Implementation of Different Topics of

Psychology in Business
Implementation of Different Topics of
Psychology in Business

Prepared For

Ms. Jasmine Jaim

Course Instructor

Course: Introduction to Psychology

Prepared By

Joynal Abedin Shanto

Md. Anwar Hossain Repon

BBA, 18th Batch

Class ID: 940

Class ID: 914

Date of Submission

February 18, 2010

Institute of Business Administration (IBA)

Jahangirnagar University

Savar, Dhaka-1342
 Transmittal Message

February 22, 2010

Ms. Jasmine Jaim

Course Instructor

Bus-110, Introduction to Psychology

Institute of Business Administration

Jahangirnagar University

Savar, Dhaka-1342

Dear Madam,

Here is the report on ‘Implementation of Different Topics of Psychology in Business’

which you assigned us on

Psychology has many implications on business. It helps us to understand how to

motivate the employees and how to use different topics in business. If we learn how
to implement different topics of psychology in business then it will help us to
implement those things in real organization also.

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,

Md. Anwar Hossain Repon

Joynal Abedin Shanto

BBA, 18th Batch

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

List of figures Page no

Figure 1 Maslow’s hierarchy of needs 17
 Executive summary

The report on “Implementation of different topics of psychology in Business” has

covered some topics such as sensation and perception, learning, memory,
intelligence, motivation, emotion and personality.
This report covers the above topics and their business implication. There are many
topics which have a few business implications in real business world. So there are a
few topics this report covered.
This report shows the business implication in the business world. From this report
organization which topics use for their employees motivation, intelligence etc have
covered.
This is descriptive type of report. So there are many descriptions about the
psychology related topics. To cope with the real business world we need to know this
psychology related topic to increase the organizations profit.
Here the report describes the some companies’ related examples and how they use
this psychology related topics in their organization.
Understanding the psychology of the employees as well as customer is really
important to compete with other existing companies. So we think this course will
help us to understand psychology as well as their business implication.
1.0 Introduction

1.1 Origin of the report

The report about the ‘implementations of different topics of psychology’ is

submitted to Ms. Jasmine Jaim, course instructor of BUS-110, Introduction to
Psychology on February 22, 2010. The report was authorized on……………. and the
report prepared by using secondary data.

1.2 Problem and Purpose

By knowing the implementation of different topics of psychology we will learn

how to use these psychological topics in an industry or organization. This report will
focus on different psychological topics and their real implementation on business
fields.

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

1.5.1 Source of Data

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.

1.5.2 Type of the Data

The data collected to make this report all are secondary.

1.6 Report Preview

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.

2.0 Sensation and Perception’s use in Business

2.1 Absolute Threshold’s Concept in Business 1

By absolute threshold we mean the smallest intensity of a stimulus that must be

present to be detected. In other words, absolute threshold means the minimum level
of a stimulus, below which there is no effect; the minimum amount below which
something either does not exist or is so faint as to seem not to exist. Absolute
threshold has also business example. One business example is described below to
understand absolute threshold.

2.1.1 Business example of absolute threshold

The obvious implication is that consumers will only consciously perceive a

marketing stimulus when it is sufficiently high in intensity to be above the absolute
threshold. Thus, if images or words in a commercial are too small or the sound level

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Summary results(2010)
is too low, consumers’ sensory receptors will not be activated, and the stimulus will
not be consciously perceived.

2.2 just noticeable difference (j.n.d)

The smallest level of stimulation required to sense that a change in stimulation

has occurred. A nineteenth century German scientist named Ernst weber discovered
that the j.n.d between two stimuli was not an absolute amount but an amount
relative to the intensity of the first
stimulus.

2.2.1 Marketing applications of j.n.d 2

Weber’s law has important application

in marketing. Manufacturers and marketers endeavor to determine the relevant j.n.d.
for their products for two very different reasons: (1) so that negative changes (e.g.,
reductions in product size, increases in product price, or reduced quantity) are not
readily discernible to the public and (2) so that product improvements (such as
improved or updated packaging, larger size, lower price) are very apparent to
consumers without being wastefully extravagant. For example, because of rising
costs, many manufacturers are faced with the choice of increasing prices or reducing
the quantity of the product offered at the existing price. Some companies have done
both, keeping the increased cost or reduced size just under the j.n.d to avoid
negative consumer reaction.

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
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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-

Table 01: Three companiy’s use of j.n.d.

Starkest Tuna Company

First year(regular Second year(decreased Decreased can Price increase
sized can in can in ounce) (low amount in
ounce) ounce)
6.5 6.125 0.375 5.8%
Proctor & Gamble
First year(regular Second year(decreased Decreased Price increase
diaper box) diaper box) diaper(in
number)
28 26 2 7.1%
Kimberly Clark
First year(regular Second year(decreased Decreased Price increase
diaper box) diaper box) diaper(in
number)
88 80 8 9.1%
Consumer reports magazine reported that for five rolls of Proctor & Gamble’s Bounty
paper towels bought in succession, the contents dropped steadily from 85 to 70
square feet. Despite the fact that the adjusted quantity in unusually listed on the
package label, most consumers do not notice it, because the package size remains
the same. (This practice is referred to as packaging-to-price or packaging-to-
size.Marketers often want to update existing packaging without losing the ready
recognition by consumers who have been exposed to years of cumulative advertising
impact. In such cases, they usually make a number of small changes, each carefully
designed to fall below the j.n.d. so that customers will not perceive any difference.
For example, Betty Crocker, the General Mills symbol, has been updated seven times
since it first appeared in
1936.

Since 1921, Geneal Mills has

used the name “Betty
Crocker” to symbolize its
Gold Medal flour and other
food products. In 1936, it
commissioned a well-known
artist to draw a “portrait” of Betty Crocker with whom homemakers would identify.
The artist blended the features of women employed in the company’s Home Service
Department into a warm, motherly image, which remained the fictitious Betty
Crocker’s official “portrait” for all the 20 years. In 1955, this image was updated into
a soft, smiling version of the original portrait, and it was updated again in 1964 and
1968 to reflect the changing times.

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.”

Lexmark International Inc., which brought the office

supplies and equipment line from the International
Business Machine Corporation in March 1991, agreed
to relinquish the IBM name by 1996. Recognizing the need to build a brand image
for Lexmark while they moved away from the well known IBM name, Lexmark
officials conducted a four-stage campaign for phasing in the Lexmark name on
products. As the right side figure indicates, Stage 1 carried only the IBM name, Stage
2 featured the IBM name and downplayed Lexmark, Stage 3 featured the Lexmark
and downplayed IBM, and Stage 4 features only the Lexmark name.

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.

When it comes to product improvements, marketers very much want to meet or

exceed the consumer’s differential threshold; that is, they want consumers to readily
perceive any improvements made in the original product. Marketers can use the
j.n.d. to determine the amount of improvement they should make in their products.
Less than the j.n.d. is wasted effort because the improvement will not be perceived;
more than the j.n.d. may be wasteful by reducing the level of repeat sales.

3.0 Learning and its use its business

A relative permanent change in behavior brought about by experience. Behavior

change is our only evidence of learning. For example, if a team leader had a
tendency to be blunt or rude toward co-workers but doesn’t act this way anymore,
then we say that he or she has learned to interact with others more effectively.

3.1 Classical conditioning

 Type of learning discovered by Ivan Pavlov in which a neutral stimulus comes to
bring about a response after it is paired with a stimulus that naturally brings about
that response.

3.1.1 Classical conditioning in Marketing3

Classical conditioning is also used as a marketing tool. Classical conditioning is

generally used with low-involvement products (Hawkins 1998.) This is because
classical conditioning is most effective when emotion is involved (Classical
Conditioning.) Advertising for low-involvement products usually attacks the consumer
through affective means because nobody wants to think (cognitive) about purchasing
low-involvement products. Advertising and sales promotions (event sponsorship) are
the most common forms of classical conditioning in marketing.

Classical conditioning is used in a plethora of

advertisements. The idea behind it is a simple one.
Make an ad (US) that elicits a positive response (UR)
in the person exposed to the ad. The product or brand
within the ad then becomes the CS. The goal of
advertisers is to get the exposed person at the grocery
store or what have you, to associate the positive
feeling they had for the ad with the product. This
makes the positive feeling now the CR. Event sponsorship is very similar to this. With
event sponsorship the sponsor wants the person viewing the event (US) to project
the positive feelings (UR) they get from the event with their product. The big
advantage to event sponsorship is that the person being exposed has generally
chosen to be exposed to the event. Therefore, the positive emotional feeling toward
the event can be intense. This can also be a double-edged sword as well. This occurs
when the emotion involved is extremely negative. An example of this is when it is a
sporting event, and the exposed person’s favorite team loses. The product could
then be associated with those feelings.

3.1.2 Classical conditioning in Advertising4

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.

In attempting to induce positive emotional responses toward a product or idea,

advertisers use classical conditioning techniques. They pair their product with an
attractive, desirable individual or situation to evoke a pleasant response.

3.2 Operant conditioning

Learning in which a voluntary response is strengthened or weakened, depending

on its favorable or unfavorable consequences.

3.2.1 Business example of operant conditioning5

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

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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.

3.2.2 Another example6

Because some personality traits may be related to consumption behavior, marketers

can develop offerings and communications that appeal to various personality types.
For example, ads targeting compliant or extremely self- monitoring consumers
should focus on the approval of others, whereas ads and promotions appealing to
high optimal stimulation-level consumers or those with a strong need for uniqueness
might focus on trying something new and different. The magazine ‘sole collector’ and
the website niketalk.com (sponsored not by nike but by sneaker enthusiasts) often
feature hand decorated athletic shoes and other one-of-a-kind sneakers, targeting
consumers with a high need for uniqueness. targeting web-savvy consumers who
have high stimulation needs and are competitive, MTV Networks has created a
series of ever-changing online games and virtual worlds with contests, experiences,
and product placements for brands such as Pepsi.

3.3 Reinforcement7

The process by which a stimulus increases the probability that a preceding

behavior will be repeated.

3.3.1 Positive reinforcement

A stimulus added to the environment that brings about an increase in a

preceding response.

3.3.2 Business example

Receiving a bonus after successfully completing an important project usually

creates positive reinforcement because it typically increases the probability that you
will use those behaviors in the future.

6
Consumer behavior(2009)
7
Individual behavior and learning in organization
3.3.3 Negative reinforcement

An unpleasant stimulus whose removal leads to an increase in the probability

that a preceding response will be repeated in the future.

3.3.4 Business example

Supervisors apply negative reinforcement when they stop criticizing employees

whose substandard performance has improved. By withholding the criticism,
employees are more likely to repeat behaviors that improve their performance.
Negative reinforcement is sometimes called escape or avoidance learning because
employees engage in the desired behaviors to escape or avoid unpleasant
consequences (such as being criticized by your supervisor or being fired from your
job).

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.

3.3.6 Business example

Threatening an employee with a demotion or discharge after treating a client

badly can be a business example of punishment. By punishment a supervisor can
improve his production also. Because when a supervisor is threatening an employee
or threatening to take measures if the employee doesn’t work those measures can
increase the production of the company.

3.3.7 Extinction

Extinction occurs when a target behavior decreases because no consequence

follows it.

3.3.8 Business example

If an employee makes practical jokes that are potentially dangerous or costly, this
behavior might be extinguished by discouraging others from praising the employee
when he or she engages in these pranks.

Behavior Consequence Behavior Consequence

Customers Boss Customers Boss stops

served too criticizessees served criticizing
slowly faster

3.3.9 Fixed interval schedule

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.

3.3.10 Variable interval schedule

A schedule by which the time between reinforcement varies around some

average rather than being fixed.

3.3.11 Business example

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.

3.3.12 Fixed ratio schedule

A schedule by which reinforcement is given only after a specific number of

responses is made. Some piece-rate systems follow this schedule where employees
get paid after they produce a fixed number of units.
3.3.13 Variable ratio schedule

A schedule by which reinforcement occurs after a varying number of responses

rather than after a fixed number.

3.3.14 Business example

Sales people experience variable ratio reinforcement because they make a

successful sale (the reinforcer) after a varying number of client calls. They might
make four unsuccessful calls before receiving an order on the fifth one. This is
followed by 15 unsuccessful sales calls before another sale is made. One successful
sale might be made after 10 calls, on average, but this does not mean that every
10th call will be successful. 

3.4 Spontaneous recovery

The re-emergence of an extinguished conditioned response after a period of rest

and with no further conditioning.

3.4.1 Spontaneous recovery in business

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.

4.0 Memory and its use in Business

4.1 Short term and long term memory

Memory stored in which information first has meaning and it can hold information
up to 15 to 20 seconds.

4.1.1 Application of short term memory

Short term memory holds information up to 15 to 20 minutes. So the advertisers

use their advertisement to keep in mind about their products for a short time. After
watching an advertisement we forget the advertisement because it is short timed.
When we see the products really then we can recall the advertisements which we
had watched.

5.0 Different kinds of problems and their uses in Business

5.1 Well defined problem

Both the nature of the problem itself and the information needed to solve it are
available and clear.

5.1.1 Business implication

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.

5.2 Ill defined problem

Both the specific nature of the problem itself and the information needed to solve
it are unclear.

5.2.1 Business implication

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.

5.3 Arrangement problems

Arrangement problems require the problem solver to rearrange

or recombine elements in a way that will satisfy a certain
criterion. Usually, several different arrangements can be made,
but only one or a few of the arrangements will produce a
solution. Anagram problems and jigsaw puzzles are examples of
arrangement problems.

5.3.1 Business implication

 When we want to draw a decision we can draw that decision by arranging all
the information needed to do that. Such as a company wants to make an annual
report by arranging all the information it has. In this situation we are using
arrangement problems. Another example can be a project, such as when we wants
to give someone reward for his/her contribution in the company. At first we have to
collect data about that person and then combine all the information needed to judge.
Then base on the data we have collected we can derive a solution.

5.4 Problem of inducing structure

In problems of inducing structure, a person must identify the existing

relationship among the elements and then construct a new relationship among them.
In such a problem the problem solver must determine not only the relationship
among the elements but also the structure and size of the elements involved.

5.4.1 Business implication

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.

6.0 Intelligence and its use in business

6.1 Fluid intelligence

Intelligence that reflects information-processing

capabilities, reasoning and memory.

6.1.1 Business implication

A manager should have information processing

capabilities. Without this capability he/she cannot make decision in the organization.
Such as a manager have many information to make a decision. If he fails to process
the information he may not conclude the right decision. By using his processing
capability he can draw the perfect decision.

6.2 Crystallized intelligence

The accumulation of information, skills and strategies that are learned through
experience and can be applied in problem solving situations.

6.2.1 Crystallized intelligence in business

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.

6.3 Emotional intelligence

The set of skills that underlie the accurate assessment, evaluation, expression and
regulation of emotions.

6.3.1 Business example8

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 Texas-based Fortune 500 Company had utilized personality assessments for

candidate selection for years with little results in reducing turnover in their high
turnover sales force. After turning to an emotional intelligence-based selection
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Summary results(2010)
assessment and EQ training and development program, they increased retention by
67 percent in the first year, which they calculated added $32 million to their bottom
line in reduced turnover costs and increased sales revenues .

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.

Lastly, through a series of recent studies conducted by ZERORISK HR, Inc., a

correlation was found between low emotional intelligence and theft and shrinkage.
One other study in the construction industry yielded results showing workers with
low emotional intelligence had a higher likelihood of getting injured while on the job.
All of these cases are starting to prove the value of having highly emotionally
intelligent employees make up your workforce if you want a competitive advantage
in this highly competitive business world.

7.0 Motivation

The factors that direct and energize the behavior of humans and other organisms.

7.1 Maslow’s hierarchy of needs

Maslow’s hierarchy of needs defines five steps of needs.

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

If Maslow's theory holds, there are some important

implications for management. There are opportunities
to motivate employees through management style,
job design, company events, and compensation
packages, some examples of which follow:

 Physiological needs: Provide lunch breaks, rest

breaks, and wages that are sufficient to
purchase the essentials of life.

 Safety Needs: Provide a safe working

environment, retirement benefits, and job
security.

 Social Needs: Create a sense of community via team-based projects and

social events.

 Esteem Needs: Recognize achievements to make employees feel appreciated

and valued. Offer job titles that convey the importance of the position.

 Self-Actualization: Provide employees a challenge and the opportunity to

reach their full career potential.

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.

7.1.2 Maslow’s theory in advertising

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.

Table 02: Maslow’s hierarchy of needs.

Self- actualization Golf lessons “Realize your full

potential”
Esteem Luxury car “Be in control of the road”
Social pendant “Show her you care”
Safety Tires “Bounces off hazards”
Physiological Breakfast cereal “The natural energy
source”

7.3 Emotions

Feelings that generally have both physiological and cognitive elements and that
influence behavior.

7.3.1 Emotions in advertising10

Emotion arousal is often used in advertising even when emotion arousal or

reduction is not a product benefit. We are just beginning to develop a sound
understanding of how emotional responses to advertising influence consumer
behavior, as well as what causes an ad to elicit particular emotions. Therefore, the
general conclusions discussed below must be regarded as tentative.

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.

Advertising using emotion based appeals is

gaining popularity. For example, Zippo recently
launched an emotion based campaign for its
lighters. It has eight print ads, each with picture of
an engraved lighter and a simple headline. A
spokesperson said of the campaign, “We wanted to
make a human, emotional attachment”.

7.4 Emotions and Brands

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.

In countries like India, emotions are definitely critical factors in consumers,

accepting and loving brands. Promotions like small offers and reduction in prices or
buy and win leaves short term impact on customers mind where as emotional appeal
help and advertiser to put long lasting impact.

8.0 Personalities

The pattern of enduring characteristics that

differentiate people – those behaviors that make each
of us unique.

8.1 Conscience and its business implication

Prevents us from behaving in a morally improper way. The best example of

conscience can be adulteration. Adulteration is an unethical work in business.
Businessmen adulterate food and other products to make profit. Another example is
pollution. Some large countries are polluting the world’s environment. So conscience
should be practiced by everyone to do moral work.

8.2 The Big five trait approaches

– Openness to experience

– Conscientiousness

– Extraversion

– Agreeableness

– Neuroticism

8.2.1 Business application

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.

Conscientiousness is needed for marketing people. Because they have to be very

careful in every steps to make decision.