Just noticeable difference and consumer behavior


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Just noticeable difference and consumer behavior

  1. 1. Just Noticeable Difference and Consumer Behavior Just Noticeable Difference is the minimal Stimulation between two products as observed by the consumer. Otherwise we can say -"The just noticeable difference (JND) is the smallest difference in intensity between two stimuli that a person can detect." Marketing Applications of the JND  Need to determine the relevant j.n.d. for their products o so that negative changes are not readily discernible to the public o so that product improvements are very apparent to consumers  New version Fig-1 Gradual Changes in Brand Name Fall Below the J.N.D. The concept of JND can also be applied to marketing mix decision related to price, promotion, packaging and product modification. For instance, if a company plans to make any changes in its product, then the change should be gradual and below the JND, so that the consumer is not sensitive to it and accepts the change. Even when organizations make changes in their logos, it should preferably be gradual, especially in the case takeovers. When Sony EntertainmentBharti Bhutani www.managementexplorer.com Page 1
  2. 2. Television acquired satellite channel SAB, the logo of SAB was changed gradually to avoid shocking the viewers. It is seen that consumers do not positively accept any kind of sudden change, because change is seen as a threat by the human psyche. For consumers to accept change without discomfort, marketing activities should be designed such that the change process is gradual. It is worth pondering on the issue as to how companies actually come to decide on increasing the prices of their products. The pricing decision is considered to be derived from a complicated algorithm determined by cost and profit margins. Some research findings suggest that consumers are conditioned to the point of 10% price increase or decrease for the change to be noticed, irrespective of the product being purchased. In other words, if a company offers a price discount of less than 10%. This application of JND is commonly used in the case of FMCG. The focus of this article is on how organizations are applying the concept of JND to protect and increase their profit margins. It is generally observed that chocolate and confectionery companies tend to reduce the pack size of their products below JND (instead of increasing prices) when the cost of the raw materials goes up. In case of culinary products, like sauces and ketchups, the thickness and composition is, at times, varied with seasonal fluctuations in the availability and prices of tomatoes and other ingredients. However, where marketers want the consumers to notice the change, the magnitude of the change has to be higher than the differential threshold. For instance, if a toilet soap brand wants to differentiate itself amidst the clutter in the market, it might need to work on changing its packaging, fragrance, ingredients or pricing to a noticeable extent. Generally, in case of personal care products in the medium price segment, the pricing strategy follows a fairly common pattern, which may not be true in the case of premium products, which cater to a niche audience. The key to positioning lies in packaging, fragrance and ingredients used in manufacturing the product. Further, even if the brand has me too a brand in the segment, then marketing needs to be designed such that all the visual and related stimuli surpass the differential threshold substantially. The concept of JND is, at times, used in the case of brands with weak equities and identities. Such less known brands borrow brands by generating look –alike imitations, which are generally sold in the rural markets. Many kinds of marketing gimmicks due to the case of high involvement products, purchase decisions get influenced and many consumers buy imitation brands, which resemble the original ones.Bharti Bhutani www.managementexplorer.com Page 1