Chapter 04

Consumer Perception
Learning objective:
• To understand the elements of perception and their role in consumer behavior.
Perception is a cognitive process through which individuals interpret and make sense of
sensory information from their environment. In the context of consumer behavior, perception
plays a vital role in how consumers perceive and evaluate products, brands, advertisements,
and overall shopping experiences. Here are the key elements of perception and their
significance in shaping consumer behavior:

I. Sensation: Sensation refers to the process of detecting and receiving sensory stimuli
through our five senses: sight, hearing, taste, smell, and touch. Marketers strategically use
sensory cues to create appealing product packaging, attractive store layouts, and engaging
advertising campaigns to capture consumers' attention and stimulate their senses.

II. Attention: Attention is the selective focusing of an individual's mental resources on a

particular stimulus. Consumers are constantly bombarded with numerous marketing
messages and stimuli, and attention acts as a filter, allowing consumers to allocate their
limited attention to the most relevant and meaningful information. Marketers employ
various techniques, such as vivid visuals, catchy slogans, and celebrity endorsements, to
grab consumers' attention and stand out from the competition.

III. Interpretation: Interpretation involves assigning meaning to the sensory information

received based on individuals' knowledge, beliefs, values, and past experiences.
Consumers' interpretation of stimuli greatly influences their perception of brands and
products. For example, a logo design may evoke different associations and emotions in
different consumers, depending on their cultural background or personal experiences.

IV. Perceptual Organization: Perceptual organization refers to the process of organizing and
structuring sensory stimuli into a coherent and meaningful whole. Consumers tend to
organize and group stimuli based on certain principles, such as proximity (objects that are
physically close are perceived as belonging together), similarity (objects that share similar
attributes are perceived as related), and closure (mentally completing incomplete stimuli to
form a whole). Marketers use these principles to create visually appealing packaging
designs and advertisements that are easy for consumers to process and comprehend.
V. Perceptual Filters: Perceptual filters are mental frameworks and biases that shape how
individuals perceive and interpret information. These filters can be influenced by cultural,
social, and individual factors. Consumers' past experiences, beliefs, attitudes, and values
act as filters that influence their perception of marketing messages. Marketers need to
understand these filters and tailor their strategies accordingly to resonate with their target
audience.

VI. Perceptual Distortion: Perceptual distortion occurs when consumers inaccurately

perceive or interpret sensory information. This distortion can be influenced by factors such
as selective perception (paying attention to information that aligns with existing beliefs),
perceptual defense (subconsciously avoiding or distorting information that conflicts with
existing beliefs), and stereotyping (applying preconceived notions and assumptions to
stimuli). Marketers need to be aware of potential distortions and work to present their
products and brands in ways that align with consumers' existing beliefs and minimize
negative biases.

Understanding the elements of perception and their role in consumer behavior helps marketers
create more effective marketing strategies. By leveraging sensory cues, capturing attention,
shaping interpretation, and accounting for perceptual filters and distortions, marketers can
enhance consumer perception, influence purchase decisions, and build strong brand
associations.

Definition of Perception with example:

Perception refers to the process by which we interpret and make sense of the information we
receive from our senses, such as sight, hearing, touch, taste, and smell. It involves organizing
and understanding sensory input to create our subjective experience of the world around us.

Here's a simple example to illustrate perception:

Imagine you're walking through a park, and you see a small, furry creature scurrying across
the path. Your visual perception helps you recognize it as a squirrel. You perceive its size,
shape, and color, and your brain matches this sensory input with your existing knowledge and
memories of squirrels. As a result, you perceive the creature as a familiar animal known for
climbing trees and gathering nuts. Additionally, you might perceive it as cute or harmless
based on your previous experiences or cultural associations.
 In this example, perception involves the interpretation of visual sensory input to identify and
categorize the creature as a squirrel. It also incorporates your personal experiences, memories,
and emotions, influencing how you perceive and react to the situation.

Perception refers to the process through which we interpret and make sense of sensory
information from our environment. It involves the organization, identification, and
interpretation of sensory stimuli, such as sight, sound, taste, touch, and smell, to create our
subjective experiences of the world.

An example of perception is how we perceive and interprets visual stimuli. When we see an
object, our visual perception helps us recognize its shape, color, and size, and understand its
spatial relationships with other objects. For instance, when we look at a red apple, our visual
perception allows us to identify it as an apple, differentiate its red color from other colors, and
determine its size and shape.

However, perception is not solely based on sensory input. It is influenced by various factors,
including our past experiences, cultural background, beliefs, and expectations. These factors
can shape our interpretation of sensory information, leading to different perceptions of the
same stimuli among individuals.

Perception in Marketing and Business:

Perception plays a crucial role in marketing and business because it influences how customers
perceive and interpret information about products, services, brands, and companies. Here are
some key points about perception in marketing and business:

I. Definition of Perception: Perception refers to the process by which individuals select,

organize, and interpret sensory information to give meaning to their environment. In
marketing and business, perception refers to how consumers perceive and make sense of
marketing stimuli such as advertisements, packaging, pricing, and brand messages.

II. Importance of Perception: Perception shapes consumers' attitudes, preferences, and

purchasing decisions. It influences how consumers perceive the value, quality, and benefits
of a product or service. Businesses need to understand and manage perception effectively
to create positive customer experiences and build strong brands.
 III. Perceptual Filters: Every individual has their own unique set of perceptual filters based
on their experiences, beliefs, values, and cultural background. These filters shape how
individuals perceive and interpret marketing messages. Marketers must consider these
filters and try to align their messaging with consumers' existing perceptions and beliefs.

IV. Brand Perception: A brand's perception is the sum total of consumers' perceptions,
beliefs, and feelings towards a brand. It is influenced by factors such as brand image,
reputation, advertising, word-of-mouth, and customer experiences. Businesses invest in
branding strategies to shape and manage the perception of their brand in the minds of
consumers.

V. Perception and Product Positioning: Perception is closely tied to product positioning.

Businesses need to position their products or services in a way that aligns with the desired
perception they want to create in the minds of consumers. Effective positioning helps
differentiate a product from competitors and influences how it is perceived in terms of
attributes, benefits, and target market fit.

VI. Influencing Perception: Marketers use various strategies to influence consumers'

perception. These include advertising, packaging design, pricing strategies, product
placement, endorsements, and creating positive customer experiences. Consistency,
credibility, and delivering on promises are important for shaping positive perceptions.

VII. Managing Negative Perception: Sometimes, businesses face challenges due to negative
perceptions caused by product failures, customer complaints, or negative publicity. In such
cases, it is essential to address the issues, communicate transparently, and take appropriate
corrective measures to rebuild trust and improve perception.

VIII. Perception and Decision Making: Consumers rely on their perception of products and
brands to make purchase decisions. Marketers often aim to create positive perceptions that
align with consumers' needs and desires, as well as influence decision-making processes
through effective marketing communication and persuasion techniques.

IX. Online Perception: In the digital age, online platforms and social media greatly influence
perception. Online reviews, ratings, and comments from other consumers can significantly
impact how a brand or product is perceived. Monitoring and managing online reputation is
vital to ensure a positive perception.
X. Consumer Research: To better understand consumer perception, businesses often conduct
market research, including surveys, focus groups, and online analytics. These insights help
marketers gain a deeper understanding of their target audience, their perceptions, and
preferences, enabling them to tailor their strategies accordingly.

In summary, perception plays a crucial role in marketing and business. Understanding and
managing consumer perception is essential for building strong brands, influencing purchase
decisions, and creating positive customer experiences.

2.To understand why consumers, process only a small amount of the information they
receive.

Consumers are bombarded with a vast amount of information on a daily basis, ranging from
advertisements, product reviews, social media posts, and more. However, despite this
abundance of information, consumers tend to process only a small fraction of what they
receive. There are several reasons why this is the case:

• Information overload: The digital age has made information more accessible than ever
before. Consumers are constantly exposed to an overwhelming amount of information,
making it impossible to process everything. As a result, individuals naturally filter out and
focus on the information that seems most relevant or interesting to them.

• Limited attention span: People have limited attention spans, and their ability to
concentrate on a specific task or absorb information is finite. In today's fast-paced world,
where multiple stimuli compete for attention, consumers are inclined to skim through
information quickly or engage in selective attention, paying attention to only certain aspects
that catch their interest.

• Cognitive biases: Consumers are influenced by various cognitive biases that affect their
information processing. For example, confirmation bias leads individuals to selectively
seek and interpret information that confirms their pre-existing beliefs or attitudes. This bias
can prevent consumers from fully considering alternative perspectives or contradictory
information.

• Time constraints: Modern lifestyles are often hectic, leaving consumers with limited time
to dedicate to information processing. Quick decision-making becomes necessary, and
individuals may rely on heuristics or mental shortcuts to make choices rather than
thoroughly analyzing all available information.

• Information credibility: Consumers are becoming increasingly aware of fake news,

misinformation, and biased sources of information. As a result, they may become skeptical
 and more discerning about the information they encounter. This skepticism can lead
consumers to process information more selectively, relying on trusted sources or seeking
additional verification before accepting information as valid.

• Lack of relevance: Not all information is equally relevant or meaningful to consumers.

Individuals are more likely to engage with information that aligns with their interests,
needs, or goals. They may ignore or filter out information that seems irrelevant or unrelated
to their current context or preferences.

In summary, the limited amount of information consumers process can be attributed to

factors such as information overload, limited attention spans, cognitive biases, time
constraints, concerns about information credibility, and the relevance of the information to
their personal needs and interests.

03. To understand how consumers, organize consumption-related information.

When consumers encounter various products and services, they often engage in a cognitive
process to organize consumption-related information in their perception. This process helps
them make sense of the options available and facilitates decision-making. Here are some
ways consumers organize consumption-related information:

i. Categorization: Consumers tend to categorize products or services based on similarities

in features, functions, or attributes. They create mental categories or product schemas to
simplify the complexity of the choices. For example, they may categorize smartphones into
brands, operating systems, or price ranges.

ii. Mental Maps: Consumers develop mental maps or frameworks to understand the
relationships between different products or services. These mental maps help them
visualize how options compare to each other. For instance, a consumer might mentally map
various coffee shop chains based on factors like price, quality, and convenience.

iii. Brand Associations: Consumers often associate certain brands with specific attributes,
qualities, or values. These associations help consumers organize their perception of brands
and guide their decision-making. For example, a consumer might associate a luxury brand
with high quality, exclusivity, and prestige.

iv. Prior Knowledge and Experience: Consumers rely on their prior knowledge and
experiences to organize consumption-related information. They draw upon past
interactions, product usage, or information gathered from various sources to form a
framework for understanding new options. Previous positive or negative experiences can
influence their perception and organization of information.

v. Social Influences: Social interactions and influences from friends, family, or online
communities can shape how consumers organize consumption-related information. Word-
 of-mouth recommendations, online reviews, or social media discussions contribute to the
formation of consumer perceptions and information organization.

vi. Decision Criteria: Consumers establish decision criteria based on their personal
preferences, needs, and values. They evaluate products or services against these criteria and
organize the information accordingly. Decision criteria may include factors like price,
quality, durability, convenience, or ethical considerations.

vii. Contextual Factors: Consumers consider the context in which they will consume a
product or service. Factors such as occasion, time constraints, location, and social norms
influence how they organize consumption-related information. For example, a consumer
may prioritize fast food options when they are in a hurry, but opt for a fine dining
experience for a special occasion.

Overall, consumers organize consumption-related information based on their cognitive

processes, past experiences, social influences, and personal preferences. Understanding
these mechanisms can help businesses tailor their marketing strategies to align with
consumer perceptions and facilitate decision-making.

No 03. To understand how consumers, organize consumption-related information.

Consumer perception is the process by which individuals select, organize, and interpret
sensory information to create a meaningful picture of the world. To understand how
consumers, organize consumption-related information in perception, we need to explore
the following concepts:

i. Selective attention: Consumers have limited cognitive resources, and they cannot process
all the information available in their environment. Therefore, they selectively attend to
information that is relevant to their needs and goals. For example, when shopping for a new
smartphone, consumers may focus on features such as battery life, camera quality, and
storage capacity while ignoring other factors such as color or brand name.

ii. Perceptual organization: Consumers organize the information they receive into coherent
patterns and structures. They use various grouping principles such as similarity, proximity,
and closure to organize the information into meaningful units. For example, when browsing
a website, consumers may group products into categories based on their similarities in
terms of brand, price range, or product type.

iii. Interpretation: Consumers interpret the information they receive based on their past
experiences, beliefs, and values. Their interpretation can be influenced by factors such as
expectations, motivation, and mood. For example, a consumer who has had positive
experiences with a particular brand may interpret new information about the brand in a
more favorable way than someone who has no prior experience with the brand.
Overall, understanding how consumers organize consumption-related information in
perception can help marketers to design effective communication strategies that are tailored
to consumers' needs and preferences. By understanding how consumers select, organize,
and interpret information, marketers can create messages that are more likely to be noticed,
remembered, and acted upon by consumers.

No 04. To understand why and how consumers “add” biases to stimuli and the
implications of this tendency for marketing.

Consumers are prone to adding biases to stimuli due to various cognitive and psychological
factors. These biases can influence their perceptions, attitudes, and behaviors towards
products and services, and have significant implications for marketing.

One reason why consumer add biases to stimuli is the availability heuristic, which is the
tendency to rely on information that is readily available in memory when making
judgments or decisions. For example, if a consumer has had a positive experience with a
brand in the past, they may be more likely to have a positive bias towards the brand in the
future.

Another reason is confirmation bias, which is the tendency to seek out and interpret
information in a way that confirms preexisting beliefs or expectations. For example, if a
consumer believes that a certain brand is high-quality, they may only pay attention to
positive information about the brand and discount negative information.

There are also cultural and social factors that can influence biases. For example, consumers
may have biases towards certain products or brands based on their cultural background or
social identity. Additionally, consumers may be influenced by the opinions of others in
their social network, leading to biases towards certain products or brands.

The implications of consumer biases for marketing are significant. Marketers need to be
aware of these biases and understand how they can influence consumer behavior. They may
need to tailor their marketing messages and strategies to address these biases and influence
consumer perceptions in a positive way. For example, a brand may need to focus on
building positive experiences and associations with their product to counteract negative
biases that consumers may have towards the brand.

In addition, marketers may need to be mindful of the potential for biases to lead to negative
outcomes, such as consumer backlash or reduced brand loyalty. They may need to take
steps to address any negative biases and work to build trust and credibility with consumers.
 Overall, understanding how and why consumers add biases to stimuli is important for
marketers in developing effective marketing strategies and building strong relationships
with consumers.

No 06. To understand the elements of consumers’ imagery.

Consumer imagery refers to the mental pictures, associations, and perceptions that
consumers have about a brand, product, or service. These mental images can influence
consumers' attitudes, preferences, and behaviors towards a particular product or brand.

To understand the elements of consumers' imagery, researchers often use qualitative

methods such as focus groups, in-depth interviews, and online surveys. These methods can
provide valuable insights into how consumers perceive a brand or product and what
associations they make with it.

Here are some of the key elements that researchers may explore when studying consumers'
imagery:

I. Perceived benefits: Consumers often associate a product or brand with specific benefits,
such as convenience, quality, reliability, or prestige. Researchers may explore which
benefits are most salient to consumers and how they influence their perceptions of a brand
or product.

II. Emotional associations: Consumers may also have emotional associations with a brand or
product, such as feelings of happiness, excitement, or trust. Researchers may explore which
emotions are most strongly associated with a brand or product and how they influence
consumers' attitudes and behaviors.

III. Perceived attributes: Consumers may have specific perceptions of a product or brand's
attributes, such as its design, packaging, or price. Researchers may explore how these
attributes influence consumers' perceptions and behaviors.

IV. Brand personality: Consumers may also perceive a brand as having a specific personality,
such as being sophisticated, adventurous, or trustworthy. Researchers may explore how
consumers' perceptions of a brand's personality influence their attitudes and behaviors.

V. Cultural associations: Consumers may associate a brand or product with specific cultural
values or identities. Researchers may explore how these associations influence consumers'
perceptions and behaviors in different cultural contexts.

By exploring these and other elements of consumers' imagery, researchers can gain a deeper
understanding of how consumers perceive and interact with brands and products, and how
they make decisions about what to buy.
 No.06. To understand how consumers, determine the quality of products and services.

Consumers determine the quality of products and services based on a variety of factors,
including their own experiences, expectations, and perceptions. Here are some of the key
factors that influence consumers' assessments of product and service quality:

I. Performance: Consumers often evaluate a product or service based on how well it

performs its intended function. For example, a car's quality may be judged based on its
speed, safety, and reliability, while a restaurant's quality may be judged based on the taste
and presentation of its food, as well as the quality of its service.

II. Features: Consumers also evaluate a product or service based on the features it offers. For
example, a smartphone's quality may be judged based on its camera quality, battery life,
and software capabilities.

III. Price: Consumers may also evaluate a product or service's quality based on its price.
Higher-priced products and services are often associated with higher quality, while lower-
priced products and services may be perceived as lower quality.

IV. Brand reputation: Consumers often rely on a brand's reputation when assessing the
quality of its products or services. Brands that have a history of producing high-quality
products or providing excellent services may be perceived as having higher quality
products or services overall.

V. Perceived value: Consumers may also evaluate the quality of a product or service based
on its perceived value. This involves comparing the price of the product or service to the
benefits it provides. Consumers may perceive a product or service as high quality if they
feel it offers good value for the price.

VI. Word-of-mouth: Finally, consumers may also rely on word-of-mouth recommendations

from friends, family, or online reviews to determine the quality of a product or service.
Positive reviews and recommendations can increase consumers' perceptions of a product
or service's quality, while negative reviews can have the opposite effect.

By understanding how consumers evaluate the quality of products and services, businesses
can improve their offerings and meet their customers' expectations more effectively. This
can lead to increased customer loyalty, higher sales, and a stronger reputation for quality
over time.
No 07. To understand consumers’ perceived risks and how they handle and reduce those
risks.

Consumers often face perceived risks when making purchasing decisions. Perceived risks refer
to the uncertainty or anxiety that consumers experience when they believe that a product or
service may fail to meet their expectations or have negative consequences. There are several
types of perceived risks that consumers may face, including financial risk, performance risk,
physical risk, social risk, and time risk.

To handle and reduce perceived risks, consumers may engage in a range of behaviors and
strategies. Here are some of the ways that consumers may handle and reduce perceived risks:

1. Information seeking: Consumers may seek out information about a product or service to
reduce their perceived risks. This may involve researching online, reading reviews, asking
for recommendations, or consulting with experts.

2. Brand reputation: Consumers may also rely on a brand's reputation to reduce their
perceived risks. Brands that have a history of producing high-quality products or providing
excellent services may be perceived as having lower risk.

3. Trial and evaluation: Consumers may try a product or service before making a final
purchase decision. For example, they may request a sample or trial period, or they may rent
or borrow a product before buying it.

4. Warranty and guarantees: Consumers may also look for warranties or guarantees to
reduce their perceived financial risk. These may include money-back guarantees, repair or
replacement policies, or extended warranties.

5. Social proof: Consumers may look to the opinions and experiences of others to reduce
their perceived risks. This may involve reading reviews, asking for recommendations, or
looking for social proof such as endorsements from celebrities or experts.

6. Avoidance: In some cases, consumers may choose to avoid the perceived risk altogether
by not making a purchase or choosing a different product or service.
By understanding consumers' perceived risks and the strategies they use to handle and reduce
those risks, businesses can better meet their customers' needs and expectations. This can help
to build trust and loyalty with customers and lead to increased sales and profits over time.

Review and Discussion Questions

No 01. How does sensory adaptation affect advertising effectiveness? How can marketers
overcome sensory adaptation?
Sensory adaptation refers to the phenomenon where our senses become less sensitive to stimuli
over time. This can affect advertising effectiveness because consumers may become less
responsive to advertising messages that they have seen or heard repeatedly. When consumers
are exposed to the same advertisement repeatedly, they may stop paying attention to it or
become less likely to engage with the message.

Marketers can overcome sensory adaptation in several ways, including:

1. Varying the message: Marketers can vary the message or creative elements of an
advertisement to keep it fresh and interesting. This may involve changing the visuals,
music, or voiceover in a television or radio advertisement, or using different copy or
imagery in a print or online advertisement.

2. Using multiple channels: Marketers can also use multiple channels to reach consumers and
deliver their message. For example, they may use a combination of television, radio, print,
and online advertising to reach consumers in different ways and reduce the risk of sensory
adaptation.

3. Timing and frequency: Marketers can also vary the timing and frequency of their
advertising to avoid overexposure. This may involve spacing out advertisements over time
or limiting the number of times an advertisement is shown to a particular consumer.

4. Personalization: Marketers can also personalize their advertising to make it more relevant
and engaging to individual consumers. This may involve using data and technology to
target advertisements based on consumer preferences and behavior.
5. Novelty and surprise: Finally, marketers can use novelty and surprise to capture consumers'
attention and overcome sensory adaptation. This may involve using unexpected visuals,
sounds, or messaging in an advertisement to create a memorable and engaging experience.

By understanding how sensory adaptation can affect advertising effectiveness, marketers can
develop strategies to overcome this phenomenon and keep their advertising messages fresh
and engaging over time. This can help to increase brand awareness, engagement, and sales
over the long term. Sensory adaptation refers to the phenomenon where our senses become
less sensitive to stimuli over time. This can affect advertising effectiveness because consumers
may become less responsive to advertising messages that they have seen or heard repeatedly.
When consumers are exposed to the same advertisement repeatedly, they may stop paying
attention to it or become less likely to engage with the message.

Marketers can overcome sensory adaptation in several ways, including:

I. Varying the message: Marketers can vary the message or creative elements of an
advertisement to keep it fresh and interesting. This may involve changing the visuals,
music, or voiceover in a television or radio advertisement, or using different copy or
imagery in a print or online advertisement.

II. Using multiple channels: Marketers can also use multiple channels to reach consumers
and deliver their message. For example, they may use a combination of television, radio,
print, and online advertising to reach consumers in different ways and reduce the risk of
sensory adaptation.

III. Timing and frequency: Marketers can also vary the timing and frequency of their
advertising to avoid overexposure. This may involve spacing out advertisements over
time or limiting the number of times an advertisement is shown to a particular consumer.

IV. Personalization: Marketers can also personalize their advertising to make it more
relevant and engaging to individual consumers. This may involve using data and
technology to target advertisements based on consumer preferences and behavior.
V. Novelty and surprise: Finally, marketers can use novelty and surprise to capture
consumers' attention and overcome sensory adaptation. This may involve using
unexpected visuals, sounds, or messaging in an advertisement to create a memorable
and engaging experience.

By understanding how sensory adaptation can affect advertising effectiveness, marketers can
develop strategies to overcome this phenomenon and keep their advertising messages fresh
and engaging over time. This can help to increase brand awareness, engagement, and sales
over the long term.

No 02 Discuss the differences between the absolute threshold and the differential
threshold. Which one is more important to marketers? Explain your answer.

Absolute threshold and differential threshold are both important concepts in the field of
perception and consumer behavior. Here are the differences between the two:

• Absolute threshold: This refers to the minimum amount of stimulation necessary for a
person to detect a particular sensory stimulus. For example, the absolute threshold for
hearing may be the minimum volume level at which a person can hear a sound. The absolute
threshold is typically measured by presenting stimuli of varying intensities and asking
participants to indicate when they can detect them.

• Differential threshold: This refers to the minimum amount of difference necessary for a
person to detect a change in a particular stimulus. For example, the differential threshold
for weight may be the minimum amount of weight difference that a person can detect when
holding two objects. The differential threshold is typically measured by presenting stimuli
of varying magnitudes and asking participants to indicate when they can detect a difference.

In terms of which threshold is more important to marketers, it depends on the context and goals
of the marketing campaign. Here are some factors to consider:

a) Product differentiation: If a marketer is trying to differentiate their product from

competitors, the differential threshold may be more important. For example, if a new
smartphone model has a slightly larger screen size than the previous model, the differential
threshold may be the minimum amount of size difference necessary for consumers to
perceive the change and see the new model as an improvement.
b) Sensory marketing: If a marketer is using sensory cues such as color, sound, or scent to
enhance the appeal of their product, the absolute threshold may be more important. For
example, if a fragrance company is designing a new perfume, the absolute threshold for
scent may be the minimum intensity at which consumers can detect the fragrance, which
can help ensure that the scent is not too overpowering or too weak.

c) Advertising effectiveness: Both absolute and differential thresholds can be important for
advertising effectiveness. For example, if an advertisement uses a subtle visual or auditory
cue, the differential threshold may be the minimum amount of change necessary for
consumers to notice the cue and associate it with the brand. On the other hand, if an
advertisement uses a strong sensory cue such as a bright color or loud sound, the absolute
threshold may be the minimum intensity necessary for consumers to perceive the cue and
be impacted by it.

Overall, both absolute and differential thresholds are important concepts for marketers to
understand, as they can influence how consumers perceive and respond to marketing stimuli.
The relative importance of each threshold depends on the specific marketing context and goals
of the campaign.

No 03. For each of these products—chocolate bars and cereals—describe how marketers can
apply their knowledge of the differential threshold to packaging, pricing, and promotional
claims during periods of (a) rising ingredient and materials costs and (b) increasing
competition.

• Chocolate bars:
(a) Rising ingredient and materials costs: During periods of rising ingredient and materials
costs, marketers can apply their knowledge of the differential threshold to packaging, pricing,
and promotional claims to maintain their profit margins. For example:

i. Packaging: Marketers can reduce the size or weight of their chocolate bars while
keeping the price the same, or increase the price while keeping the size the same. By
doing this, they can avoid raising the price of the product, which may turn off price-
sensitive consumers.
ii. Pricing: Marketers can also use differential threshold to adjust their prices. For
example, they may increase the price of their premium chocolate bars by a larger amount
than their standard chocolate bars, knowing that consumers will be less likely to notice
the price increase for the premium product.
iii. Promotional claims: Marketers can also adjust their promotional claims to emphasize
the value of their products. For example, they may highlight the quality of their
chocolate or the use of sustainable ingredients to justify a higher price point.
(b) Increasing competition: When facing increasing competition, marketers can use
differential threshold to differentiate their chocolate bars from their competitors. For example:

i. Packaging: Marketers can use differential threshold to make their packaging more
distinctive or eye-catching. This can help their chocolate bars stand out on the shelves and
attract the attention of consumers.
ii. Pricing: Marketers can also use differential threshold to adjust their prices in response to
competition. For example, they may lower the price of their chocolate bars slightly below
that of their competitors, knowing that consumers may be more likely to switch brands for
a small price difference.
iii. Promotional claims: Marketers can also adjust their promotional claims to emphasize
unique features of their chocolate bars, such as the use of special ingredients or a unique
manufacturing process.

• Cereals:

(a) Rising ingredient and materials costs: During periods of rising ingredient and materials
costs, marketers can apply their knowledge of the differential threshold to packaging, pricing,
and promotional claims to maintain their profit margins. For example:

i. Packaging: Marketers can reduce the size of their cereal boxes while keeping the price the
same, or increase the price while keeping the size the same. By doing this, they can avoid
raising the price of the product, which may turn off price-sensitive consumers.
ii. Pricing: Marketers can also use differential threshold to adjust their prices. For example,
they may increase the price of their premium cereals by a larger amount than their standard
cereals, knowing that consumers will be less likely to notice the price increase for the
premium product.
iii. Promotional claims: Marketers can also adjust their promotional claims to emphasize the
nutritional value or health benefits of their cereals to justify a higher price point.
(b) Increasing competition: When facing increasing competition, marketers can use
differential threshold to differentiate their cereals from their competitors. For example:

i. Packaging: Marketers can use differential threshold to make their packaging more
distinctive or eye-catching. This can help their cereals stand out on the shelves and attract
the attention of consumers.
ii. Pricing: Marketers can also use differential threshold to adjust their prices in response to
competition. For example, they may lower the price of their cereals slightly below that of
their competitors, knowing that consumers may be more likely to switch brands for a small
price difference.
iii. Promotional claims: Marketers can also adjust their promotional claims to emphasize
unique features of their cereals, such as the use of special ingredients or the inclusion of
vitamins and minerals. They may also highlight the taste and texture of their cereals to
appeal to consumers who prioritize flavor over nutrition.

No 04. Does subliminal advertising work? Support your view.

The concept of subliminal advertising suggests that advertisers can influence our behavior and
decision-making without our conscious awareness by embedding hidden messages in
advertisements. However, the effectiveness of subliminal advertising is highly debated among
experts, and there is little empirical evidence to support its effectiveness.

One reason why subliminal advertising is considered ineffective is that the human brain has a
natural filtering mechanism that prevents us from consciously processing all of the stimuli we
encounter. Thus, even if a subliminal message is present, it is unlikely to have a significant
impact on our behavior because we may not even register its presence.

Furthermore, most studies conducted on the effectiveness of subliminal advertising have found
no evidence that it has any significant impact on consumer behavior. While some studies have
suggested that subliminal messages can affect attitudes or emotions, these effects are generally
small and short-lived.

Additionally, there are ethical concerns surrounding the use of subliminal advertising. The use
of hidden messages to manipulate consumers without their knowledge or consent is generally
considered unethical and is not widely practiced in the advertising industry.

In conclusion, while the idea of subliminal advertising may be intriguing, there is little
evidence to support its effectiveness. Most studies have found no significant impact on
consumer behavior, and the use of hidden messages is generally considered unethical.
Therefore, it is unlikely that subliminal advertising has a meaningful impact on our decision-
making or behavior.
No.05. How do advertisers use contrast to make sure that their ads are noticed? Would
the lack of contrast between the ad and the medium in which it appears help or hinder
the effectiveness of the ad?
Advertisers often use contrast to make their ads stand out and grab attention. Contrast refers
to the difference in visual properties, such as color, brightness, or size, between the ad and its
surroundings. By using contrast, advertisers can create a visual hierarchy that draws the
viewer's attention to the ad.

For example, an advertiser might use a bright, bold color for their product against a more
muted or neutral background. This contrast makes the product visually pop and stand out from
the surroundings, which can increase the likelihood that the viewer will notice and remember
it.

On the other hand, if the ad lacks contrast with its surrounding medium, it may be harder for
it to catch the viewer's attention. For instance, an ad with a low-contrast color scheme might
blend in with the background, making it more difficult to distinguish from other elements on
the page. In such cases, the ad may not be noticed or remembered by viewers as effectively as
a high-contrast ad.

In summary, contrast is an essential tool for advertisers to make their ads stand out and grab
attention. A lack of contrast between the ad and its medium can hinder the effectiveness of the
ad by making it less noticeable and memorable.

No.06. What are the implications of figure-and-ground relationships for print ads and
for online ads? How can the figure-and-ground construct help or interfere with the
communication of advertising messages?

The figure-and-ground relationship refers to the perception of an image as a foreground figure

against a background. In the context of print ads and online ads, the figure-and-ground
construct can have significant implications for the communication of advertising messages.

In print ads, the figure-and-ground relationship is essential in drawing the viewer's attention
to the most critical aspect of the advertisement. The figure is the focal point, and the ground is
the supporting context. A successful print ad will make effective use of the figure-ground
relationship to highlight the product or service being advertised while providing the necessary
information about its benefits and features. A clear and distinct figure against an appropriate
background will help attract attention and make the ad more memorable.

In online advertising, the figure-and-ground construct is also essential but can be more
complicated. The figure and ground can interchange depending on the viewer's actions and the
context of the ad's placement. For example, in a search engine results page, the ad's headline
or image may act as the figure, with the rest of the page acting as the ground. In contrast, in
social media feeds, the ground may be the scrolling feed, and the ad may need to use
contrasting colors or bold typography to act as the figure.

However, the figure-and-ground relationship can also interfere with the communication of
advertising messages. A cluttered or ambiguous background can make it difficult for the
viewer to understand the ad's message and make it challenging to distinguish the figure. In
online advertising, the figure may be lost in the background, leading to low click-through rates
and poor performance.

To ensure that the figure-and-ground construct helps with the communication of advertising
messages, advertisers should focus on creating clear, unambiguous visuals with the figure
prominently positioned and contrasted from the ground. A clear, concise headline or tagline
can also help emphasize the figure and its message. By using the figure-and-ground construct
effectively, advertisers can create compelling and memorable ads that resonate with their target
audience.

No 07. Why do marketers sometimes reposition their products or services? Illustrate

your answer with examples.
Marketers reposition their products or services to target a new market or to revitalize interest
in the existing market. Repositioning may be necessary due to changes in customer needs,
preferences, or behavior, as well as the competitive landscape.

Here are a few examples of how marketers have successfully repositioned their products or
services:
 i. Apple: Apple repositioned its brand from a niche computer company to a mainstream
consumer electronics brand. Apple shifted its focus from a niche market of creative
professionals to a broader audience by introducing products like the iPod, iPhone, and iPad.
The shift in focus led to Apple becoming one of the most valuable companies in the world.

ii. McDonald's: McDonald's repositioned itself by focusing on healthier food options. The
fast-food chain introduced salads, fruit cups, and other healthier menu items, appealing to
customers who are health-conscious. McDonald's also introduced all-day breakfast, which
was a huge success and helped the company increase its revenue.

iii. Old Spice: Old Spice, a brand of men's grooming products, repositioned itself from a brand
for older men to a brand for younger men. Old Spice introduced a new line of products with
a new look, new scent, and a humorous advertising campaign that appealed to younger
men. The campaign featured the "Old Spice Guy," a suave and sophisticated character who
became a viral sensation.

iv. Volvo: Volvo, a car manufacturer, repositioned itself by focusing on safety. Volvo
introduced new safety features, such as airbags and seat belts, and made safety a key selling
point in their marketing campaigns. This repositioning helped Volvo become known as one
of the safest car brands in the world.

In conclusion, marketers reposition their products or services to target a new market or to

revitalize interest in the existing market. Successful repositioning can help a brand gain market
share and increase revenue.

No 08. Why is it more difficult for consumers to evaluate the effective quality of services
than the quality of products?

There are several reasons why it is more difficult for consumers to evaluate the effective
quality of services compared to products:
I. Intangibility: Unlike products, services are intangible and cannot be seen, touched, or
smelled before purchase. Consumers may have difficulty assessing the quality of a service
before experiencing it.
 II. Variability: Services are often produced and delivered by human beings, which can result
in variability in quality depending on the service provider's skill, experience, and attitude.
In contrast, products are typically manufactured to a consistent standard.

III. Inseparability: Services are often produced and consumed simultaneously, which can
make it difficult for consumers to evaluate the quality of the service before it is delivered.
For example, it is challenging for a consumer to evaluate the quality of a haircut until it is
complete.

IV. Perishability: Services are often perishable and cannot be stored for later evaluation or
use. If a consumer is dissatisfied with a service, it cannot be returned or exchanged like a
product.

V. Heterogeneity: Different consumers may have different expectations and preferences for
a service, which can make it difficult to establish a universal standard for service quality
evaluation. For example, one consumer may consider a restaurant to be of high quality if
the food is delicious, while another consumer may prioritize attentive service or a
welcoming atmosphere.

These factors make it challenging for consumers to evaluate the effective quality of services,
and they may rely on cues such as brand reputation, recommendations from friends and family,
and online reviews to make purchasing decisions.

No 09. Discuss the roles of extrinsic and intrinsic cues in the perceived quality of: (a)
wines, (b) restaurants, (c) smartphones, and (d) graduate education.

Perceived quality is influenced by both extrinsic and intrinsic cues. Extrinsic cues refer to
external factors that influence perception, such as packaging, brand name, and price. In
contrast, intrinsic cues refer to the inherent features of a product or service that directly affect
the consumer's perception of quality, such as taste, design, and functionality.
(a) Wines:
Extrinsic cues play a significant role in the perceived quality of wines. Factors such as brand
name, label design, and packaging can influence a consumer's perception of the quality of
wine. For example, wines with more expensive packaging or labeled as "reserve" or "vintage"
are often perceived as higher quality. On the other hand, intrinsic cues, such as the taste, aroma,
and color of the wine, are also important in determining its quality.

(b) Restaurants:
Both extrinsic and intrinsic cues play a significant role in the perceived quality of restaurants.
Extrinsic cues such as location, ambiance, and décor can influence a consumer's perception of
the quality of a restaurant. For example, a restaurant in a high-end neighborhood or with an
elegant interior design may be perceived as high quality. On the other hand, intrinsic cues such
as the quality of the food, service, and cleanliness are also important in determining the
perceived quality of a restaurant.

(c) Smartphones:
Extrinsic cues such as brand name, design, and price can influence a consumer's perception of
the quality of a smartphone. For example, smartphones from well-known brands such as Apple
and Samsung are often perceived as higher quality. Intrinsic cues such as the features,
specifications, and functionality of the smartphone also play an important role in determining
its perceived quality.

(d) Graduate education:

Extrinsic cues such as the reputation of the institution, the rank of the program, and the faculty
can influence a consumer's perception of the quality of graduate education. For example, a
graduate program at a highly ranked university may be perceived as higher quality. Intrinsic
cues such as the curriculum, research opportunities, and quality of instruction are also
important in determining the perceived quality of graduate education.
 The question of Main Book
Question 01. Write down about perceived risk, types of perceived risk with definition
and examples.

Perceived risk is the subjective evaluation of the potential harm that may result from a
particular action, decision, or purchase. It can influence consumer behavior, particularly in
situations where the outcome is uncertain or there is a significant investment involved. There
are several types of perceived risk:

I. Financial Risk: This type of risk is related to the potential monetary loss that may result
from a purchase or investment. Examples include investing in stocks, buying a house, or
purchasing a luxury car.

II. Functional Risk: This type of risk is associated with the ability of a product or service to
meet the needs and expectations of the consumer. Examples include purchasing a new
phone or a computer, where the consumer might be concerned about the device's reliability,
durability, or features.

III. Physical Risk: This type of risk is related to the potential harm to an individual's physical
well-being that may result from using a product or service. Examples include using a new
medicine or undergoing a surgical procedure.

IV. Social Risk: This type of risk is associated with the potential social consequences of a
purchase or decision. Examples include buying a luxury car that may be perceived as
ostentatious or investing in a company that has a poor social or environmental record.

V. Psychological Risk: This type of risk is related to the potential harm to an individual's self-
esteem or sense of self-worth that may result from a purchase or decision. Examples include
purchasing clothes or accessories that do not align with the consumer's sense of style or
purchasing a product that may be perceived as inferior.

VI. Time Risk: This type of risk is associated with the potential loss of time or effort that may
result from a purchase or decision. Examples include investing time and effort in a project
that does not yield the desired results or waiting too long to make a decision and missing
out on an opportunity.
In summary, perceived risk can have a significant impact on consumer behavior, and it is
essential for businesses to understand the different types of perceived risks and how they affect
consumer decision-making.

Question no 02. "The SERVQUAL scale measures the “gaps” between customers’
expectations of the services that they had purchased and their perceptions of the services
that they had actually received" Explain the Statement.

The SERVQUAL scale is a widely used tool for measuring service quality. It consists of a set
of questions that ask customers to rate their expectations of a service against their perceptions
of the service that they actually received. The scale is designed to identify gaps between these
two sets of ratings, which are interpreted as indicators of the quality of the service provided.

In other words, the SERVQUAL scale is based on the assumption that customers have certain
expectations about the quality of service they will receive. These expectations may be shaped
by previous experiences with the same service or by the customer's perception of what a good
service should be like. Once the customer has experienced the service, they are asked to rate
their perceptions of the service received. These ratings are then compared to the ratings of their
expectations, and the difference between the two is calculated.

If the customer's perception of the service received exceeds their expectations, then the gap is
positive, indicating that the service quality exceeded their expectations. Conversely, if the
customer's perception of the service received falls short of their expectations, then the gap is
negative, indicating that the service quality did not meet their expectations.

By analyzing the gaps between expectations and perceptions, service providers can identify
areas where they need to improve their services to better meet customer expectations. The
SERVQUAL scale is a valuable tool for assessing service quality and identifying
opportunities for service improvement.