CONSUMER BEHAVIOUR
Chapter 5
Perception and Information Processing
CHAPTER OVERVIEW
Perception is the first step in information processing. It is an internal influence that considers how a
consumer sees the world. Perception is a result of past experience, existing knowledge, culture, influence
of those around them and marketing activities.
Perception is a process which involves exposure, attention and interpretation. Relevant information is then
transferred to memory. Marketers need to understand these stages to understand how they can influence a
consumer’s perception of their brand.
Consumers filter out unwanted information and use techniques like selective exposure, selective attention,
sensory distortion and selective discrimination. They also interpret information using gestalt principles like
figure ground principles, grouping and closure to make sense of new information.
Brand building and positioning are key aspects of marketing that need to be addressed alongside how
consumers interpret information.
LEARNING OBJECTIVES
After reading this chapter, students should be able to:
 Understand the nature of perception and how it affects consumer behaviour
 Define the concepts of exposure, attention, interpretation and memory and discuss how they
influence the interpretation of marketing information
 Describe the information process and how it relates to consumer behaviour
 Discuss the communication processes involved in perception
 Outline how the gestalt theory and semiotics impact on consumer behaviour
 Outline the role of risk and how marketers and consumers use risk reduction strategies
 Understand the nature of positioning and consumer behaviour
 Discuss the importance of brands in consumer behaviour.
CHAPTER TOPICS
1.
2.
What is perception?
The nature of perception
 The role of perception in the decision-making process
 Information processing
- Exposure
- Attention
- Interpretation
 Memory
3. Information processing and consumer behaviour

Absolute threshold

Weber’s concept of just noticeable difference (JND)

Selective exposure

Sensory distortion

Selective retention

Selective attention

Stimulus generalisation

Stimulus discrimination

The influence of colour on perception
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4.
5.
6.
7.
8.
9.
10.
11.

The influence of semantics (words) on perception

Perceptual categorisation
Communication processes
Gestalt theory

Case point 5.1—Big brands, after a landmark court win, have a new weapon against
imitators—the gestalt factor

Figure and ground perception

Grouping

Semiotics
Perceived value

Case in point 5.2—Hidden meanings of semiotic marketing
Perceived risk

Types of risk

Case in point 5.3—“Wait there’s more” tactics examined
Positioning

Positioning maps

Positioning strategies

Repositioning brands
Brands
Brand equity and branding

Brand names

Line and brand extensions
The means end chain theory

Case in point 5.4—Bringing healthcare brands to life
LECTURE OUTLINE
Encourage discussion to introduce subject:
Have a show of hands by students on the type of movies they enjoy. Some will like horror flicks, some will
love romance, adventure will be preferred by others, while others will enjoy ‘chick flicks’! Now have a
brief discussion on favourite football teams. If you’re brave enough, ask why!
One of the reasons behind people liking different types of movies and football teams is perception. Other
factors, such as family influence, geographic factors, culture, and other internal and external influences
will play a part as well, but how we ‘see’ the world and develop favourite things links directly to
perception.
Perception also refers to how we develop preferences for different product types and brands and even how
we divert attention to certain types of communication.
This chapter will examine why marketers need to understand perception and look at the ways consumers
respond to various stimuli. Concepts relating to perception and how consumers process information to
make sense of the world around them will also be examined.
1.
What is perception?
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. A
sensation is the immediate response generated by an incoming stimulus. Marketers want to know what
consumers like and dislike, because not only does it affect our reactions to their products and services, but
also how we attend to their marketing efforts—like promotional messages, selling techniques, pricing
levels, and various attributes of the product or service itself.
2.
The nature of perception
We all perceive things differently. No two people see things the same way. We interpret things in the
environment differently. Our senses work involuntary, but we still make active choices as to what we
divert our attention to.
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Marketers want their messages to be noticed and attended to. To do this, we need to understand how
consumers process information. Information processing is the series of activities that happen in the brain
as information is received, processed and given meaning.
The role of perception in the decision-making process
Have you ever heard the saying ‘the customer is always right’? Even if they are not, correcting them will
probably end in a negative attitude towards your brand, and no sale because you are challenging their
perception! Perception is a key part in the information processing chain. How consumers perceive your
offering (once they have noticed it) will not be the same as your interpretation of your marketing offer and
promotion. Their perception will be linked to their past experience, attitudes, culture, the situation and
social influences.
Information processing
Figure 5.1 (text, p. 123) lists the steps in consumer information processing. Each step is affected by
internal influences acting on the consumer, and governing their overall perception of stimuli.
Exposure
Consumers are exposed to stimuli whether they like it or not. Exposure occurs when our sensory receptors
detect a stimulus. Think back to the exercise where students noticed different stimuli around them—like
aromas of fresh bread etc.
Marketers know they must be exposed to the consumer to be noticed at all. Different eye-catching or
attention-grabbing techniques are used by marketers.
Attention
Attention occurs when information is transferred from the sensory receptors (senses) to the brain for
further processing. For example, if someone hears a joke on television, and stops to work it out, they are
giving attention to it.
Salience is an important concept to consider when trying to attract attention. It refers to the importance of
a stimulus over less-important stimuli. For example, if you include some negative aspect in your ad in
order to show a positive result, you may only attract enough attention to have the negative aspects noticed,
and then associated with your brand.
Interpretation
Interpretation is the stage of processing at which consumers give meaning to the incoming stimulus
information. Information is subject to cognitive and affective interpretation. This is illustrated in Figure
5.2 (text, p. 125).
Cognitive interpretation refers to the thought processes involved with interpreting the information.
Affective interpretation refers to how consistent the information is with existing beliefs and feelings. To
ensure honesty in research on feelings, different physiological measures are used. Some of these are
outlined in Exhibit 5.2 (text, p. 125).
There are several factors that influence the way consumers perceive (and interpret) information:
 Individual characteristics—prior experience and learning (such as those taught by family).
 Stimulus factors—how a message is communicated. Use examples of celebrities appropriate for
different age groups to illustrate.
 Situational factors—like the weather, or a personal situation like in love, on holidays, bored,
hungry, etc.
Memory
Memory will be dealt with in detail in Chapter 6. It is defined as the information storage facility in the
brain. Marketers want consumers to retrieve information about their products when their needs are
aroused.
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3.
Information processing and consumer behaviour
There are a number of theories related to perception and information processing that can guide decisions to
be made by marketers. Some of these are discussed below.
Absolute threshold
The absolute threshold is the lowest point at which we perceive stimuli. When we flick through the pages
of a magazine, all the ads for similar products tend to blend into one another. Occasionally one will stand
out because of the colours, style or size of ad.
Implications for marketers
Marketers need to ensure they can break through the clutter with different techniques to gain the attention
of prospects.
Weber’s concept of just noticeable difference (JND)
The concept of just noticeable difference (JND) is the minimum level of change to a stimulus that is
required in order for the change to be noticed. Change can be related to product names, (e.g. Lipton tea →
Black tea) product features (change of aromas, different functions), product sizes (from 250ml to 200ml),
pricing points (from $1.50 to $1.95). If the change is a positive one, a marketer will tell the world. If more
is included a packet, it will be promoted through advertising and labelled clearly on the packaging. If the
changes are significant, such as a complete logo and brand name change (Grace Bros to Myer) it may be
an effort to reposition the company to a different market segment or an attempt to rid the company of a
poor image.
Implications for marketers
Marketers need to ensure that any changes to their product, if perceived as negative, will not be noticed. A
step of changes is sometimes preferred over one major change. If the change is likely to be noticed, then it
is important not to hide that change from consumers, but point it out quite clearly to minimise backlash.
Selective exposure
There are a number of concepts linked to how we process messages and pay attention to certain stimuli.
Consumers are exposed to many promotional messages every day, and it’s impossible to pay attention to
every single one. Selective exposure refers to the fact that consumers make a choice about what
information they take notice of. Often it’s an intentional avoidance of certain media or messages. That is
why the RTA has struggled to reduce the road toll with messages about speeding and alcohol limits,
because young people don’t want to be told. Other age groups are the same, with avoiding messages about
breast cancer checks, financial management for retirement, and smoking in the presence of children. It’s
important not to only refer to the younger generation since they are most likely the instructor’s target
audience!
Sensory distortion
Sensory distortion occurs when consumers add preconceived ideas or attitudes to interpret new
information that enters a sensory store in their memory. For example, if you believe all home insurance
policies are the same, you will only shop around to get the best rate, not product (even if the insurers claim
their offerings are superior). Marketers therefore need to stand out with certain benefits that are important
to consumers, so that positive word-of-mouth is another tool of the trade that can be used. People will
listen to their friends over advertisers.
Selective retention
Selective retention means that we remember information we find meaningful and interesting. Consider
when you have asked someone their name only to forget it 30 seconds later! One of the keys for marketers
is to make themselves memorable and appeal to what interests the consumer, not the marketer.
Selective attention
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Selective attention is the idea that individuals do not take in all the stimuli around them. So if a piece of
information is important for consumers to take in and remember, repeat it. Don’t include too much
information for consumers to retain.
Stimulus generalisation
Stimulus generalisation occurs when a conditioned response occurs to stimuli that are similar to the
conditioned stimulus. That is, consumers see no real difference between brands, so marketers sometimes
make them as similar as possible. Cases that have reached the courts are outlined in your text. Generic
brands like No Frills, Woolworths’ Home Brand, and Farmland often tend to rely on this strategy,
assuming shoppers mainly use price as the key differentiator between brands.
Stimulus discrimination
Stimulus discrimination refers to the ability to see distinct differences between stimuli. These differences
might only be perceived by the consumer, and may not be ‘real’ differences. If a consumer is loyal to a
brand, they will always be able to find their favourite brand on a shelf amongst a foray of competitor
offerings. This is why marketers strive for brand-loyal consumers.
The influence of colour on perception
Colours have a great influence on perception, and scientists have proven that colours actually influence
behaviour. The reason is that the stimuli presented by colours have an influence on the central nervous
system. But this influence has to be learnt. Different countries have different meanings for certain colours.
In Australia white might refer to purity, but in Japan it means grieving. Marketers must conduct research
and really know their consumers when designing product styles and colours, and promotional materials,
including packaging.
The influence of semantics on perception
Words can be used interchangeably in a crossword, but don’t necessarily mean exactly the same thing in
different contexts. For example, cool might mean refreshing, but it can also mean aloof. Words can be
used in ad copy, to form pictures in people’s minds. For example, a cream soap might offer the user a
‘refreshing’ sensation while showering.
Perceptual categorisation
A personal construct is like a personal filing system where you have a whole set of ‘files’ in your mind
with related information in them. Consumers only use a few criteria when filing, so its important that the
characteristics brought out in a marketing offer are salient to the consumer and more likely to be ‘filed’
where the marketer wants. It is important that marketers do not use too much information in their
advertisements (for example), so that the right information is stored in the right place.
Marketers also use this concept in their branding. If there are positive associations with the brand, then
marketers may decide to keep the ‘family’ brand name when introducing a new range of products. For
example, Cadbury has extended their brand name from chocolates to ice creams, biscuits and cake mixes.
4.
Communication processes
The communication process basically depicts how communication works, for any situation,
communication or message. Figure 5.3 (text p. 133) outlines the key components of the communication
process. The effectiveness of any communication is influenced by the way the whole process is
perceived—not just the message itself.
Non-verbal cues provide as much information as the verbal components. In addition, noise factors such as
physical noise (like aircraft and loudspeakers) or psychological noise (like past experience, existing beliefs
or even factors like hunger and tiredness), can also affect communication. Marketers should keep the basic
communication process in mind when communicating to prospects or other players in the marketing
channel.
5.
Gestalt theory
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Gestalt psychology is the name given to the school of psychology that first developed the basic principles
of perceptual organisation. Consumers organise their perceptions into unified wholes according to the
principles of gestalt psychology: figure and ground, grouping, and closure. 1 Organisation helps consumers
to complete the picture to make it more meaningful. The text gives an example (p. 132) of how a man and
woman with children in a park are assumed to be a family, but if the man and woman were sitting on a rug
with a glass of wine, the setting is more romantic.
A lot of thought needs to go into marketing communication messages, because although individual
elements may not necessarily be noticed, all elements go into making the ‘whole’ picture.
Case point 5.1—Big brands, after a landmark court win, have a new weapon against imitators—
the gestalt factor
Case in point 5.1 discusses the application of gestalt principles to marketing. Several examples are given
on how consumers tend to position a brand on a whole number of attributes—well and truly beyond a
brand name. Colours, logos, brand names and themes add up to form a total picture. The side issues (for
companies) of gestalt principles being used by consumers are two-fold. Marketers can stand out and be
counted when they have the ‘total package’ right. However, a good package may have to stand against
copycats who want to hop on the same bandwagon.
Figure and ground perception
Figure and ground perception is about how we distinguish between a figure and its background. For
example, a celebrity that is popular may be the (main) figure or part of the background, depending on the
perception of the viewer.
Grouping
Based on gestalt principles, we group items to make sense of them. Three main ways to group are:
similarity, proximity and closure.
Similarity
We tend to group things together that are similar. Marketers will use the same brand name to link different
types of products together. For example, Cadbury uses the same brand name across a range of different
product lines, even though there are different competitors in each product grouping.
Proximity
Items that appear the same are grouped together. Therefore Cadbury can use the same brand name across
different product lines, because all lines are drawn together by a common ingredient—chocolate.
Closure
Closure occurs when we take new information and link it to existing information that we already know. For
example, some advertisers want us to complete the sentence (The Fresh Food People → Woolworths) or to
answer a question (Which bank? → Commonwealth Bank). Soundtracks also create powerful imagery, by
setting the scene for the listeners. For example, sounds of thunder evoke storms.
Semiotics
Semiotics refers to the use of signs or symbols to establish an image and convey a message. For example,
Kleenex toilet tissues use a cute Labrador puppy to show softness and tenderness against your skin.
Case in point 5.2—Hidden meanings of semiotic marketing
“Brands are based on an evolving mass of hidden meanings and associations.” Advertising and promotions
goes part way to working with semiotics, as young celebrities are used to associate their brand—and
indeed the product category—with youthfulness and appeal. Marketers must consider all aspects of their
brand and the hidden meanings conjured up by their marketing efforts, from product features, brand name,
pricing and promotional efforts to colour.
1
Schiffman, L., Bednall, D., Watson, J. & Kanuk, L. (1997) Consumer Behaviour, Prentice Hall: Sydney, p. 173.
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Encourage examples from students on semiotics at work in the marketplace by using well-established
brands like Vegemite, Weet-Bix and Colgate.
6.
Perceived value
What one person considers as value, another person may perceive as not valuable at all. There are three
types of consumer value:
1. Extrinsic versus intrinsic value
2. Self-oriented versus others-oriented value
3. Active versus reactive value.
Extrinsic versus intrinsic value
Extrinsic value relates to the situation where consumption occurs to satisfy some further goal. In other
words, you might buy a laptop so you can study at TAFE or university. Intrinsic value is measured by the
ability of the consumption process to satisfy for its own sake. For example, eating at McDonald’s will
satisfy your hunger as an end in itself.
Self-oriented versus others-oriented value
Self-oriented value refers to value obtained from the consumption process that is somewhat selfish in
nature. Others-oriented value is obtained from consumption that we perceive will benefit others. The
different reasons laundry detergent is purchased are given as an example in the text (p. 142). This
particular value can often have hidden meanings as we externally state that the purchase is for someone
else, yet there may be some internal motive behind our behaviour!
Active versus reactive value
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. Reactive value comes from doing something or
responding to something as part of the consumption process, such as the pleasure obtained from visiting a
gallery.
7.
Perceived risk
Perceived risk is the fear that the purchase of products or services may result in disappointment or
unpleasant consequences. Remember that the risk is perceived or imagined, but can influence whether the
consumer will buy that particular product or brand at all. Consumers are influenced only by risk that they
perceive.
Marketers need to be aware of the types of risk, and how they can help consumers overcome this fear and
reduce their cognitive dissonance (Chapter 3). Services often carry greater risk than products, because of
the very nature of services, such as intangibility, variability of service and perishability (if the service is
not used).
Types of risk





Financial risk is the risk that the consumer will experience some sort of monetary or economic
loss (e.g. paying for a holiday six months in advance when you might get sick).
Physical or utility risk is a risk that the consumer will be harmed in some way or the product will
not perform as ‘expected’ (e.g. juice extractor doesn’t juice whole fruit as expected).
Social risk is the risk that the consumer will suffer social embarrassment from their purchase (e.g.
buying another brand of doll instead of Barbie).
Ego risk is the risk that the decision may not be in line with a person’s sense of self and their
values (e.g. We don’t shop at THAT store).
Opportunity risk is the risk of purchasing a particular product or service and forgoing another
(e.g. Do we buy a rear projection TV or a plasma screen?).
Sometimes marketers use these risks as part of their marketing campaign, so a risk may be alleviated as a
result of the purchase of their brand. (e.g. Don’t risk getting caught with your pants down!)
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Marketers can use a number of strategies to reduce the level of perceived risk:
 Trial use of product or service
 Warranty or money-back guarantee
 Building a strong and reliable brand name
 Use of respected spokespeople in a campaign with high frequency (lots of repetition)
 Rewards or reinforcement for purchase (congratulations, special owner’s club)
 Back-up customer service and technical advice.
Case in point 5.3—“Wait there’s more” tactics examined
This case addresses the issue of risk reversal, where the marketer takes on some of the risk for the
consumer. Strategies like money-back guarantees, gifts and test drives can be used so the consumer thinks
they have nothing to lose. However, the discussion suggests that it really depends on the nature of the
product or service being marketed, and just how much risk the marketer should take, since they are in
business not only to satisfy customers, but also to make a profit.
8.
Positioning
Positioning is how your product is perceived (against competitors) in the minds of consumers. It involves
determining a set of attributes for your brand, and communicating these to your target market. Positioning
is based on a complex set of factors that are important to the consumer.
Positioning maps
A positioning map (or perceptual map) is a graphical representation of market positioning according to
consumer perceptions. The two most important attributes are plotted on a graph to more easily show how a
product is perceived in relation to competitors. The graph can also show gaps that are not being filled by
companies.
Positioning strategies
There are a number of strategies a marketer can use to develop their position. The list below is not
exhaustive:
 Positioning in relation to competitors—compares your brand’s benefits against the competitors
(Duracell battery lasts longest)
 Positioning on the basis of product attributes and benefits—particular benefits may be unique to
your particular brand (Fisher & Paykel’s washing machine provides the best wringing cycle)
 Positioning on the basis of usage occasion—products add a certain touch when used on special
occasions (Harley-Davidson for the pleasure rider).
Repositioning brands
Sometimes companies lose their way either through inadequate market research or environmental
scanning. Kodak has lost ground and valuable market share in the photography market through the
development of affordable digital technology. They are now employing new strategies and introducing
new initiatives to reposition their image and regain market share.
9.
Brands
A brand is a mix of tangible and intangible elements that make up an identifying name, mark or symbol.
Consumers evaluate brands based on clusters of values they perceive a brand to represent. It is rare for a
brand to only be evaluated on one attribute; it is usually a combination of features that provide value to
customers.

As it becomes more difficult to differentiate one brand from another, brands are becoming an
important asset to stand out from the competition.

A marketer’s overall aim is to develop a relationship with customers, which will result in brand
loyalty. This also helps to act as a buffer in light of competitor activity such as price reductions or
special incentives.
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10.

To be successful, brands must be customer-focused and offer value. This can be done through
continual innovation, market monitoring and consistent communication across all levels of the
marketing channel.

A brand is a way that an organisation identifies and differentiates its products, but it is also a lot
more. A brand can also be described as a link between an organisation’s marketing activities and
consumers’ perceptions.

Brands can assist consumers to reduce perceived risk by reassuring them of consistent quality and
service.

A relationship with a service ‘brand’ (such as banks, lawyers, teaching) is most likely based on
the consumers’ experience with the employees, rather than the brand itself. Marketers need to
focus on the importance of their human resources when developing their brands.
Brand equity and branding
Brand equity is a measure of a brand’s worth. It incorporates brand association and brand image. Consider
the difference in value of brands by comparing:
 Coca-Cola and a suburban manufacturer (like Berts)
 Subway with the local sandwich shop
 Bakers Delight with a small bakery.
Brand equity is influenced by all the factors in a company’s marketing mix—including product quality and
features, service, pricing points, distribution outlets and availability and marketing communications. It is
also important that a brand can deliver on its promises.
Brand names
Brand names can be based on functional features or intangible image aspects.
Many well-known brand names become part of everyday language. Classic examples include Bandaid,
Walkman, Panadol and Hoover.
Line and brand extensions
A line extension is the launch of a variation on an existing brand into the same product category.
A brand extension is the launch of an existing brand into a new category.
11.
The means end chain theory
Means end chain analysis is a way of determining consumer behaviour based on the perception of brand
attributes, benefits and consumer values. This tool can then help marketers understand how they can
reposition their offerings, based on the most important aspects of their brand to consumers.
Sometimes positioning a brand based on its concrete attributes may not be appropriate. In many markets
where products are similar, it can be difficult to distinguish between brand offerings.
Attributes gain their relevance because they allow the consumer to achieve certain benefits. For example,
laser therapy may promise to remove sun damage and fine lines. A benefit increases in importance as the
consumer has a higher need, such as self esteem or self actualisation (eternal youthfulness).
A product can have different perceptual meanings depending on the motivations (and needs) of the
consumer. Consider the different reasons behind the purchase of a home computer.
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 will be preferred over competing alternatives. This means
that market research should go beyond identifying important brand attributes and explore what different
types of customers seek or value in their brands. Focus groups and other qualitative methods are more
valuable research tools to explore this type of information.
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Consider the example of Vita Brits, and how they ran a campaign on “I’ll get it”. Celebrities and other
people with vitality for life were featured in the ad. This ad was subject to research that revealed that
people want breakfast cereals that provide energy so life can be enjoyed. It didn’t necessarily imply that
people will win or excel all the time, although sports stars like Kieran Perkins were featured.
Case in point 5.4—Bringing healthcare brands to life
Brand building is proving crucial in the healthcare industry. Brand building includes emphasising the
benefits of using products, rather than actual attributes.
The four elements of a brand that should be emphasised include:
1. Attributes—What it is, what it does, how it looks
2. Benefits—Actual (reduces acne) or abstract (makes you feel prettier)
3. Personality—creation of a brand’s character through qualities that resonate at a deeper level. Can
include imagery (Landcare Australia’s hand helping Australia), celebrity endorsement (L’Oreal)
or a trade character (Crazy Johns)
4. Values—that help mirror a customer’s self-definition.
Consider brands that use one or more of these elements in your discussions.
INTERACTIVE CLASS EXERCISES
What is perception?
Sensations enter the body through our senses—eyes, ears, nose, mouth and skin. Ask students what senses
are aroused when they walk through a shopping centre. Encourage input like fresh-bread aroma, samples
being cooked in a supermarket, cute puppies in a pet-shop window, music being played in a store, the
warmth of a store in winter when it’s cold outside.
Try to find examples for all senses. Then discuss how this might impact on their behaviour in the shopping
centre. Behaviour doesn’t have to result in a purchase to be favourable.
Exposure
Brainstorm with the class to list different techniques used by marketers to attract attention. For example,
gondolas in supermarkets with price-offs, cute ads, funny ads, competitions, samples, high frequency of
ads, incomplete sentences, celebrities, quality products, third-party endorsements, aromas like fresh coffee,
loud music, spokesperson on microphone.
Attention
Play a series of ads from the radio or television. Ask students what they noticed in one particular ad. This
tends to work better with a run of a few ads, because students will listen attentively to one, and then
attention may wane, giving a more realistic look at the concept of attention.
Interpretation
Ask students if they have ever heard an ad that they didn’t really believe. Why didn’t they believe? Was it
inconsistent with their existing beliefs? How did the marketer want them to perceive the ad?
Weber’s concept of just noticeable difference (JND)
JND can be a lot of fun for students. It is recommended that the instructor acquire some examples from
famous companies, like Kraft, Coca-Cola, Arnott’s or Kellogg’s. On most websites for well-established
brands there is a history segment or some link to historic ads. Students may also raise examples of how
product sizes have been reduced (e.g. burgers at McDonald’s) or product changes that have been made that
do stand out (e.g. different ingredients affect the taste). Note that attention is only one part of the
perception process, so if the change is likely to be where consumers will notice it least, then changes might
be able to be more significant than if the change was for an important part of that product.
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Information processing
Ask students to break into six groups. Appoint a concept in the table below to each group, and ask them to
consider how marketers can work with this type of perceptive tool, inadvertently used by consumers. Also
ask students to consider examples of companies that do it right for their specific concept.
Concept
Marketer’s actions
Examples
Selective exposure
E.g. use same logo across brands
E.g. Arnott’s
Sensory distortion
Selective retention
Selective attention
Stimulus generalisation
Stimulus discrimination
The influence of colour on perception
Ask students the meanings of different colours in our society, e.g. blue refers to calming or refreshing.
Also draw out examples of companies that use the particular colours to achieve a certain perception about
their brand.
Gestalt theory
Instructors should use examples to have some fun with gestalt principles.
Consider the following two examples:
(Source: http://psylux.psych.tu-dresden.de/i1/kaw/diverses%20Material/www.illusionworks.com/html/)
Organisation:
Vase or faces?
Figure and ground:
Old woman or young woman?
It is important for students to also see the relevance of gestalt principles for marketing. Ask students to
break into groups and raise examples of companies that use: figure and ground, grouping (similarity,
proximity and closure) and semiotics. Interesting discussions will come out of the exercise.
Perceived value
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To help students understand the role of perceived value, and how we all want different things from our
purchases, ask students to break into groups and scan through a magazine. Pick out three different ads and
ask students to say why they would buy that product (or not), based on:
 extrinsic versus intrinsic value;
 self-oriented versus others-oriented value; and
 active versus reactive value.
All three categories may not apply to each example.
Perceived risk
Ask students to fill in the following table relating to different types of perceived risk and strategies
marketers use to reduce that level of risk. Encourage specific companies.
Type of risk
Specific example
Marketer’s action(s) to reduce that
risk
Financial risk
Physical or utility risk
Social risk
Ego risk
Opportunity risk
Positioning
Break students into groups to prepare positioning maps for a range of products. For example:
 Airlines
 Biscuits
 Beer or another alcoholic beverage
 Supermarkets
 Six-cylinder cars.
Consider the range of parameters or dimensions that could be used. Students working in a group may find
it difficult to agree on dimensions. Also ask students to prepare a positioning statement for three of the
companies in their positioning map.
Brands
As it becomes more difficult to differentiate one brand from another, brands are becoming an important
asset to stand out from the competition. Name a couple of different products, and ask students to name
some of the brands in that category. What were the first three brands recalled in each? Why?
For example:

Take-away food

Sports

Jeans

Perfume

Toothpaste.
Line and brand extensions
Ask students for examples of line extensions (e.g. new cereals) and brand extensions (Cadbury into cake
mixes and ice creams). Why were these extensions successful or unsuccessful?
The means end chain theory
Break students into groups and ask them to work backwards on well-known advertising campaigns to
determine the particular values the brand is aiming to instil in prospects’ minds. Some examples include:

Kleenex toilet tissue

Heinz baked beans

Cottees cordial
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

Qantas Airways
Novotel hotel chain.
DISCUSSION EXERCISES
1.
Visit the website for Kraft (www.kraft.com.au) and look up one of their products, such as Vegemite.
Take the link to information on how the product has changed over the decades (most often in
response to consumer feedback or rising costs). Also refer to past ads on the product. Discuss the
changes that have been made in a stepped fashion (JND) to reduce awareness by the consumer of
those changes. Consider at least three consecutive changes.
The product chosen will result on different information on brands. However, it is important for
students to show that the changes were not as noticeable at the time as when they are looked at from
a historical perspective.
2.
Find examples of marketing promotions that specifically use stimulus factors to appeal to:
a) Selective exposure
b) Selective attention.
A variety of media types could have been used to demonstrate the point. It’s important that students
consider not only promotional types, but also specific vehicles (e.g. specific magazines).
a) Selective exposure—target specific groups using creative tools to get exposed in the first place or
use the right media vehicle and language targeted very clearly to meet the target market’s needs.
b) Selective attention—the marketer knows their customers, brings out only relevant information
and repeats it.
3.
A 35-year-old mother of two works part-time and lives with her husband in a three-bedroom house in
the suburbs. To relax last Tuesday night she watched ‘Better Homes and Gardens’ and then ‘All
Saints’. The next day she participated in a market research interview, and could only remember an ad
about preventing child abuse and some new cookies put out by one of the cake-mix brands. However,
she can remember quite clearly the recipes and brands used in the cooking segment of Better Homes
and Gardens and also what happened to Terry when the heart attack patient called her name. How
can you explain this memory recall using perception concepts?
The mother’s patterns of memory recall of the ads can be considered a combination of elements. The
child abuse ads were relevant as she thinks of her own children (selective retention), whilst the
cookie ads remind her of her responsibility at the next playgroup meet later in the week (selective
attention). She remembered just a few ads because of their relevance, or alternatively she could have
switched channels or moved from the room when the ads were on (selective exposure). The TV shows
she was watching, however, were indeed relevant either to her lifestyle (cooking for her family)
(stimulus discrimination) or because of her involvement with the drama. Other ads were ignored or
not remembered (selective exposure). The fact that she remembered the ingredients and brands from
the TV show indicates the importance of marketers being creative with product placement and use in
TV shows and movies.
4.
Cut out three advertisements from magazines and determine which (if any) gestalt principles are being
used. Why is the advertiser using this technique to gain attention?
An advertiser might use figure and ground with the use of a celebrity so the consumer thinks of that
celebrity using the product when they are making a purchase decision. Similarity or proximity might
be used when the advertiser wants to be linked with a certain event (Olympics sponsor) or particular
idea relating to their product (softness and puppies). Closure might be used when the advertiser is
aiming for consumers to remember their brand name.
5.
For the following products, identify the perceived risks that a consumer is likely to experience during
the purchase decision process. Discuss how the marketers of these products can reduce these
perceived risks.
a) Winter holiday to New Zealand
b) New beer on the market
c) Fragrance for a partner
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a) Winter holiday to New Zealand—risks most likely are financial (especially if paid up-front),
physical (may break a leg skiing) or utility (don’t enjoy it because of blizzards or floods), ego risk
because the person is a hot-weather person who doesn’t usually enjoy winter weather,
opportunity risk because they have forgone a holiday to the Great Barrier Reef where it’s
warmer. A marketer can provide a money-back guarantee or insurance if the person can’t travel
(if sufficient warning is given), proper advice on best places and times to travel (expertise from
agent), free medical insurance, and the ‘chance of a lifetime’ offer that won’t be available again.
b) New beer on the market—Risks most likely will be utility (don’t like the taste), social risk as peers
scoff at a ‘ladies’ beer, ego risk when the brand makes the man, opportunity risk for limited
income. Marketers can offer six-pack sales or samples in clubs; provide appropriate promotion
and ad campaign with cool celebrities that match target audience; single can sales.
c) Fragrance for a partner—financial risk that they won’t like it (especially if pricey or wanting to
make an impression), physical risk if they are highly allergic, utility risk if it clashes with the
person’s personal scent, social risk because of the wrong brand, ego risk in terms of how the
giver likes to be perceived, opportunity risk since once the fragrance is given, the impression is
made! Marketers can offer a price special or package offer (series of products), samples in store
or magazines; have appropriate celebrities wear it, show value of their brand, etc.
6.
Construct a positioning map for take-away food outlets using two relevant dimensions. Then, mark
the position on the map of five different brands that you know in your local area. Describe the
positioning of these five brands. Do any of these brands need to be repositioned based on how they
perform on your two chosen attributes?
The map will depend on the dimensions chosen. For example, dimensions could have been based on
price, taste, healthy, fast service, etc. Students may find gaps in the existing market, or alternatively
may decide that just two dimensions give too limited a view of the market.
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