Chapter 6 Consumer Perception

Chapter Outline
‡ Elements of Perception ‡ Aspects of Perception
± Selection ± Organization ± Interpretation

Perception
‡ The process by which an individual selects, organizes, and interprets stimuli into a meaningful and coherent picture of the world ‡ How we see the world around us

Sketchers

Elements of Perception
‡ ‡ ‡ ‡ Sensation Absolute threshold Differential threshold Subliminal perception

advertisements ‡ The absolute threshold is the lowest level at which an individual can experience a sensation. brand names.Sensation ‡ The immediate and direct response of the sensory organs to stimuli ‡ A stimulus is any unit of input to any of the senses. . Eg: products.

‡ Sensory Adaptation: getting used to eg. Bright sun. cold shower .

‡ Ex: Absolute threshold THE IMPACT OF UPWARD PRICE MOVEMENTS ON DAILY HOUSEHOLD GOODS. .

Differential Threshold ‡ Minimal difference that can be detected between two similar stimuli ‡ Also known as the just noticeable difference (the j.d.) .n.

----------------------------------------------------------------------------------------- .‡ How do marketers apply the concept of differential threshold or 'just noticeable difference' in their marketing strategy? Explain giving suitable examples. 1. for the various products from the same family productgroup. in order to exploit the strength of the original brand.PRODUCTLINE EXTENSION. ------------------------------------------------------------------------------2. This concept is applied to the advertising/ promotion of the productline.DISTRIBUTION CHANNELS The marketers' apply the concept of differential threshold in the selection of the distribution channels. The concept of differential threshold is applied to almost all aspects of marketing strategies.

PRODUCT PRICING The marketers' apply the concept of differential threshold in the PRICING of the two brands from the same company --like two toothpaste brands from one company. -------------------------------------------------------------------------5. . ------------------------------------------------------------------------6.3. PRODUCT PACKAGING The marketers' apply the concept of differential threshold in the PACKAGING of the various models of the company products / to create uniform image.PRODUCT PROMOTIONS The marketers' apply the concept of differential threshold in the DEVELOPMENT/ IMPLEMENTATION of the sales promotion programs in two channels to maintain similarity / cost down. PRODUCT PERCEPTION/ IMAGE The marketers' apply the concept of differential threshold in the PRODUCT POSITIONING in more than one market segments. -----------------------------------------------------------------------4.

d.n. the greater the additional intensity needed for the second stimulus to be perceived as different. (just noticeable difference) between two stimuli is not an absolute amount but an amount relative to the intensity of the first stimulus ‡ Weber s law states that the stronger the initial stimulus. .Weber s Law ‡ The j.

the ability of a person to detect a difference between the two levels of the stimulus decreases ‡ Eg weights of products .‡ Weber's Law states that as the intensity of the stimulus increases.

N.n. ‡ Marketers need to determine the relevant j.D.d.Marketing Applications of the J. for their products ± so that negative changes are not readily discernible to the public ± so that positive changes are very apparent to consumers .

Subliminal Perception ‡ Stimuli that are too weak or too brief to be consciously seen or heard may be strong enough to be perceived by one or more receptor cells. Eg Theatre . We perceive stimuli without being aware of them.

Is Subliminal Persuasion Effective? ‡ Extensive research has shown no evidence that subliminal advertising can cause behavior changes ‡ Some evidence that subliminal stimuli may influence affective reactions .

Aspects of Perception Selection Organization Interpretation .

Aspects of Perception Selection Organization Interpretation .

Someone who is hungry . Stronger the need. ‡ Stimuli selected depends on three major factors ± Nature of the stimulus-contrast ± Expectations-conditioned to expect eg.Perceptual Selection ‡ Consumers subconsciously are selective as to what they perceive. greater the tendency to ignore unrelated stimuli in the environment. Eg. ± Motives-perceive things we need or want.

Discussion Questions ‡ What marketing stimuli do you remember from your day so far? ‡ Why do you think you selected these stimuli to perceive and remember? .

Perceptual Selection Concepts ‡ ‡ ‡ ‡ Selective Exposure Selective Attention Perceptual Defense Perceptual Blocking ‡ Consumers seek out messages which: ± Are pleasant ± They can sympathize ± Reassure them of good purchases .

Perceptual Selection Concepts ‡ ‡ ‡ ‡ Selective Exposure Selective Attention Perceptual Defense Perceptual Blocking ‡ Heightened awareness when stimuli meet their needs ‡ Consumers prefer different messages and medium .

Perceptual Selection Concepts ‡ ‡ ‡ ‡ Selective Exposure Selective Attention Perceptual Defense Perceptual Blocking ‡ Screening out of stimuli which are threatening though exposure has taken place ‡ Eg warning labels on cigarette packs .

Perceptual Selection Concepts ‡ ‡ ‡ ‡ Selective Exposure Selective Attention Perceptual Defense Perceptual Blocking ‡ Consumers avoid being bombarded by stimuli by Tuning out ± TiVo and Replay are devices which allow consumers to skip TV commercials .

Aspects of Perception Selection Organization Interpretation .

This is also called Gestalt psychology (Gestalt in german means pattern)3 principles: . This method simplifies life considerably for the individual.Perceptual Organisation ‡ People do not experience numerous stimuli from the environment as separate sensations but they tend to organize them in groups and perceive them as unified wholes.

. ‡ The ground is usually hazy. ‡ Marketers usually design so the figure is the noticed stimuli.Organization Principles ‡ Figure and ground ‡ Grouping ‡ Closure ‡ People tend to organize perceptions into figureand-ground relationships.

weblink .Lacoste¶s campaign uses a very plain ground so the symbol really shows.

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‡ Grouping helps memory and recall. Advertisement for tea ‡ 9 digit numbers in chunks of 3 .Organization Principles ‡ Figure and ground ‡ Grouping ‡ Closure ‡ People group stimuli to form a unified impression or concept. ‡ Eg.

‡ Will often fill in missing pieces ‡ Incomplete messages remembered more than complete .Organization Principles ‡ Figure and ground ‡ Grouping ‡ Closure ‡ People have a need for closure and organize perceptions to form a complete picture.

‡ Eg: person who begins a task or hears the beginning of a message develops a need to complete it. not an arc. .‡ Eg: a circle with a section of its periphery missing is invariably perceived as a circle.

Aspects of Perception Selection Organization Interpretation .

Interpretation Perceptual Distortion ‡ Physical Appearances ‡ Stereotypes ‡ First Impressions ‡ Jumping to Conclusions ‡ Halo Effect ‡ Positive attributes of people they know to those who resemble them ‡ Important for model selection ‡ Attractive models are more persuasive for some products .

Interpretation Perceptual Distortion ‡ Physical Appearances ‡ Stereotypes ‡ First Impressions ‡ Jumping to Conclusions ‡ Halo Effect ‡ People hold meanings related to stimuli ‡ Stereotypes influence how stimuli are perceived ‡ Eg United Colours of Benetton campaign .

or predictive ‡ Eg products must be perfect before they are launched .Interpretation Perceptual Distortion ‡ Physical Appearances ‡ Stereotypes ‡ First Impressions ‡ Jumping to Conclusions ‡ Halo Effect ‡ First impressions are lasting ‡ The perceiver is trying to determine which stimuli are relevant. important.

Interpretation Perceptual Distortion ‡ Physical Appearances ‡ Stereotypes ‡ First Impressions ‡ Jumping to Conclusions ‡ Halo Effect ‡ People tend not to listen to all the information before making conclusion ‡ Important to put persuasive arguments first in advertising .

just purchase packages they believe contain greater volume which maybe true or not.Jumping to Conclusions ‡ Eg consumer may just hear beginning of a commercial message and draw conclusions. . ‡ Eg A study found out that consumers do not read food labels. Elongated packaging more volume than round packaging.

Jumping to Conclusion .

.Interpretation Perceptual Distortion ‡ ‡ ‡ ‡ ‡ Physical Appearances Stereotypes First Impressions Jumping to Conclusions Halo Effect ‡ Consumers perceive and evaluate a person or an object on many dimensions based on just one dimension ‡ Used in licensing of names ‡ Eg product line extension on the basis of brand or spokesperson.

Eg of Halo Effect ‡ Tampering with the perceived halo effect of a product or brand can have disastrous effects. . But this move led to a dip in sales. JW Marriott took over the Righa Royal Hotel in New York city and renamed it JW Marriott New York.

Issues in Consumer Imagery ‡ Consumer Imagery: Consumers have certain perceptions or images which are relevant to consumer behavior. ‡ Product Positioning and Repositioning ‡ Positioning of Services ‡ Perceived Price ‡ Perceived Quality ‡ Retail Store Image ‡ Manufacturer Image ‡ Perceived Risk .

Positioning ‡ Establishing a specific image for a brand in the consumer s mind ‡ Positioning is more important than the product s characteristics although products that are poorly made will not succeed in the long run on the basis of image alone. . ‡ Most new products fail because of me too offerings.

In the same example through research.‡ Successful positioning is based on Benefits v/s Features ‡ Eg Nutrigrain and Balance energy bars ‡ Positioning is the essence of marketing mix. . manufacturers can determine the characteristics of persons who will have healthy breakfast habits and develop a marketing plan.

‡ Positioning coveys the concept or meaning of the product in terms of how it fulfills a consumer need. . Eg 7 Up slogan as The UnCola -it shows as an alternative to the most popular soft drink and also places it in the same league with its giant competitor. ‡ A good positioning strategy should have a 2 pronged meaning one that is congruent with the consumer needs while at the same time featuring the brand against its competition.

Positioning Techniques ‡ Umbrella Positioning ‡ Positioning against Competition ‡ Positioning Based on a Specific Benefit ‡ Finding an Unowned Position ‡ Filling Several Positions ‡ Repositioning .

UMBRELLA POSITIONING ‡ Ex: Nobody can do it like McDonald s .

Ads for coconut oil target a blue coloured bottle .Positioning against Competition ‡ Ex.

Positioning based on a specific benefit ‡ Ex:Anti-dandruff shampoo .

tough on grease. . ‡ Eg Toothpaste market Topol was positioned as a smoker s toothpaste that could fight tartar and gum disease became very successful.Finding an unowned Position ‡ In highly competitive markets finding a niche unfilled by other companies is challenging but not impossible. ‡ Eg Palmolive positions its dishwashing liquid as. soft on hands .

Filling Several Positions ‡ Because unfilled gaps or unowned perceptual positions present opportunities for competitors. Eg:P&G world s largest producer of laundry detergents like Tide and Ariel . marketers create several distinct offerings in the form of brands to fill several identified niches.

competitor cutting into the brand s market share ‡ 2. too many competitors stressing the same attribute eg: the milk chocolate melts in your mouth ‡ 3. Changing consumer preferences ‡ Ex:Kentucky Fried Chicken changed to KFC to avoid Fried from its advertising. .Product Repositioning ‡ Why must we reposition? ‡ 1.

Product Repositioning ‡ Ex: Johnson and Johnson with declining birth rates and consumer s preferences for gentle and pure products have emerged. . powder and soap for grown ups. J&J repositioned its baby lotion.

Thus the marketing objective is to create a distinct image about the brand in the mind of the consumer. Eg hotels will have packaged soaps and shampoos. eg:delivery vehicles painted in distinct colours .Positioning of Services ‡ As services are intangible differentiating a service from its competitor is a key factor.

Doubletree and Hampton Inn Chains. brands are separate and distinct from one another as each targets a different segment.Differentiated Positioning Strategy ‡ Companies market several versions of their service to different market segments. ‡ Eg Hilton Hotel purchased Embassy Suites. though shared ownership. .

consumers associate services with their settings and accordingly judge the quality. style.Good ambience: temperature. . use of materials and artwork. Efficiency/Convenience-easy to find ‡ C. lighting. Privacy visual and personal during transaction ‡ B. ‡ Eg Bank-5 environmental variables ‡ A. soft music ‡ D. Physical appearance of bank employees ‡ E. Aesthetics: Colour.Aspects of Service Positioning ‡ Physical environment-eg banks and offices.

‡ Consumers pay attention to prices paid by other consumers eg. . Frequent flyers.Perceived Price ‡ How a consumer perceives price has strong influence on both purchase intention and purchase satisfaction. senior citizens etc. ‡ Eg:Nobody is happy to know that he or she paid twice as much for an airline ticket.

. ‡ Eg: products on sale ‡ Reference prices are internal and external ‡ External reference price uses a higher ext ref price.Reference Prices ‡ Reference price is any price that a consumer uses as a basis for comparison in judging another price. sold elsewhere at by offering a lower sales price to persuade consumer that the buy is a good buy.

Eg: was and now ‡ They play a major role in consumer s evaluations and perceptions of value of advertised (external) price deal.‡ Internal reference is price retrieved by the consumer from memory. .

Tensile Price Claim ‡ 3 types of tensile price claims ‡ Maximum. minimum and range. save upto 60%. save 20% or more . ‡ Eg save 10-40%.

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‡ Findings say maximum discount level are more effective than minimum discount and discount range .

‡ Study found that additional savings offered directly on the bundle have a greater impact on the consumer s perceptions of transaction value as compared to savings on individual items in the bundle .Bundle Price ‡ Marketing of two or more products or services in a single package for a special price.

Perceived Quality ‡ Perceived Quality of Products ± Intrinsic vs. refreshing and flavorful . Eg flavor of ice-cream or cake Eg: It is interesting to note that color of powdered fruit drink is more important than its label and the actual taste. Orange color is perceived as sweet. Extrinsic Cues Intrinsic cues concern physical characteristics of the product itself.

brand image.Extrinsic cues ‡ In the absence of actual experience with a product. consumers often evaluate products on the basis of cues that are external to the product itself such as price. manufacturer s image. . retail store image or even the country of origin.

Perceived Quality of products ‡ ‡ ‡ ‡ -Country-of-origin stereotypes Eg: Japanese cars are more reliable Eg: German engineering is excellent Eg: Made in USA label means a superior product .

Perceived Quality of Services ‡ ‡ ‡ ‡ ‡ Services have distinctive characteristics They are intangible They are variable They are perishable They are simultaneously produced and consumed .

. professionalism of the nurse to evaluate the quality of a doctor s services. room furnishings. number and source of framed degrees on the wall. consumers rely on surrogate or extrinsic cues to evaluate service quality eg: In a doctor s clinic consumers note quality of the clinic. pleasantness of receptionist.‡ Consumers cannot compare competing services side by side as they do with competing products.

food .Standardization of services ‡ Actual quality of services will vary from person to person. customer to customer and from service employee to another service employee. ‡ Therefore it is essential to standardize services. However the downfall is customized services which consumers value ‡ Eg: haircut.

‡ Unlike products which are first produced. then produced and consumed simultaneously eg haircut ‡ Whereas defective products can be detected before reaching consumer. then sold and then consumed. an inferior service is consumed as it is being produced thus little opportunity to correct it. Eg haircut . services are first sold.

service providers offer discounts ‡ Eg telephone calls are cheaper after 11 p.m. is inexpensive . to ease traffic ‡ Eg early dinner before 7 pm.‡ During peak hours quality of services decreases because both the service provider and customer are hurried and under stress. ‡ To counter this problem.

. responsiveness. assurance.Perceived Quality of Services ‡ SERVQUAL scale used to measure gap between customers expectation of service and perceptions of actual service delivered based on 5 dimensions: reliability. empathy and tangibility.

at the promised time and doing it right the first time ‡ Responsiveness-prompt service.‡ Reliability-providing the service as promised. willingness to help consumers. readiness to respond to customer requests ‡ Assurance-instilling confidence in customers and making them feel safe in their transactions .

‡ Empathy-employees dealing with customers with care by understanding their needs ‡ Tangibility-modern equipment. convenient operating hours. employees with professional appearance. visually appealing facilities and materials related to the service .

process dimension-focuses on how core service is delivered that is employees responsiveness. outcome dimension-focuses on reliability of the core services ‡ 2. assurance and empathy in handling customers ‡ Eg fedex .‡ These dimensions are divided into 2 groups ‡ 1.

the higher the price.) ‡ In addition to price consumers use such cues as brand image and store image to evaluate its quality ‡ Generally consumers rely on price when they have little information or they have little confidence in their own ability ..Price/Quality Relationship ‡ The perception of price as an indicator of product quality (e. the higher the perceived quality of the product.g.

. magnitude of price advantage) Thus frequent advertising that presents large number of price specials reinforces consumer beliefs about the competitiveness of a store s prices.Retail Store Image ‡ A study of retail store image on comparative pricing strategies found that consumers tend to perceive stores that offer a small discount on a large number of items (i. frequency of price advantage) as having lower prices overall than competing stores that offer large discounts on a small number of products. (i.e.e.

the image of the store will improve. For this reason marketers of prestigious brands will attempt to control the outlets. the less favorable image becomes enhanced at the expense of the more favorable image. ‡ For eg. When brand and retailer images become associated. whereas the image of the brand will be adversely affected. Thus when a low-priced store carries a brand with a high priced image. .Retail Store Image ‡ Perceived quality is sometimes a function of both price and store image.

Positive correlation between pioneer brand image and individual s ideal self-image. Pioneer Brands have a favorable perception than follower brands.Manufacturer s Image ‡ Consumer imagery extends to manufacturer s image as well. .

Perceived Risk ‡ Consumer purchase decisions are often associated with risk. ‡ Major types of risks include . ‡ Perceived risk is defined as the uncertainty that consumers face when they cannot foresee the consequences of their purchase decisions.

Risk types ‡ ‡ ‡ ‡ ‡ ‡ Functional risk Physical risk Financial risk Social risk Psychological risk Time risk .

Perception of Risk Varies
‡ Consumer perception of risk varies depending on the person, product, situation and culture. ‡ Person: High risk perceivers and Low risk perceivers. High risk are described as narrow categorizers and low risk are described as broad categorizers.

‡ Product: Higher degree of risk (functional, financial and time) in the purchase of a plasma tv as compared to an automobile. ‡ In addition to products consumers perceive services to be riskier than products (social, psychological, physical)

‡ Situation: traditional retail store, online or door to door sales ‡ Culture: today a lot of shopping is done online as compared to some years ago. In online or mail order shopping the consumer cannot inspect the merchandise before ordering. However as they gain experience in online purchasing their levels of risk can be reduced.

How Consumers Handle Risk
‡ 1.Consumers seek information‡ 2.Consumers are brand loyal eg high risk perceivers ‡ 3.Consumers select by brand image-No experience consumers, seek well known brands ‡ 4.Consumers rely on store image-when consumers have no other info, they trust the judgement of buyers of a reputable store. Also store image wherein consumers will look for product testing, assurance of service, return priveleges and adjustment in case of dissatisfaction.

e. free samples. eg: people buy a car after taking a test drive. they equate price with quality ‡ 6. Consumers buy the most expensive model: when in doubt they buy the most expensive model which is probably the best in quality. By way of warranties. money back guarantees.Consumers seek reassurance: eg. i. . pre-purchase trial.‡ 5.

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