CHAPTER 6
CONSUMER PERCEPTION
PERCEPTION
Perception is defined as the process by which an
individual selects, organizes and interprets stimuli
into a meaningful and coherent picture of the world.
How each person recognizes, selects, organizes and
interprets the stimuli is a highly individual process based
on each person’s needs, values and expectations.
DYNAMICS OF PERCEPTION
Perception is the result of two different kinds of
inputs that interact to form the personal pictures
that each individual experiences.
• Physical stimuli from the outside environment
• Expectations based on previous experiences
Aspects of Perception
1. Perceptual selection
What stimuli get selected depends on three major
factors –
• Nature of the stimuli - Nature of the product
Physical attributes
Package design
Brand name
Advertisements/Commercials
Position of the ad
• Expectations
People usually see what they expect to see based
on familiarity, previous experience & expectations.
• Motives
People tend to perceive the things they need or want.
An individual’s perceptual process simply attunes itself
more closely to those elements in the environment that
are important to that person.
These factors give rise to four important concepts
concerning perception »Selective exposure
»Selective attention
»Perceptual defense
»Perceptual blocking
2. Perceptual organization
• People do not experience the numerous stimuli they
select from the environment.
They tend to organize them into groups and
perceive them as unified whole.
• Three basic principles of perceptual organizations» Figure-and-ground
» Groupings
» closure
3. Perceptual interpretation
The interpretation of stimuli is uniquely individual.
How close a person’s interpretations are to reality
depends on the clarity of the stimulus, the past
experiences of the perceiver and his/her motives or
interests at the time of perception.
Perceptual distortion
» Physical appearance
» Stereotypes
» First impressions
» Jumping to conclusions
» Halo effects
CONSUMER IMAGERY
Product positioning
Different brands in the same category can be
differentiated if the marketers stress the benefits rather
than the product’s physical features.
A good positioning strategy should have a two-pronged
meaning:
– Congruent with the consumer’s need
– Featuring the brand against the competition
Major positioning strategies
» Umbrella positioning
» Position against the competition
» Positioning based o a specific benefit
» Finding an “unowned” position
» Filling several positions
Product repositioning
The marketers may be forced to reposition their
product –
– In response to market events
– To satisfy consumer preferences
Positioning of services
As services are intangible, image becomes a key
factors in differentiating a service from its competition.
The marketing objective is to enable the consumer to
link a specific image with a specific brand name.
– Visual images and tangible reminders of the service
– Several versions of the service offered to different
market segments by using a differentiated positioning
strategy
– The physical environment
Perceived price
How a consumer perceives a price has a strong
influence on both purchase intention and purchase
satisfaction.
• Reference prices
A reference price is any price that a consumer uses as a
basis for comparison in judging another price.
– External reference price:
Offering lower price by
the advertisers
– Internal reference price:
Retrieved by the
consumer from memory.
According to the acquisition-transaction utility theory,
two types of utility are associated with consumer
purchases.
– Acquisition utility represents the consumer’s
perceived economic gain or loss associated with a
purchase.
It is a function of product utility and purchase price.
– Transaction utility concerns the perceived pleasure or
displeasure associated with the financial aspect of the
purchase.
It is determined by the difference between the internal
reference price and the purchase price.
• Tensile and objective price claims
The semantic cues of the phrase used to communicate
the price-related information may affect consumers’ price
perception.
– Tensile price claims -
A range of price discount
(Save up to 60%)
– Objective price claims-
A single discount level
(Save 25%)
Perceived quality
Consumers often judge the quality of a product or
service on the basis of various informational cues that
they associate with the product.
Intrinsic cues:
Physical characteristics of the product
Extrinsic cues:
Cues that are external to the product
• Perceived quality of products
Intrinsic cues:
Size, color, flavor, aroma
Extrinsic cues: Price, package, advertising, brand
image, manufacturer’s image, retail
store image, country of origin
• Perceived quality of services
Extrinsic cues: Physical evidence, environment,
number of employees
Difference between the customer’s expectation and
perception
Price/quality relationship
Consumers use price and brand name to evaluate the
prestige of the product.
When consumers evaluate more concrete attributes of a
product, they rely less on the price and brand name as
indicators of quality.
Retail store image
Design and physical environment, Pricing strategies,
Product assortments, Number, types and behavior of
other customers and sales personnel.
Manufacturer’s image
Manufacturers with a favorable image find that their
new product are accepted more readily.
Perceived risk
Perceived risk is defined as the uncertainty that the
consumer face when they cannot foresee the
consequences of their purchase decisions.
Types of perceived risks
Functional risk
Physical risk
Financial risk
Social risk
Psychological risk
Time risk
How consumers handle risks
» Consumers seek information
» Consumers are brand loyal
» Consumers select by brand image
» Consumers rely on store image
» Consumers buy the most expensive
model
» Consumers seek reassurance