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  1. 1. Consumer Perception
  2. 2. Perception <ul><li>The process by which an individual selects, organizes, and interprets stimuli into a meaningful and coherent picture of the world </li></ul><ul><li>How we see the world around us </li></ul>
  3. 3. Elements of Perception <ul><li>Sensation </li></ul><ul><li>Absolute threshold (The lowest level at which an individual can experience a sensation) </li></ul><ul><li>Differential threshold (The minimum difference that can be detected between two similar stimuli) </li></ul><ul><li>Subliminal perception </li></ul>
  4. 4. Sensation The immediate and direct response of the sensory organs to stimuli. A perfectly unchanging environment provides little to no sensation at all!
  5. 5. Weber’s Law (Differential Threshold) 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).
  6. 6. Marketing Applications of the JND <ul><li>Need to determine the relevant just noticeable difference (j.n.d.) for their products </li></ul><ul><ul><li>so that negative changes are not readily discernible to the public </li></ul></ul><ul><ul><li>so that product improvements are very apparent to consumers </li></ul></ul>
  7. 7. Figure 6.2 Betty Crocker Changes Fall Below the J.N.D .
  8. 8. Figure 6.3 Gradual Changes in Brand Name Fall Below the J.N.D .
  9. 9. Subliminal Perception Perception of very weak or rapid stimuli received below the level of conscious awareness.
  10. 10. Is Subliminal Persuasion Effective? <ul><li>Extensive research has shown no evidence that subliminal advertising can cause behavior changes </li></ul><ul><li>Some evidence that subliminal stimuli may influence affective reactions </li></ul>
  11. 11. Aspects of Perception Selection Organization Interpretation
  12. 12. Perceptual Selection <ul><li>Depends on two major factors </li></ul><ul><ul><li>Consumers’ previous experience </li></ul></ul><ul><ul><li>Consumers’ motives </li></ul></ul>
  13. 13. Concepts Concerning Selective Perception <ul><li>Selective Exposure </li></ul><ul><li>Selective Attention </li></ul><ul><li>Perceptual Defense </li></ul><ul><li>Perceptual Blocking </li></ul>Gestalt Psychology
  14. 14. Concepts Concerning Selective Perception <ul><li>Selective Exposure: </li></ul><ul><li>Consumers actively seek out messages that they find pleasant or with which they are sympathetic, and they actively avoid painful or threatening ones. They also selectively expose themselves to advertisements that reassure them of the wisdom of their purchase decisions. </li></ul>
  15. 15. Concepts Concerning Selective Perception <ul><li>Selective Attention: </li></ul><ul><li>Consumers exercise a great deal of selectivity in terms of the attention they give to commercial stimuli. They have heightened awareness of stimuli that meet their needs or interests and minimal awareness of stimuli irrelevant to their needs. Some people are more interested in price, some in appearance, and some in social acceptability. </li></ul>
  16. 16. Concepts Concerning Selective Perception <ul><li>Perceptual Defense: </li></ul><ul><li>Consumers subconsciously screen out stimuli that they find psychologically threatening, even though exposure has already taken places. </li></ul><ul><li>For example: Stroke and Cardiac problem happens, because of smoking… </li></ul>
  17. 17. Concepts Concerning Selective Perception <ul><li>Perceptual Blocking: </li></ul><ul><li>Consumers protect themselves from being bombarded with stimuli by simply “tuning out” – clocking such stimuli from conscious awareness. </li></ul><ul><li>For example, Changing TV channels frequently and miss any important messages…. </li></ul>
  18. 18. Influences of Perceptual Distortion <ul><li>Physical Appearances </li></ul><ul><li>Stereotypes </li></ul><ul><li>First Impressions </li></ul><ul><li>Jumping to Conclusions </li></ul><ul><li>Halo Effect </li></ul>
  19. 19. Issues In Consumer Imagery <ul><li>Product Positioning and Repositioning </li></ul><ul><li>Positioning of Services </li></ul><ul><li>Perceived Price </li></ul><ul><li>Perceived Quality </li></ul><ul><li>Retail Store Image </li></ul><ul><li>Manufacturer Image </li></ul><ul><li>Perceived Risk </li></ul>
  20. 20. Positioning Establishing a specific image for a brand in relation to competing brands.
  21. 21. Pricing Strategies Focused on Perceived Value <ul><li>Satisfaction-based Pricing </li></ul><ul><li>Relationship Pricing </li></ul><ul><li>Efficiency Pricing </li></ul>
  22. 22. Issues in Perceived Price <ul><li>Reference prices </li></ul><ul><ul><li>Internal </li></ul></ul><ul><ul><li>External </li></ul></ul><ul><li>Tensile and objective price claims </li></ul>20% to 70% Off! Was $199 Now $99 Sale!
  23. 23. Acquisition-Transaction Utility <ul><li>Acquisition utility represents the consumer’s perceived economic gain or loss associated with the purchase </li></ul><ul><li>Function of product utility and purchase price </li></ul><ul><li>Transaction utility concerns the perceived pleasure or displeasure associated with the financial aspect of the purchase </li></ul><ul><li>Determined by the difference between the internal reference price and the purchase price </li></ul>
  24. 24. Tensile and Objective Price Claims <ul><li>Evaluations least favorable for ads stating the minimum discount level </li></ul><ul><li>Ads stating maximum discount levels are better than stating a range </li></ul>Save 10% or more Save upto 50%
  25. 25. Perceived Quality <ul><li>Perceived Quality of Products </li></ul><ul><ul><li>Intrinsic vs. Extrinsic Cues </li></ul></ul><ul><li>Perceived Quality of Services </li></ul><ul><li>Price/Quality Relationship </li></ul>
  26. 26. Characteristics of Services <ul><li>Intangible </li></ul><ul><li>Variable </li></ul><ul><li>Perishable </li></ul><ul><li>Simultaneously Produced and Consumed </li></ul>
  27. 27. Table 6.3 SERVQUAL Dimensions for Measuring Service Quality <ul><li>DIMENSION DESCRIPTION </li></ul><ul><li>Tangibles Appearance of physical facilities, equipment, personnel, and communication materials </li></ul><ul><li>Reliability Ability to perform the promised service dependably and accurately </li></ul><ul><li>Responsiveness Willingness to help customers and provide prompt service </li></ul><ul><li>Assurance Knowledge and courtesy of employees and their ability to convey trust and confidence </li></ul><ul><li>Empathy Caring, individualized attention the firm provides its customers </li></ul>
  28. 28. 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).
  29. 29. Perceived Risk <ul><li>Types </li></ul><ul><li>Functional Risk </li></ul><ul><li>Physical Risk </li></ul><ul><li>Financial Risk </li></ul><ul><li>Psychological Risk </li></ul><ul><li>Time Risk </li></ul>The degree of uncertainty perceived by the consumer as to the consequences (outcome) of a specific purchase decision.
  30. 30. How Consumers Handle Risk <ul><li>Seek Information </li></ul><ul><li>Stay Brand Loyal </li></ul><ul><li>Select by Brand Image </li></ul><ul><li>Rely on Store Image </li></ul><ul><li>Buy the Most Expensive Model </li></ul><ul><li>Seek Reassurance </li></ul>