MenuItem 5: {Topic 5} Perception and information processing Section A: True or False 1. Consumers use perception as a shortcut to decide which alternative products will best suit them. Answer: T page 122 2. Information processing is a series of activities by which stimuli are transformed into information and stored. Answer: T page 123 3. Exposure occurs when the individual can recall the stimulus. Answer: F page 123 4. The process of flipping through the pages of a magazine and ‘ignoring’ the advertisements is called absolute threshold. Answer: F page 126 5. The reason most students promptly forget most of the things they learn in class is because of selective retention. Answer: T page 128 6. Colour can be used successfully to influence consumers by international marketers because colours have the same meaning to all consumers. Answer: F page 130 7. Using two adults, two children and a dog in an advertisement for a product directed at families is an example of Gestalt theory in practice. Answer: T page 132 8. Intrinsic value is measured by the ability of the consumption process to satisfy for its own sake. Answer: T page 140 9. While both Panadol and No Frills paracetamol both contain 500 mg of paracetamol, many consumers believe there is a difference between the brands due to the manufacturers’ positioning efforts. Answer: T page 147 10. Brand building and positioning are not important in the perception of consumers when deciding between products. Answer: F page 156 Test Bank t/a Consumer Behaviour by Karen Webb 5-1 Section B: Multiple Choice Question 1 Which of the following is NOT a major step in information processing? a) b) c) d) Attention Interpretation Positioning Memory Answer: C page 123 Question 2 Exposure occurs when: a) b) c) d) A stimulus comes within range of our sensory receptor nerves The individual assigns some meaning to the stimulus The individual can recall the stimulus The individual becomes aware of the stimulus Answer: A page 123 Question 3 Attention occurs when: a) b) c) d) An individual is exposed to a stimulus The individual can recall the stimulus The individual becomes aware of the stimulus The receptor nerves pass the sensations on to the brain for processing Answer: D page 123 Question 4 Attention is determined by: a) b) c) d) The nature of the stimulus The nature of the individual Both the stimulus and the individual Stochastic processes Answer: C page 124 Question 5 Consumers use selective exposure because: a) b) c) d) They are lazy There is too much information in their lives to pay attention to it all There is too much information that doesn’t really say anything They are afraid Test Bank t/a Consumer Behaviour by Karen Webb 5-2 Answer: B page 127 Question 6 Selective retention in marketing terms means that we: a) b) c) d) Remember information we find meaningful and interesting Remember everything we were ever taught Remember the benefits of every competitive offering Remember if we liked the product last time we used it Answer: A page 128 Question 7 A advertisement of a red sports car is an example of: a) b) c) d) Normal advertising practice Use of colour to influence our perception Common because most sports cars are red Probably accidental as a red car was the only one available Answer: B page 129 Question 8 The use of family brands as a marketing strategy is making use of: a) b) c) d) Cost savings in packaging artwork Consumers’ personal constructs Limited imagination Company perceptions Answer: B page 130 Question 9 In visual advertising, e.g. television advertisements, non-verbal aspects: a) b) c) d) Convey attitudes and emotions Make the advertisement look good Are necessary to fill in the gaps Don’t really matter Answer: A page 132 Question 10 The perception theory being used when LiveWire made their drink cans similar to Red Bull was: a) Selective exposure b) Stimulus generalisation Test Bank t/a Consumer Behaviour by Karen Webb 5-3 c) Personal construct d) Gestalt Answer: D page 134 Question 11 A good, catchy slogan which immediately makes us think of the correct brand name is making use of: a) b) c) d) Similarity Proximity Closure Semiotics Answer: C page 139 Question 12 Value is: a) b) c) d) Highly objective Highly subjective Slightly objective Slightly subjective Answer: B page 140 Question 13 Purchase of airline tickets for the next holiday is a situation where ____________ value occurs. a) b) c) d) Intrinsic Active Extrinsic Self-oriented Answer: C page 140 Question 14 Purchase of an ice-cream on a hot day is a situation where _____________ value occurs. a) b) c) d) Intrinsic Active Extrinsic Self-oriented Answer: A page 140 Question 15 Test Bank t/a Consumer Behaviour by Karen Webb 5-4 The way meaning is conveyed through signs, words, pictures, music, colours, scents, etc., is called: a) b) c) d) Semantics Heuristics Gestalt Semiotics Answer: D page 140 Question 16 Warranties are a positive marketing response to: a) b) c) d) Poor manufacturing Perceived dissonance Perceived risk Actual risk Answer: C page 143 Question 17 Consumers view services as having greater perceived risk than products because of the _____________ nature of services. a) b) c) d) Heterogeneity Intangibility Inseparability Flexibility Answer: B page 143 Question 18 Using the phrase ‘You can bank on it’ is trying to reduce which type of risk? a) b) c) d) Ego risk Opportunity risk Financial risk Physical risk Answer: C page 144 Question 19 The advertising phrase ‘Good on you Mum, Tip Top’s the one’ is trying to reduce which type of risk? a) b) c) d) Ego risk Opportunity risk Financial risk Social risk Answer: B page 144 Test Bank t/a Consumer Behaviour by Karen Webb 5-5 Question 20 The advertising phrase ‘Stand out, be proud’ is trying to reduce which type of risk? a) b) c) d) Ego risk Opportunity risk Financial risk Social risk Answer: D page 144 Question 21 Which two of the following characteristics can influence positioning? a) b) c) d) Marketing communications Marketing strategies Product characteristics Product strategies Answer: A & C page 147 Question 22 A positioning map lets marketers see how: a) b) c) d) Consumers perceive their products against competitors Retailers perceive their products against competitors Retailers place their products against competitors Consumers purchase their products against competitors Answer: A page 148 Question 23 Brands are important because they: a) b) c) d) Make labelling the products easy Help consumers differentiate between similar products Make consumers believe the price is reasonable Make shareholders accept the market price Answer: B page 149 Question 24 The measure of a brand’s worth is called: a) b) c) d) Brand equity Brand price Share price Share dividend Test Bank t/a Consumer Behaviour by Karen Webb 5-6 Answer: A page 151 Question 25 Dick Smith’s use of the Australian flag on the packaging of his biscuit range is an example of which theory? a) b) c) d) Perception Gestalt Means end chain Grouping Answer: C page 153 Section C: Short Answers Question 1 What is perception and how is it related to sensation? Answer: page 122 Perception is an automatic and natural phenomenon and involves the interpretation of stimuli from the environment. It involves organising and giving meaning to new information from the environment. The stimuli are received in the form of sensations. A sensation is the immediate experience generated by an incoming stimulus. Sensations enter the body via our sensory receptors: eyes, ears, nose, mouth and skin. As a formal definition, to perceive is to (see, hear, touch, taste, smell, sense) some (thing, event, situation) in a particular way. Question 2 Describe the factors that will influence the way consumers perceive information. Answer: page 124 There are several factors that influence the way consumers perceive information. These include: • Individual characteristics, including prior learning and the expectations of the individual. For example, if we are brought up to believe that the family is very important, then we are more likely to respond favourably to messages that portray family scenarios. • Stimulus factors. This refers to how a message is communicated, by way of the actual message or media. For example, if Kylie Minogue were used as a spokeswoman for a brand, she might appeal to people aged in their 20’s and 30’s, but she may not really appeal to senior citizens. Older citizens may respond a lot more favourably to somebody like John Laws or Ray Martin. • Situational factors. Different situations can have an impact on the way information is interpreted. For example, you may be on a diet and you may be very hungry at a particular time, so you may decide to eat something you wouldn’t normally eat, because it’s all that you can find. Similarly, you might normally have a light breakfast, but when on holidays, you may enjoy a large buffet breakfast. Test Bank t/a Consumer Behaviour by Karen Webb 5-7 • The way that information is presented. This can also influence the way it is processed. For example, product packaging is very important for communicating information about branding, positioning and tangible benefits. It is estimated that over 70% of purchase decisions are made at point of sale. Therefore, packaging and instore communication play a very important role. Packaging research has found that picture elements of packaging should be positioned on the left-hand side in order to enhance recall. Brand name or variety descriptions are most effective placed in the middle of the pack, or on the right-hand side. Question 3 What is absolute threshold and how can marketers use it? Answer: page 126 The absolute threshold is the lowest point at which we perceive stimuli. For example, if you flip through a glossy fashion magazine, you are likely to see page after page of advertisements for cosmetics and perfumes. After a while they all look the same and you don’t tend to really notice specific advertisements unless they really stand out. This is because of the clutter. Marketers can use it to gain our attention by making advertisements that look totally different from the rest, for example an almost totally white space with a tiny bit of copy, very loud colours when most ads are in muted colours, very loud voices or no sound at all in TV ads. Question 4 Explain, using examples, the theory of selective exposure. Answer: page 127 Consumers are exposed to so many promotional messages every day that they tend to filter out unwanted information. Selective exposure refers to the fact that consumers make a choice, or selection, about what information they will take notice of. We respond to our environment, either the physical or perceived environment. The way we perceive things is influenced by our biases. We selectively tune in and out of the environment. People tend to see what they want to see because they tend to view everything from their own perspective. For example, many younger people don’t like watching news and current affairs shows, so they avoid them. Question 5 Explain stimulus discrimination, and the legal marketing implications of it. Answer: page 129 Stimulus discrimination refers to the ability to see a distinct difference between stimuli. For example, no matter how many brands of similar looking cat food are on a supermarket shelf, the consumer will always recognise their favourite brand. Test Bank t/a Consumer Behaviour by Karen Webb 5-8 This occurs when we learn to distinguish between the conditioned stimulus and other stimuli, even if they are similar. Competitors often create packaging similar to popular brands in order to fool some consumers to buying their product; passing off is the legal term. In 2002, Symphony, manufactured by ABC Tissue Products, launched a successful pack design using what it called a ‘cherub design’, with cupid-like images. Sorbent then launched a similar design on its packaging. ABC Tissue Products launched legal action against Cater Holt Harvey, who own Sorbent brand, over the very similar packaging. Tissues are a convenience good, so consumers don’t tend to spend a lot of time searching for information, evaluating brands or deciding which one to buy. It’s easy to see how similar packaging could mislead consumers into thinking that all the products on the shelf that look similar are the same brand. Question 6 Explain what is meant by a ‘personal construct’, and how it might work in a consumer. Answer: page 130 Individuals have a personal construct, which is like a personal filing system where you have a whole set of ‘files’ in your mind with related information in them. When new information comes in, you must determine which file it fits in by trying to match the message with some information already in one of the ‘files’. Individuals define incoming stimuli as like or unlike others that we are familiar with, based on only a few salient characteristics. This means that when we see, hear, or sense new information we tend to evaluate it according to only a few criteria that consumers find important. For example, if a person likes cars with European styling and they see an ad for a brand new car that has ‘European styling’ they will be more likely to regard the car in a favourable way even though they may know little else about the car. Question 7 What is gestalt theory and how does it work? Answer: page 132 Gestalt is about patterns or configurations. Gestaltists believe that we categorise incoming stimuli into meaningful patterns. It occurs at the interpretation stage of the information processing chain. For example, looking at a picture of a man, woman and kids enjoying a picnic at a park, we perceive it as a family because we put the people together in the context. If the ‘parents’ from that advertisement were sitting on a rug together enjoying a glass of wine, we would perceive the setting as a romantic one. Question 8 In gestalt theory, individuals ‘group’ incoming stimuli in order to make sense of messages. Describe the three common types of grouping, and how they might work in advertising. Answer: page 139 Test Bank t/a Consumer Behaviour by Karen Webb 5-9 Similarity We tend to group similar information together. Marketers often use similar brand names to existing products or family branding so that consumers ‘group’ the products together in their minds. Golden Circle is a well-known Australian canned fruit and juice producer. The company is well established as a quality brand. The company has launched a new range of baby foods under the Golden Circle brand. The brand’s existing good image should help consumers to evaluate the product in a market where the Heinz brand dominates. Proximity Items that appear the same are grouped together. Proximity involves the way the brain processes visual stimuli by organising the shapes into patterns, in order to make sense of the incoming information. Marketers use it to help us remember brand names, for example, the pizza delivery company with the telephone number 481 11 11 repeated in jingle form throughout the television and radio ads Closure This is where stimulus information is received, but the message is incomplete. Closure occurs when we take existing information from our memory and relate it to the new information to make sense of the incomplete message. When the slogan ‘Oh What a Feeling…’ is heard, most people automatically think of Toyota. However if you had never experienced any Toyota advertising, the phrase would be meaningless. Radio advertisements often use music and sound effects to create an idea of image in the listener’s mind. The listener often ‘completes the story’ based on the audio stimuli. The sounds of a waterfall and singing birds during an advertisement for a relaxing holiday resort may help listeners to visualise the resort as very relaxing and peaceful. Question 9 Briefly describe the five types of risk a consumer might experience. Answer: page 144 Financial risk is the risk that the consumer will experience some sort of monetary or economic loss, for example the perceived risk associated with investment. Physical/utility risk is the risk of the consumer being physically harmed in some way, or that the product may not perform as it is expected to. Social risk is the risk that the consumer will suffer a terrible social embarrassment, for example when your friends get dressed up for a special event and you turn up in jeans and a T-shirt. Ego risk is the risk that the decision may not be in line with a person’s sense of self and their values. For example, a very conservative person may not be interested in body piercing or tight and revealing clothing. Opportunity risk is the risk that by purchasing a particular product and foregoing another, you might not be making the best decision. It results in a feeling of doubt: ‘Should I have bought the other product?’ An example of this may be choosing a formal dress or suit. The buyer may purchase a nice outfit but then worry about whether they made the right choice. Test Bank t/a Consumer Behaviour by Karen Webb 5-10 Question 10 Describe the three strategies which can be used to develop a market position: Answer: page 148 Positioning in relation to competitors This means taking an approach that compares your brand’s benefits against those of competitors. For example, a garden products company such as Nylex is positioned as having the strongest and best quality products on the market. Perception on the basis of product attributes and benefits Products can be perceived by consumers as particularly strong in one area. For example, Volvo is perceived by most as a ‘safe car’. A brand of vacuum cleaner may be positioned as a heavy duty machine capable of removing all traces of pet hair. Positioning on the basis of the usage occasion Some products have a clear position as suitable for particular situations. For example, some brands of wine and champagne are promoted as being suitable for special occasions. The Arnott’s Emporio range of biscuits was promoted for special occasions, as distinct from Arnott’s everyday ranges. Section D: Essay Questions Question 1 Consumers generally process information in a systematic manner. Explain the steps involved, using a consumer purchase decision of your choice to frame your answer. Answer: pages 123-126 The theory is given below, with some examples. Answers should relate this theory to the consumer purchase decision chosen. Exposure Consumers are exposed to stimuli whether they like it or not. Exposure occurs when our sensory receptors detect a stimulus. Consumers can choose whether or not to deal with the stimulus. The implication for marketers is that information must first be placed in a situation where consumers will be exposed to it. Suppose you determine that your target audience will be watching television at a particular time of the day. What’s to stop them from changing channels when the advertisements come on? Nothing really - that’s why advertisers often place their advertisements on competing channels at the same time. This is known as road blocking, because wherever consumers turn, they cannot escape the advertising message! Attention This occurs when information is transferred from the sensory receptors to the brain for further processing. For example, you might see something ‘strange’-looking on a television advertisement, and stop and take notice of the advertisement to sort out what it is you are seeing. ‘Salience’ is an important concept when considering how to gain an audience’s attention. Salience is the psychological term for the phenomenon where people think about things that are important to them more than those things that are not. It sounds Test Bank t/a Consumer Behaviour by Karen Webb 5-11 simple; however, marketers want to make their products seem important. Repetition is used by advertisers to increase the prominence of a brand and make it more salient. Interpretation This is the stage of processing at which consumers give meaning to the incoming stimulus information. Information is filed alongside other information that the consumer considers as similar. Information is subject to cognitive and affective interpretation. Cognitive interpretation is a process of adding meaning from existing knowledge. Information can be given semantic and psychological meaning. Affective interpretation is the processing of information and adding meaning based on feelings. Memory This is a complex psychological phenomenon. However, it is useful in understanding perception as the ability of consumers to interpret new information is based on their existing memory. Memory is the information storage facility in the brain. Marketers also want their marketing messages to be transferred to the consumer’s memory for consideration when making a buying decision. Question 2 Message processing and attention is affected by many things. Two of these are colours and semantics. Explain, using examples, how these influence our perception. Answer: pages 129-130 THE INFLUENCE OF COLOUR ON PERCEPTION Colours have a great influence on perception. Just think of the different colours that you associate with different things. For example, most Western people wear black to a funeral or when grieving, as it represents death, whereas white is a traditional wedding colour, signifying a new life. Pink has been associated with femininity and blue with masculinity. Sometimes, when someone is sad, their mood might be described as ‘blue’. We also use the phrase ‘green with envy’. The colour green is also often used to describe people who are young and inexperienced. Yellow is often considered a cowardly colour. Science has proven that colours can influence behaviour. The reason is that the stimuli presented by colours have an influence on the central nervous system. People from different cultures perceive different colours as having unique meanings. In Western cultures, red makes us feel warm, whereas blue gives us a much cooler feeling. The spectrum colours of red, yellow and orange have the longest wavelengths and they are associated with heat. Blues, greens and violets have shorter wavelengths and are associated with cool. Companies spend a lot of time and money on designing advertising, logos and packaging. The choice of colours in advertising or on signage and packaging is just as important as the layout and copy. The symbolic nature of colours is often used by marketers - in packaging, advertising and in store signs. The perfume ‘Red Door’ uses intense sensual imagery in its advertising, promotion and packaging. It uses a very vibrant red colour to represent passion and a warm feeling. THE INFLUENCE OF SEMANTICS ON PERCEPTION Test Bank t/a Consumer Behaviour by Karen Webb 5-12 Words often convey a lot more than the dictionary definition. For example, consider the following description of a cake. An advertisement might describe it as deliciously light and moist. This conveys a great deal of meaning. The person reading the advertisement will get an idea in their mind about what the cake tastes like, just by the use of these descriptive terms. Consider also the words ‘loving’ and ‘passionate’. These can have similar meanings in the same context, but in fact they can convey very different feelings. You might describe a ‘loving family’ or a ‘passionate’ couple. Some other examples of words that have similar meanings , but that convey different tones and messages are ‘cops’ and ‘police’, ‘good bloke’ and ‘nice man’. Question 3 Describe the marketing communication process, explaining at which points perception will mean the communication process will be successful or unsuccessful. Answer: page 133 Message as intended - sales idea or proposition is developed Encoding the message - this is influenced by the perception of the company or advertising agency personnel, which may not be the same as that of the consumer. Message channel - advertising media selection - market research is needed so the chosen media will be in line with what the consumer perceives to be an appropriate place for that message, for example, funerals should probably not be advertised using signage at sporting venues, whereas this is appropriate for investments and cars. Decoding the message - the consumers perception is important - if it is not the same as the company’s, or it is not believed, the message will fail. Message as received – again, perception will play a strong role here. Response - interest, purchase or desire - this will only occur if the consumer perceives the message to be appropriate and acceptable. Feedback - this is an important stage to find out how the consumer’s perception has influenced the process, either successfully or unsuccessfully. Question 4 Explain the three types of consumer value: intrinsic and extrinsic, self-oriented and others-oriented value, and active and reactive value, and how marketers have used each one. Answer: pages 140-143 Extrinsic value relates to the situation where consumption occurs to satisfy some further goal. For example, a mobile phone might be purchased for the purpose of allowing the person to be contacted and to make contact with others. The value consumers get from the phone is based on its role in helping people communicate, rather than from the phone itself. Intrinsic value, on the other hand, is measured by the ability of the consumption process to satisfy for its own sake. For example, listening to a CD of your favourite band creates value that is appreciated as an end in itself, so Sony show users experiencing amazing things. Self-oriented value refers to value obtained from the consumption process that is somewhat selfish in nature, whereas others-oriented value is obtained from Test Bank t/a Consumer Behaviour by Karen Webb 5-13 consumption that we perceive will benefit others. For example, a person who buys a particular laundry detergent because it makes their clothes look nicer is expressing self-oriented value. Marketers use terms such as “You’re worth it”. A person who chooses a laundry brand because it is environmentally friendly is expressing othersoriented value because their consumption benefits someone else - in this case, society. Charities often use this value to promote their causes. Active value refers to value that comes from consumers doing something with a product or manipulating it in some way, such as driving a car or eating a meal. advertisers show people eating or driving and experiencing great pleasure. Reactive value comes from doing something or responding to something as part of the consumption process, such as the pleasure obtained by visiting an art gallery. Question 5 Explain how means end chain analysis is used to determine consumer behaviour based on the perception of brand attributes, benefits and consumer values. Answer: pages 153-156 A consumer evaluates a brand in terms of its overall value. This perception of value is based on how the product performs on various attributes that the consumer deems important. Some attributes are more important than others. Means end chain analysis is a way of determining consumer behaviour based on the perception of brand attributes, benefits and consumer values. In order to position products and brands at a higher level, we need to understand and measure the meanings that products have for consumers. The ‘means-end chain’ establishes a link between tangible attributes of a product and the individual and social needs of consumers, such as benefits and values. Sometimes, simply positioning a brand based on its concrete attributes may not be appropriate. In undifferentiated or mass markets, which include the majority of fast moving consumer goods, many products are difficult to distinguish. For example, most brands of tomato sauce, margarine and paracetamol-based pain relief medication are basically the same. However, different brands have different meanings, based on the benefits they offer consumers in intangible terms. For example, the Herron paracetamol brand is positioned not on the basis of what it does, but rather on the fact that it is made in Australia by an Australian-owned company. Consumer durables may also face the same issues as those outlined in the previous article. With product technology moving at such an enormously fast pace, consumers are often bamboozled by scientific facts and information. This may include products such as video and digital cameras, computers and even mobile phones. In these types of markets, consumers look for ways to simplify the complex information available to them. They simplify detailed brand and attribute information by categorising the information into higher level constructs such as ‘reliability’ and ‘quality’. Communication strategies based solely on the performance of product attributes are not likely to be successful for these products. Marketers know this. In car advertisements, for example, one can encounter higher-level constructs such as ‘excitement’, ‘performance’, ‘spacious’, ‘luxurious’ and ‘economical’. In car ads it is not uncommon to refer to more personal values such as fun and enjoyment (‘the ultimate driving machine’), and achievement (‘arriving ahead of schedule’), which in Test Bank t/a Consumer Behaviour by Karen Webb 5-14 this case refers to arriving at a social status position ahead of when one would expect to arrive at that position. Attributes gain their relevance because they allow the consumer to achieve certain benefits. For example, a particular model of car may offer cost savings, whereas a brand of moisturiser may promise soft, smooth skin. Subsequently, a benefit increases in importance as the consumer has a higher need for the benefit. These are often related to the higher-order needs such as belonging, achievement, esteem and self-actualisation. A product has different perceptual meanings depending on the motivations and needs of the consumer. For example ‘a computer can be a necessity for a person who values “sense of accomplishment”, a status symbol for a person who values “self-respect”, and a toy for a person who values “fun and enjoyment”’. Marketers conduct quantitative and qualitative research to determine what attributes consumers see as important in products, but also to determine their underlying values. You can see from the previous computer buying example that consumer values can be just as important for marketers to understand as the actual benefits and attributes that consumers seek. ‘The more closely a product or brand is linked to the various elements in consumers’ means-end structures, the more likely it has personal relevance, and the more likely it will be preferred and chosen’. The implication here is that marketing research about consumer needs should go beyond simply identifying important product or brand attributes, but it should also link the attributes sought by particular clusters of consumers with their values. Qualitative research is particularly useful as it allows the interviewer to probe for more information. This allows them to find out more about consumer’s underlying motivations for purchase. The linkage of product or brand attributes and benefits to values increases the strength by which the product or brand is perceived to be consistent with the consumer’s personal values. The brand is therefore perceived as a highly desirable choice when it comes to decision- making time. Consider an example of how a means-end chain works. Think about a product such as ‘Logicol’ low cholesterol margarine-type spread. Research might reveal that consumers perceive this brand as a low-fat product that promotes a healthy body. A consumer may link health with their desire for enjoyment of life. The underlying value in this case is the enjoyment of life. Initially you might wonder how enjoyment of life relates to margarine. However, if armed with this knowledge, marketers can develop effective marketing communication strategies that appeal to these consumer values. This creates a very strong position in the minds of consumers. Not only does the brand offer sought benefits, but it also makes a direct connection with the consumer’s core values, thus increasing the likelihood of purchase. Test Bank t/a Consumer Behaviour by Karen Webb 5-15