Professional Documents
Culture Documents
Psychology in Business
Implementation of Different Topics of
Psychology in Business
Prepared For
Course Instructor
Prepared By
Date of Submission
Jahangirnagar University
Savar, Dhaka-1342
Transmittal Message
Course Instructor
Jahangirnagar University
Savar, Dhaka-1342
Dear Madam,
I appreciate you for choosing this topic for our report. And this report will help us
understand how to implement these psychology topics.
Sincerely yours,
Class ID.914
Class ID.940
Table of contents Page
No
Executive summary…………………………………………………………….... vi
1.0 Introduction…………………………………………………………………… 01
1.1 Origin of the report 01
1.2 Problem and purpose……………………………………………………..... 01
1.3 Scope 01
1.4 Background …………………………………………………………………… 01
1.5 Methodology 01-02
1.6 Report preview……………………………………………………………….. 02
1.7 Limitation 02
2.0 Sensation and perception’s use in Business………………………….. 02
2.1 Absolute threshold concept in Business 02
2.1.1 Business example of absolute threshold………………………….... 02
2.2 Just noticeable difference(j.n.d.) 03
2.2.1 Marketing applications of j.n.d………………………………………... 03-06
3.0 Learning and its use in Business 06
3.1 Classical conditioning…………………………………………………….... 06
3.1.1 Classical conditioning in Marketing 07
3.1.2 Classical conditioning in Advertising………………………….......... 07
3.2 Operant conditioning 08
3.2.1 Business example of operant conditioning……………………....... 08
3.2.2 Another example of operant conditioning 09
3.3 Reinforcement………………………………………………………………… 09
3.3.1 Positive reinforcement 09
3.3.2 Business example of positive reinforcement…………………….... 09
3.3.3 Negative reinforcement 10
3.3.4 Business example of negative reinforcement……………………... 10
3.3.5 Punishment 10
3.3.6 Business example of punishment……………………………………... 10
3.3.7 Extinction 10
3.3.8 Business example of extinction……………………………………….. 10
3.3.9 Fixed interval schedule 11
3.3.10 Variable interval schedule…………………………………………..... 11
3.3.11 Business example of variable interval schedule 11
3.3.12 Fixed ratio schedule…………………………………………………….. 11
3.3.13 Variable ratio schedule 12
3.3.14 Business example of variable ratio schedule…………………….. 12
3.4 Spontaneous recovery 12
3.4.1 Spontaneous recovery in Business………………………………….... 12
4.0 Memory and its use in Business 12
4.1 Short term memory and long term memory………………………….. 12
4.1.1 Application of short term memory 12
5.0 Different kinds of problems and their uses in Business………….... 13
5.1 Well defined problem 13
5.1.1 Business implication…………………………………………………...... 13
5.2 Ill defined problem 13
5.2.1 Business implication of ill defined problem………………………... 13
5.3 Arrangement problems 13
5.3.1 Business application of arrangement problem…………………….. 13
5.4 Problem of inducing structure 14
5.4.1 Business implication of problem of inducing structure………….. 14
6.0 Intelligence and its use in Business 14
6.1 Fluid intelligence…………………………………………………………..... 14
6.1.1 Business implication of fluid intelligence 14
6.2 Crystallized intelligence……………………………………………………. 15
6.2.1 Crystallized intelligence in Business 15
6.3 Emotional intelligence……………………………………………………... 15
6.3.1 Business example of emotional intelligence 15
7.0 Motivation……………………………………………………………………… 16
7.1 Maslow’s hierarchy of needs 16
7.1.1 Maslow’s hierarchy in Business……………………………………..... 17
7.1.2 Maslow’s theory in Advertising 17
List of Illustrations Page no
Table 1 Three company’s use of j.n.d. 04
Table 2 Maslow’s hierarchy of needs 18
1.3 Scope
This report mainly covers the most important psychology topics with their
relevant business examples as well as business implication. But the first two chapters
of the text don’t cover in this report. All psychology topics don’t have their real world
implication. So this report covers mainly the topics which has implication in real
business situation.
1.4 Background
Psychological topics are necessary to know the behavior of the consumer. Topics
like absolute threshold, difference threshold, j.n.d (just noticeable difference),
classical conditioning, operant conditioning, emotions have different implications on
business fields like marketing, advertising etc. We have learnt theoretically from the
textbook and now we will learn from the real business world. So the problem is
theoretical learning will not help us to handle the real business world and so we need
real business need and implications.
1.5 Methodology
Report parts have been made by using the lectures provided by course
instructor, two academic resources also used to collect data for the report, and there
are data from World Wide Web. Although from the class lectures or academic
resources have been used to make this report but I have also used my view,
perception, reasoning to make this report.
The report covers mainly six chapters from the text. These chapters are
sensation and perception, learning, memory, cognition and language, intelligence
and motivation and emotion. In this report the definition of the topics and the
related business example is provided. How to use the psychology topics in the real
business world is shown here.
1.7 Limitations
There are many psychology topics which we have covered in our course. But all
those have few business implications. Such as scientific method of psychological
research, psychology’s family tree etc. These have worked as a limitation for
preparing this report.
1
Summary results(2010)
is too low, consumers’ sensory receptors will not be activated, and the stimulus will
not be consciously perceived.
Manufacturers who choose the quantity of their products also try to ensure that
product changes remain just under the point of just noticeable difference. For
example, when the price of coffee beans goes up, coffee processors often
downgrade quality by adding inferior beans to the mix, up to but not including the
j.n.d.- the point at which the consumer will notice a difference in taste. Another
example, to meet current nutritional concerns a number of food processors have
adjusted their recipes to substitute unsaturated fats for the animal fats and the
coconut and palm oils previously used, with the intention of keeping any differences
in taste under the j.n.d. A number of well known food companies have been
“downsizing” their packaging-that is, decreasing the package size or even
maintaining the package size but decreasing their contents. By charging the same
2
Kanuk L.G.S.L.L(2004)
price, they are in fact achieving a price increase that is “invisible” to the consumer.
Three companies used j.n.d for their product. Below the example is show in a table
of three companies-
In 1972, as women’s roles in society evolved, the portrait was again updated to
reflect a much more businesslike Betty. In 1980, a new portrait gave the always-
poised Betty a softer image and slightly more casual dress, so that more women
would identify with her. In 1986,her image was again updated to show a more
professional and approachable Betty Crocker, as comfortable in the bed room as in
the kitchen. In 1996,her portrait was updated once again to reflect contemporary
women from all walks of life and ethnic backgrounds. This last portrait was based on
a compute-generated image of 75 different women which was combined with the
1986 rendition, to enable an even wider audience of women to identify with her. In
all of her incarnations, Betty is portrait in a red dress or jacket with white at her
neck, wearing a hairstyle and clothing which reflect the current fashions of the times.
Despite the dramatic differences between the 1936 and 1996 versions, each
successive change remained below the j.n.d. enabling Betty Crocker to remain a
current, familiar, and valuable symbol of quality for General Mills products.
The Campbell Soup Company traditionally has been extremely subtle in changing its
package. An alternation here, a slight typographic change there, a refinement of its
logo type, have all combined to keep the product looking up-to-date without losing
any of the valuable Campbell image. However, the
company recently decided to re-engineer its classic
red and white packaging, updating the traditional
packaging with high gloss color pictures. They also
changed the company’s time honored slogan from
“M’m-m’m good” to “M’m-m’better”-all in an effort, in
the words of its president, “to get noticed in a new
way….to break through.”
Another interesting example is Ivory soap, which was introduced in 1879. The subtle
packaging changes Ivory introduced over the years were each small enough to avoid
notice, but the package managed to retain the contemporary look. The latest Ivory
package is considerably different from the original, but the changes made at each
step of the way were designed so skillfully that the transition has been hardly
noticeable to consumers.
When the Coors Brewing Company changed its packaging above the j.n.d. by adding
the words “original draft” to its label, it received hundreds of complaints from
drinkers who believed the product itself had been changed, thus forcing the
company to bring back the old label. Similarly, when the Kellogg Company decided to
change the color and the illustration on its well-known Corn Flakes box to celebrate
its 90th birthday, loyal consumers were confused into thinking the new box was a
different product.
3
Layberger M.(2010)
4
Summary results(2010)
Classical conditioning is a form of learning but it is also a form of behavioral
change. Advertisers have long relied on its principles to cause consumers to buy one
company’s products and services over those of another company by achieving a
conditioned response in consumers.
It is a very effective tool for advertising and is used in many different forms of
advertising. By just turning on the television and watching a few commercials you
are sure to see quite a few examples of Classical Conditioning. Let’s see a graph
which is described about how positive emotional response can be created.
Study by Pedalino & Gamboa (1974) - To help reduce the frequency of employee
tardiness, the researchers implemented a game-like system for all employees that
arrived on time. When an employee arrived on time, they were allowed to draw a
5
Summary results(2010)
card. Over the course of a 5-day workweek, the employee would have a full hand for
poker. At the end of the week, the best hand won $20. This simple method reduced
employee tardiness significantly and demonstrated the effectiveness of operant
conditioning on humans.
3.3 Reinforcement7
6
Consumer behavior(2009)
7
Individual behavior and learning in organization
3.3.3 Negative reinforcement
3.3.5 Punishment
A stimulus that decreases the probability that a previous behavior will occur
again or punishment may occur by introducing an unpleasant consequence or
removing a pleasant consequence.
3.3.7 Extinction
A schedule that provides reinforcement for a response only if a fixed time period
has elapsed, making overall rates of response relatively low. Most people get paid on
a fixed interval schedule because their paychecks are received every week or two
weeks. As long as the job is performed satisfactorily, a paycheck is received on the
appointed day.
Promotions typically follow this schedule because they occur at uneven time
intervals. The first promotion might be received after two years of good
performance, the next after four years, and the third after 18 months and so on.
Promotions are interval-based because they are typically received after a period of
time rather than after a desired number of behaviors.
Knowledge about spontaneous recovery can allow brand owners with seasonal
products (Christmas, Easter) such as liqueurs, premium whiskeys and food hampers(
when as much as two-thirds of the sales are made) to use promotional money to
carefully judge when the moment is right to start advertising and reawaken forgotten
pleasant memories of Christmases past.
Memory stored in which information first has meaning and it can hold information
up to 15 to 20 seconds.
Both the nature of the problem itself and the information needed to solve it are
available and clear.
Company conflict is a well defined problem. Because the nature of the problem
(conflict) and the solution needed to solve are clear. A manager knows how to solve
that problem. So this is a well defined problem.
Both the specific nature of the problem itself and the information needed to solve
it are unclear.
Stealing can be an example of ill defined problem. Because we don’t know the
nature of the problem and the way to solve it. Because who stole that in not known
by us.
In this problem at first we have to identify the existing relationship among the
elements and then construct a new relationship among them. For example, we want
to predict the company’s profit this year. We can solve this problem by using
problems of inducing structure. To solve this problem we have to see the existing
relationship that means the profits of the previous years. Then we have to try to
construct a new relationship among them that means we can predict what can be
this year’s profit.
The accumulation of information, skills and strategies that are learned through
experience and can be applied in problem solving situations.
A manager can draw a conclusion or can take his decision from the past
information, strategies. By using the past strategy a manger can tackle the adverse
situation or draw a decision.
The set of skills that underlie the accurate assessment, evaluation, expression and
regulation of emotions.
For example, the Hay Group states one study of 44 Fortune 500 companies found
that salespeople with high EQ (Emotional Intelligence Quotient) produced twice the
revenue of those with average or below average scores. In another study, technical
programmers demonstrating the top 10 percent of emotional intelligence
competency were developing software three times faster than those with lower
competency.
A Fortune 500 company in financial services proved that their high EQ salespeople
produced 18 percent more than the lower EQ salespeople. One recent study
conducted by a Dallas corporation measured that the productivity difference between
their low scoring emotional intelligence employees and their high scoring emotional
intelligence employees was 20 times.
A large metropolitan hospital reduced their critical care nursing turnover from 65
percent to 15 percent within 18 months of implementing an emotional intelligence
screening assessment. A community bank that reduced staff by 30 percent due to
the sluggish economy assessed the remaining workforce for their emotional
intelligence competencies, placed them in the right role for those competencies, and
the bank is now producing more with less people.
7.0 Motivation
The factors that direct and energize the behavior of humans and other organisms.
Hierarchy of Needs
1. Basic Physiological needs,
2. Safety and security needs,
3. Belongingness and love needs,
4. Esteem needs, and
5. Self-actualization needs.
7.1.1 Maslow’s hierarchy in Business 9
However, not all people are driven by the same needs - at any time different
people may be motivated by entirely different factors. It is important to understand
the needs being pursued by each employee. To motivate an employee, the manager
must be able to recognize the needs level at which the employee is operating, and
use those needs as levers of motivation.
To help with training of Maslow's theory look for Maslow's Hierarchy of Needs
motivators in advertising. This is a great basis for Maslow and motivation training
exercises:
9
Summary results(2010)
1. Biological and Physiological needs - wife/child-abuse help-lines, social security
benefits, Samaritans, roadside recovery.
2. Safety needs - home security products (alarms, etc), house an contents
insurance, life assurance, schools.
3. Belongingness and Love needs - dating and match-making services, chat-
lines, clubs and membership societies, Macdonalds, 'family' themes like the
old style Oxo stock cube ads.
4. Esteem needs - cosmetics, fast cars, home improvements, furniture, fashion
clothes, drinks, lifestyle products and services.
5. Self-Actualization needs - Open University, and that's about it; little else in
mainstream media because only 2% of population are self-actualizers, so
they don't constitute a very big part of the mainstream market.
7.3 Emotions
Feelings that generally have both physiological and cognitive elements and that
influence behavior.
10
Hawkins(9th edition)
Emotional content in advertisements enhances their
attention attraction and maintenance capabilities.
Advertising messages that trigger the emotional
reactions of joy, warmth, or even disgust are more
likely to be attended to than are more neutral ads.
Such emotions helps advertiser to create brands. Brands are built in the minds
and hearts of customers and it is important to understand that consumers like and
consume brands rationally as well as emotionally.
8.0 Personalities
– Openness to experience
– Conscientiousness
– Extraversion
– Agreeableness
– Neuroticism
Openness to experience refers to that how much experience one individual can
gather. It is essential in making decisions because to make decisions information is
vital thing. To guess company’s performance we need information.