Chapter 6 Consumer Perception

Perception The process by which an individual selects, organizes, and interprets stimuli into a meaningful and coherent picture of the world.

Elements of Perception Sensation The absolute threshold The differential threshold Subliminal perception

Sensory Receptors The human organs (eyes, ears, nose, mouth, skin) that receive sensory inputs.

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

Differential Threshold The minimal difference that can be detected between two stimuli. Also known as the j.n.d. (just noticeable difference).

Weber’s Law A theory concerning the perceived differentiation between similar stimuli of varying intensities (i.e., the stronger the initial stimulus, the greater the additional intensity needed for the second stimulus to be perceived as different).

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

Subliminal Perception Perception of very weak or rapid stimuli received below the level of conscious awareness.

Is Subliminal Persuasion Effective? Extensive research has shown no evidence that subliminal advertising can cause behavior changes Some evidence that subliminal stimuli may influence affective reactions

Aspects of Perception Selection Organization Interpretation

Perceptual Selection Depends on two major factors Consumers’ previous experience (expectations) Consumers’ motives

Some Marketing Variables Influencing Consumer Perception Nature of Product Physical Attributes of Product Package Design Brand Name Advertisements & Commercials Position of Ad Editorial Environment

Concepts Concerning Selective Perception Selective Exposure Selective Attention Perceptual Defense Perceptual Blocking

Principles of Perceptual Organization Figure and ground Grouping Closure Zeigernik effect

Zeigernik Effect A person beginning a task needs to complete it. When he or she is prevented from doing so, a state of tension is created that manifests itself in improved memory for the incomplete task.

Distorting Influences Physical Appearances Stereotypes Irrelevant Cues First Impressions Jumping to Conclusions Halo Effect

Issues In Consumer Imagery Product Positioning and Repositioning Positioning of Services Perceived Price Perceived Quality Retail Store Image Manufacturers Image Perceived Risk

Positioning Establishing a specific image for a brand in relation to competing brands.

Reposition Changing the way a product is perceived by consumers in relation to other brands or product uses.

Perceptual Mapping A research technique that enables marketers to plot graphically consumers’ perceptions concerning product attributes of specific brands.

Perceptual Mapping Fashion Coverage More More Copy Artwork Splash More Copy More Artwork Crash Bash Splash Club Coverage

Efficiency/Convenience Ambient Background Conditions Social Conditions The Service Environment: Environmental Variables Most Important to Bank Customers Privacy Efficiency/Convenience Ambient Background Conditions Social Conditions Aesthetics

Issues in Perceived Price Reference prices Tensile and objective price claims Was $199 Now $99 Sale! 20% to 70% Off!

Reference Price Any price that a consumer uses as a basis for comparison in judging another price.

Was $199 Sale! $89 Now $99 Reference Prices External Reference Price Internal Reference Price Was $199 Now $99 Sale! $89

Tensile and Objective Price Claims Evaluations least favorable for ads stating the minimum discount level Ads stating maximum discount levels are better than stating a range Save 10% or more Save upto 50%

Perceived Quality Perceived Quality of Products Intrinsic vs. Extrinsic Cues Perceived Quality of Services Price/Quality Relationship

Intrinsic Cues Physical characteristics of the product (such as size, color, flavor, or aroma) that serve to influence the consumer’s perceptions of product quality.

Extrinsic Cues Cues external to the product (such as price, store image, or brand image) that serve to influence the consumer’s perception of a product’s quality.

Characteristics of Services Intangible Variable Perishable Simultaneously Produced and Consumed

Table 6.1 SERVQUAL Dimensions for Measuring Service Quality DIMENSION DESCRIPTION Tangibles Appearance of physical facilities, equipment, personnel, and communication materials Reliability Ability to perform the promised service dependably and accurately Responsiveness Willingness to help customers and provide prompt service Assurance Knowledge and courtesy of employees and their ability to convey trust and confidence Empathy Caring, individualized attention the firm provides its customers

Figure 6.11 A Conceptual Model of the Components of Transaction Satisfaction Evaluation of Service Quality (SQ) Evaluation of Product Quality (PQ) Transaction Satisfaction (TSAT) Evaluation of Price (P)

Figure 6.12 Conceptual Model of the Behavioral Consequences of Service Quality Intentions +$ Ongoing Revenue Increased Spending Price Premium Referred Customers Superior Favorable Remain Behavior Financial Consequences -$ Decreased Spending Lost Customers Costs to Attract New Customers Inferior Unfavorable Defect Focus of present study Empirical links demonstrated in macro studies

Price/Quality Relationship The perception of price as an indicator of product quality (e.g., the higher the price, the higher the perceived quality of the product).

A. Conceptual Relationship of Price Effect Figure 6.13 Conceptual Model of the Effects of Price, Brand Name, and Store Name on Perceived Value Objective Price + + Perception of Price Perceived Quality Perceived Sacrifice Perceived Value - + - + Willingness to Buy A. Conceptual Relationship of Price Effect

Figure 6.13 continued + + + + - + B. Extended Conceptualization Brand Name Store Name Objective Price + + Perception of Price Perception of Brand Perception of Store + Perceived Quality Perceived Sacrifice + - + Perceived Value B. Extended Conceptualization to Include Brand Name and Store Name - + Willingness to Buy

Perceived Risk The degree of uncertainty perceived by the consumer as to the consequences (outcome) of a specific purchase decision.

Types of Perceived Risk Functional Risk Physical Risk Financial Risk Psychological Risk Time Risk

How Consumers Handle Risk Seek Information Stay Brand Loyal Select by Brand Image Rely on Store Image Buy the Most Expensive Model Seek Reassurance