CHAPTER SIX Consumer Perception

Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall Learning Objectives To Understand the Sensory Dynamics of Perception. To Learn About the Three Elements of Perception. To Understand the Components of Consumer Imagery and Their Strategic Applications. Here is an outline of the topics for Chapter Six. Chapter Six Slide Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall

Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall 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 Absolute threshold Differential threshold Subliminal perception Chapter Six Slide Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall

Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall Sensation Sensation is the immediate and direct response of the sensory organs to stimuli A stimulus is any unit of input to any of the senses. The absolute threshold is the lowest level at which an individual can experience a sensation. Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall Chapter Six Slide

Differential Threshold (Just Noticeable Difference – j.n.d.) Minimal difference that can be detected between two similar stimuli Weber’s law The j.n.d. between two stimuli is not an absolute amount but an amount relative 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. Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall Chapter Six Slide

Marketing Applications of the J.N.D. Marketers 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 Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall Chapter Six Slide

Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall Discussion Question How might a cereal manufacturer such as Kellogg’s use the j.n.d. for Frosted Flakes in terms of: Product decisions Packaging decisions Advertising decisions Sales promotion decisions Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall Chapter Six Slide

Subliminal Perception Stimuli that are too weak or too brief to be consciously seen or heard They may be strong enough to be perceived by one or more receptor cells. Is it effective? Extensive research has shown no evidence that subliminal advertising can cause behavior changes Some evidence that subliminal stimuli may influence affective reactions Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall Chapter Six Slide

Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall Aspects of Perception Selection Organization Interpretation Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall Chapter Six Slide

Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall Perceptual Selection Selection Depends Upon: Nature of the stimulus Includes the product’s physical attributes, package design, brand name, advertising and more… Expectations Based on familiarity, previous experience or expectations. Motives Needs or wants for a product or service. Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall Chapter Six Slide

Why Are Consumers Likely to Notice This Ad? Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall Chapter Six Slide

The Attention-Getting Nature of a Dramatic Image Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall Chapter Six Slide

Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall Discussion Questions What marketing stimuli do you remember from your day so far? Why do you think you selected these stimuli to perceive and remember? Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall Chapter Six Slide

Perceptual Selection Important Concepts Selective Exposure Consumers seek out messages which: Are pleasant They can sympathize Reassure them of good purchases Selective Attention Heightened awareness when stimuli meet their needs Consumers prefer different messages and medium Perceptual Defense Screening out of stimuli which are threatening Perceptual Blocking Consumers avoid being bombarded by: Tuning out TiVo Chapter Six Slide Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall

Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall Organization Principles People tend to organize perceptions into figure-and-ground relationships. The ground is usually hazy. Marketers usually design so the figure is the noticed stimuli. Figure and ground Grouping Closure ? Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall Chapter Six Slide

Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall Organization Principles Figure and ground Grouping Closure People group stimuli to form a unified impression or concept. Grouping helps memory and recall. Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall Chapter Six Slide

Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall Organization Principles People have a need for closure and organize perceptions to form a complete picture. Will often fill in missing pieces Incomplete messages remembered more than complete Figure and ground Grouping Closure Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall Chapter Six Slide

What Element of Perceptual Organization Is Featured in This Ad? Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall Chapter Six Slide

Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall Closure Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall Chapter Six Slide

Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall Discussion Question Do you agree you remember more of what you have NOT completed? How might a local bank use this in their advertising? Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall Chapter Six Slide

Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall Interpretation People hold meanings related to stimuli Stereotypes Physical Appearances Descriptive Terms First Impressions Halo Effect Stereotypes Physical Appearances Descriptive Terms First Impressions Halo Effect Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall Chapter Six Slide

Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall Interpretation Stereotypes Physical Appearances Descriptive Terms First Impressions Halo Effect Stereotypes Physical Appearances Descriptive Terms First Impressions Halo Effect Positive attributes of people they know to those who resemble them Important for model selection Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall Chapter Six Slide

Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall Interpretation Stereotypes Physical Appearances Descriptive Terms First Impressions Halo Effect Verbal messages reflect stereotypes Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall Chapter Six Slide

How Does This Ad Depict Perceptual Interpretation? Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall Chapter Six Slide

Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall It Contrasts the Powerful Durango with Less Rugged Referred to in the Ad as the “Land Of Tofu.” Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall Chapter Six Slide

Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall Interpretation Stereotypes Physical Appearances Descriptive Terms First Impressions Halo Effect Stereotypes Physical Appearances Descriptive Terms First Impressions Halo Effect First impressions are lasting The perceiver is trying to determine which stimuli are relevant, important, or predictive Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall Chapter Six Slide

Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall Interpretation Stereotypes Physical Appearances Descriptive Terms First Impressions Halo Effect Stereotypes Physical Appearances Descriptive Terms First Impressions Halo Effect Consumers perceive and evaluate multiple objects based on just one dimension Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall Chapter Six Slide

Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall Product Positioning Establishing a specific image for a brand in the consumer’s mind in relation to competing brands Conveys the product in terms of how it fulfills a need Successful positioning creates a distinctive, positive brand image Chapter Six Slide Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall

Which Concepts of Perception Are Applied in These Ads? Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall Chapter Six Slide

The Principle Of Contrast Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall Chapter Six Slide

Packaging as a Positioning Element Packaging conveys the image that the brand communicates to the buyer. Color, weight, image, and shape are all important. Repositioning might be necessary because: Increased competition Changing consumer tastes Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall Chapter Six Slide

Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall Perceptual Mapping An analytical technique that enables marketers to plot graphically consumers’ perceptions concerning product attributes of specific brands Chapter Six Slide Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall

Perceptual Mapping Figure 6.9 Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall Chapter Six Slide

Positioning of Services Image is a key factor for services Services often want a differentiated positioning strategy to market several versions of their service to different markets. Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall Chapter Six Slide

Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall Which Elements of This Ad Convey the Restaurant’s Perceptual Position and How? Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall Chapter Six Slide

Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall The Steak Knife and the Reference to Vegetarians Convey The Position of the Restaurant as a Well-Established Steakhouse Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall Chapter Six Slide

Perceived Price and Perceived Quality Reference prices – used as a basis for comparison in judging another price Internal External Perceived Quality of Products Intrinsic vs. Extrinsic Cues Chapter Six Slide Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall

Three Pricing Strategies Focused on Perceived Value - Table 6.4 Pricing Strategy Provides Value By… Implemented As… Satisfaction-based pricing Recognizing and reducing customers’ perceptions of uncertainty, which the intangible nature of services magnifies Service guarantees Benefit-driven pricing Flat-rate pricing Relationship pricing Encouraging long-term relationships with the company that customers view as beneficial Long-term contracts Price bundling Efficiency pricing Sharing with customers the cost savings that the company has achieved by understanding, managing, and reducing the costs of providing the service Cost-leader pricing Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall 38 Chapter Six Slide

Measuring Perceptions of Brand Luxury Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall Chapter Six Slide

Perceived Quality of Services Difficult due to characteristics of services Intangible Variable Perishable Simultaneously Produced and Consumed SERVQUAL scale used to measure gap between customers’ expectation of service and perceptions of actual service Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall Chapter Six Slide

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.) Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall Chapter Six Slide

How Can This Ad Affect the Service’s Perceived Quality? Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall Chapter Six Slide

Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall It Uses a Process Dimension in Advertising a Newly-Formed Business Class on an Airline Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall Chapter Six Slide

Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall Discussion Questions When have you used price as an indicator of quality? Were you correct? Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall Chapter Six Slide

Which of the Ad’s Elements Conveys the Product’s Quality? Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall Chapter Six Slide

The Slogan on the Ad’s Bottom Left Reads “Perfection Has Its Price” Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall Chapter Six Slide

Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall Retail Store Image Brands carried Prices Level of service Store ambiance Clientele Product assortment Discounts Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall Chapter Six Slide

Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall Manufacturer’s Image Favorable image tied to new product acceptance Companies sponsor community events to enhance images Product and institutional images Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall Chapter Six Slide

Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall Perceived Risk The degree of uncertainty perceived by the consumer as to the consequences (outcome) of a specific purchase decision Types Functional Risk Physical Risk Financial Risk Social Risk Psychological Risk Time Risk Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall Chapter Six Slide

How Consumers Handle Risk Seek Information Stay Brand Loyal Select by Brand Image Rely on Store Image Buy the Most Expensive Model Seek Reassurance Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall Chapter Six Slide

Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted, in any form or by any means, electronic, mechanical, photocopying, recording, or otherwise, without the prior written permission of the publisher. Printed in the United States of America. Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall Chapter Six Slide