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Lecture 12 dynamics of perception

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  • 1. CONSUMER BEHAVIOUR LESSON 12: DYNAMICS OF PERCEPTION Introduction Perceptual Selection In the earlier lesson we have learnt how we as individuals receive We as consumers subconsciously exercise selectivity as to the sensations from stimuli in the outside environment and how stimuli they perceive. the human organism adapts to the level and intensity of Which stimuli get selected depends on two major factors in sensory input. In this lesson we come to one of the major addition to the nature of the stimulus itself: principles of perception, i., the interpretation and organisation a. Consumers’ previous experience as it affects their expectations. of inputs. b. Their motives at the time (their needs, desires, interests, and Objectives so on). After studying this lesson you should be able to Each of these factors can serve to increase or decrease the • Discuss the dynamics of perception in terms of its three probability that a stimulus will be perceived. main aspects—selection, organization, and interpretation. • Discuss the various forms of selective perception. The Nature of the Stimulus • Explain the concept of Gestalt psychology. Marketing stimulus contains an enormous number of • Discuss the various forms of perceptual distortion. variables. Examples include: • Understand the implications of consumer imagery by a. Nature of the product. positioning and repositioning products. b. Its physical attributes. • Understand the positioning of services. c. The package design. • Explain the impact of price on consumer perception of d. The brand name. products, service, and quality. e. The advertisements and commercials. • Discuss the terms retail store image and manufacturer’s image. f. The position of a print ad or commercial. • Describe consumers’ perception of risk and key risk g. The editorial environment. reduction strategies. Contrast is one of the most attention-compelling attributes Dynamics of Perception of a stimulus. We are constantly bombarded with stimuli during every minute h. Advertisers use extreme attention-getting devices to get and every hour of our life. maximum contrast and penetrate the consumer’s Perception is not a function of sensory input alone, rather, perceptual screen. perception is the result of two different kinds of inputs that i. Advertisers use color contrasts, size, etc., to create stopping interact to form the personal pictures—the perceptions—that power and gain attention. each individual experiences. Packaging is also differentiated sufficiently to ensure rapid a. Physical stimuli from the outside environment, and internal consumer perception. stimuli based on expectations, motives, and learning are Sometimes advertisers capitalize on the lack of contrast. based on previous experiences. A technique that has been used effectively in TV commercials is Because each person is a unique individual, with unique to position the commercial so close to the storyline of a experiences, needs, wants, desires, and expectations, it follows program that viewers are unaware they are watching an ad until that each individual’s perceptions are also unique. they are well into it. T e ea et r ea p c st p r e t oselection, organization, hr r he set o ecpin — Advertisers are also running print ads (called advertorials) that and interpretation of stimuli. closely resemble editorial material, making it increasingly difficult b. Individuals are very selective as to which stimuli they for readers to tell them apart. “recognize.” Advertisers are producing 30-minute commercials (called c. They subconsciously organize the stimuli they do recognize infomercials) that appear to the average viewer as documenta- according to widely held psychological principles. ries. d. And they interpret such stimuli (i.e., they give meaning to them) subjectively in accordance with their needs, Expectations expectations, and experiences. People see what they expect to see. What they expect to see is usually based on familiarity, previous experience, or preconditioned set expectations. © Copy Right: Rai University 100 11.623.3
  • 2. Stimuli that conflict sharply with expectations often receive The simplest example is the contrast between a figure and the CONSUMER BEHAVIOURmore attention than those that conform to expectations. ground on which it is placed.For years, certain advertisers have used blatant sexuality in The figure is usually perceived clearly.advertisements for products to which sex was not relevant in The ground is usually perceived as indefinite, hazy, and continuous.the belief that such advertisements would attract a high degree The figure is more clearly perceived because it appears to beof attention. dominant—the ground appears to be subordinate and lessAds with irrelevant sexuality often defeat the marketer’s important.objectives, because readers tend to remember the sexual aspects Advertisers have to plan their advertisements carefully to makeof the ad, not the product or brand advertised. sure that the stimulus they want noted is seen as figure and not as ground.MotivesPeople tend to perceive things they need or want. Marketers sometimes run advertisements that confuse the consumer because there is no clear indication of which is figurea. The stronger the need, the greater the tendency to ignore and which is ground. unrelated stimuli in the environment.An individual’s perceptual process attunes itself more closely to Groupingthose elements of the environment that are important to that Individuals tend to group stimuli in “chunks” rather than asperson. discrete bits of information.Marketing managers recognize the efficiency of targeting their Grouping can be used advantageously by marketers to implyproducts to the perceived needs of consumers. certain desired meanings in connection with their products.Selective Perception ClosureThe consumer’s “selection” of stimuli (selective perception) Individuals have a need for closure.from the environment is based on the interaction of expecta- a. As a result, people organize a perception so they see ations and motives with the stimulus itself. complete picture.Selective exposure—consumers actively seek out messages b. If the pattern of stimuli to which they are exposed isthey find pleasant or with which they are sympathetic. incomplete, they tend to perceive it as complete—they filla. Consumers actively avoid painful or threatening messages. in the missing pieces. Selective attention—consumers have a heightened The very act of completion serves to involve the consumer awareness of the stimuli that meet their needs or interests. more deeply in the message.b. Consumers have a lower awareness of stimuli irrelevant to their needs. Perceptual Interpretationc. People vary in terms of the kind of information in which The interpretation of stimuli is uniquely individual because it is they are interested and the form of message and type of based on what individuals expect to see in light of their medium they prefer. previous experience.Perceptual defense—threatening or otherwise damaging Stimuli are often highly ambiguous.stimuli are less likely to be perceived than are neutral stimuli. a. When stimuli are highly ambiguous, individuals usuallyIndividuals unconsciously may distort information that is not interpret them in such a way that they serve to fulfillconsistent with their needs, values, and beliefs. personal needs, wishes, and interests.Perceptual blocking—consumers screen out enormous How close a person’s interpretations are to reality depends onamounts of advertising by simply “tuning out.” the clarity of the stimulus, the past experiences of the perceiver,Perceptual Organization and his or her motives and interests at the time of perception.People do not experience the numerous stimuli they select fromthe environment as separate and discrete sensations. Perceptual Distortion With respect to perceptual distortion, individuals are subjectPeople tend to organize stimuli into groups and perceive them to a number of influences that tend to distort their perceptions.as unified wholes. Physical Appearances—people tend to attribute the qualitiesGestalt psychology (Gestalt, in German, means pattern or they associate with certain people to others who may resembleconfiguration) is the name of the school of psychology that them.first developed the basic principles of perceptual organization. a. Attractive models are more persuasive and have a moreThree of the most basic principles of perceptual organization positive influence on consumer attitudes and behavior thanare figure and ground, grouping, and closure. do average-looking models. Stereotypes—individuals tend to carry “pictures” in theirFigure and Ground minds of the meaning of various kinds of stimuli.Stimuli that contrast with their environment are more likely tobe noticed. © Copy Right: Rai University11.623.3 101
  • 3. First Impressions—these tend to be lasting but formed while Consumer ImageryCONSUMER BEHAVIOUR the perceiver does not know which stimuli are relevant, Consumers attempt to preserve or enhance their self-images by important, or predictive. buying products they believe agree with that self-image and Jumping to Conclusions—many people tend to jump to avoiding products that do not agree. This is called consumer conclusions before examining all the relevant evidence—hearing imagery. the beginning of an ad and drawing the incorrect conclusion. Consumers tend to shop in stores that have images that agree Halo Effect—describes situations where the evaluation of a with their own self-images. single object or person on a multitude of dimensions is based on the evaluation of just one or a few dimensions. Product Positioning Positioning strategy (product positioning) is the essence of b. Consumers often evaluate an entire product line on the the marketing mix. basis of the one product within the product line. a. Positioning conveys the concept or meaning of the c. Licensing also is based on the halo effect—associating product or service, in terms of how it fulfills a consumer products with a well-known celebrity or designer name. need. Activity 1 b. The marketer must create a distinctive product image in the Select a restaurant where you have recently eaten. Analyze the mind of the consumer. atmosphere and physical environment of this service establish- ment. What image does the environment convey? Should the How a product is positioned in the mind of the consumer is owner change anything to make the environment more more important to the product’s success than are the product’s appealing to customers? Explain. actual characteristics. Marketers try to differentiate their products by stressing attributes they claim will fulfill the consumer’s needs better than competing brands. The result of a successful positioning strategy is a distinctive brand image on which consumers rely to make choices. A positive brand image is associated with consumer loyalty, consumer beliefs about positive brand value, and a willingness to search for the brand. A positive brand image also serves to promote consumer interest in future brand promotions, and inoculates against competitors’ marketing activities. Major positioning strategies include: Umbrella positioning—creating an overall image of the company around which a lot of products can be featured individually. Positioning against the competition. Positioning based on a specific benefit—effective depictions of a core product benefit often include memorable imagery. Finding an “unowned” position—finding a niche unfilled by other companies. Filling several positions—because unfilled gaps or “un- owned” perceptual positions present opportunities for competitors, sophisticated marketers create several distinct offerings, often in the form of different brands, to fill several identified niches. Product Repositioning Regardless of how well positioned a product appears to be the marketer may be forced to reposition (product repositioning) it in response to market events, such as a competitor cutting into the brand’s market share. Rather than trying to meet the lower prices of high-quality private label competition, some premium brand marketers have repositioned their brands to justify their higher prices, playing up brand attributes that had previously been ignored. © Copy Right: Rai University 102 11.623.3
  • 4. Another reason to reposition a product or service is to satisfy Perception of price fairness—customers pay attention to the CONSUMER BEHAVIOURchanging consumer preferences. prices paid by other customers (e.g., senior citizens, frequent fliers, affinity club members).Perceptual Mapping a) Customers perceive differential pricing strategies used byPerceptual mapping allows marketers to determine how their some marketers as unfair to those not eligible for theproducts appear to consumers in relation to competitive brands special prices.on one or more relevant characteristics. b) Perceptions of price unfairness affect consumers’Perceptual mapping enables the marketer to see gaps in the perceptions of product value, and ultimately, theirpositioning of all brands in the product class and to identify willingness to patronize a store or a service.areas in which consumer needs are not being adequately met. Reference PricesPositioning of Services What is a reference price?Compared with manufacturing firms, service marketers face A reference price is any price that a consumer uses as a basisseveral unique problems in positioning and promoting their for comparison in judging another price.offerings. Reference prices can be external or internal.Services are intangible, image becomes a key factor in differenti-ating a service from its competition. An advertiser generally uses a higher external reference price (“sold elsewhere at...”) in an ad in which a lower sales price isThe marketing objective is to enable the consumer to link a being offered, to persuade the consumer that the productspecific image with a specific brand name. advertised is a really good buy.Many service marketers have developed strategies to provide Internal reference prices are those prices (or price ranges)customers with visual images and tangible reminders of their retrieved by the consumer from memory.service offerings. Internal reference points are thought to play a major role inExamples would include painted delivery vehicles, restaurant consumers’ evaluations and perceptions of value of anmatchbooks, packaged hotel soaps and shampoos, and a variety advertised (i.e., external) price deal, as well as in the believabilityof other specialty items. of any advertised reference price.Sometimes companies market several versions of their service Acquisition-transaction utility theory—acquisition utilityto different market segments by using a differentiated position- represents the perceived economic gain or loss associated with aing strategy. purchase, and is a function of product utility and purchase price.The design of the service environment is an important aspect a) Transaction utility concerns the perceived pleasure orof service positioning strategy and sharply influences consumer displeasure associated with the financial aspect of theimpressions and consumer and employee behavior. purchase and is determined by the difference between theThe physical environment is particularly important in creating a internal reference price and the purchase price.favorable impression for such services as banks, retail stores, Several studies have investigated the effects on consumerand professional offices, because there are so few objective price perceptions of three types of advertised referencecriteria by which consumers can judge the quality of the services prices: plausible low, plausible high, and implausible high.they receive. b) Plausible low prices are well within the range ofThe service environment conveys the image of the service acceptable market prices.provider with whom the service is so closely linked. c) Plausible high is near the outer limits of the range butOne study of service environments identified five environmen- not beyond the realm of believability.tal variables most important to bank customers. d) Implausible high is well above the consumer’s perceiveda. Privacy—both visually and verbally, with enclosed offices, range of acceptable market prices. transaction privacy, etc. As long as an advertised reference price is within a givenb. Efficiency/convenience—transaction areas that are easy to consumer’s acceptable price range, it is considered plausible and find, directional signs, etc. is assimilated.c. Ambient background conditions—temperature, lighting, e) If the advertised reference point is outside the range of noise, and music. acceptable prices (i.e., implausible), it will be contrasted andd. Social conditions—the physical appearance of other people thus will not be perceived as a valid reference point. in the bank environment, such as bank customers and bank personnel. Tensile and Objective Price Claims The semantic cues (i.e., specific wording) of the phrase used toe. Aesthetics—e.g., color, style, use of materials, and artwork. communicate the price-related information may affect consum- ers’ price perceptions.Perceived PriceHow a consumer perceives a price (perceived price)—as high, Acquisition-transaction utility (e.g., “save 10 to 40 percent,”as low, as fair—has a strong influence on both purchase “save up to 60 percent,” “save 20 percent or more”) are used tointentions and purchase satisfaction. © Copy Right: Rai University11.623.3 103
  • 5. promote a range of price discounts for a product line, an entire Consumers are unable to compare services side-by-side as theyCONSUMER BEHAVIOUR department, or sometimes an entire store. do products, so consumers rely on surrogate or extrinsic cues Objective price claims provide a single discount level (e.g., when purchasing services. “save 25 percent”). Marketers try to standardize their services in order to provide Tensile and objective price claims have a potentially greater effect consistency of quality. on consumer shopping and on store traffic than a reference price Service is consumed as it is being produced. advertisement that promotes a single product because of the As a result, defective services are difficult to correct. broader range of merchandise covered by them. Researchers have concluded that the service quality that a a) Consumer evaluations and shopping intentions are least customer perceives is a function of the magnitude and direction favorable for advertisements stating the minimum of the gap between expected service and the customer’s assessment discount level (“save 10 percent or more”). of the service actually delivered. b) Ads that state a maximum discount level (“save up to 40 SERVQUAL, measures the gap between customers’ expecta- percent”) either equal or exceed the effectiveness of ads tions of services and their perceptions of the actual service. stating a discount range (“save 10 to 40 percent”). a) These perceptions are based on the dimensions of; Consumer reactions to tensile price claims are affected by tangibles, reliability, responsiveness, assurance, and the width of the discount range. empathy. c) Studies found that, for broader discount ranges, tensile b) Two dimensions used to measure service quality are outcome claims stating the maximum level of savings have more dimensions—the reliable delivery of the core service—and positive effects than those stating the minimum level or process dimensions—how the core service is delivered. the entire savings range. Transaction satisfaction index is one tool researchers have d) For more narrow discount ranges, tensile claims stating the used to try to integrate the concepts of product quality and maximum level of savings appear to be no more effective service quality. than claims stating the minimum level or the entire savings Conceptual Model of Transaction Satisfaction—the model ranges. suggests that the consumer’s overall satisfaction with the Consumers are less sensitive to price when using credit transaction is based on evaluation of service quality, product cards than when they use cash. quality, and price. e) In a similar vein, a recent study reported that consumers tend to be less sensitive to price when they shop online Price/Quality Relationship rather than when they shop in stores. Perceived product value has been described as a trade-off between the product’s perceived benefits (or quality) and Perceived Quality perceived sacrifice required to acquire it. Consumers often judge the quality of a product (perceived A number of research studies support the view that consumers quality) on the basis of a variety of informational cues. rely on price as an indicator of product quality. a) Intrinsic cues are physical characteristics of the product a) Other studies suggest consumers are actually relying on a itself, such as size, color, flavor, or aroma. well-known brand name as a quality indicator. b) Extrinsic cues are such things as price, store image, service Because price is so often considered to be an indicator of environment, brand image, and promotional message. quality, some products deliberately emphasize a high price Perceived Quality of Products to underscore their claims of quality. Intrinsic cues are concerned with physical characteristics of the Marketers have used the price/quality relationship to product itself, size, color, flavor, etc. position their products as the top-quality offering in their a) Consumers like to think they base quality evaluations on product category. intrinsic cues, but in reality, they are often unable to identify b) There is a positive price/quality relationship. that product in a taste test. c) Consumers use price as a surrogate indicator of quality if b) In the absence of actual experience with a product, they have little information or little confidence in their consumers often evaluate quality on the basis of extrinsic ability to make a choice. cues, price, brand image, store image, etc. Many consumers use country-of-origin stereotypes to evaluate Retail Store Image products. Retail stores have their own images that influence the perception of the quality of the products they carry. Perceived Quality of Services It is more difficult for consumers to evaluate the quality of Studies show consumers perceive stores with small discounts services than the quality of products. on a large number of products as having lower-priced items than stores that offer large discounts on a small number of Service characteristics include—intangibility, variability, perish- products. ability, simultaneously produced, and consumed. The width of product assortment also affects retail store image. © Copy Right: Rai University 104 11.623.3
  • 6. The type of product the consumer wishes to buy influences his Perception of Risk Varies CONSUMER BEHAVIOURor her selection of retail outlet, conversely, the consumer’s The amount of risk perceived depends on the specific con-evaluation of a product often is influenced by the knowledge of sumer.where it was bought. High-risk perceivers are narrow categorizers because they limitMost studies of the effects of extrinsic cues on perceived their choices.product quality have focused on just one variable—either price Low-risk perceivers are broad categorizers because they makeor store image. their choice from a wide range of alternatives.a) When a second extrinsic cue is available (e.g., price and store Individual perception of risk varies by product category. image), however, perceived quality is sometimes a function a) Consumers are likely to perceive a higher degree of risk in of the interaction of both cues on the consumer. the purchase of a high definition television set (e.g., functional risk, financial risk, time risk) than in the purchaseManufacturer’s Image of an automobile.Consumer imagery extends beyond perceived price and storeimage to the producers themselves. Researchers have identified product-specific perceived risk.Manufacturers who enjoy a favorable image generally find that b) One study found that consumers perceive service decisionstheir new products are accepted more readily than those of to be riskier than product decisions, particularly in terms ofmanufacturers who have a less favorable or even a “neutral” social risk, physical risk, and psychological risks.image. Perception of the degree of risk is also affected by the shoppingResearchers have found that consumers generally have favorable situation.perceptions of pioneer brands (the first in a product category),even after follower brands become available. How Consumers Handle Riska) They also found a positive correlation between pioneer 1. Consumers seek information about products and brand image and an individual’s ideal self-image, which product categories by word-of-mouth. suggests that positive perceptions toward pioneer brands a) They spend more time considering their decision the lead to positive purchase. higher the perceived risk. Some major marketers introduce new products under the 2. Consumers are brand loyal. guise of supposedly smaller, pioneering (and presumably a) Consumers avoid risk by staying with a brand they more forward-thinking) companies. know and are satisfied with.b) The goal of this so-called stealth (or faux) parentage is to b) High-risk perceivers are the most brand loyal. persuade consumers (particularly young consumers) that 3. Consumers select by brand image. the new brands are produced by independent, nonconformist free spirits, rather than by giant corporate a) When consumers lack experience with a product, they entities such as their parents might patronize. trust a well-known brand.Companies sometimes use stealth parentage when they enter a b) Consumers believe well-known brands are better andproduct category totally unrelated to the one with which their are worth buying for assured quality.corporate name has become synonymous. 4. Consumers rely on store image.Today, companies are using advertising, exhibits, and sponsor- a) If consumers have no other information about aship of community events to enhance their images. product, they judge it based on the store. b) Store image imparts the implication of product testingPerceived Risk and assurance of service.Perceived risk is the uncertainty that consumers face when they 5. Consumers buy the most expensive model.cannot foresee the consequences of their purchase decision. a) When in doubt, consumers equate price with quality.The degree of risk that consumers perceive and their owntolerance for risk taking are factors that influence their purchase 6. Consumers seek reassurance.strategies. a) Consumers, uncertain about a product choice, seekConsumers are influenced by risks that they perceive, whether or reassurance through guarantees, tryouts, money-backnot such risks actually exist. offers, etc.a) Risk that is not perceived will not influence consumer The concept of perceived risk has major implications for the behavior. introduction of new products.Types of risk include: functional risk, physical risk, financial b) Because high-risk perceivers are less likely to purchaserisk, social risk, psychological risk, and time risk. new or innovative products than low-risk perceivers, it is important for marketers to provide such consumers with persuasive risk-reduction strategies. © Copy Right: Rai University11.623.3 105
  • 7. Activity 2 7. The technique of _____ helps marketers to determineCONSUMER BEHAVIOUR how their products and services appear to consumers in Tick the correct choice relation to competitive brands on one or more relevant 1. Many times a new product is a success because it is an characteristics. extension of a successful and trusted brand. This is a. umbrella branding because people: b. repositioning a. create first impressions. c. perceptual mapping b. tend to stereotype. d. perceptual organization c. are affected by the halo effect. 8. It is difficult for service companies to position their d. jump to conclusions. products without tangibles, so they must work on other 2. Positioning strategy is the essence of the marketing mix; it factors to attract customers. Which of the following is not compliments the company’s definition of the company’s: an important environmental variable important to bank a. competition. customers? b. segmentation strategy. a. privacy c. selection of target markets. b. aesthetics d. all of the above c. physical appearance of the people in the bank, both customers and personnel d. all of the above are important to bank customers 3. Avis uses a clear comparative strategy by stating, “We are number 2, we try harder.” This is an example of: a. positioning. 9. The service industry faces a challenge of pricing intangible products. Three strategies based on customer perception of b. stereotyping. the value provided help service companies to price their c. how it uses sympathy to attract customers. products. Which of the following is not one of the d. deception. strategies? a. satisfaction-based pricing 4. Gillette’s “For oily hair only” shampoo was a product b. relationship pricing failure because: c. reference pricing a. most people do not have oily hair. d. efficiency pricing b. most people were turned off by the slogan. c. most people do not acknowledge that they have oily 10. A _____ is any price that a consumer uses as a basis for hair. comparison in judging another price. d. many customers have negative feelings toward Gillette a. tensile company. b. objective c. reference 5. One company may realize there are several market opportunities for one product. A company like Anheuser- d. discount Busch introduced three brands of beer, and positioned them according to different criteria. Which positioning 11. “Save 10 to 40%” and “save up to 60%” are examples of: strategy would that fall under? a. tensile price claims. a. umbrella positioning b. objective price claims. b. filling several positions c. reference price claims. c. positioning based on a specific benefit d. plausible low prices. d. repositioning 12. Consumer Reports found that consumers often cannot 6. When Kentucky Fried Chicken changed its name to KFC, it differentiate among various cola beverages and that they was to omit the dreaded word fried from its advertising. base their preferences on _____ cues such as packaging, KFC had to go through a/an _____ process to justify the pricing, advertising and peer pressure. name change. a. extrinsic a. umbrella positioning b. intrinsic b. repositioning c. positive c. reorganization d. negative d. financial audit © Copy Right: Rai University 106 11.623.3
  • 8. 13. Some distinctive characteristics of services make it harder 19. How do consumers handle risk? CONSUMER BEHAVIOUR on consumers to judge quality. Which of the following is a. They seek information. not a characteristic of services? b. They select by brand image. a. variable c. They buy the most expensive model. b. perishable d. all of the above c. tangible d. simultaneously produced and consumed 20. Some consumers will buy the most expensive model of a14. If you go to the same restaurant every day, but are waited new product. This happens most of the time because: on by different servers, the quality of your meal may a. they are concerned with image. fluctuate. This is because of the service characteristic of _____. b. they have little information, and this would reduce the risk. a. variability c. most consumers have lots of money. b. perishability d. the lower priced models are always sold out. c. intangibility d. being simultaneously produced and consumed Key Terms • Exposure15. Studies have shown that consumers that use a price/quality • Attention relationship are actually relying on a well-known brand • Selective Exposure name as an indicator of quality. Also, these consumers use price and brand to evaluate the prestige of the product but • Focal attention do not generally use these cues to evaluate product _____. • Non Focal Attention a. price • Habituation b. value • Perceptual Defense c. performance • Subliminal perception d. features • Gestalt Psychology • Closure16. A study of retail store image based on competitive pricing • Similarity strategies found that consumers tend to perceive stores • Figure-Ground that offer a small discount on a large number of items as having _____ prices over all in comparison to stores that offer larger discounts on a smaller number of products. a. higher b. lower c. extremely higher d. the same17. Which of the following is an important consumer perception factor that affects customer decisions? a. quality b. price/quality relationship c. store image d. all of the above are consumer perception factors that affect decisions18. _____ is the uncertainty that consumers face when they cannot foresee the consequences of their purchase decision. a. Post-purchase dissonance b. Cognitive dissonance c. Perceived risk d. none of the above © Copy Right: Rai University11.623.3 107
  • 9. Article 1 (remember, the heart is a bit too over-hyped! Time for the gallCONSUMER BEHAVIOUR bladder to get some limelight as well!) of consumers. Perception Perception is specific. Perception is personal. Perception is It’s Perception Management! individualistic. Yes, it certainly is all of this! The brand manager Brand is a function of the mind. It is perceptions which shape its is a clever guy as well! He knows how to create, nurture and personality and evolution over time so brand management is, in essence, mass-replicate perception itself! And that indeed is the new management of perceptions. science of perception management I am talking about. A new science that depends on image matrices that can leverage attitude and subsequent behaviour. The roots of much of which can be found in the early processes adopted by Pavlov. Pavlov is alive and kicking in the science of perception management today. As alive as Fido Dido himself! It is indeed all about stimulus and response. A particular and specific consumer response is pretty possible with a specific delivery of a stimulus. The delivery vehicle needs to be right. The choice of stimulus must be one that has been vetted by an ardent and intensive process of mass and specific consumer research, covering the quantitative, the qualitative and the holistic! Look around at brands that have succeeded in breaching the threshold perception levels of contemporary consumer mindsets. These are brands that have got the stimulus just right for the society the brands swim in today. What’s more, the paradigm of positive stimulus creating positive response is being broken up by the demands of contemporary society that believes less and less in rules. A negative stimulus is pretty much capable of producing a positive response as well! Nestle’s Yorkie chocolate bar touts itself boldly as “Not for girls”! Girls are even derided - “Does not come in Pink”! Girls love picking up the chocolate off the SARS today is a brand — a brand with negative perception. shelves! Remember, this is rebel society we live in! Perception IN the Eighties we called it Product Management. In the management in these times is a daunting task that defies the Nineties we glamorised it as Brand Management. In the dos and don’ts many of us have picked up in management opening years of the 2000 series, we might as well get ready to schools that taught static-state societal theory. rechristen it once again. Perception management it is then! Brand managers are seeking If given the right to father this new science, art and philosophy out the help of those who understand the psychology of as we know it today, I would choose the blatantly open individuals and the psychology of the mass that constitutes terminology of them all that best describes the management of contemporary society today. Brand managers will soon run to brands today. Perception Management! seers who can look into the future of society as it morphs itself Brand management is today in essence the management of as well! Remember, the brand that can offer perception cues of perception. The complex process of management of perception what consumers will want in the future is going to be one step in a bid to leverage attitude. Critical attitude that leads to ahead in this mass perception game. purchase decisions, and more importantly an attitude that The good thing about perception is that once it attains critical fosters the brand in a positive mindset for years to come in the mass through the hard work put in by hard-working brand hearts, minds and gall bladders (who knows where the seat of managers, it is pretty viral in its spread and stretch. It is indeed a thinking and emotion really is?) of consumers. good thing for positive perception and a terrible thing when it Perception management it is! The brand itself, for a start, is a comes to negative perception! perception. Its value is a bigger perception still. Its delivery I have just returned from a quick, anxious and hurried trip into expectations, its quality standards, and its satisfaction cues are all Hong Kong. There is a dreadful fear all around in this territory. perception-triggers that create that all big ‘P’! Brand perception! My two-day trip into Hong Kong and Macao has been full of Brand managers are therefore perception managers for their sights that speak of both a metaphorical and literal viral fear. offerings of commerce. The brand manager does what he does There is paranoia in the air. Face-masks that protect, gloves that in a bid to create that positive perception for the wares he touts. are ubiquitous, rabid stares at people who are ill-mannered In this process he swims within an environment, fights with it, enough not to cough or sneeze into tissues held on their and eventually dominates it ... as in the case of the most nostrils and mouths, and a fear of death lurking at the corner successful brands that occupy the hearts or gall bladders © Copy Right: Rai University 108 11.623.3
  • 10. of every individual’s sleeve is a reality in this otherwise open Cader, who was in India recently on a mission for SriLankan Airlines CONSUMER BEHAVIOURmarket. and also to look at the possibility of working with some IndianThe perception of SARS is a blatant reality today. Even as I consultants, spoke to Catalyst on marketing practices in West Asia,return from Hong Kong, friends who know I have been there, Indian brands in the ‘Gulf’ and also on the work of his company.don’t want to party with me for a while. There are some who Edited excerpts from his interview:are absolutely open, telling me to be careful and avoid visiting How high is the level of awareness of marketing in Westthe region. Others are polite and speak on the phone and make Asia?those excuses of how they want to postpone their meetings for The whole awareness of marketing is slowly beginning tonext week as something special has come up! increase. There are lots of multinational companies setting upSARS is a brand today. A brand that has a perception that is base there. So with all the MNCs coming in, the market isdeadly. A perception that is negative to the point of death. getting very competitive. Also, other support services aroundNegative to the point of being shunned. The spread is viral. the core marketing areas are also being set up - things such asWord-of-mouth spread that is as potent in its reach and deadly research, feasibility studies, advertising, media buying andeffect as the virus at prey itself! Remember, SARS is a perception outdoor. This is a good sign, which means that marketers haveas well! A perception that has found its way in a quick and access to all those services.efficient manner that rivals Mr Bush’s “shock and awe” tamasha What this also means is that many of the local companies,in Iraq! some of which have had a very high degree of protection, haveSARS today threatens businesses of every ilk in the region! It been challenged.threatens the very fabric of the economy of South East Asia. Of course, some are finding it very difficult to cope, but thereFor a long time to come, tourists will avoid the region. Travel are some good local brands that are fighting it out and comingadvisories will be out. And for a long time to come, I will not out on top.visit Hong Kong as well! If you look at Saudi Arabia, there is a brand called Al Marai,Article 2 which is a dairy brand (Saudi is one of the driest countries and this brand has one of the largest dairy farms near Riyadh) and is“Indian Brands Abroad Have To Work On one of the strongest brands, which even the MNCs have notPerception” been able to fight. Unilever and Nestle pulled out of ice-creams “The people of West Asia are realising that a brand is last year in West Asia because they couldn’t fight the local not just putting a name on a product, but that they’ve got competition. to invest in it. They’ve got to look at advertising and promotion as an investment rather than as expenditure. In a market such as Oman we have a brand of detergent called That awareness is increasing. And for us in the consult- Bahar, which has actually taken Ariel head on and has done fairly ing business, there lies tremendous opportunity.” well.Say ‘West Asia’, or to use a more popular term, ‘Gulf’, and the So we are beginning to see some of these local brands comingimmediate picture that comes to mind is oil, deserts and up.perhaps lots of Indians, but not a marketing consultancy firm. Is there a conscious effort to build brands in the West AsianSo, it’s a bit of a surprise to hear of MTI Consulting, a global region?marketing consulting and training firm based in Bahrain. Certainly. I don’t think it’s yet at a stage like in India or theWhat’s more interesting about MTI and Hilmy Cader, its West. But it is changing rapidly. The people of West Asia arefounder and Managing Director, is that in just a few years they realising that a brand is not just putting a name on something,developed a strategic marketing tool that’s won them words of but that they’ve got to invest in it.praise from none less than Philip Kotler, the guru of all They’ve got to look at advertising and promotion as anmarketing gurus. investment rather than as expenditure. So that awareness isCader says he would like to “take marketing consulting to the increasing.next level, to something we call `venture marketing’ - which is And for us in the consulting business we see a tremendousto say, ok, we believe in our marketing consulting solutions, so opportunity, because there are a lot of small and mediumforget about the fixed fees, let’s work on performance.” MTI’s groups who have typically been traders.clients come from 20 countries around the world, and include They have a brand, but the approach has been more one ofthe likes of Agribrands International, subsidiaries of DuPont trading. They are now saying ‘we need to build a brand andand SriLankan Airlines. strengthen it’.The company’s ‘8S’ strategic marketing tool takes businesses What sort of promotional and advertising strategies dothrough an eight-stage sequential process that comprises steps companies in the region look at? Is there a lot of advertis-such as scope, scan, sights, strategy, structure, staff, systems and ing on television?social responsibility. The focus is, as Cader puts it, “directly on What we are increasingly seeing is increasing spends on - Iperformance improvement, basically improving the wouldn’t call it below-the-line - but promotions that are morebottomline”. related to the point of sale. This is because the population is relatively small and lots of shopping malls and restaurants are © Copy Right: Rai University11.623.3 109
  • 11. coming up. All of them are packed in the evening and you find Then we look at ‘systems’ in terms of control, reporting andCONSUMER BEHAVIOUR that is what the TV stations call ‘prime time’. If you look at the processes. One area we find a lot of marketing organisations are number of cars at the mall there is a mismatch between the weak in is process. people there and the people likely to be watching TV. The IT processes are there, but take a salesperson going into a So the whole concept of experience marketing, in terms of shop. You know he just goes in and goes on. But the processes catching the person closer to the point of purchase has rel- you follow when you go into a shop, those areas are not evance. There are lots of companies that are saying it’s not clear.The last part of our model is ‘social responsibility’. worth going on the media because they need, say, $100,000 to We believe there are two things an organisation must do: The stand up and do what they can do with $10,000 in a market of first is compliance, not just to the narrow law, but also more in two million people. In which case they have to go to a larger spirit. market, they won’t need the local media, but the regional or Because increasingly you find that the corporate world is paying global media to do that. So a lot of it is shifting to the point of very little respect to this, and this is going to backfire. purchase. The other is how can you make the world a better place. Could you explain how the ‘8S’ system developed by your company works? I’m not talking of charity, but of how social responsibility can It is basically a strategic planning model that we developed to be integrated into your communication, like what Body Shoppe take an organisation through the entire planning process. has done. So we start off with looking at the ‘scope’ of the organisation. So, how is the ‘8S’ approach different? Here we try to enable the client to define aspects such as ‘what One, it takes a more holistic view. It doesn’t focus just on the business are we really in’ and ‘why are we in business’? Then we four ‘Ps’ or the strategy. ‘scan’ the environment. It is increasingly difficult to focus and say ‘this is core marketing Once the scanning is done we look at where the client wants to and you need core marketing people’. be - in the long term and in the short term. We call this ‘sights’. What is the future of marketing in West Asia? Which are This is not just the ceremonial stuff you want to have on the the more vibrant markets? wall, but involves actually getting a commitment from people Use of marketing is certainly going to increase. The need for on where they really want to be and can they realistically be there, that is there. There’s more competition coming in and you and in that entire market what particular segments are you going cannot continue to rely on gut feel. to get into, which consumers are you going to target and so on. In terms of sophistication you are talking about Dubai and And we find that this is not addressed in many marketing Lebanon. plans. But in terms of mass marketing, you are looking at Saudi Then we look at the ‘strategy’ on how to achieve the ‘sights’ in Arabia, Morocco and Egypt where the opportunities really are terms of customers, CRM, communication, channel strategy from an FMCG point of view. and such details. From a more corporate services point of view, it’s Dubai. Then we look at ‘structure’, which we don’t look at in tradi- How widely used is marketing research in West Asia? Also, tional marketing (and is left to the HR department). This you is it very relevant? can’t do in an integrated highly competitive market, because you It is in fact more important for the simple reason that you have need to look at your own structure as your implementation of a high number of expatriates in marketing positions. So, you the strategy depends a lot on structure. are talking about an expatriate trying to understand a different Say, for instance, you offer a seamless ‘total solution’ to the culture, a different language and so on. Arabic is a very descrip- customer. tive language and we have enormous problems because a brand Take a computer company with a structure where one person manager will do the focus group brief in English, goes to the handles printers and another handles scanners, and they don’t research agency which thinks of it in English and goes to talk to each other. If I’m a customer, you can tell me you are somebody else who does the translation in Arabic and they may giving me total solutions. just do a check with someone who writes in Arabic, but thinks in English. And by the time the whole process is complete, you But if you have people in two different locations and they don’t can lose the subtle nuances, especially in qualitative research. talk to each other, and you tell me there is no problem with my printer and there is no problem with my scanner, and the So MR is very important. problem is in the connection, you are right. But I don’t get a Also, there is high degree of courtesy bias, like in Japan. So solution. So structure is very important. people may not necessarily tell you all the time ‘this is bad’, Then we look at ‘staff’ in terms of what competencies are which doesn’t help you if you are in marketing because you required. And an important part there is the organisation’s have to cut through all that and find out what is the chance of structure and performance-based pay. More and more compa- someone buying your detergent powder or whatever. nies are moving towards performance-based pay. What kind of equity do Indian brands have in West Asia? I think most of the Indian brands, whether it is Amul or Onida, are there. But I still think they are positioned lower to © Copy Right: Rai University 110 11.623.3
  • 12. middle. I feel that in terms of intrinsic quality, the Indian CONSUMER BEHAVIOURbrands are still able to deliver. But what they have to work on is Marketing Applicationsthe perception.So is perception management the main task for Indian of the JNDbrands looking at entering that market? n Need to determine the relevant j.n.d. forYes, perception and positioning. The good news is that you their productshave a product that can live up to much higher expectations. – so that negative changes are not readilyThere is scope for Indian brands in the product area. There is discernible to the publicalso scope for Indian brands in the service area. Look at – so that product improvements are veryadvertising, for instance. apparent to consumersYou still don’t get any Indian ad agencies going all out in theGulf or anywhere in the world for that matter. Whereas I feelthat you have one of the best and most competitive advertisingindustries in the world here in India.And I feel that Indians are among the best ad people in theworld. But that has been confined to India and hasn’t beentaken out to the world. So I feel there is a lot that can be donein the service area. There are lots of Indian service brands thathaven’t gone out and have a lot of scope.Points To Remember A theory concerning the perceived differentiation between similar stimuli of Weber’s varying intensities (i.e., the Law stronger the initial stimulus, the greater the additional intensity needed for the second stimulus to be perceived as different). Figure 6.3 Gradual Changes in Brand Name Fall Below the J.N.D. © Copy Right: Rai University11.623.3 111
  • 13. CONSUMER BEHAVIOUR Concepts Concerning Selective Perception Perception of very weak or rapid stimuli n Selective Exposure Subliminal received below the n Selective Attention Perception level of conscious Gestalt n Perceptual Defense awareness. Psychology n Perceptual Blocking Principles of Perceptual Aspects of Perception Organization n Figure and ground Selection n Grouping n Closure Organization Interpretation © Copy Right: Rai University 112 11.623.3
  • 14. Notes CONSUMER BEHAVIOUR Influences of Perceptual Distortion n Physical Appearances n Stereotypes n First Impressions n Jumping to Conclusions n Halo Effect Issues In Consumer Imagery n Product Positioning and Repositioning n Positioning of Services n Perceived Price n Perceived Quality n Retail Store Image n Manufacturer Image n Perceived Risk © Copy Right: Rai University11.623.3 113