Consumer Perception CHAPTER SIX

A Simple Model of Consumer Decision Making Chapter One Slide2 Copyright 2010 Pearson Education, Inc.

Chapter Six Slide3

Overview First: Perception and its major concepts. Second: Elements of Perception. Third: Consumer imagery components. 4

First: Perception and its major concepts 5

Perception and its major concepts Perception is the process by which an individual selects, organizes, and interprets stimuli into a meaningful and coherent picture. Major concepts in Perception: 1- Sensation 2- Absolute threshold 3- Differential threshold 4- Subliminal perception Chapter Six Slide Perception is how we see the world around us. You and your friend might see the same person, thing, or event, yet, you will interpret in different ways. 6

1- Sensation Sensation is the immediate and direct response of the sensory organs (eyes, ears, nose, mouth and fingers) to stimuli. – A stimulus is any unit of input to any of the senses (light, color, sound, odor, and texture). Most of marketing focuses on sight and sound but much research is being done on smell and touch. Chapter Six Slide7

We receive external stimuli through our five senses 8

2- Absolute threshold The absolute threshold is the lowest level at which an individual can experience a sensation.  Advertisers must reach the absolute threshold for consumers to be able to experience their advertising message.  It is interesting that the absolute threshold changes over time. Consumers adapt and get used to a certain ad or message so no longer notice it. This is one of the reasons why advertisers change their ads frequently. 9

3- Differential Threshold (Just Noticeable Difference – J.N.D.) Minimal difference that can be detected (noticed) between two similar stimuli. Weber’s law – The J.N.D. between two stimuli is not an absolute amount but an amount relative (not fixed) to the intensity of the first stimulus. – The stronger the initial stimulus, the greater the additional intensity needed for the second stimulus to be perceived as different. 10

Marketing Applications of the J.N.D. Marketers need to determine the relevant J.N.D. for their products changes – so that negative changes (e.g. increase the price or reduce the package size) are not noticeable to the consumers – and product improvements (e.g. price discount or extra quantity) are very apparent to consumers Chapter Six Slide Marketers also want to be careful when they change the look of a product or packaging, that consumers still recognize the brand and transfer their positive feelings toward the brand. The pictures: Betty Crocker, the general mills symbol, has been updated seven times form 1936 to 1996., but the basic elements of the symbol changed only minimally from one update to the next in order to maintain continuous consumer recognition. 11

Chapter Six Slide12

4- Subliminal Perception Stimuli that are too weak or too brief to be consciously seen or heard (beneath the deferential threshold but not beneath the absolute threshold). Are they perceived and capable of affecting consumer behavior (e.g. purchase behavior)? – Example: It is claimed that writing words of “ eat popcorn and drink Coca-Cola “ in a cinema during the movie for a short period of time that viewers were unaware of seeing the message have increased sales of popcorn and Coca-Cola). Is subliminal perception really effective? – Extensive research has shown no evidence that subliminal advertising can cause behavior changes – Some evidence that subliminal stimuli may influence affective reactions 13

second: elements of perception 14

Elements of Perception Selection Organization Interpretation 15

1- Perceptual Selection Includes the product’s physical attributes, package design, package colors, brand name. Contrast is the most attention compelling attributes of a stimulus (e.g. back and white ad among colored ads). Nature of the stimulus Based on consumers’ familiarity, previous experience or expectations on how the brand performs. Consumers give more attention to familiar stimuli. Some Studies proved that consumers give much concern on stimuli that are not compatible with their expectations. Expectations Consumers’ Needs or wants for a product or service. Example: obese people see ads related to fitness and diet. Motives Consumers are exposed to thousands, if not millions, of stimuli every day. The stimuli that they perceive depends on three factors : 16

Why Are Consumers Likely to Notice This Ad? The Attention- Getting Nature of a contrast 17

Perceptual Selection Important Concepts Selective Attention Consumers have a Heightened awareness when stimuli meet their needs or interest and vice versa Consumers are different in preference of message information (some are interested in price, or product features, others are interested in distribution) and type of medium (newspapers, TV, radio, Internet) Perceptual Defense Consumers subconsciously Screen out stimuli which are psychologically threatening and sometimes distort information that is not consistent with their needs, values and belief (example: smokers pay no attention to the written warning or images on the cigarette packs) Perceptual Blocking Consumers protect themselves from being bombarded with overwhelming stimuli by: Tuning out: blocking stimuli from conscious awareness Using TiVo or DVR (devices enable viewers to skip TV commercials) 18

2- Organization Figure and ground Grouping Closure People tend to organize perceptions into figure-and- ground relationships. Figure is more clearly perceived because it appears to be dominant. in contrast, ground (background) is usually hazy, adding sensory effect. Marketers usually design advertising so that the figure is the noticed stimuli (using contrast). Principles of perceptual organization: 19

Application of the Figure-Ground Principle This ad for the Australian postal service uses an application of the figure- ground principle. 20

Application of the Figure-Ground Principle 21

2- Organization Figure and ground Grouping Closure People group stimuli to form a unified impression or concept. Information grouping helps memory and recall. Marketers use grouping to convey certain desired meaning Example: an advertisement for tea shows a young man and a woman sipping tea in a beautiful room leads consumers to associate drinking tea with romance. Principles of perceptual organization: 22

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2- Organization Figure and ground Grouping Closure People have a need for closure and organize perceptions to form a complete picture. consumers will often, consciously of subconsciously, fill in the missing pieces of a stimuli Incomplete messages serves to involve consumers more deeply in the message and be remembered more than complete messages Principles of perceptual organization: 24

In IBM logo, we perceive the letters 'I', 'B', and 'M' although the shapes we see, in fact, are only lines of white space of differing length hovering above each other. Closure 25

What Element of Perceptual Organization Is Featured in This Ad? Closure 26

3- Interpretation StereotypesPhysical AppearancesDescriptive TermsFirst ImpressionsHalo Effect People hold meanings related to stimuli. That meaning may be different than the advertiser’s because they have unique motives, interests, and experiences For instance, individuals tend to have stereotypes (biased picture in the mind of the meanings of various stimuli). People add these biases to what they see or hear and form a distorted impression. Marketers must be aware of possible consumers sterotypes that influence their perception of the marketers’ stimuli. StereotypesPhysical AppearancesDescriptive TermsFirst ImpressionsHalo Effect 27

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3- Interpretation StereotypesPhysical AppearancesDescriptive TermsFirst ImpressionsHalo Effect Physical appearance of products influences consumers’ judgment. People tend to imitate persons who resemble them, which is Important in selecting models who appear physically in advertisements to persuade consumers with advertised products So that, ad models are likely to be more persuasive StereotypesPhysical AppearancesDescriptive TermsFirst ImpressionsHalo Effect 29

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3- Interpretation Descriptive terms (Verbal messages) in the ad reflect stereotypes that influence the consumer’s perception Advertisers must be careful about using verbal messages that reflects stereotypes against their products Chapter Six Slide StereotypesPhysical AppearancesDescriptive TermsFirst ImpressionsHalo Effect 31

How Does This Ad Depict Perceptual Interpretation? It Contrasts the Powerful Durango car with Less Rugged (weak) cars referred to in the Ad as the “Land Of Tofu.” But One Asian student interpreted the ad as contrasting American cars with cars made in Asia, where tofu plant originated 32

3- Interpretation StereotypesPhysical AppearancesDescriptive TermsFirst ImpressionsHalo Effect First impressions are lasting so a marketer should be careful how they advertise new products (introducing a new product before It has been perfected may prove fatal to the ultimate success because subsequent information about its advantage, even if true, will be often neglected by the memory of its early performance neglected). StereotypesPhysical AppearancesDescriptive TermsFirst ImpressionsHalo Effect 33

3- Interpretation StereotypesPhysical AppearancesDescriptive TermsFirst ImpressionsHalo Effect Consumers perceive and evaluate multiple objects (person, product, service, product line) based on just one dimension For instance, a consumer might consider a clean waiting room as an indication of a good dentist. StereotypesPhysical AppearancesDescriptive TermsFirst ImpressionsHalo Effect 34

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Third: Consumer Imagery components Consumers perceived images about products, services, prices, product quality, retail stores, and manufacturers. Marketer are doing to form these images for sake of their products. 36

Consumer Imagery components 1- Product positioning 2- packaging 3- Product repositioning 4- Perceptual mapping 5- Perceived price 6- Perceived quality 7- Price quality relationship 8- Retail store image 9- Manufactures’ image 10- Perceived risk 37

Perceived Risk Perceived risk is the degree of uncertainty perceived by the consumer as to the consequences (outcomes) of a specific purchase decision: Types of perceived risks: – Functional Risk deals with the risk that the product will not perform as expected – Physical Risk is the risk to hurt self and others – Financial Risk is that the product will not be worth its cost – Social Risk is that the choice of the product might lead to social embarrassment. – Psychological Risk will hurt the consumer's ego – Time Risk is that the time has been wasted in purchasing this product. 38

How Consumers Handle Risk Seek Information so that they have more knowledge when they purchase Stay Brand Loyal, thereby avoiding risk by sticking with a known product Select by Brand Image because they may already know and trust the brand, perhaps from buying a different product by the same brand or company Rely on Store Image: reputable store Buy the Most Expensive Model, assuming that the price/quality relationship will safely deliver them the best product Seek Reassurance through money-back guarantees, warranties, seals of approval and free trials. 39