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CHAPTER SIX Consumer Perception
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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. Reality is a totally personnal phenomenon, based on the conssumer’s needs, wants, values adn personal experiences. Thus perceptions are more improtant to undertstand then the reality. Trhough advertising, marketeers try to shape consumers’ perceptions. Chapter Six Slide Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall
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Chapter-5
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Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall
6.1 Perception The process by which an individual selects, organizes, and interprets stimuli into a meaningful and coherent picture of the world Elements of Perception 1- Sensation 2- Absolute threshold 3- Differential threshold 4- Subliminal perception 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. This interpretation is highly individualized and depends on each person’s own needs, values, and expectations. These are the four major elements of perception. They will be described in detail on the following slides. Chapter Six Slide Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall
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Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall
1. 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. Marketing Applications: Sight Sound Smell Touch Sensation is the response of the sensory organs, including the eyes, ears, nose, mouth, and skin. An unchanged environment, regardless o fthe strength o fthe sensory input, provides little or no sensation at all. In situation in which there is great deal of sensory input, the senses do not detect small changes or differences in inputs. Most of marketing focuses on sight and sound but much research is being done on smell and touch. The web link on this page connects to a company that uses smell as a marketing tactic. People associate memories with smell. Research shows how fragrance influences the in-store experience of consumers. Touching a product influences persuasion. Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall Chapter Six Slide
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2- The absolute Threshold
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2- The absolute Threshold
The absolute threshold is the lowest level at which an individual can experience a sensation. Implication to marketing: To change the advertising to avoid absolute threshold to decrease. To use methoods that will increase sensory input. E.g: experiential marketing, sophisticated scented ads, Sophisticated inserts and pop ups, Ambush advertising, Product placement Advertisers must reach the absolute threshold for consumers to be able to experience their advertising tactic. It is interesting that the absolute threshold changes over time. Consumers adapt (sensory adaptation) 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. Different methods to increase sensory input: Experiential Marketing Sophisticated scented ads Sophisticated inserts and pop ups Ambush advertising Product placement Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall Chapter Six Slide
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2- Absolute Threshold Marketing Implications
Experiential Marketing Sophisticated scented ads Sophisticated inserts and pop ups Ambush advertising Product placement James Bond Xperia Replacement Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall Chapter Six Slide
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It is easy, even a kid can play with Xperia Z3
XPERIA Z3 LAUNCH EVENT- PS4 JOKE VIRAL VIDEO Concept : Unexpected Performance, Different Joke describing PS4 integration of Xperia Z3 It is easy, even a kid can play with Xperia Z3
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2 dimensional chalk drawing
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3- Differential Threshold (Just Noticeable Difference – j.n.d.)
Minimal difference that can be detected between two similar stimuli (perception is relative and comparable) 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. Marketers are very concerned with the differential threshold, which is also called the just noticeable difference. It was a German scientist named Ernst Weber who realized that this difference was not a fixed amount. The best example is when you buy a low-priced product like a cup of coffee from Starbucks. A $1 increase in your tall coffee would be noticed by you. But if you were buying a laptop whose price changed from $455 to $456 you might not even notice. Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall Chapter Six Slide
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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 Marketers make changes in their products over time. Sometimes they have to make negative changes, perhaps increase price or reduce package size. They want to make this negative change subtle enough that most consumers will not notice. On the other hand, a marketer might want to make positive changes to the product. They would want to determine how small they can make this change so that it is noticeable to the end consumer but does not cost the marketer excessive amounts of money. Marketers also want to be careful that when they change the look of a product or packaging, that consumers still recognize the brand and transfer their positive feelings toward the brand. Betty Crocker symbol of General Mills Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall Chapter Six Slide
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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 Kellogg’s might want to change their ingredients, either to make the product healthier or because they have secured lower-priced raw materials. They might want to reduce package size to avoid a price increase and they would not want this to be noticed. Perhaps Tony the Tiger could look a little different. At one point, Pillsbury made a decision to make the Pillsbury Dough Boy a bit thinner. They wanted to make sure he still was cute but looked a bit more fit and lean. Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall Chapter Six Slide
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3- 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 People are stimulated below their consious level of awareness. People have been fascinated by subliminal perception for over 50 years. The question is whether stimuli that are not consciously sensed can still be perceived and are therefore capable of altering behavior. At this point, there is no research that shows that it directly changes attitudes or purchase behavior. No doubt, there will continue to be research on this subject as many feel that there is indeed an effect from subliminal perception. Example: Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall Chapter Six Slide
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Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall
6.2 Aspects of Perception 1- Selection 2- Organization 3- Interpretation The study of perception is largely the study of what we subconsiously add to or subtract from raw sensory inputs to produce our own private picture of the world. Consumers are bombarded by stimuli and are therefore very selective as to what messages and information they perceive. As new information comes to their mind, it is organized within their mind. Finally, consumers interpret the stimuli based on their needs, expectations, and experience. Each of these stages will be examined on the following slides. Consumers are; 1- very selective to which stimuli they will recognise 2- they subconsciously organise the stimuli that they recognised 3- They interpret such stimuli (they give meaning to them) subjectively in accordance with their personal needs, expectations, and experiences. Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall Chapter Six Slide
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1 - Perceptual Selection
Selection Depends Upon: Includes the product’s physical attributes, package design, brand name, advertising and more… Nature of the stimulus Based on familiarity, previous experience or expectations. Expectations Needs or wants for a product or service. Motives Contrast Consumers are exposed to thousands, if not millions, of stimuli every day. The stimuli that they perceive depends on the three factors on this slide – nature of the stimulus, expectations, and motives. i- Think of the last time you went to the supermarket – what products did you notice? Why? Perhaps it was the nature of the stimulus, the packaging of the product. İi- You might notice a sale on your favorite brand because you have positive expectations of how that brand performs. İii- Finally, your motive in going to the supermarket might have been to purchase eggs and milk. This might lead you to notice promotions or point-of-purchase displays for these products. Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall Chapter Six Slide
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Which white square is smaller?
Contrast: According to the principles of contrast, the stimuli that contradict most with the background or the expectations of people receive maximum attention
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Some other attention factors
Light Colour Brights Colour Intensity: Contrast Intensity Size Repetition Motion Novelty and familiarity Size God is great God is great
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Why Are Consumers Likely to Notice This Ad?
Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall Chapter Six Slide
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The Attention-Getting Nature of a Dramatic Image
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Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall
Discussion Questions What marketing stimuli do you remember from your weekend so far? Why do you think you selected these stimuli to perceive and remember? If you think about it, you might be surprised at what you have seen today. Did you go online to Google? If so, you probably had many contextual search ads appearing on your screen. Also consider outdoor advertisements you may have seen, including billboards, taxi tops, and rail advertising. Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall Chapter Six Slide
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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 e.g: smokers towards cigarette advertisements Perceptual Blocking Consumers avoid being bombarded by: Tuning out TiVo These four concepts are very important to consider when understanding how consumers select which stimuli they will perceive. In general, they are selective as to what they are exposed to – what messages they seek out. Once exposed, they are selective of their attention to some messages over others. Consumers might even screen out or block messages that they consider threatening or overwhelming. Chapter Six Slide Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall
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Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall
2- Organization Principles People tend to organize perceptions into figure-and-ground relationships. The background is usually perceived as hazy, indefinite, and continious. Marketers usually design so the figure is the noticed stimuli. Figure and ground Grouping Closure Organization refers to how people organize stimuli into groups and perceive them as a whole. This is referred to as Gestalt which means pattern in German. There are three major principles of perceptual organization, including figure and ground, grouping, and closure. The first, figure and ground, has to do with contrast. An advertiser wants just enough contrast so that the figure is noticed but that the background adds a sensory effect. Product placement, when a product appears in a movie or television show, can be considered a figure and ground issue. The advertiser wants the product (figure) to be noticed as it blends in with the ground (character in the show). This web link takes you to a very fun site called sporcle. The quiz that is opened for you refers to the top brands, organized by product category. Is this similar to how you organize these brands? How did you do on the test? Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall Chapter Six Slide
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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. Grouping is common in perceptual organization. Whether it is numbers (phone numbers) that are grouped in 3 or 4 digits OR images in an ad, consumers will group stimuli together to organize them. This grouping helps memory and recall. Marketing Implication: It is important to group the product with a sence of emotion or attmosphere or social environment or with a mood to make the consumers to associate the product with the desired feeling. Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall Chapter Six Slide
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The mind forms shapes that don't exist
Grouping of Image The mind forms shapes that don't exist
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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 Individuals organize their perceptions to form a complete picture. Our minds have a need for closure and we will work to fill in the missing information when we are presented incomplete stimuli. Marketing Implication: The ads that need to be turn upside down to see it Giving a task Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall Chapter Six Slide
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What Element of Perceptual Organization Is Featured in This Ad?
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Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall
Closure Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall Chapter Six Slide
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Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall
3- Interpretation People add their biased pictures to the received sensory stimuli and form distorted impressions. People hold meanings related to stimuli Triggers of strereotypes: Physical appearences Descriptive terms First impressions Halo effect Stereotypes People tend to carry biassed pictures in their mind of the meanings or various stimuli, called stereotypes. Perceptual interpretation occurs because consumers have unique motives, interests, and experiences. How people interpret often reveals a lot about themselves. For instance, individuals tend to have stereotypes due to physical appearances, descriptive terms, first impressions, and the halo effect. These will be examined in the next couple of slides. Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall Chapter Six Slide
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Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall
Interpretation Physical Appearances Descriptive Terms First Impressions Halo Effect Physical Appearances Descriptive Terms First Impressions Halo Effect Positive attributes of people they know to those who resemble them Important for model selection We often make decisions based on how people or products appear. A beautiful spokesperson might be perceived as possessing expertise for beauty products. A certain color to a food might make us think it is healthier. The web link is an example of a tool marketers can use on their website to give a “human” touch. There are many attractive hosts to choose from. Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall Chapter Six Slide
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Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall
Interpretation Physical Appearances Descriptive Terms First Impressions Halo Effect Verbal messages reflect stereotypes The choice of descriptive terms for names and advertisement in services are particularly important due to the intangible nature of services. In this ad, the marketer has stereotyped the person who eats a cheeseburger vs. tofu and applied them in a descriptive sense to their product. Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall Chapter Six Slide
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How Does This Ad Depict Perceptual Interpretation?
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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
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Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall
Interpretation Physical Appearances Descriptive Terms First Impressions Halo Effect 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 First impressions are lasting so a marketer should be careful how they advertise new products. Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall Chapter Six Slide
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Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall
Interpretation Physical Appearances Descriptive Terms First Impressions Halo Effect Physical Appearances Descriptive Terms First Impressions Halo Effect Consumers perceive and evaluate multiple objects based on just one dimension e.g: Brand name, spokepers, waiting room of denstist With the halo effect, a person uses just one dimension in evaluating a person, product, or service. For instance, a consumer might consider a clean waiting room as an indication of a good dentist. For this reason, marketers use the halo effect when licensing names of products or choosing spokespeople. Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall Chapter Six Slide
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Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall
6.3 Consumer Imagery Consumers have a number of enduring images or perceptions towards products or services or brands. Products and brands have symbolic value for individuals, who evaluate them with their personal pictures of themlseves. Teh following section examines consumers’ perceived images of products, brands, services, prices, product quality, retail stores and manufacturers. Chapter Six Slide Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall
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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 Poisitining is the unique position of a product that occupies in consumers’ minds Conveys the product in terms of how it fulfills a need Successful positioning creates a distinctive, positive brand image It is important to realize that good position defines the product in a unique place in the consumer’s mind when compared to competing products. This place is the result of the benefits that are offered by the product and how they are different or better than those of the competitor’s products. Chapter Six Slide Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall
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Which Concepts of Perception Are Applied in These Ads?
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The Principle Of Contrast
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Packaging as a Positioning Element
Packaging conveys the image that the brand communicates to the buyer. Color, weight, image, and shape are all important. A consumer often derives their understanding of a product and its benefits from the packaging. A good example would be shampoo. The shape of the bottle, the choice of colors and symbols, and even the cap can help the consumer position the product and determine if the product’s benefits are gentle, color safe, strong cleaning, or conditioning. Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall Chapter Six Slide
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Product Repositioning
Repositioning might be necessary because: Increased competition, increased number of products with same attributes Changing consumer tastes and preferencies Many marketers will need to reposition their product over time due to either market changes or consumer preference changes. This is often challenging to marketers, especially if their product had been perceived negatively in the marketplace. Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall Chapter Six Slide
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Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall
Perceptual Mapping Perceptual Mapping enables marketers to determine how tehy want ther product or services to appear to cınsumers in relation to competitors’ brands on one or more relevant characteristics. An analytical technique that enables marketers to plot graphically consumers’ perceptions concerning product attributes of specific brands Perceptual mapping helps the marketer visualize how their product is positioned in the consumer’s mind. It is a graph of products within a category based on two major benefits or attributes. It allows them to see gaps in the positioning of all the products and identify areas for new products. Chapter Six Slide Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall
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Presence % relative to category average
Brand Positioning Map TV MARKET Low High Growing Equity Strong Little Declining Olympic Clean Sheet Fading Star Classic Little Tiger Weak Specialist Defender Limited Fighter TOTAL High Low Presence % relative to category average Growing Equity Strong Little Declining Olympic Clean Sheet Fading Star Classic Little Tiger Weak Specialist Defender 15-24 Chapter Six Slide
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Positioning of Services
As services are intangible, image becomes a key factor when positioning services Visuals Tangible reminders of offerings Services often want a differentiated positioning strategy to market several versions of their service to different markets. Positioning of services has extra challenges due to the intangible nature of a service. You cannot hold it in your hand and look at it – you must make your decision based on visual images and tangible cues, such as delivery trucks, storefronts, or other marketing tactics. Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall Chapter Six Slide
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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
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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 Sharp image Tangible visual Contrast Shocking Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall Chapter Six Slide
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Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall
Perceived Price Peceived price should reflect the value that the customer receives from the purchase Reference prices – used as a basis for comparison in judging another price Internal: Consumer’s own experience External:the advertised price Perceived price should reflect the value that the customer receives from their purchase. It is important for customer satisfaction that the consumer sees their price as fair. To determine fairness, consumers look at other prices that they know. Comparative prices might be ones that the consumer knows (internal) or prices that the marketer uses in their advertising as is the case with an ad that states “compare to $100 at our competitor.” Example: Flat TV perceived prices over time. Price discounts have to be handle in causition. Price discounts immediately increase buying intentions, but also lowers consumers’ future reference prices. Chapter Six Slide Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall
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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 These are three pricing strategies that one set of researchers proposed. They would be effective when considering services and the customer perception of the value that the service delivers. Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall 49 Chapter Six Slide
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Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall
Perceived Quality Perceived Quality of Products Intrinsic: Physical characteristics, colour, flavor, aroma, size) Extrinsic Cues: Brand name, reputation, location within store, country of origin Consumers perceive the quality of a product by intrinsic and extrinsic cues. Those that are intrinsic concern the physical characteristics of the product. These include color, flavor, aroma, and size. Many times a consumer will use extrinsic cues, those that are not really part of the physical product including brand name, reputation, and location within store. If a consumer has no experience with a product, they are more likely to use external cues. An example of external cues is country of origin. A chocolate is from Switzerland so it must be good even though you know nothing of the color or taste of the chocolate. Example: Smirnoff- Russian votka imaage, but from US Haagen Dazs: Scandinavian imaage but from US. Chapter Six Slide Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall
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Measuring Perceptions of Brand Luxury
This survey was used in a study to measure perceptions of brand luxury. The benefit of “luxury” would be one that many marketers would use, including hotels, cars, and jewelry. Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall Chapter Six Slide
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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 Services have unique characteristics that make quality a more complex issue. First of all, services are intangible. It is hard for consumers to compare them side by side without having to use external cues. Secondly, they can differ from day to day. We all know that we can get a haircut from a barber or hair stylist on one day that is vastly different from the quality of a previous cut. Services are difficult because they are perishable, they cannot be put on a shelf and left standing from day to day. Finally, the products are consumed and produced at the same time, making quality control hard for the service marketer. The SERVQUAL scale measures the gap between customer expectations of a service before it is provided versus their perceptions after the service is provided. The scale measures five dimensions, including reliability, responsiveness, assurance, empathy, and tangibility Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall Chapter Six Slide
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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.) Value is the trade-off between perceived benefits and perceived sacrifice. As such, a consumer helps understand the benefits many times in terms of the monetary sacrifice. The more they pay, the better product or service they get. Price positioningn strtegy need to be evaluaated carefully. Price discounts or product bundle prommotions may cause the conusmers’ to think that the product quality is lower. Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall Chapter Six Slide
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How Can This Ad Affect the Service’s Perceived Quality?
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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
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Discussion Questions When have you used price as an indicator of quality? Were you correct? You have probably done this many times for a service. Was it always better? Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall Chapter Six Slide
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Which of the Ad’s Elements Conveys the Product’s Quality?
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The Slogan on the Ad’s Bottom Left Reads “Perfection Has Its Price”
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Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall
Retail Store Image Brands carried Prices Level of service Store ambiance Clientele Product assortment Discounts The image and subsequent positioning of a retail store is a result of the factors listed above. Of considerable interest are the brands that the store carries. There is an association formed between the retailer and their brands. Research has shown that strong brands will improve the image of a retailer in many situations. Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall Chapter Six Slide
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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 Manufacturers want their corporate image to be positive so that their products and brands can be positively perceived in the marketplace. Institutional advertising can do this in addition to exhibits and sponsorship of community events. Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall Chapter Six Slide
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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 Consumer purchase decisions are determined by the degree of risk that consumers perceive, and their tolerance for risk. The major types of risk are listed in this slide. The first, functional risk, deals with the risk that the product will not perform as expected. Physical risk is the risk to self and others. Financial risk is that the product will not be worth its cost and social risk is that the choice of the product might lead to social embarrassment. Psychological risk is that a poor product choice will hurt the consumer's ego and time risk is that the time has been wasted in purchasing this product. Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall Chapter Six Slide
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How Consumers Handle Risk
Seek Information Stay Brand Loyal Select by Brand Image Rely on Store Image Buy the Most Expensive Model Seek Reassurance How consumers handle risk will differ by their own individual strategy. That being said, there are a handful of strategies that people tend to use when dealing with risk. The first of these is to seek information so that they have more knowledge when they purchase. Consumers can also stay brand loyal, thereby avoiding risk by sticking with a known product. Consumers can select by brand image to reduce their risk because they may already know and trust the brand, perhaps from buying a different product by the same brand or company. Some consumers will rely on store image to help them reduce risk. Some customers buy the most expensive model assuming that the price/quality relationship will safely deliver them the best product. Finally, consumers seek reassurance through money-back guarantees, warranties, seals of approval and free trials. Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall Chapter Six Slide
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Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall
Homework Dead Line: 2 May 2016, after the course Style: Printed hand out. Max 10 slides Subject: Write and discuss Hofstede’s Cultural Dimensions Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall Chapter Six Slide
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THANKS YOU
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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
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