it. This process differs from induction, whereby a set of facts is used to test the truthof
a hypothesis. Inductionstarts with facts and a hunch
and ends with a strongerconviction about the hunch.
Abductionstartswith the facts alone and the outcome
is a hunch.
Formallywe can describe the abductiveprocess as
one in which an event, conspicuous or anomalous
enough to call for explanation, triggers a search in
memoryfor "if p then q" condition-actionrules. Events
are usually complex and multifaceted,with many candidate p's or q's. If some salient, previously stored
rule accountsfor the event (a condition-actionmatch),
the consumer has an "aha!"experience: belief in the
rule is inductively strengthened.If not, the consumer
must resortto abduction(Mick 1986) to try to account
for the event: the consumer must generate a hypothesis by selecting some facet of the event as p or q and
then search memory for a "then q" or an "if p" to
create a plausible rule. The more conditions of the
rule met by the event, the more plausible is the abduction.Attributiontheoristsalso have consideredwhat
leads people to ask "why" questions. Weiner (1985)
identifies two factors that promote spontaneousattribution activity: the observationof unexpected, novel
events and nonachievementof a goal.
A form of abduction with particularrelevance to
consumer learning is generalization (Holland et al.
1986). Treatingdisparateobservationsas instances of
a single principle reduces memory demands and increases predictive power over the marketplace. Familiarity is importantin determiningwhich facts attractattention(Miyake and Norman 1979). Consumers
"mustknow enough to know what is not known" and
thus what needs explaining. Most research indicates
that people generate few hypotheses and underestimate the likelihood of alternative unspecified hypotheses (Fischhoff, Slovic, and Lichtenstein 1978;
Gettys and Fisher 1979; Gettys, Mehle, and Fisher
1986; Tweney et al. 1980). Apparentlythey covertly
rehearsepreviouslygeneratedhypotheses(Hoch 1984a;
Nickerson 1984), which interfereswith the generation
of new hypotheses and leads to functional fixedness
in problem solving. Alba and Chattopadhyay(1985,
1986) have shown that readily available brandnames
can inhibit the retrieval of competing brands and

sometimes entire product categories, though greater
productfamiliarityreduces this retrievalinterference.
Without new hypotheses, the consumer is less likely
to generateor recognizenew diagnosticevidence, which
limits the opportunityfor learning.
To illustratehow abductionmay direct the path of
learning, consider how a consumer might respond to
the experienceof a piece of dried-outchicken at a Roy
Rogers fast food restaurant.A possible rule to test is
that "if chicken is dry, the chef is having an off day"
or "if chickenis dry, trafficthroughthe restaurantmust
be slow"-but in a world in which the KentuckyFried
Chicken chain argues that "we do chicken right," another abduction is that the problem is endemic: "If
you orderchicken at a roast beef specialty restaurant,
don't be surprisedif it comes dry; you are safer ordering roast beef than chicken at Roy Rogers." Quite
a numberof subsequentexperiences (including good
chicken at Kentucky or good roast beef at Roy Rogers) might inductively strengthen this abducted hypothesis. The updating would be rational, but the
question might not be the most useful one to have
asked.
As this example illustrates, the informationenvironment seldom affords evidence that is conclusive.
There usually is ambiguity in the sense that the evidence is consistent with more than one hypothesis
(Hoch and Ha 1986)-but is the evidence perceived
to be equivocal? Are consumers aware of "multiple
sufficient causes" (Shaklee and Fischhoff 1982)? If
consumersfail to recognize the full range of interpretations, the evidence will be seen as more diagnostic
than it is and consumers may infer that they have
learnedmore than they actually have.
Consumermotivation influences whether the hypotheses generatedare many and complex, with contingencies and interdependencies,or few and simple.
Whenconsumershave modestgoals, they are less likely
to experiencethe disconfirmationsof expectationsthat
trigger hypothesis generation. Their hypotheses may
be formedpassively: by chance, by the suggestions of
advertising, or by salient aspects of the problem the
consumeris tryingto solve. Consumersmay not want
to know very much about the comparative performance of brandsof flu medication, let alone the possibility that a brand'sperformanceinteractswith diet,
mood, the weather,or any of a multitudeof candidate
factors. They may be content to let advertisingset the
investigative agenda with yes/no ratherthan relative
questions: "Did brandA let me rest at night?"versus
"Did brand B help me cope with a busy day better
than A?" They may not see the point in creating alternativesto a consumptionrule that works. A "good
enough" bias may inhibit consumer hypothesis generation (Hoch 1984b).
4 / Journalof Marketing,
April1989
2. The Consumer is Confronted:

Exposure to Evidence
For true learning to occur, the consumer must be exposed to diagnosticproductexperiences,evidence that
discriminatesamong competing consumptionrules or
alternatives.3This informationis often difficult to obtain because of both consumers' own actions and the
availability and structureof informationin the marketplace.
Exposureto productexperienceoccursin two ways:
by passive observation, whereby the consumer does
not actively manipulatethe decision environment,and
by active, self-directedsearch. Learningfrom passive
observation can be difficult; people can be easily
overwhelmed by the data. Research on multiple cue
probability learning (MCPL) has demonstratedthat
people have difficulty learning probabilisticrelations
between two or more variables, especially in the presence of error in the variables (Brehmer 1980). Researchon covariationassessment(Arkes and Harkness
1983; Crocker1981) and illusorycorrelation(Hamilton
and Rose 1980) suggests that people pay too much
attentionto positive "hits" and neglect other sources
of information.
Though relevant prior knowledge and realistic
stimulitypicallylead to improvedperformance(Sniezek
1986), learning from passive observation presents a
difficult information-processingtask. Total reliance
on passive observation may preclude observation of
diagnostic (negative) feedback when operatingin stable, circumscribedenvironments.For example, much
of a child's food consumption learning is essentially
passive because it is determinedby exogenous caretakers. Though children (and parents)learn which of
the foods served by parents taste good and bad, the
fact that they cannot learn about foods never served
reduces the potential for diagnostic disconfirming
feedback. One might argue that learning throughactive hypothesis testing is advantageousbecause it affords the consumer the opportunity to search purposefully for diagnostic information;however, as we
show, active hypothesis testing can exacerbateproblems at the exposure stage because of self-inflicted
search biases (Fischhoff and Beyth-Marom 1983;
Snyder and Swann 1978; Wason 1960).
Familiarity and exposure. Though familiarity
probablyinfluenceslearningmost at the encodingstage,
it also can affect exposure. Many studies have demonstrated the limited extent of external information
search (Newman 1977). Findings on the relation between familiarity and search have been inconsistent
(Brucks 1985); the antecedents are probably more
3In Bayesian terms, information is diagnostic when the likelihood
rate, P(H,|D)/P(H2|D), is significantly different from 1.
complex than those conceptualized. However, there

are theoreticalreasons to believe that the relationship
may be inverted-U-shaped(Johnsonand Russo 1984),
with both high and low familiarityleading to less external search. The rationaleis that though familiarity
encouragessearchby reducingthe costs of processing
new information, experts may not find much added
value in the information. Novice consumers do not
know what to ask, whereas consumerswith a rich belief structurethinkthey alreadyknow the answers. Familiarityand priorknowledge may inhibitlearningbecause of overconfidence in one's level of expertise
(Brucks 1985). Overconfidenceis a common finding
in judgmentanddecisionresearch(Einhor andHogarth
1978; Lichtenstein,Fischhoff, and Phillips 1982) and
in certaincases is more pronouncedwhen people have
or think they have expertise (Arkes, Dawes, and
Christensen1986; Bradley 1981). Limitedexternalinformation search, even for expensive durable goods
for which "perceived risk" is supposedly high, may
result in part because consumers underestimatewhat
more there is to lear (Duncan and Olshavsky 1982).
Motivation and exposure. Factors that inhibit hy-
pothesisgenerationmay also inhibitinformationsearch.

Consumersmay see little pragmaticvalue in trying to
disconfirm a consumption rule that works (Hoch
1984b). Research on the "law of small numbers"
(Tversky and Kahneman 1971) suggests that consumers may think they have sufficient evidence and
thereforemay be less motivatedto continue sampling
even when statistical criteria would not supportsuch
high confidence. The consumer motive to "satisfice"
(Simon 1957) often is expressed as a greaterconcern
for rule sufficiency than for rule necessity (Klayman
and Ha 1987). Shaklee and Fischhoff (1982) have
shown that people engage in truncated, superficial
causal search, choosing to clarify the role of one salient hypothesis before consideringothers even in the
presenceof multiple sufficient causes. By focusing on
single sufficient causes, consumers simplify the task
and still make sense of the data.
Consumersare more carefulto avoid false positive
errors(e.g., the errorof buyingan inferiorhouse brand)
than false negative errors(e.g., the opportunitycosts
of not buying a high quality generic). They act as
thoughthey have a confirmationbias (Deighton 1984)
or, as Bruner,Goodnow, and Austin (1956) put it, "a
thirst for confirming redundancy," expending more
effort searching for hypothesis-consistent than hypothesis-inconsistentinformation(Snyder and Swann
1978). The ad claim that no other toothpastehas ever
done a test that proves it is better than Crest exploits
consumerconcern for sufficiency and lack of interest
in necessity. Meyer (1987) found that consumers selectively exposed themselves to "good" alternatives
before examining "bad"alternatives,even though the

task was to learn the underlyingrule governing product quality.This patternmakessense if consumershave
a generalized notion that learning about what constitutes a good alternative provides more utility than
learningabout bad alternatives,which is probablythe
case in many consumer markets where a reasonable
numberof good alternativesare present.
One reason for so little active informationsearch
is that learning occurs in the context of ongoing behavior, creating what Horton (1967) called "mixed
motive" situations in which the desire to learn generalizations is balanced against more pressing online
goals. Consumers act as though the cost of learning
is greater than the cost of a mistake and, in consumption situations involving inconsequentialstakes,
they may be correct. For example, consumers who
develop nontransferable,product-specific skills may
be unwilling to learn how to use a superiorproduct
(Alba and Hutchinson 1988). Tschirgi (1980) has argued that hypothesis-testingbehavioris most likely to
occur when something goes wrong or unexpectedly
turns out right. Because many consumption experiences involve mundaneoutcomes, active hypothesistesting may be infrequent.Schwartz(1982) has shown
thatwith positive reinforcement,both pigeons and human beings repeat what has worked in the past. This
behavioralstereotypyinterfereswith the ability to uncover generalizationsby precludingthe observationof
negative feedback. Brandloyalty and buyer inertiaare
examples of consumer stereotypy. Only in cases involving a strongvariety-seekingmotive (McAlisterand
Pessemier 1982) is there any significant countervailing force.
The cognitive dissonance literaturehas shown that
consumers have a disposition, in postpurchaseinformation search, to seek exposure to consistent, dissoinformation(CummingsandVenkatesan
nance-reducing
Ehrlich
et
al. 1957). Consumerstend to avoid
1976;
situations in which they might receive unfavorable
feedback about chosen alternatives and favorable
feedbackabout rejectedalternatives;insteadthey often
attempt to "confirm a good buy," especially if the
choice is irreversible (Frey and Rosch 1984). Postpurchase confirmation is particularlylikely in consumer "converts," for whom the need to justify peculiar diets or extensive productusage is acute (Frey
and Wicklund 1978).
Environmental constraints on exposure. The
structureof evidence in the marketplaceis not a matter of chance, but is largely the result of managerial
decisions. Informationenvironmentsoften are not built
to facilitate learning;on the contrary,they may deliberately impede it. Retailerswant to presentunique alternativesand avoid selling the same brands as their
competitors. The burdenplaced on consumersto sort

out privatelabel brands,special model numbersof national brands,and differentproductassortmentsmakes
directprice and qualitycomparisonsextremelycostly.4
Retail informationenvironmentsfavor sequential
over simultaneousinformationpresentation.Side-byside comparisonsare rare and brandprocessing is the
norm(Bettmanand Kakkar1977), placing severe burdens on memory, as when one tries to comparestereo
speakers across retail outlets. Advertising that presents informationabout one brand only also encourages brand-basedprocessing. Marketand media segmentation strategies inhibit exposure to information
across segments. Distributionpolicies may discriminate against particulartypes of consumers. Weekend
"do-it-yourselfers"
may never hear aboutmaterialsand
tools available to contractors.
Negative feedback is importantfor learning;without it, a general overconfidence in judgment competence may develop (Einhornand Hogarth 1978). One
obstacle to receiving such feedbackis self-selectiona consumer'sdecisions or actions may limit access to
negative feedback. Purchase of a durable good (refrigerator,car, computer, stereo) can potentially take
the consumerout of the marketfor a long time. Though
product failure is a clear source of feedback, most
household appliances last many years, during which
consumersare less attentiveto alternativesunless they
habituallyread ConsumerReports. Performancefeedback often is delayed and once received may be difficult to integratewith existing beliefs: five-year warranties, 7500-hour light bulbs, and claims for longer
lasting batteriesare difficult to monitor. Anotherfactor inhibiting negative feedback is the self-fulfilling
prophesy occurring when a consumer's own actions
change the informationenvironment,typically for the
better(Darley and Fazio 1980). A beer consumerwho
follows Lowenbrau'ssuggestion that "tonightis kind
of special" and serves Lowenbrauwill have difficulty
untanglingthe effect of the occasion from the effect
of the brand. When a consumer acts to avoid a problem with a productand then attributesthe outcome to
own initiative instead of manufacturerincompetence,
the negative featuremay be encoded as positive. With
the rapidly changing technology of word processing,
for example, some users take perverse pride in the
ability to operate with obsolete programs.
Product experience, however, can and does provide negative feedback. When expectations are vio-
4Shugan (1986) presents data showing that even when competing

retail outlets sell the same product line (e.g., Canon cameras), they
often do not carry the same model numbers. An obvious exception to
this practice is in the consumer packaged goods/grocery trade. However, in the retailing of durable goods and most nongrocery soft goods
(e.g., clothing), the practice is common.
lated, motivation to correct the problem is high and

learningusually is rapid(Tschirgi1980; Weiner 1985).
A clearly flawed productis quick to generatenegative
word-of-mouth(Richins 1983), as in the case of such
productsas Rely tampons. However, much consumption experienceoccursin whatwe would call "friendly"
environments, those structuredto afford little opportunity for negative feedback (Davis, Hoch, and
Ragsdale 1986). For example, in service marketing
(as in marriage),filtered feedback may be functional;
negative feedback (originating from either client or
service provider)may be avoided for fear of its shortrun cost to workingrelationships.More subtly, wrong
rules that work (sufficient conditions treated as necessary) create friendly feedbackuntil somethingin the
decision environmentchanges, at which point the cost
of maintainingthe rule may be severe.
Summaryof exposure biases. StandardBayesian
inference requiresthat evidence take the form of random observationsfrom a known data-generatingprocess. In consumer learning environments, most observations are not likely to be random. Ideally, if the
sampling process can be modeled (Schum 1980),
Bayesian updatingis still possible, but there is no evidence that consumer intuitions are so refined or indeed that consumers are alert to sampling biases.
Our discussion highlights the furtherproblemthat
successive product experiences (whether passive or
active) may not be independent. In Bayesian terms,
this problem is called "conditionalnonindependence"
(Fischhoff and Beyth-Marom 1983); that is, P(Dj|H)
is not necessarily equal to P(Dj|H,Di). Confirmatory
search, self-selection biases, and self-fulfilling prophecies are all examples of violations of conditional independence. The problem is not that conditionalnonindependence cannot be accommodated within the
Bayesian perspective (Winkler 1972), but that consumers may not be aware of it or know how to cope
with it. They may falsely assess the cumulative impact of a chain of productexperiences and overstate
diagnosticity. We do not believe that consumers always overlook conditional independence; for instance, in learning through education, they are alert
to source credibility and are sensitive to the fact that
repeated advertisementsfrom a manufacturerare not
conditionally independent. However, the nonindependence characterizingevidence from product experiencemay be less transparent;
nonindependencemay
be undetected because source and audience are the
same.
3. The Consumer Perceives:
Encoding of Evidence
Even when the consumer is exposed to representative
evidence, many factors influence whether it is at-
tendedto and the form in which it is encoded. A ubiquitous finding in perception is that the selection of
evidence and the meaning(s) attachedto it depend on
priorknowledgeand expectations.If a storedrule does
not implicate a piece of data, it may not be encoded.
Siegler (1983), studyingchildren's ability to lear the
rules needed to solve balance beam problems, found
that young children did not generalize across experiences in which the distanceof a peg from the fulcrum
was varied along with its mass. Having no reason to
expect the distance dimension to matter, they failed
to encode it.
Familiarity and encoding. In the psychology of
encoding, it is common to distinguish two extreme
modes of processing (Bobrow and Norman 1975). In
bottom-upprocessing,perceptionis data-driven,guided
of the stimulus.By such
by the objectivecharacteristics
a process we accommodate to the reality that chilis
are hot, Pepsi is sweet, and lemons are sour. The contrastingmode is top-downprocessingor concept-driven
perceptionguided by prior knowledge. Here new information is assimilated into preexisting knowledge
structures.Brand names influence perception by assimilation, as shown in researchcomparingblind with
brandedtaste tests (e.g., Allison and Uhl 1964).
Neither mode is inherentlysuperior:assimilation,
for example, has both advantagesand disadvantages
for processing new information. It helps consumers
process informationquickly, improving comprehension and performancein complex but stable environments by reducing cognitive demands. For instance,
performancein the previously mentionedMCPLtasks
improves significantly when variables are given realistic labels (price and quality) and the relation between variables matches subjects' prior theories
(Muchinskyand Dudycha 1975; Sniezek 1986). However, strong expectations can hinder performancein
unstableenvironmentsif consumerssee what they expect to see and overlookdiscrepantinformation.When
priortheoriesare not congruentwith the data, learning
can be very difficult (Camerer 1981; Sniezek 1986).
When consumers are inexperienced, encoding of
complex productexperience is difficult because of a
lack of relevant knowledge structures(Sujan 1985).
Consumerswho are unfamiliarwith a domain tend to
encode more incidental detail and rely on peripheral
cues (Chaiken1980), which is similarto what has been
found in researchon young children's comprehension
of TV advertising (Roedder 1981). In these cases,
productexperience may be more overwhelming than
informative;novice consumersmay not apprehendthe
experience enough to appreciateit.
The nature of assimilative processing is an importantissue in research on belief formation, maintenance, and memory. Priming of prior stereotypic
WhatConsumers
LearnfromExperience
Managing
/ 7
beliefs favors memory for stereotype-consistentinformation over irrelevantinformation(Darley and Gross

1983; Rothbart, Evans, and Fulero 1979) because
preexistingstructuresfacilitatethe processingof primeconsistentinformation(Srull,Lichtenstein,andRothbart
1985). Moreover, people tend to encode information
as consistent with prior knowledge, especially when
the evidence is ambiguous(Herr, Sherman,and Fazio
1982;Higgins, Rholes, and Jones 1977; Srulland Wyer
1979, 1980). In real-world interactions assimilative
processing can be self-fulfilling as the encoding stage
feeds back on exposure (Herr 1986). This is not to
suggest that people never accommodate unexpected
information. When new data unambiguously violate
prior expectations, they are rememberedbest of all
and have greatimpacton subsequentjudgments(Hastie
and Kumar 1979; Srull, Lichtenstein, and Rothbart
1985). Recent researchsuggests this effect occurs because more elaborate, deeper processing is needed to
reconcile the incongruity(Hastie 1984).
Effects of familiarityhave been studiedin the consumer domain with similar results. In the consumer
satisfaction-dissatisfaction literature, slight differences between expectationsand performancehave led
to assimilation (Oliver 1977; Olshavsky and Miller
1972), whereas large discrepancieshave producedaccommodationin the form of contrasteffects (Anderson
1973; Cohen and Goldberg 1970). Top-down, assimilative processing is sometimes referred to as "default" processing, the default being prior expectations. Recently, Deighton (1984) and Hoch and Ha
(1986) examined the role of advertisementsin inducing default processing of subsequentproduct experience. They found that unless the productevidence was
unambiguous(either clearly good or clearly bad), ad
claims assumed the default role, leading to assimilative processing similar to that found in the previously
cited primingstudies. The ads appearedto "transform
the productexperience"(Wells 1984). Advertisingled
consumers to allocate disproportionateattention and
encoding efforts to the advertisedbrand(Hoch and Ha
1986) during productexperience.
Finally, evidence suggests that people differentially encode positive and negative outcomes. Estes
(1976) found selective encoding of outcomes in a sequentialtask; confirmingoutcomes were remembered
better than disconfirmingcounterparts.Dellarosa and
Bourne (1984) showed that once a decision is made,
people rememberdecision-consistentinformationmuch
better than decision-inconsistent information. They
found that this memory difference was due both to
differentialattentionand elaborationat the time of encoding and to the availability of better retrieval cues
for consistent informationat the time of recall.
Motivation and encoding. Even when consumers
are exposed to information,attentionalresourcesoften
are still under voluntarycontrol. If consumersdo not

see the new informationas pertinent,relevant, or personally involving, they may not bother to encode.
Moreover, when confrontedwith large amountsof incoming data, consumers may have to infer what has
happened. If not highly motivated, consumers may
engage in "easier"processingby retrievingpreviously
learnedconsumptionrules (Schweder and D'Andrade
1980), and in doing so learnless from experiencethan
they should.
Objectively disconfirming evidence may not be
encoded as such for several reasons. First, many consumption rules are elastic in their ability to account,
post hoc, for diverse outcomes; the rules are not precise enough to be refuted easily. Consider the belief
among many house painters that "oil-based paint is
the only way to go." When the paint startspeeling on
the 1890 Victorian, should the painterrevise his beliefs about the quality of latex versus oil or attribute
the problemto one of a host of othercandidates(poor
surface preparation,95% humidity)? For a rule that
has worked in the past, consumersmay be motivated
to engage in selective retrieval to explain away apparentinconsistencies(Gilovich 1983). Thoughex post
redefinition and reconstructionof evidence does not
appearto be very common (Alba and Hasher 1983),
it may be more likely when outcomes are separated
in time from original actions (Snyder and Uranowitz
1978). If consumersuse an outcomeas a retrievalcue,
they will be more likely to retrievedecision-consistent
evidence (Dellarosa and Bourne 1984). Second, consumers may recognize that the available outcome
feedbackis not perfectlyreliable.Gorman(1986) found
that when subjectswere informedthat feedbackcould
contain error their hypotheses were effectively immunized against diconfirmingevidence. Third, consumers may be reluctantto abandona long-standing
rule or custom if they have nothingbetter with which
to replace it; disconfirmationof a theory does not entail its replacementas Kuhn(1970) has observed. Partially right rules may "feel" betterthan no rule at all.
Mynatt, Doherty, and Tweney (1978) found that, in
a very complex task, subjects often went back to hypotheses that previously had been abandonedas a result of negative feedback, presumablybecause they
could not come up with anythingbetter.
Environmental constraints on encoding. Many ex-
periences are inherentlyambiguous (open to multiple

interpretations),particularlyin closely contested markets. The encoding problems resulting from information ambiguity are due mainly to assimilation to
prior expectations. Ambiguityper se is not the problem, but ratherthe fact that consumers overstate the
diagnosticityof the information.As Will Rogers said,
"It's not what we don't know that gives us trouble;
it's what we know that ain't so." For example, in par-
ity categories (e.g., beer, margarine), there is very

little that experience can teach us except maybe that
there is very little to learn. Consumers may be unaware of operating in environmentsthat are data-rich
but information-poor
(Ha and Hoch 1988; Johnsonand
Katrichis 1988). One possible explanationis that consumers have an illusion of control (Langer 1975) induced by the realism of first-handproductexperience.
Consumers feel that they should be able to learn
something from using products and sometimes they
do, but, like experts in a varietyof predictiondomains
(Dremen 1982; Jacoby et al. 1984; Oskamp 1965),
consumers assume that more experience (datapoints)
is better regardless of diagnosticity. Research on direct experience with attitudeobjects indicatesthat not
only does attitude-behaviorconsistency increase, but
so does attitudinalconfidence (Fazio and Zanna 1981;
Smith and Swinyard 1982).
The informationeconomics school (Nelson 1970,
1974) does not recognize that productexperience can
be ambiguous. In its purest form, it draws a distinction between search goods (for which quality can be
determinedbefore purchase)and experiencegoods (for
which quality can be determinedonly afterpurchase);
however, it assumes that after experiencing n brands
"the consumer is able to determinewith certaintyhis
most preferredbrandamong the n" (Nelson 1970, p.
314). Though some productexperiences undoubtedly
provideclearcutevidence of productquality (e.g., paper towels), many consumptionexperiences are open
to multiple interpretations(e.g., drinkingbeer). When
the physical characteristicsof differentbrandsare indistinct or difficult to disentangle from one another
(e.g., attributesof a beverage), consumerevaluations
of quality have proven to be unstable (Ha and Hoch
1988; Hoch and Ha 1986), influenced by both contextual factors in the decision environmentand outside suggestion such as advertising. Our treatmentof
learning in ambiguous contexts has some points in
common with the economic analysis of "credence
goods" (Bloom and Krips 1982; Darby and Karni
1973), but thereis a basic distinction.Consumersknow
that neithersearch nor experience can help them evaluate credence qualities. Informationis missing and so
consumers become extra vigilant-hence their interest in surrogatesfor firsthandknowledge (warranties,
reputation,etc.). Ambiguousqualities,in contrast,are
perceived and evaluated by the consumer (nothing is
missing), but they have the potential to be perceived
in more than one way.
Productexperience also may be ambiguous when
consumptionrules are fuzzy. The wife who describes
her spouse as a "kindof meat and potatoesman"(Levy
1981) may have little difficulty explaining why he ate
fish at the neighbors' dinnerparty("he was just being
polite"). Product experience may tell little about the
validity of an imprecise rule, regardless of how dis-
tinctive the experience is. Moreover, some product

claims may be more testablethanothers. For instance,
the claim "We have the best warrantyin the business"
is relatively easy to evaluate, though not costless. In
contrast, it is difficult to imagine any product experience that could test claims like "Oh, what a feeling-Toyota!" or "Nissan:built for the humanrace";
they are hard to confirm, but even harderto disconfirm. Though in most circumstancesconsumers show
a clear preferencefor objective over subjectiveclaims
(Holbrook1978), lack of disconfirmingevidence may
enhance ad credibility even when confirming evidence also is lacking (Hoch and Ha 1986; Shaklee and
Fischhoff 1982).
Finally, the reliability of consumer learning also
is affected by the processing demandsof the decision
environment.Time pressureand distractionare ubiquitous aspects of much of in-store informationsearch
and decision making (Hoyer 1984). Under such conditions, consumers often adopt simplifying choice
heuristics (Wright 1974); if the evidence is ambiguous, what is learned may depend on the particular
evaluationprocessused. Recently,Ha and Hoch (1988)
found that when consumerswere confrontedwith large
amounts of data to be processed in a short period of
time, advertising systematically influenced how they
interpretedambiguousevidence. However, when consumers had either the opportunity(adequateprocessing time) or the motivation to engage in exhaustive,
data-drivenprocessing, even ambiguousevidence was
renderedless open to influence.
Summary of encoding biases. In Bayesian infer-
ence, evidence is assumed to be encoded veridically.

In fact, encoding is beyond the realm of the updating
process. The meaning of a datum is assessed independently of hypotheses and prior knowledge. Our
discussion of encoding suggests that the interpretation
of a datum typically is not conditionally independent
of previousdata. Instead,not only are consumerslikely
to see what they expect to see, they also may not be
motivated to accommodate discrepant evidence,
choosing either to reinterpretit so it fits or to explain
it away as an exception to the rule.
4. The Consumer Integrates:

The Updating Process
In the final stage, consumersmust integratenew evidence with existing beliefs. In practice it is often difficult to separateproblems due to inappropriateintegrationfromthose thatmay have occurredduringeither
exposure or encoding. Clearly, the quality of the updatingdepends on the quality of the evidential inputs.
The behavioral decision-making literature (e.g.,
Kahneman,Slovic, and Tversky 1982) is replete with
examples of deviations from the Bayesian norm;most
of these are discussed within the exposure and encodManagingWhatConsumersLearnfrom Experience/ 9
ing stages. However, even when exposure and encoding biases are not operative (Slovic and Lichtenstein
1971), research shows that the transition from prior
to revised beliefs is not very Bayesian in character.
When consumers have a product experience (D)
that is a direct consequence of an underlying hypothesis (H) so that P(DIH) is close to 1, how should they
adjust their beliefs? Clearly, the credibility of the hypothesis cannot decrease, but by how much should it
increase? Normatively, the observation of D and
knowledge of the conditional probability P(DIH) does
not provide enough information. The consumer also
needs knowledge of the probability that D would be
observed even if H were not true, that is, P(DI-H).
The reason is clear: D tells the consumer nothing new
if it is as likely to occur under H as under -H. With
knowledge of P(D|-H), the consumer can assess the
Bayesian likelihood ratio. Unfortunately, people exhibit a pseudodiagnosticity bias (Doherty et al. 1979;
Nisbett, Zukier, and Lemley 1981; Troutman and
Shanteau 1977), showing much more concern about
P(DIH) than P(DI-H) and in fact often acting as though
P(DI-H) = 1 - P(DIH) (Fischhoff and Beyth-Marom
1983). Beyth-Marom and Fischhoff (1983) found that
people selectively search out information about P(DIH)
(a self-induced exposure bias), but often consider information about P(DI-H) irrelevant to the task (an encoding bias). If consumers either are not exposed to
or do not understand the significance of P(DI-H), they
may perceive diagnostically worthless experiences as
informative simply because P(DIH) is large. For example, consider the hypothesis "Folger's is a great
coffee" and the datum "Folger's is mountain grown"
and let us assume that all coffee is mountain grown,
that is, P(DIH) = P(D|-H) = 1. Though D supports
H, observing D is nondiagnostic because P(DI-H) =
1. However, if consumers rely on a "more is better"
rule about data (Hoch and Ha 1986; Snapper and
Peterson 1971), prior knowledge will be solidified unjustifiably by even uninformative product experiences.
People may weigh evidence that supports prior
knowledge differently from that which contradicts it.
Lord, Ross, and Lepper (1979) found that subjects rated
evidence supportive of a prior theory as more convincing and probative while discounting contrary evidence, and as a consequence became more polarized
in their beliefs after viewing mixed evidence. This
tendency has been aptly labeled "cognitive conservatism" (Greenwald 1980). Similar results have been
found in what is known as the "debriefing paradigm"
(Ross, Lepper, and Hubbard 1975).
A final integration issue is capacity. Capon and
Kuhn (1980) found that children lack information integration strategies necessary to accommodate multiple pieces of information. If information is inade-
quately integrated, beliefs will change less than they

should in response to experience.
Strategic Implications of Learning

From Experience
We review recent research on experiential learning not
just to show how much of learning is fallible, but to
suggest that the points where consumer learning is most
error-prone are those where marketers can exert leverage on the learning process, whether by facilitating, hindering, or shaping what is learned.
The review identifies three influences on learning:
familiarity, motivation, and ambiguity. Three questions reflecting these factors can be used to classify
the environments facing the manager who seeks to influence consumer learning.
1. What do consumersalready know? Our review
shows that if consumers are unfamiliar with the
domain, learning is open to influence but will be
slow. Without familiarity, prior beliefs tend to be
few or weakly held, but consumers lack competing hypotheses to organize complex experience;
too many answers and too few questions can overwhelm the process (Miyake and Norman 1979).
Consumers gain only a superficial (holistic) appreciationof experience because they lack the skills
needed to develop a detailed analytic understanding (Alba and Hutchinson 1987). Consider how
little novices learn from experience with rare foods
such as truffles, caviar, or saffron; here the marketer's job is to teach rules for interpreting product experience. If consumers are familiar with the
domain, learning will be faster but typically less
suggestible.
2. How much can experience teach? Ambiguity

emerges as a critical environmental factor enabling the management of experiential learning.
When experience is neither vague nor open to
multiple interpretations, consumers learn fast and
the manager has little scope for influencing the
result. An ambiguous environment, in contrast,
poses both threats and opportunities. The threat is
that, if left to their own devices, consumers using
a competitor's product may not recognize when a
productexperience is uninformativeand may credit
it with significance, becoming more entrenched in
purchasebehavior. The opportunityis either to help
the consumer to recognize that experience is
teaching nothing (parity products) or to interpret
or resolve the ambiguity in directions that favor
one's own brand.
3. Howmotivatedare consumersto learn?Thehighly

motivated consumer generates more hypotheses,
enters more actively into the search for information, and encodes the information more fully than
the consumer who is less motivated to learn. Consumers who are strongly motivated to learn tend
to be less susceptible to influence than those who
are not. Given that many consumption decisions
are commonplace and the outcomes often are inconsequential, motivation to learn is likely to be
low much of the time.
These three questions define the six categories of

readiness to lear defined in Figure 2. In constructing
FIGURE2
A Classification of Readiness to Learn from
Experience
How motivated
are consumers
to learn?
What do
consumers
already know?
Unfamiliar
Highly
How much can

experience teach?
Little
A Lot
(High Ambiguity) (Low Ambiguity)
Learningis most
susceptible to
management.
,rapid,
.Formation
Formation
of
"superstitious"
beliefs is possible.
Existingbeliefs
inhibit suggestibility.
.,~~~~~~~~~Motivated
Moti~vated
Familiar
Learningis slow to
start and difficultto
sustain, but is
susceptible to
management.
.initiate
...~~~~~~~~~Motivated
Complacencyinhibits
initiationof learning,
so experience is
Familiar
unresponsiveto
management.
Learningis
spontaneous,
and
difficult to
manage.
Unfamiliar
Weakly
Learning is
difficuit to
and once
started difficult
to manage.
the figure we make the simplifying assumption that

low ambiguityin a learning situationmore than compensates for lack of familiarity. Unambiguous experience is so informativethat the familiaritydistinction
becomes relatively insignificant. The disposable diaper market in recent years has illustratedthe consequences of unambiguous product experience. When
manufacturersshowed consumers sharp performance
differences, consumers were quick to learn. When
Huggies introducedelasticizedleg holes, Pampers,the
more familiar brand, lost share. Pampers responded
with a better, ultra-absorbentgel-filled product and
recovered its lead.
Besides the three questions defining the learning
environment,the strategistmust ask a fourthquestion.
It probes the manager'sincentive to facilitate learning
about the product category, which depends on the
brand's market standing. Market standing refers to
whetherthe brandis dominant(a topdog) or weak (an
underdog)in relationto other brandsable to serve the
consumer group targetedby the strategist. As a measure of standing, the brand's share of sales in the target marketis generally adequate.The denominatorof
share is total sales in a market defined as whatever
the targetconsumergroup considers to be the relevant
set of competingbrands, the evoked set. Among most
soda drinkers,for example, Coke is a topdogand Hires
Root Beer is a distinct underdog. Among serious root
beer drinkers, however, Hires might be topdog and
Barrelheadan underdog.A fragmentedindustry(Porter
1980) may have no topdog or may have more than
one brandin that position. The fourth question is:
4. How much do we want consumers to learn? A

topdog does not have the same incentive to encourage learning as an underdog for two reasons.
First, a topdog is more vulnerableto learning. Prior
knowledge usually favors topdogs in the target
market as a whole. In contrast, underdogs thrive
by discrediting or displacing the consumption rules
that have created the established market order.
Actions that impede learning thereforetend to help
topdogs whereas underdogs gain by facilitating
learning. Underdogs must find ways to build motivation and overcome consumer lethargy and lack
of curiosity.5 Second, topdogs have more resources to exert control over the marketplace than
underdogs. One result of this differential power is
that topdogs have access to a larger arsenal of
strategic weapons than do underdogs. For example, though topdogs can use advertising to both
educate the consumer and influence the consumption experience, underdogs typically cannot compete as equals on advertising and therefore may
do better if they use other forms of promotion to
encourage learning.
Our discussion of strategicinitiatives is organized

as shown in Figures 3 and 4. First we consider prescriptionsfor topdogs, then those for underdogs.
FIGURE3
Strategies for Managing Learning from
Experience: Topdog Strategies
How motivated
are consumers
to learn?
What do
consumers
already know?
Unfamiliar
y
oight
~~Motivated
Familiar
Unfamiliar
How much can

experience teach?
Little
A Lot
(High Ambiguity) (Low Ambiguity)
When the consumer wants to learn,

their natural curiosity works to the
underdog's advantage. Strategies
designed for the weakly motivated
consumer are also appropriate here.
Disrupt
the
agenda.
Facilitate
trial.
Weakly
Motivated
Familiar
Do
everything.
sThe statement is obviously an oversimplification but, because we

cannot cover all cases in the article, we feel it is a useful generalization. We recognize that it is not always true that topdogs do not gain
from consumer learning. For example, topdogs want consumers to
learn about product improvements or new features. However, to convey this new information to consumers, the topdog usually will be
better off relying on communication-based (education) strategies than
encouraging learning from experience because of greater control and
the inherent resource advantages accompanying a large customer base.
Conversely, a poor quality underdog may not want to encourage consumers to learn much about the product; however, because such a
brand dare not call much attention to itself, it will probably always
be an underdog.
WhatConsumers
LearnfromExperience
Managing
/ 11
FIGURE4
Strategies for Managing Learning from
Experience: Underdog Strategies
How motivated
are consumers
to learn?
What do
consumers
already know?
Unfamiliar
How much can

experience
teach?
Little
A Lot
(Low Ambiguity)
(High Ambiguity)
Reinforce
the
agenda.
Explain
the
Highly
Motivated
Motvated
Block
Familiar
difference.
exposure
o
to
evidence.
Unfamiliar
Weakly
Motivated
Familiar
When consumer motivation is low,

inertia works to the topdog's
advantage.
Strategies designed for
the highly motivated consumer are
also appropriate here, though
implementation
should
be easier.
Topdog Tactics
The topdog must be most concerned with managing
the learning process when confronting a highly motivatedconsumer.The vigilantconsumeris more likely
to learn something new (potentiallydetrimentalto the
topdog) from experience. The topdog needs to erect
appropriatedefenses: either reinforcingthe agenda or
blocking exposure when experience is ambiguous, or
explaining the unambiguousexperience. When motivation is low, inertiaworks to the topdog's advantage.
As long as the manageris alert to the possibility that
motivation may change, strategies designed for the
highly motivated consumer are also appropriatehere,
the difference being that implementationshould be
easier.
need us"; "You get what you pay for") and the questionable motives of competitors' comparison claims
(such as Coke's ponderingwhy competitorsuse it as
a standardof comparison and the "It's just as good
as a Xerox" campaign). Advertising, however, is a
limited tool. In derogatingthe second source, the topdog must be careful not to protest too much. Other,
directways of blockingexposureto evidencemay prove
moresuccessful,particularly
thoseexploitingthe market
of
the
brand
in
the distributionchannel.
power
leading
Interbrandprice comparisonsprovide particularly
unambiguous information. Manufacturersof strong
brands, however, have a variety of arrangementsto
discourageside-by-side comparisons. Exclusive dealerships are one. For example, a Maytag washer cannot be comparedwith a GE washer in the same store,
which may be advantageousto Maytag because the
companyjustifies its higher price with an experience
attribute, dependability, that requires delayed feedback and may be less vivid at the time of the decision
than more tangible features. Another tactic involves
exclusive locations in the store: Frito-Lay, Hartz
Mountain, Disney, and designer clothing lines use
variantsof the self-containedmerchandisingcenter to
inhibit learning by comparison.
Retailers often share the major brand's dislike of
directcomparison.They limit assortmentwithin a category (Shugan 1986), so marketersmay face little
competition at the point of purchase. Private labels
make exact comparisons with the same manufacturer's other brands impossible; a Whirlpool labeled
Kenmoreat Sears cannot be compareddirectly with a
Whirlpool at another retail store. Leading manufacturersthat produce superficiallydifferent brandedalternativesfor differentretail chains (e.g., a Black and
Decker drill with a unique model numberfor K-Mart)
make intrabrandcomparisonvery difficult; by legally
price discriminating against smaller, less powerful
channel members, the topdog provides an incentive
for the retailerto concentrateon its line.
Block exposure to evidence. When motivation to
learn is strong and priorknowledge is well developed

and favors the leader, the leader usually benefits by
obstructingaccess to evidence. Topdogs typicallyhave
little to gain from consumer search; consumers often
have tried the brand already. Topdogs can preempt
attempts by a competitor to induce trial by quickly
matching promotional tactics-for example, matching a competitor'scoupon or even acceptingthe competitor's coupon. Advertising also can be used to discourage trial. "Why change if it works?" is the
implicationof a Kellogg's Corn Flakes campaignthat
stresses the value of the tried and true. Topdog advertising often articulates the risks of experimentation. It may offer reasons for not experimenting,such
as dependablequality ("We're always there when you
Reinforce the agenda. A topdog is vulnerable when
consumersdo not understandor cannot explain its favored status. Brands may build strong market share
before they have built the consumer beliefs to legitimize their share. The pioneers of the personal computer marketsuch as Apple and Commodore, for example, grew their shares more rapidly than they
developedconsumerconfidencein their products;they
were vulnerable to IBM's entry with a better story.
Topdogs have marketpower, however, and can use it
to control the consumer's learning agenda by influencing the consumer's evoked set of brands, the attributes that should be considered (Boyd, Ray, and
Strong 1972), and the explanations for product performance available for abduction.
April1989
When the consumer does not know enough about

the product category to know which alternativesare
missing, the topdog may be able to frame the evaluation process unobtrusivelyby setting a brandagenda
that specifies the competingalternatives(Hauser 1986;
Kahn, Moore, and Glazer 1987). When Steve
Landsbergfor Ryder Trucksposes the alternativesfor
moving as "pay someone else an arm and a leg; borrow your brother-in-law'struck;or Ryder," the problem is framedto omit directly similar alternatives(UHaul, Jartran).Tversky (1972) cites a television commercial for a computer training school that sets the
agenda by relying on the reasonablenessof the elimination-by-aspectschoice rule in the face of too many
alternatives.
The topdog also may focus on reinforcing an attributeagenda, providingthe belief structuresneeded
to encode and interpret complex, information-rich
consumptionexperiences. Transformationaladvertising (Wells 1984) sets the experience agenda when it
shows the consumer how to use and enjoy the product. Marketleaders have an advantagein using transformationalappeals, both because of a large base of
customers with experience and because such advertising requires high frequency to be effective (Wells
1986).
When ambiguity is the result of the essential
sameness (parity) of the leading brands, few properties may be available for transformation.Distinctiveness may have to come from an "irrelevantattributes"
strategy. An irrelevantattributeis one that gives little
or no informationabout quality. For example, among
the top beer advertisers, Budweiser is "beechwood
aged," Old Style is "fully kraeusened,"and Miller is
"brewed the American way."6 Even attributes that
provide no basis for discrimination(because many alternativeshave them) can serve to differentiatea brand
(as long as a competitor does not claim them), perhaps because they are nonfalsifiable and easily confirmed. Leading brands have used such claims as
"mountain grown coffee," "provides the recommended daily allowances of eight importantvitamins
and minerals,"and the inimitable"Lay's potatochips:
bet you can't eat just one." These nondistinctive attributesare favoredby sufficiencytesting(Hoch 1984b;
Klayman and Ha 1987) and satisfy consumers' implicit rule that "more information is better." In the
absence of comparativetesting, they become a basis
for self-justificationof a purchaseor repeat buying.
6The "irrelevant attributes strategy" is not without danger. Overexaggerated or superfluous claims have incurred the wrath of the FTC
(Preston 1977). Also, the work of Petty, Cacioppo, and Schumann
(1983) suggests that very subjective claims may not be as favorably
evaluated when involvement (motivation to learn) is high.
Explain the experience. A high share topdog brand
that is unambiguously good is in a strong position,

provided that it is fortified by investment in product
improvements and extensions (Park, Jaworski, and
Maclnnes 1986) and secured by protective patents,
copyrights, and trademarks.Even so, consumersmay
need to be told why they find the experience of using
the brandso satisfying. By pointing out that Thomas'
English Muffins taste betterbecause they have "nooks
and crannies"or that Clausen's pickles are uncooked
(and crisper) and therefore must be refrigerated,the
marketer identifies distinctive and easily verifiable
productattributesas the cause of the product'sappeal.
More than 15 years ago Heinz Ketchup adopted the
easily verified "thickness"claim ratherthan the more
centralbut less objective "richness"attribute,relying
on consumer inference (Kardes 1988; Sawyer 1987)
to link viscosity to flavor. Propositionslike these become available for abductionwhenever the consumer
has a particularlypleasing experience. The consumer
asks, for example, "Why is the sound of the orchestra
so crisp?Is it becauseI recordedit on Memorextape?"
Underdog Tactics
Unlike marketleaders, good quality underdogbrands
have everything to gain and little to lose by encouraging consumersto learnfrom experience. They must
exploit the advantagesof learningfrom experiencehigher source credibility and greater memorability.
Underdogs obviously face a difficult task, especially
when confrontingan unmotivatedtarget market. The
underdogmust do all it can to get the consumerto try
the productby reducingcosts or by increasingthe perceived risks of not learning. When experience is unambiguously good, trial may be enough. When the
experienceis ambiguous,the task is considerablymore
difficult; the underdogmust also try to influence the
interpretationof an experience that has been previously shaped by the topdog. When consumers want
to learn, their naturalcuriosity works to the underdog's advantage. As in the case of the topdog facing
unmotivatedconsumers,the underdogtargetinghighly
motivated consumers should pursue the same tactics
as those suggested for reaching less motivated consumers.
Do everything. When the consumer has well-developed belief structures, strong priors favoring the
marketleader, and little naturallyoccurringevidence
(an ambiguous environment)to reduce confidence in
those beliefs, few attractiveoptions are available to
the underdog. When consumersthink they know how
to evaluate productsand feel little incentive to experiment, the underdogmust break habituatedmodes of
consumption.
Though reliance on advertisingalone is foolhardy
WhatConsumers
LearnfromExperience
Managing
/ 13
given the mismatch of underdog and topdog resources, several communicationtactics are possible.
Gornand Weinberg(1984) have shown thateven when
comparative advertising does not improve product
evaluations, it can increase judgments of similarity
between the target (underdog) and referent (topdog)
brands.Refutationalappeals are possible when the audience is uniformlynegatively predisposed(Haas and
Linder 1972; Sawyer 1973). The underdogalso may
try "side-swiping"appeals, contesting topdog claims
when the environmentfavors disconfirmation.
An underdogmay be able to leverage limited resources more effectively at the channel level. For instance, side-by-side displays or sales promotionsthat
induce comparisonwill help the underdog;if the evidence is truly ambiguous, a test will show the similarity of the underdogand topdog and may reveal the
pseudodiagnosticityof the market leader's comparative "advantage."Though underdogs may not have
the power and influence to force the retailerto provide
side-by-side comparisons, retailers themselves can
promote their own house brandsand private labels in
such a way. K-Mart merchandisesits K-Gro line of
garden products beside nationally advertised Scott
products, with graphics to show that the ingredients
are identical. Lawn fertilizer is a prototypicallyambiguous product, but K-Martdisambiguatesthe comparison process through merchandising. One other
possibility for underdogsis to develop theirown unorthodox distribution channel, such as home parties
(Davis and Frenzen 1986), where they can be sure
that the consumer sees only their brand. In such a
channel the credibility of direct experience and the
strengthof underlyingsocial relationsmay be enough
to encourage trial.
Disrupt the agenda. When evidence is ambiguous
and familiarity is inadequate, underdog brands have

the opportunityto change the experience agenda to
their own advantage. In contrast to the "do everything" situation facing underdogs in domains with
which consumers are familiar, consumers who lack
familiarity can be more easily persuadedto try new
things. If advertising is coupled with product experience, induced perhaps by sales promotion, the advertisement can give a focus to consumers' product
testing activities, rendering the experience easier to
encode and interpretby narrowingit to relevant aspects favorable to the underdog.
When consumers are less familiar with the category, an underdogcan constructincentives to search,
to inspect, and to compare. Search-encouragingappeals often are perceivedas more credible-why would
the advertiseruse such an appeal unless the product
is truly superior?Pepsi challenged consumers to "let
your taste decide." Chrysler and Lee Iacocca staked
their futureon such claims. Ha (1987) found such appeals to be effective for underdogbrands, regardless
of the evidence. They failed for market leaders by
drawingattentionto low share brandsthat consumers
otherwise would have ignored.
Anothertactic is to suggest to consumersthat they
use the underdog brand in contexts or on occasions
for which it can be expected to performwell. StoveTop Stuffing has been promotednot as a replacement
for potatoes, but as a way to add variety to the carbohydratemenu item. A danger with this appeal is
thatit may lead to overlyrestrictedusage patterns(e.g.,
"weekends are for Michelob").
Underdogsneed a variety of ways to alter the ongoing consumer agenda by teaching consumers how
to interpretevidence. They can supplementadvertising with personal selling and target small groups of
consumers for intensive training. In-store cosmetics
clinics and Mary Kay home partiestransformthe ambiguousor even potentiallynegativeexperienceof selfadornmentinto one that is affirming and rewarding.
Novice consumers are open to learninghow to interpretambiguousor unfamiliarproductexperiences.Wine
tasting classes sponsored by premium wineries and
cooking classes offered by gourmetshops and kitchen
utensil manufacturersare examples. Throughsuch efforts, consumers can learn rules like "good Champagne keeps on bubbling," an attributethat discriminates among alternativesmore vividly than "mere"
taste. Distinctionwithoutperformancedifferencemay
help to define the brand.By adopting 15 and 30 packs
ratherthanstayingwith industrystandards,Stroh'sbeer
may have distinguisheditself fromthe competitorsmore
effectively than it could have through an expensive
image campaign.
Facilitate trial. An unambiguouslygood low share

brandis in a strong position. Its aim is to buy exposure and to control the encoding of the experience.
Consumersampling is a good idea, probablyproviding more directimpactper dollarthanadvertisingurging consumersto "tryit, you'll like it" thatmust overcome much largertopdog budgets. However, sampling
also is expensive, even for low cost nondurablegoods,
and pitfalls abound. A sample's merit may not be noticed if it is used out of the usual context. Large samples have a better chance of being used properlyand
of being fully appreciatedthan single trial packs or
scratch-and-sniff perfume strips in magazines that
provide fragmentaryexperiences. Sampling is seldom
practicalfor durablegoods, but surrogatetrialsor "testdrives" can be substituted.The extended warrantyis
a way to reduce risk short of sampling, a tactic pursued by lower pricedimportsinvadingmaturemarkets
(e.g., home electronics). When the underdog'soffering is of low quality, promotion can do little more
than stress the obvious price-for-qualitytradeoff, as

discount brokeragehouses do.
Modeling Learning:The Simulated

Test of Market Actions
Many common market research tools (e.g., concept
tests, simulatedtest markets,and some copy tests) give
the test subjectssomethingnew to learnand then measure what has been learned. One reason for studying
the forces that shape learning from experience is to
judge the validity of the results of these tools and to
design more effective tools.
Preliminaryconcept testing often relies solely on
verbal depictions of the productsand the likely product experience, as in conjoint analysis (Green and
Srinivasan 1978). Clearly, the manager must start
somewhere, but for many new ideas, especially those
that are not simple reformulationsor line extensions,
the experienceof readinga verbaldescriptionof product function may not be very informative for either
the consumeror the manager.Featuresexperimentally
manipulatedin concept testing may not be isomorphic
with perceptualdimensions driving the evaluation of
real objects (Holbrooket al. 1985). The experience of
using new technologies is often difficult to anticipate.
Consumersmay have troubleimagining, for example,
alternativeuses of unfamiliartelecommunicationfeatures such as call forwarding, call waiting, and conference calling; they may provide uneducatedguesses
about willingness to pay until they have used the features or at least experienced others using them. The
real need for telephone answering machines can be
appreciatedonly after the product is turned on and
monitoringof phone traffic commences.
Blind product tests concentratethe tester's attention on the physical product. They invite consumers
to test hypotheses that pertainto productquality, but
they skew testing to favor aspects of quality that can
be inferredfrom the immediately accessible physical
cues. They also may distort the consumption act, as
Coke argued when it accused Pepsi Challenge participants of taking "little bitty sips" instead of the great
hearty gulps needed to truly appreciateCoke's taste.
In taste testing, it is importantto measure the consumer's discrimination ability at the same time as
preference(Buchananand Morrison1984) becausesuch
data help characterizethe level of ambiguity in the
decision environment. However, it is also important
not to confuse the physiological act of product discriminationwith the naturalconditions found during
online, extended experience with the product. Consumers who cannot reliably discriminatebetween the
flavors of two brands of ketchup in blind tests may
notice differences when the experience is defined to
include transportingthe producthome from the store,
dispensing,consumingin the context of an entiremeal

or snack, the aftertaste,and the appearanceof the bottle after repeated uses. Similarly, side-by-side beer
tasting often is done over too short a period to allow
the "burp"factor to operate.
Side-by-side testing encourages the encoding of
comparativedata, a rare act in naturallearning settings. It understatesthe true cost of learning, which
depends on motivation, informationaccessibility, and
time availability. It thereforeoverstates the competitive prospects of underdogs that have a comparative
performance advantage. However, monadic testing
absolutely discourages the encoding of comparative
data. It is more tolerant of confirmationbiases than
even the harshestnaturallearning environment.
What consumers learn from a written concept or
a mockup may not be the same as what they would
have learned from the product or service itself, because how they learn may not be the same. The hypotheses they test, the evidence availableto them, and
the aspects of the evidence that they encode may all
be different. Pre-test-marketproduct evaluation systems like ASSESSOR (Silk and Urban 1978; also see
Tauber 1977) recognize many of these problems, as
do good test marketdata analysissystems (Narasimhan
and Sen 1983). While controllingfor self-selected exposure due to advertising-inducedproduct trial, ASSESSOR also attemptsto simulateproductexperience
through a forced-exposurein-home trial; this procedure, though not infallible, explicitly recognizes the
problems in learning from experience at both the exposure and encoding stages.
Often advertising tries to influence the learning
process at points other than at the formationof priors.
Advertising may aim to influence hypothesis generation, encourage search, or direct the encoding process. Copy tests of such advertising must do much
more thanmeasurewhetherpriorexpectations(or purchase intent) are affected. Recall scores are particularly irrelevantto evaluating this kind of communication. If the purpose of a piece of advertisingcopy
is stated in the terms of the learning model, tests of
copy effectivenesscan be tailoredto measuringwhether
the precise purpose is achieved. Has the advertising
raised a new hypothesis that the consumer considers
worthy of testing? Has the advertising increased the
propensityto searchout new information?How is experience likely to mesh with the advertisedclaim?
Above all, learningfrom experiencetakes time and
repetition(Wells 1986). Belief structuresevolve with
use. These issues have not gone unrecognized,but experienceless testing is still the norm. However, in the
context of the hypothesis-generation, testing, and
generalizationmodel of learning, it is clear how single-exposure copy tests and tests of communication
isolated from the opportunityfor experience can pro-
vide misleading evaluationsof new productideas and

advertisingeffectiveness.
Conclusion
Manufacturerscan exert some control over the consumer learning process by understandinghow consumers learn from experience. In the design of communicationand promotionalprograms, and in testing
the effectiveness of new product concepts or advertising executions, learning must be accounted for not
as something independentof marketingaction, but as
a process that marketinghas the power to leverage in
building brand attitudes and consumer loyalty. The
shapingof learningfrom experienceis somethingvery
different from education. Education affects prior
knowledge; to the extent priors resist updating, education can impede learning from experience.
Marketingactions either foster or inhibit learning.
In general, marketleaders stand to gain from impeding learningand underdogsfrom encouragingit. The
underdoghas much to gain from control of the learning process. Learningthrougheducationis usually not
an option for underdogs because they lack the resources to outspend leaders. The credibility of self-
directed learning, however, deriving from the consumer's sense of control of the process and the vividness of personally controlled experiences, makes it
a powerful tool in the underdog's armory. Strong
brands, in contrast, have much to lose from learning.
If consumers come to believe that Tylenol is chemically identicalto its competitorsor thatCoke refreshes
neither more nor less than Pepsi, the foundation of
these brands' popularityis eroded.
The consumptionexperience and the malleability
of experiencehave recently become importantthemes
in consumer behavior research, as our review indicates. Such research topics have the potential to be
relevant to marketingpractice. For example, recognizing that consumers are active if not infallible partners in their own persuasionsuggests that we should
find ways to bringexperienceinto the laboratorywhen
we pretestthe efficacy of marketingtools such as advertising, packaging, and sales promotion. In addition, our discussion of the ambiguityin a decision environmentindicates a need for measurementmethods
to determinewhethera new productoffers advantages
thatare easy or very difficultto comprehend.We hope
our discussion will stimulate studies that translateresearchon learningfrom experience into workableoptions for marketingmanagement.
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Managing What Consumers Learn from Experience

Author(s): Stephen J. Hoch and John Deighton

Stephen J. Hoch & John Deighton

The best salesmanfor the productis the productitself

product experience tends to be regarded as beyond the

think they know as much as they need to know to get

and an ambiguous information environment

(product performanceis difficult to evaluate). Datril

How and What Do Consumers

'Our review of the psychological literature is selective, with a clear

typically higher, as the interestsof the source and the

2Consumerswho considerthemselvesproductnovices may realize

At various points in the development, we contrast

1. The Consumer Speculates:

they do speculate,why they considerone set of hunches

can inhibit the retrieval of competing brands and

2. The Consumer is Confronted:

complex than those conceptualized. However, there

pothesisgenerationmay also inhibitinformationsearch.

before examining "bad"alternatives,even though the

competitors. The burdenplaced on consumersto sort

4Shugan (1986) presents data showing that even when competing

lated, motivation to correct the problem is high and

beliefs favors memory for stereotype-consistentinformation over irrelevantinformation(Darley and Gross

are exposed to information,attentionalresourcesoften

are still under voluntarycontrol. If consumersdo not

periences are inherentlyambiguous (open to multiple

ity categories (e.g., beer, margarine), there is very

tinctive the experience is. Moreover, some product

ence, evidence is assumed to be encoded veridically.

4. The Consumer Integrates:

quately integrated, beliefs will change less than they

Strategic Implications of Learning

2. How much can experience teach? Ambiguity

3. Howmotivatedare consumersto learn?Thehighly

These three questions define the six categories of

How much can

the figure we make the simplifying assumption that

4. How much do we want consumers to learn? A

Our discussion of strategicinitiatives is organized

How much can

When the consumer wants to learn,

sThe statement is obviously an oversimplification but, because we

How much can

When consumer motivation is low,

Block exposure to evidence. When motivation to

learn is strong and priorknowledge is well developed

Reinforce the agenda. A topdog is vulnerable when

When the consumer does not know enough about

Explain the experience. A high share topdog brand

that is unambiguously good is in a strong position,

and familiarity is inadequate, underdog brands have

Facilitate trial. An unambiguouslygood low share

than stress the obvious price-for-qualitytradeoff, as

Modeling Learning:The Simulated

dispensing,consumingin the context of an entiremeal

vide misleading evaluationsof new productideas and

egy," Journal of Marketing, 36 (April), 27-33.

of Abnormal and Social Psychology, 54, 98-102.

perimental Social Psychology, 14, 132-9.

Psychological Review, 94 (2), 211-28.

Scott, Jerome E. and Stephen K. Keiser (1984), "Forecasting

Tweney, Ryan, M. E. Doherty, W. J. Worner, D. B. Pliske.