Sharif Amer J.

Abirin Marketing Management Task #4

Denver Dolette

What is Cognition?
Cognition in psychology can be defined as the process of thinking. It involves gaining and
understanding new information and then utilizing that information in a new form. Different
cognitive processing is involved in cognition, such as judgmental processes (or how the brain
determines emotions), remembering (or recalling information), decision-making, and problem-
solving. All of these processes involve taking in new information and formulating what to do
with that information, as well as how to utilize that information in the future.
Cognition influences people in many areas of their lives, especially how they perceive and
interact with the world. Human beings utilize cognition to understand memories, which may
shape how one perceives new experiences. When someone experiences a memorable event, there
is a lot of sensory information to be taken in and coded within the brain. Sometimes people
remember things differently than they may have occurred because cognition fills in aspects they
may not have remembered fully. Cognition also affects how we interact with the world. Because
we use cognition to understand memories, those memories also impact how we experience new
things. People's brains consistently utilize old information to begin understanding new
information as it is being processed

Different Types of Cognition

There are several types of cognitive processes that can be broken into three categories – social,
emotional, and executive.

Every day, various kinds of cognitive activities take place in the brain. They are cognition,
perception, learning, memory, and thought.

How the brain concentrates on stimuli is known as attention cognition. Because people's
attention spans and cognitive abilities vary depending on their cognitions, this experience may
differ depending on the individual. The cognitive process of perception is to comprehend the
data being ingested, which is typically data from the five senses. The brain uses perception
cognition to try to understand what is seen. Thought is a cognition that is more difficult to
understand. Thought is the internal monologue of the brain. It is sometimes guided by external
stimuli but is often free to think about whatever someone wants. This type of cognitive process is
what helps people to make decisions and have higher levels of reasoning.
Learning is a cognitive process that is easiest when people are younger. It involves seeing new
information, retaining it, and utilizing it for later use. The learned information is then stored in
the memory, another form of cognition. Memory cognition keeps all the information learned,
experienced, and perceived stored for later use.
Categories of Cognition
All these various types of cognitions can fall into three categories – social, emotional, and
executive.

Social cognition is used in social situations. It involves remembering social situations and
processing those experiences to understand the behavior of others and predict it.
Emotional cognition is the cognition type that allows people to feel their emotions and
understand the emotions of others. Emotional cognition involves understanding the emotional
expressions of others, such as body language, tone, and facial expressions.
Executive cognition involves higher-level processing, such as decision-making and controlling
other cognitions. These cognitions are more thought-out processes and are not automatic.
In the example of someone seeing someone they know from childhood; they may use executive
cognition to decide whether to speak to them. If they decide to speak, they utilize social
cognition to have a conversation and speak about past experiences with the person. The
emotional function is utilized in this setting to determine whether the person is enjoying the
conversation.

What are the Different Types of Customers?

Customers play a significant role in any business. To understand customer behavior and better
allocate resources to different customers to generate the highest profit, it is necessary to identify
and segment different types of customers. By better understanding the different types of
customers, businesses can be better equipped to develop successful strategies.

Five Main Types of Customers

In the retail industry, customers can be segmented into five main types:
Loyal customers: Customers that make up a minority of the customer base but generate a large
portion of sales.
Impulse customers: Customers that do not have a specific product in mind and purchase goods
when it seems good at the time.
Discount customers: Customers that shop frequently but base buying decisions primarily on
markdowns.
Need-based customers: Customers with the intention of buying a specific product.
Wandering customers: Customers that are not sure of what they want to buy.

1. Loyal Customers
Loyal customers are the most important segment to appease and should be top-of-mind for any
company. This type of customers generally represents no more than 20% of a company’s
customer base but contributes most of the sales revenue. Loyal customers, as the name implies,
are loyal and value a product heavily.

2. Impulse Customers
Impulse customers are the best customers to upsell to and are the second most attractive segment
(after loyal customers) to focus on. Impulse customers do not have a specific shopping list in
mind and purchase products spontaneously. In addition, impulse customers are typically
receptive to recommendations on products.

Impulse customers are second to loyal customers in the generation of sales revenue. Keeping
these customers in the loop on new product offerings goes a long way in improving a company’s
profitability.

3. Discount Customers
Discount customers play an important role in turning over a company’s inventory. Therefore,
discount customers are a key contributor to a company’s cash flow. This type of customer
seldom purchases products at full price and shops around for the best markdowns.

Discount customers are resilient to upselling, are usually the least loyal segment of customers,
and generally move on when better markdowns are available elsewhere.

4. Need-Based Customers
Need-based customers are driven by a specific need. In other words, they enter the store quickly,
purchase what they need, and leave. These customers buy for a specific need or occasion and are
hard to upsell. It is important to note that need-based customers can be easily drawn to other
businesses.

Therefore, it is important to initiate positive personal interaction with this customer segment in
order to retain them. Converting need-based customers to loyal customers is attainable with
proper positive personal interactions.

5. Wandering Customers
Wandering customers draw the largest amount of traffic to the company while making up the
smallest percentage of sales revenue. They have no specific need or desire in mind and are
attracted by the location of the business more than anything else. These customers enjoy the
social interaction of the shopping experience.

Therefore, spending too much time trying to appease this segment can draw away from the more
profitable segments. Although this segment generates the least amount of sales revenue,
providing insightful information about products to these customers can stimulate interest and
ultimately result in a purchase.