Consumer Perception

PerceptionPerception

The process by which an individual selects, organizes, and interprets stimuli into a

meaningful and coherent picture of the world.

Elements of Perception

• Sensation(Attention, Stress, Vigilance & Sleep/Wakefulness Monitoring)

• The absolute threshold(Vision, Hearing, Odour)

• The differential threshold(j.n.d for the product improvements and repeated sales)

• Subliminal perception(new products, audio, images)

Sensory Sensory ReceptorsReceptors

The human organs (eyes, ears, nose, mouth, skin) that

receive sensory inputs.

Absolute Absolute ThresholdThreshold

The lowest level at which an individual can experience a

sensationThe  smallest  intensity  of

  a  stimulus  that   can  reliably  evoke  a  sensation.

EXAMPLETHE  IMPACT  OF  UPWARD  PRICE

 MOVEMENTS  ON   DAILYHOUSEHOLD  GOODS.

THIS  SHOWS  THE  IMPORTANCE  OF  MARKET  SEGMENTATION

AND   THE  ASSOCIATED  PRICING  POLICIES.

Sensory Sensory AdaptationAdaptation

“Getting used to” certain sensations; becoming

accommodated to a certain level of stimulation.

Differential Differential ThresholdThreshold

The minimal difference that can be detected between two stimuli. Also known as the

j.n.d. (just noticeable difference) this may be

applicable to product line extention, selection of distribution channels,

product pricing, promotions, packaging, image.

Weber’s LawWeber’s Law

A theory concerning the perceived differentiation between similar stimuli of varying intensities (i.e., the stronger

the initial stimulus, the greater the additional intensity needed for the second stimulus to be perceived as

different) e.g. this way we can deduct the differences when the product

differences are made in the market with the attributes like the size, quality increase in price or the packaging etc..

Marketing Applications of the JND

• Need to determine the relevant j.n.d. for their products– so that negative changes are not

readily discernible (visionary) to the public

– so that product improvements are very apparent(appearing to the eye or mind) of the consumers e.g. a manu. Increases the price of the car by irs400 is the j.n.d.

Subliminal Subliminal PerceptionPerception

Perception of very weak or rapid stimuli received below the level of conscious awareness.-To promote unfimiliar products e.g. “Lipton ice” was flashed on computers for 24 milliseconds-Images e.g. kittens, couples, negative scenes- Audio messages e.g. Backmasking or heavy metal music

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

Perceptual Selection

• Depends on two major factors– Consumers’ previous

experience (expectations)

– Consumers’ motives

Some Marketing Variables Influencing Consumer Perception• Nature of Product• Physical Attributes of Product• Package Design• Brand Name• Advertisements & Commercials• Positioning of the Ad• Editorial Environment

Selective Perception• Selective Exposure: Consumer selects

which promo messages they will expose themselves towards.

• Selective Attention: Which promo messages they will pay attention towards.

• Perceptual Defense: Not perceiving the stimuli because they are threatening, un-pleasent or offensive

• Perceptual Blocking: Consumers avoid being bombarded by: – Tuning out of a Frequency of Media

Principles of Perceptual Organization

• Figure and ground (2D images)

• Grouping

• Closure(People have a need for closure and organize perceptions to form a complete picture i.e. impacting than a pic

Law of ClosureThe law of closure posits thatperceptually close up, or complete, objects that are not, in fact,

complete. In the above, we perceive the letters 'I', 'B', and 'M' although the shapes we see, in fact, are only lines of white space of differing length hovering above each other. Similarly, we see the figure on Paul Thagard's book (figure ) as forming a three-dimensional box although all we see, in fact, is 24 dissimilar red shapes (count for yourself!) on a dark red background. Figure is the typical textbook example of the law of closure; we perceive a circle and not 8 individual circles e.g. incomplete, familiar jingles, audio track sometime copied and inspired for the people or the customers to complete or be inspired by a new product for the same reason.

Contd..

--Law of similarity

--Law of Symmetry

--Law of Proximity

Distorting Influences

• Physical Appearances

• Stereotypes

• Irrelevant Cues(internal & external)

• First Impressions

• Jumping to Conclusions

• Halo Effect(Biasing on the items of a Broader Brand is the better one!)

Issues In Consumer Imagery

• Product Positioning and Repositioning• Positioning of Services• Perceived Price• Perceived Quality• Retail Store Image• Manufacturers Image• Perceived Risk

PositioningPositioningEstablishing a specific image

for a brand in relation to competing brands.

RepositionReposition

Changing the way a product is perceived by consumers in

relation to other brands or product uses.

Perceptual Perceptual MappingMapping

A research technique that enables marketers to plot graphically consumers’ perceptions concerning

product attributes of specific brands.

Perceptual Mapping

MoreArtwork

MoreCopy

Fashion Coverage

Club Coverage

Splash

Crash

FashionSplash

Bash

Perceptual Map

Pain Relievers

(perceptual map)

Gentleness

Effectiveness

Tylenol

Private-labelAspirin Anacin

Bayer

Excedrin

Nuprin

Advil

Perceptual Map (continued)Situation Analysis For Beverage Study:

Perceptual Map

* Crush

* Sprite*

Seven-up

*MinuteMaid

* Mello Yello

Non-Cola

Diet

Cola

Non-Diet

*Diet Sprite

*Diet Mello Yello

*Cherry Coke

*Pepsi

*Shasta

*Coke

*Diet Pepsi

*Diet Coke

Issues in Perceived Price

• Reference prices(comparing and referencing different prices in the minds)

• Tensile(non-specified) and objective(specified) price claims

Reference Reference PricePrice

Any price that a consumer uses as a basis for

comparison in judging another price.

Reference Prices

• External Reference Price(based on the price in the world likely other countries)

• Internal Reference Price(based on alternatives which are under priced)

Tensile and Objective Price Claims

• Evaluations least favorable for ads stating the minimum discount level

• Ads stating maximum discount levels are better than stating a range

Perceived Quality

• Perceived Quality of Products– Intrinsic vs. Extrinsic Cues

• Perceived Quality of Services• Price/Quality Relationship

Intrinsic CuesIntrinsic Cues

Physical characteristics of the product (such as size,

color, flavor, or aroma) that serve to influence the

consumer’s perceptions of product quality.

Extrinsic CuesExtrinsic Cues

Cues external to the product (such as price, store image,

or brand image) that serve to influence the consumer’s perception of a product’s

quality.

Characteristics of Services

• Intangible• Variable• Perishable• Simultaneously

Produced and Consumed

Dimensions for Measuring Service Quality

DIMENSION DESCRIPTION

•Tangibles Appearance of physical facilities, equipment, personnel, and communication materials

•Reliability Ability to perform the promised service dependably and accurately

•Responsiveness Willingness to help customers and provide prompt service

•Assurance Knowledge and courtesy of employees and their ability to convey trust and confidence

•Empathy Caring, individualized attention the firm provides its customers

A Conceptual Model of the Components of Transaction Satisfaction

Evaluation of Service Quality(SQ)

Evaluation of Service Quality(SQ)

Evaluation of Product Quality(PQ)

Evaluation of Product Quality(PQ)

Evaluation of Price(P)

Evaluation of Price(P)

Transaction Satisfaction(TSAT)

Transaction Satisfaction(TSAT)

Conceptual Model of the Behavioral Consequences of Service Quality

Superior

Inferior

Favorable

Unfavorable

Remain

Behavior

Defect

+$Ongoing Revenue

Increased SpendingPrice Premium

Referred Customers

Financial Consequences

-$Decreased Spending

Lost CustomersCosts to AttractNew Customers

ServiceQuality

BehavioralIntentions

Focus of present studyEmpirical links demonstrated in macro studies

Price/Quality Price/Quality RelationshipRelationship

The perception of price as an indicator of product quality (e.g., the higher the price, the higher the perceived quality of the product).

Conceptual Model of the Effects of Price, Brand Name, and Store Name on Perceived

Value

Objective Price

Perception of Price

Perceived Sacrifice

Perceived Quality

Perceived Value

Willingness to Buy

A. Conceptual Relationship of Price Effect

+

++

+

--

B. Extended Conceptualization to Include Brand Name and

Store Name

Store Name

Brand Name

Perception of Store

Perception of Brand

+

+

Objective Price

Perception of Price

Perceived Sacrifice

Perceived Quality

Perceived Value

Willingness to Buy

+

+

+

+

-

-

Perceived Perceived RiskRisk

The degree of uncertainty perceived by the consumer

as to the consequences (outcome) of a specific

purchase decision.

Types of Perceived Risk

• Functional Risk• Physical Risk• Financial Risk• Psychological

Risk• Time Risk

How Consumers Handle Risk

• Seek Information• Stay Brand Loyal• Select by Brand Image• Rely on Store Image• Buy the Most Expensive Model• Seek Reassurance