CB Perception

2014 CONSUMER BEHAVIOUR PGDM

PROF. MOHAN B.RAO

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P E R C E P T I O N


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BEAUTY


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?


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Sheila

Sheila

Sheila


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PERCEPTION

Our senses ( vision, hearing and smelling,touch)

are more wide ranging, complex, delicate and

sensitive.

Process of perception: Sense organs provide

our brain with a steady flow of information about

our environment and the brain’s task is to take

this raw material and use it to help us make

sense of the environment.

Perception is a mechanism by which an individual

receives, selects, organizes, and interprets

stimuli into meaningful coherent picture of the

world


PROF. MOHAN B.RAO


Sensory Thresholds

Absolute Threshold

refers to the

minimum amount

of stimulation that

can be detected on

a sensory channel.

Marketing Stimuli

Differential Threshold

refers to the ability

of a sensory system

to detect changes or

differences between

two stimuli. (j.n.d.-

Just Noticeable

Difference &

Weber’s Law)

So the lowest Intensity of a Stimulus that Consumers are capable of perceiving are:


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Marketing Applications

of the JND

Need to determine the relevant j.n.d. for their

products

– so that negative changes are not readily

discernible to the public

– so that product improvements are very apparent

to consumers


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Gradual Changes in Brand Name

Fall Below the J.N.D.


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Subliminal Perception

There are wide individual differences in threshold levels

Advertisers lack control over consumers’ distance and position from a screen

The consumer must be paying absolute attention to the stimulus

Even if the desired effect is induced, it operates only at a very general level


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Marketing Variables Influencing

Consumer Perception

• Nature of Product

• Physical Attributes of Product

• Package Design

• Brand Name

• Advertisements & Commercials

• Editorial Environment

• ??????.

• ??????????.

• ????????????.


PROF. MOHAN B.RAO


1

Marketing Variables Influencing

Consumer Perception

• Nature of Product

• Physical Attributes of Product

• Package Design

• Brand Name

• Advertisements & Commercials

• Editorial Environment

• Price.

• Logistics & distribution.

• Sales outlets & sales personnel..


PROF. MOHAN B.RAO


ELEMENTS OF PERCEPTION

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

sensory inputs.

• The absolute threshold • The lowest level at which an individual can experience a sensation.

• Sensory adaptation • “Getting used to” certain sensations; becoming accommodated to a

certain level of stimulation.

• ??????????? • The minimal difference that can be detected between two stimuli.

Also known as the j.n.d. (just noticeable difference).

• ??????????? • Perception of very weak or rapid stimuli received below the level of

conscious awareness


PROF. MOHAN B.RAO


ELEMENTS OF PERCEPTION

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

sensory inputs.

• The absolute threshold • The lowest level at which an individual can experience a sensation.

• Sensory adaptation • “Getting used to” certain sensations; becoming accommodated to a

certain level of stimulation.

• The differential threshold • The minimal difference that can be detected between two stimuli.

Also known as the j.n.d. (just noticeable difference).

• Subliminal perception • Perception of very weak or rapid stimuli received below the level of

conscious awareness


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PERCEPTION CONTD…

External Factors of Stimuli: * Intensity & Size *

Position * Contrast * Novelty * Repetition *

Movement.

Internal Factors of Stimuli: *selective attention *

selective exposure* selective reception* selective

comprehension* selective retention

Stimulus can be assortment of sensory inputs like

products; packaging; adverts; impact of visuals.

Result is: All of us have a tendency to view the

same phenomenon or situation differently.


PROF. MOHAN B.RAO


Various references to Perception

I. Perceptual Blocking:

Blocking out stimuli consciously when too much information

is Bombarded.

II. Perceptual Organization:

The way the stimuli are organized around principles of

Figure & Ground; Grouping; Closure.

III.Perceptual Interpretation:

Dependent on individual expectations in the light of

previous experience or intuition or motives or interest at the

time of perception.

1


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Various references to Perception

IV. Perceptual Distortions:

Due to Personality or physical experience; stereotypes;

Halo effect; Irrelevant cues; First impression; hasty conclusions.

V. Perceptual Mapping:

A technique to help understand and estimate how products

& services appear to the consumer in relation to competition.


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Stimulus Organization

Principle of Similarity Consumers Tend to Group Objects That Share Similar

Physical characteristics.

Figure-Ground Principle

One Part of the Stimulus Will Dominate (the Figure) While Other Parts Recede Into the Backdrop (the Ground)

Closure Principle

People Tend to Perceive an Incomplete Picture as Whole.


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Grouping & closure

Perceptual Organization


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Model of the Effects of Price, Brand Name, and

Store Name on Perceived Value

Store

Name

Brand

Name

Perception

of Store

Perception

of Brand

+

+

Objectiv

e Price

Perception

of Price

Perceived

Sacrifice

Perceived

Quality

Perceived

Value

Willingness

to Buy

+

+

+

+

-

-


PROF. MOHAN B.RAO


Price Perception

• Consumers perceive a price as either high or low on the basis of a comparison with an internal price (or referent price).

• Price perceptions and the social judgment theory – “regions”

– “Assimilation” (acceptable)

and “contrast” (too high or low)


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Perceived Value

• The trade-off between product benefits

and product costs.

Perceived value = perceived benefits / perceived costs


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Understanding Consumers

Information Processing Model of CB

Interpretation Attitudes:

Like/Dislike

information

Memory/Prior Knowledge

Individual

Consumer:

Personality (intro/extro)

Environmental

Characteristics:

Culture (color)

Stimuli

beliefs

Selection Choice


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Usually, you can’t get “voluntary”

attention… (hard to make ads

personally relevant for all

consumers)

Then you have to rely on

“involuntary” attention-getting

techniques…


PROF. MOHAN B.RAO


Information Processing at Work…

• Select certain stimuli which stand out in the ad – Plane

– Brand names: Forbes, Economist

• Interpret: advertiser is trying to compare the brands – (you know Economy class is cheaper; Business is more

expensive; First class is most expensive – MEMORY)

• Belief: Forbes is for the most up-market passengers

• Attitude: Favorable attitude towards Forbes – May buy the magazine (Choice…)

• Individual differences: Expensive = good?

• Environment: comparative ad: good?


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Interpretation (“Perception”)

• Interpretation = next stage – after selection

• Reaching subjective conclusions based on the information – i.e., forming beliefs

• The key process that we use for interpretation: – Inferencing


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Involuntary attention-getting

techniques…

– Contrast….

• Big difference between two adjacent

stimuli

– Novelty

– Color

– Size

– Humor

– Sex


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Inference: Forming Beliefs Through

Simple Association

• Some concepts are naturally associated

together in consumer’s minds

– Example: high price = quality/status…

• Marketers create inferences about brand

image by using these associations…

– Color of product or package

• Blue: ?? (detergent)

• Green: ?? (toothpaste)

• Drink and Detergent (colorless vs. yellow).


PROF. MOHAN B.RAO


Inference: Forming Beliefs Through

Simple Association – Brand name

• Alphanumeric (ASCENT XYS)

– Country of origin (where the product is made often has associations)

• Clothing: which country = status associations?

– Brand extensions also use inferencing principles • Surf excel = what associations?


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Explain…

A famous Harvard professor of decision sciences was once retained

by a retailer to suggest ways to improve sales efficiency in its store.

When he arrived, he became especially concerned with the women's

blouse sub department in the "bargain basement." This area seemed

to be extremely inefficient. Blouses were strewn about in a jumble

and shoppers wasted many minutes attempting to find their correct

size. Upon mentioning this to the management, the professor was

invited to return the next morning to observe the entire process from

scratch. He noted that prior to the store opening hour, employees

neatly arranged also the blouses by size. Then, however, they threw

them on the encounter and thoroughly mixed them up! WHY?


PROF. MOHAN B.RAO


Explain…

A famous Harvard professor of decision sciences was once retained

by a retailer to suggest ways to improve sales efficiency in its store.

When he arrived, he became especially concerned with the women's

blouse sub department in the "bargain basement." This area seemed

to be extremely inefficient. Blouses were strewn about in a jumble

and shoppers wasted many minutes attempting to find their correct

size. Upon mentioning this to the management, the professor was

invited to return the next morning to observe the entire process from

scratch. He noted that prior to the store opening hour, employees

neatly arranged also the blouses by size. Then, however, they threw

them on the encounter and thoroughly mixed them up! For some

reason, this technique seemed to increase total sales of the blouses.


PROF. MOHAN B.RAO


Leads us to Perceptual Positioning Positioning Strategy Uses Elements of the Marketing Mix to

Influence the Consumer’s Interpretation of Its Meaning.

Attributes

Users

Lifestyle Quality

Price Leadership

Product Class Competitors

Occasions

Positioning

Dimensions


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Positioning: Create a Perception

• Two aspects of successful positioning

– The belief/perception you create must be about an

attribute that matters

• Coke and taste…

– You should be perceived differently from

competition!

• Pepsi vs. Coke

• Cars: again, helps to have a distinctive position…

– Which brand has the “cute” car position?

– Which brand has the “safe” car position?


PROF. MOHAN B.RAO


General Takeaway for Consumer Behavior

• Consumer Perceptions are very important! – The objective product (diamonds) may not really have value; but

people can perceive it as having value. This is where your positioning strategy comes in.

• Positioning = make consumers perceive the product in a certain way (e.g., “gift of love”)

• Positioning strategies have to be designed with regard to what perceptions will “sell”. – E.g., “romantic love” is important in West

– Not so much in East: “Success / harmony / prosperity” much more important

• So position accordingly (and be ready to change positioning once values change…)


PROF. MOHAN B.RAO


1

POSITIONING

Establishing a defined image for a brand in

relation to competing brands.

REPOSITIONING

Changing the way a product is perceived by

consumers in relation to other brands or product

uses

REFERENCE PRICE

Any price that a consumer uses as a basis for

comparison in judging another price.

LET’S REFRESH…..


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•Product name

•Product packaging

•Colors

•Price perceptions

•Free product samples

•Advertising

•Product endorsers

How Businesses Shape Consumers’

Opinions


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The Product’s Name Influences

Opinion Formation

•The meaning derived from the name may influence

the opinion formed about the product

•When it conveys the wrong meaning, sales can suffer

•Research on composite branding shows the brand

name appearing first has the strongest influence on

attributes associated with that name

•Descriptive names and labels have also been seen to

influence consumers’ opinions and behaviors


PROF. MOHAN B.RAO


Product Packaging Influences Opinion

Formation •Product packaging creates expectations of the product and its capabilities including impressions of how much product is inside the package

•Packages are effective at drawing attention particularly when

they have an unusual shape or are taller and thinner as

opposed to shorter but wider packaging

•Me-too product packaging, which imitates packaging of a

leading brand, tries to create favorable opinions with

consumers

•Stimulus generation occurs when, for an existing stimulus-

response relationship, the more similar a new stimulus is to

the existing one, the more likely it will evoke the same

response


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Color Influences Opinion Formation

•Consumer opinions are often tied to the product’s color (which

conveys meaning)

•Color granules in detergents and cold capsules serve as a

visual cue for products’ effectiveness

•Pastel colored vacuum cleaners are perceived to be lighter in

weight rather than dark colored tones

•Colors of foods may change expectations of flavor and also

change perceived flavor (vanilla pudding that is colored

chocolate)

•Websites that use blue screens are seen as more relaxing

with faster download times than those with yellow screens


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Price Perceptions •Nine-ending prices: when the last digit of the price is the

number 9, it signals a lower price or is mentally rounded

down …..Given a price of Rs 49.99, it can be viewed as Rs

49.00 instead of Rs 50.00

•Reference pricing: information about a price other than that

actually charged for the product is provided

•Price tag may carry actual price and manufacturer

recommended price or price previously charged

•Designed to encourage consumers to form a favorable

opinion about the reasonableness of the price

•Free samples (gifting) can be effective when introducing a

new product

•They encourage trial and help foster positive opinions


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Advertising Influences Opinion

Formation- Advertising Appeals •Informational advertising appeals attempt to influence consumers’

beliefs about the advertised product

•Emotional advertising appeals try to influence consumers’ feelings

about the advertised product

•Utilitarian advertising appeals aim to influence consumers’ opinions

about the advertised product’s ability to perform its intended function

•Value-expressive advertising appeals attempt to influence consumers’

opinions about the advertised product’s ability to communicate

something about the use of the product.

•The appropriateness of using a particular type of appeal depends on what’s

important to consumers as they form their product opinions

•Products can be valued for both their utilitarian and value-expressive

properties


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Advertising Influences Opinion

Formation- Claims •Stronger claims create more favorable product opinions

•Relevancy makes claims stronger

•Strength also depends on what the ad conveys about the

product’s characteristics and benefits

•Ad claim substantiation is important in opinion formation

•Search claims: claims that can be validated before purchase

by examining information readily available in the marketplace

•Testimonials and product demonstrations are effective ways

to substantiate claims

•Advertising execution elements, pictures, camera angles etc.


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Product Endorsers Influence Opinion

Formation •Endorsers can help shape product opinions in several ways:

•Association with brand may be reason enough to buy it

•Endorsers may embody meanings that companies want attached to

their brands

•Match-up hypothesis: endorsers are more effective when perceived

as appropriate for the product

•Endorsers may give testimonials and provide evidence of product’s

attributes (make-up on a model)

•Endorsers may serve as a peripheral cue

•Endorser’s trustworthiness is critical in increasing the

believability of the ad claim

Documents

CB Perception