1. CHAPTER 6
CONSUMER PERCEPTION

2. PERCEPTION
Perception is defined as the process by which an individual selects, organizes and interprets stimuli into a meaningful and coherent picture of the world.
How each person recognizes, selects, organizes and interprets the stimuli is a highly individual process based on each person’s needs, values and expectations.

3. DYNAMICS OF PERCEPTION
Perception is the result of two different kinds of inputs that interact to form the personal pictures that each individual experiences.
Physical stimuli from the outside environment
Expectations based on previous experiences

4. Aspects of Perception Perceptual selection
What stimuli get selected depends on three major factors –
Nature of the stimuli - Nature of the product
Physical attributes
Package design
Brand name
Advertisements/Commercials
Position of the ad

5. People tend to perceive the things they need or want.
Expectations
People usually see what they expect to see based on familiarity, previous experience & expectations.
Motives
People tend to perceive the things they need or want.
An individual’s perceptual process simply attunes itself more closely to those elements in the environment that are important to that person.

6. Selective exposure
Selective attention
Perceptual defense
Perceptual blocking
These factors give rise to four important concepts concerning perception -

7. 2. Perceptual organization
People do not experience the numerous stimuli they select from the environment.
They tend to organize them into groups and perceive them as unified whole.
Three basic principles of perceptual organizations-
Figure-and-ground
Groupings
closure

8. 3. Perceptual interpretation
The interpretation of stimuli is uniquely individual.
How close a person’s interpretations are to reality depends on the clarity of the stimulus, the past experiences of the perceiver and his/her motives or interests at the time of perception.

9. Perceptual distortion
Physical appearance
Stereotypes
First impressions
Jumping to conclusions
Halo effects

10. CONSUMER IMAGERY Product positioning
Different brands in the same category can be differentiated if the marketers stress the benefits rather than the product’s physical features.
A good positioning strategy should have a two-pronged meaning:
Congruent with the consumer’s need
Featuring the brand against the competition

11. Major positioning strategies
Umbrella positioning
Position against the competition
Positioning based o a specific benefit
Finding an “unowned” position
Filling several positions

12. Product repositioning
The marketers may be forced to reposition their product –
In response to market events
To satisfy consumer preferences

13. Positioning of services
As services are intangible, image becomes a key factors in differentiating a service from its competition.
The marketing objective is to enable the consumer to link a specific image with a specific brand name.
Visual images and tangible reminders of the service
Several versions of the service offered to different market segments by using a differentiated positioning strategy
The physical environment

14. Perceived price
How a consumer perceives a price has a strong influence on both purchase intention and purchase satisfaction.
Reference prices
A reference price is any price that a consumer uses as a basis for comparison in judging another price.
External reference price: Offering lower price by the advertisers
Internal reference price: Retrieved by the consumer from memory.

15. According to the acquisition-transaction utility theory, two types of utility are associated with consumer purchases.
Acquisition utility represents the consumer’s perceived economic gain or loss associated with a purchase.
It is a function of product utility and purchase price.
Transaction utility concerns the perceived pleasure or displeasure associated with the financial aspect of the purchase.
It is determined by the difference between the internal reference price and the purchase price.

16. Tensile and objective price claims
The semantic cues of the phrase used to communicate the price-related information may affect consumers’ price perception.
Tensile price claims - A range of price discount
(Save up to 60%)
Objective price claims- A single discount level
(Save 25%)

17. Perceived quality
Consumers often judge the quality of a product or service on the basis of various informational cues that they associate with the product.
Intrinsic cues: Physical characteristics of the product
Extrinsic cues: Cues that are external to the product

18. Perceived quality of products
Intrinsic cues: Size, color, flavor, aroma
Extrinsic cues: Price, package, advertising, brand image, manufacturer’s image, retail store image, country of origin
Perceived quality of services
Extrinsic cues: Physical evidence, environment, number of employees
Difference between the customer’s expectation and perception

19. Price/quality relationship
Consumers use price and brand name to evaluate the prestige of the product.
When consumers evaluate more concrete attributes of a product, they rely less on the price and brand name as indicators of quality.
Retail store image
Design and physical environment, Pricing strategies, Product assortments, Number, types and behavior of other customers and sales personnel.

20. Manufacturer’s image Perceived risk
Manufacturers with a favorable image find that their new product are accepted more readily.
Perceived risk
Perceived risk is defined as the uncertainty that the consumer face when they cannot foresee the consequences of their purchase decisions.

21. Types of perceived risks Functional risk
Physical risk
Financial risk
Social risk
Psychological risk
Time risk

22. How consumers handle risks
Consumers seek information
Consumers are brand loyal
Consumers select by brand image
Consumers rely on store image
Consumers buy the most expensive model
Consumers seek reassurance