Consumer Perception

Chapter Content Elements of Perception Aspects of Perception

Selection Organization Interpretation

Prof Meghna Verma

Perception Definition

The process by which an individual selects, organizes, and interprets stimuli into a meaningful and coherent picture of the world. By Schiffman & Kanuk How we see the world around us.

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Elements of Perception

Sensation Absolute threshold Differential threshold Subliminal perception

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Sensation

It is the immediate and direct response of the sensory organs to stimuli. A stimulus is any unit of input to any of the senses. It (Sensory inputs or stimuli) includes products, packages , brand names ,advertisements . Sensory receptors are the human organs, that receives sensory inputs. As sensory input decreases, our ability to detect changes in input increases, to the point that we attain max sensitivity under condition of minimal stimulation.

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Absolute Threshold

The absolute threshold is the lowest level at which an individual can experience a sensation. As our exposure to stimulus increases , we notice it less. In the field of perception adaptation refers to getting used to certain sensations. Sensory adaptation is a problem that concerns many advertisers.
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Differential Threshold

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

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Webers Law

The j.n.d. between two stimuli is not an absolute amount but an amount relative to the intensity of the first stimulus Webers law states that the stronger the initial stimulus, the greater the additional intensity needed for the second stimulus to be perceived as different.
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Marketing Applications of the J.N.D.

Marketers need to determine the relevant j.n.d. for their products for two reasons: so that negative changes (reduction in prd size or quality or increase in price) are not readily discernible to the public. so that product improvements are very apparent to consumers In product improvement marketers should carefully note that: Less than j.n.d is a waste effort because the improvement will not be perceived. More than j.n.d is also wasteful because it can reduce the level of repeat purchase in some products.
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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. This process is called subliminal perception. People can be stimulated below their level of conscious awareness .i.e. they can perceive stimuli without being consciously aware that they are doing so.
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Is Subliminal Persuasion Effective?

Extensive research has shown no evidence that subliminal advertising can influence consumption behaviour or can persuade consumers to act in a given manner. However some evidence that subliminal stimuli may influence affective reactions.
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Aspects of Perception
Selection of stimuli
Organization of stimuli

Interpretation of stimuli
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Perceptual Selection

Consumers subconsciously are selective as to what they perceive. In actuality, consumer receive (perceive) a small fraction of stimuli to which they are exposed. Stimuli Selection depends on the Nature of the stimulus (packaging ,brand name, ads) Expectations (Consumers previous experience ) People tend to perceive products and products attributes according to their own expectations. Stimuli that conflict sharply with expectation receives more attention than those that conform . Consumers motives (need , interest ,desire)the stronger the need , the greater the tendency to ignore unrelated stimuli in the environment.
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Selective Perception

Consumers selection of stimuli from environment is based on the expectations and motives with the stimuli itself. Based on these factors there are 4 imp concepts :

Selective Exposure Selective Attention Perceptual Defense Perceptual Blocking

Consumers seek out messages which:

Are pleasant They can sympathize Reassure them of good purchases

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Perceptual Selection
Concepts

Selective Exposure Selective Attention Perceptual Defense Perceptual Blocking

Heightened awareness when stimuli meet their needs Consumers prefer different messages and medium, some people like complex, sophisticated msgs; others like simple graphics.
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Perceptual Selection
Concepts

Selective Exposure Selective Attention Perceptual Defense Perceptual Blocking

Screening out of stimuli which are psychologically threatening.

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Concepts Concerning Selective Perception

Selective Exposure Selective Attention Perceptual Defense Perceptual Blocking

Consumers avoid being bombardedwith the stimuli by simply Tuning out- blocking such stimuli from conscious awareness.

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Aspects of Perception
Selection Organization

Interpretation

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Perceptual Organization

People tend to add to or subtract from the stimuli to which they are exposed on the basis of expectations and motives using generalized principles of organization based on Gestalt theory.

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Principles of Perceptual Organization (Gestalt Psychology)

Figure and ground Grouping Closure

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People tend to organize perceptions into figure-andground relationships. Stimuli that contrast their environment are more likely to be noticed. The ground is usually hazy. Marketers usually design so the figure is the noticed stimuli.
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Principles of Perceptual Organization

Figure and ground Grouping Closure

People group stimuli to form a unified impression or concept. Grouping helps memory and recall.

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Organization
Principles

Figure and ground Grouping Closure

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People have a need for closure and organize perceptions to form a complete picture. Will often fill in missing pieces Incomplete messages remembered more than complete

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Aspects of Perception
Selection Organization

Interpretation

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Perception is a personal phenomenon. People exercise selectively as to which stimuli they perceive Then they organize these stimuli on the basis of certain psychological principles. Finally interpretation of stimuli is done which is also uniquely individual.
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Interpretation
Influences of 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
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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

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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, or predictive
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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
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Interpretation
Perceptual Distortion

Physical Appearances Stereotypes First Impressions Jumping to Conclusions Halo Effect

Consumers perceive and evaluate multiple objects based on just one dimension Used in licensing of names Important with spokesperson choice
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The halo effect helps Adidas break into new product categories.

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Issues in Consumer Imagery

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

Establishing a specific image for a brand in the consumers mind Product is positioned in relation to competing brands Conveys the concept, or meaning, of the product in terms of how it fulfills a consumer need Result of successful positioning is a distinctive, positive brand image
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Positioning Techniques

Umbrella Positioning Positioning against Competition Positioning Based on a Specific Benefit

Finding an Unowned Position Filling Several Positions Product Repositioning

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Perceptual Mapping

A research technique that enables marketers to plot graphically consumers perceptions concerning product attributes of specific brands. It helps marketer to determine how their products/services appear to consumers in relation to competitive brands on one or mere relevant characteristics.
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Positioning of services

Service marketers face unique problem in positioning and promoting their offerings because:
Services are intangible Image becomes a key factor in differentiating a service from its competitors.

Marketers have developed strategies to provide customers with visual images and tangible reminders of their service offerings They feature real service employees in their ads. More emphasis is given on designing the service environment (physical environment) .
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Issues in Perceived Price

Reference prices used as a basis for comparison in judging another price

Internal External

Acquisition and transaction utility One study offers three types of pricing strategies in service industry based on perception of value.
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Three Pricing Strategies Focused on Perceived Value

Pricing Strategy Provides Value By
Satisfaction-based pricing Recognizing and reducing customers perceptions of uncertainly, which the intangible nature of services magnifies

Implemented As
Service guarantees Benefit-driven pricing Flat-rate pricing

Relationship pricing

Encouraging long-term Long-term contracts relationships with the company Price bundling that customers view as beneficial Sharing with customers the Cost-leader pricing. cost savings that the company has achieved by understanding, managing, and reducing the costs of providing the service
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Efficiency pricing

Issues in Perceived Price

Reference prices

Internal -- If pur.price is < internal price, +ve trans. utility External

Tensile (range of discount) and objective price claims (single discount)

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Acquisition-Transaction Utility

Acquisition utility

Transaction utility

The consumers perceived economic gain or loss associated with the purchase Function of product utility and purchase price

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The perceived pleasure or displeasure associated with the financial aspect of the purchase Determined by the difference between the internal reference price and the purchase price 38

Perceived Quality

Perceived Quality of Products

Intrinsic vs. Extrinsic Cues

Perceived Quality of Services Price/Quality Relationship

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Perceived Quality of Products

Consumer use physical characteristics (size, colour, flavor) to judge the quality. They even use country-of-origin stereotypes to evaluate products. e.g- Japanese technology is better.

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Perceived Quality of Services

Difficult due to characteristics of services

Intangible Variable Perishable Simultaneously Produced and Consumed

SERVQUAL scale used to measure gap between customers expectation of service and perceptions of actual service
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SERVQUAL Dimensions for Measuring Service Quality

DIMENSION Tangibles DESCRIPTION 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
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Price/Quality Relationship

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

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

+
Perceived Quality

Perception of Price

+
Perceived Sacrifice

Perceived Value

Willingness to Buy

A. Conceptual Relationship of Price Effect

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Figure continued
Brand Name

Store Name

Objectiv e Price

Perception of Brand

Perception of Store

+
+
Perceived Quality

Perception of Price

+
Perceived Sacrifice

+ B. Extended Conceptualization to Include Brand Name and Store Name

Perceived Value

Willingness to Buy
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Perceived Risk

The degree of uncertainty perceived by the consumer as to the consequences (outcome) of a specific purchase decision Types

Functional Risk (Product will not perform as expected) Physical Risk (risk to self- cream may adversely effect my hair) Financial Risk (product may not be worth the cost) Psychological Risk (poor product choice will bruise the consumers ego) Time Risk (time spent in product search may be wasted if the product does not perform as expected)
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How Consumers Handle Risk

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

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