1. Copyright  2005 McGraw-Hill Australia Pty Ltd PPTs t/a Consumer Behaviour by Karen Webb Slides prepared by Sarah Fletcher and Morena Dobrowolski PERCEPTION AND INFORMATION PROCESSING

2. Copyright  2005 McGraw-Hill Australia Pty Ltd PPTs t/a Consumer Behaviour by Karen Webb Slides prepared by Sarah Fletcher and Morena Dobrowolski 5-2 Perception and information processing At the end of this session, you should understand: The nature of perception and its role in consumer behaviour The concepts of exposure, attention, interpretation, memory and their role in the interpretation of marketing information The information processing process as it relates to consumer behaviour The communication processes involved in perception The relevance of gestalt theory to consumer theory The concept of semiotics and its relevance to consumer perception The role of risk and risk reduction strategies The nature of positioning and consumer behaviour The importance of brands in consumer marketing

3. Copyright  2005 McGraw-Hill Australia Pty Ltd PPTs t/a Consumer Behaviour by Karen Webb Slides prepared by Sarah Fletcher and Morena Dobrowolski 5-3 What do you see?

4. Copyright  2005 McGraw-Hill Australia Pty Ltd PPTs t/a Consumer Behaviour by Karen Webb Slides prepared by Sarah Fletcher and Morena Dobrowolski 5-4 What do you see now?

5. Copyright  2005 McGraw-Hill Australia Pty Ltd PPTs t/a Consumer Behaviour by Karen Webb Slides prepared by Sarah Fletcher and Morena Dobrowolski 5-5 Which line is longer?

6. Copyright  2005 McGraw-Hill Australia Pty Ltd PPTs t/a Consumer Behaviour by Karen Webb Slides prepared by Sarah Fletcher and Morena Dobrowolski 5-6 What colour comes to mind?

7. Copyright  2005 McGraw-Hill Australia Pty Ltd PPTs t/a Consumer Behaviour by Karen Webb Slides prepared by Sarah Fletcher and Morena Dobrowolski 5-7 So….what then is perception? How we interpret stimuli from the environment Perception is how we organise and give meaning to new information from the environment A sensation is the immediate experience generated by an incoming stimulus from our sensory receptors

8. Copyright  2005 McGraw-Hill Australia Pty Ltd PPTs t/a Consumer Behaviour by Karen Webb Slides prepared by Sarah Fletcher and Morena Dobrowolski 5-8 Information processing

9. Copyright  2005 McGraw-Hill Australia Pty Ltd PPTs t/a Consumer Behaviour by Karen Webb Slides prepared by Sarah Fletcher and Morena Dobrowolski 5-9 Exposure Exposure occurs when our sensory receptors detect a stimulus Implication for marketers: – Consumers must be exposed to your marketing efforts for them to perceive anything – Ad placement - being in the right place at the right time!! – Road blocking - catch them at every corner:  Ads on competing channels  Use multiple media

10. Copyright  2005 McGraw-Hill Australia Pty Ltd PPTs t/a Consumer Behaviour by Karen Webb Slides prepared by Sarah Fletcher and Morena Dobrowolski 5-10 Attention Attention occurs when information is transferred from the sensory receptors to the brain for further processing Attention-getting techniques could include the use of: – Colour, size, intensity, contract, novelty, humour – Salience - we tend to pay attention to things that we think are important to us - make the ad seem important! – Repetition See EXHIBIT 5.1 Unicef uses a striking statement to gain attention, page 124. PowerPoint slides supplied on the Instructor Resource CD to accompany Consumer Behaviour include advertisement images.

11. Copyright  2005 McGraw-Hill Australia Pty Ltd PPTs t/a Consumer Behaviour by Karen Webb Slides prepared by Sarah Fletcher and Morena Dobrowolski 5-11 Physiological measures of attention Eye pupil dilatation Eye tracing Tachistoscopic tests Theatre tests Brain-wave analysis

12. Copyright  2005 McGraw-Hill Australia Pty Ltd PPTs t/a Consumer Behaviour by Karen Webb Slides prepared by Sarah Fletcher and Morena Dobrowolski 5-12 Interpretation Interpretation occurs when consumers give meaning to the incoming stimulus information Information is subject to: – Cognitive interpretation - the process of adding meaning from existing knowledge – Affective interpretation - the processing of information and adding meaning based on feelings Influences on interpretation: – Individual characteristics – Stimulus factors – Situational factors – The way the information is presented

13. Copyright  2005 McGraw-Hill Australia Pty Ltd PPTs t/a Consumer Behaviour by Karen Webb Slides prepared by Sarah Fletcher and Morena Dobrowolski 5-13 Memory Memory is the information storage facility in the brain. – See Chapter 6 for more information

14. Copyright  2005 McGraw-Hill Australia Pty Ltd PPTs t/a Consumer Behaviour by Karen Webb Slides prepared by Sarah Fletcher and Morena Dobrowolski 5-14 Perception theories that guide marketing decisions Absolute threshold – Lowest point that we perceive stimuli – Adaption - the process of flipping through the pages and ‘ignoring’ the advertisements – Marketers need to break through the clutter

15. Copyright  2005 McGraw-Hill Australia Pty Ltd PPTs t/a Consumer Behaviour by Karen Webb Slides prepared by Sarah Fletcher and Morena Dobrowolski 5-15 Perception theories that guide marketing decisions Weber’s concept of Just Noticeable Difference (JND) – Just Noticeable Difference - the minimum level of change to a stimulus that is required in order for the change to be noticed – Weber’s law states: ‘the stronger the initial stimulus, the greater the change required for the stimulus to be seen as different’ – Some things you want your customers to notice - e.g. specials, improvements – Others you don’t - changes in packaging, size

16. Copyright  2005 McGraw-Hill Australia Pty Ltd PPTs t/a Consumer Behaviour by Karen Webb Slides prepared by Sarah Fletcher and Morena Dobrowolski 5-16 Perception theories that guide marketing decisions Selective exposure – We don’t notice everything! – We filter out unwanted information Selective distortion – We add preconceived ideas or attitudes to interpret new information that enters the sensory store of the memory Selective retention – We remember information that we find meaningful and interesting Selective attention – We don’t take in all the information around us – Marketers need to identify what their customers will notice and pay attention to

17. Copyright  2005 McGraw-Hill Australia Pty Ltd PPTs t/a Consumer Behaviour by Karen Webb Slides prepared by Sarah Fletcher and Morena Dobrowolski 5-17 Perception theories that guide marketing decisions Stimulus generalisation – When a conditioned response occurs to stimuli that are similar to the conditioned stimulus – When you find it hard to tell the difference between two stimuli - e.g. ‘me-too’ products Stimulus discrimination – Ability to see a distinct difference between stimuli – What marketers want to achieve from their products

18. Copyright  2005 McGraw-Hill Australia Pty Ltd PPTs t/a Consumer Behaviour by Karen Webb Slides prepared by Sarah Fletcher and Morena Dobrowolski 5-18 Perception theories that guide marketing decisions The influence of colour on perception – Colours have different meanings, which can vary from culture to culture – What do these colours mean to you?  Blue  Red  White  Green – Choose colours carefully for advertising, signage and packaging as it can influence what they mean to your target audience The influence of semantics on perception – Words can have double meanings - choose them carefully

19. Copyright  2005 McGraw-Hill Australia Pty Ltd PPTs t/a Consumer Behaviour by Karen Webb Slides prepared by Sarah Fletcher and Morena Dobrowolski 5-19 Perception theories that guide marketing decisions Perceptual categorisation – Personal constructs - we categorise related information into sets in our mind – Applications for marketers  Family branding

20. Copyright  2005 McGraw-Hill Australia Pty Ltd PPTs t/a Consumer Behaviour by Karen Webb Slides prepared by Sarah Fletcher and Morena Dobrowolski 5-20 Communication process

21. Copyright  2005 McGraw-Hill Australia Pty Ltd PPTs t/a Consumer Behaviour by Karen Webb Slides prepared by Sarah Fletcher and Morena Dobrowolski 5-21 ACTIVITY Write down the age of the woman in the next slide.

22. Copyright  2005 McGraw-Hill Australia Pty Ltd PPTs t/a Consumer Behaviour by Karen Webb Slides prepared by Sarah Fletcher and Morena Dobrowolski 5-22

23. Copyright  2005 McGraw-Hill Australia Pty Ltd PPTs t/a Consumer Behaviour by Karen Webb Slides prepared by Sarah Fletcher and Morena Dobrowolski 5-23 Gestalt theory Gestalt is about patterns or configurations Individuals categorise incoming stimuli into patterns that are meaningful to them – e.g. a setting with two adults and children picnicking in the park may be perceived as a traditional family The view is of the whole rather than the parts of a message Categorisation occurs at the interpretation stage of information processing

24. Copyright  2005 McGraw-Hill Australia Pty Ltd PPTs t/a Consumer Behaviour by Karen Webb Slides prepared by Sarah Fletcher and Morena Dobrowolski 5-24 Figure and ground perception – The way in which we distinguish between a figure and its background See EXHIBIT 5.4 This advertisement demonstrates figure and ground perception, page 140. PowerPoint slides supplied on the Instructor Resource CD to accompany Consumer Behaviour include advertisement images.

25. Copyright  2005 McGraw-Hill Australia Pty Ltd PPTs t/a Consumer Behaviour by Karen Webb Slides prepared by Sarah Fletcher and Morena Dobrowolski 5-25 Grouping Grouping stimuli to make sense of messages – Similarity  Use of family branding – Proximity – Closure  Taking existing information from our memory and relating it to new information to make sense of incomplete messages

26. Copyright  2005 McGraw-Hill Australia Pty Ltd PPTs t/a Consumer Behaviour by Karen Webb Slides prepared by Sarah Fletcher and Morena Dobrowolski 5-26 ‘Copycats trip over spitting images’ - Activity Case in point 5.1 – ‘Big brands, after a landmark court win, have a new weapon against imitators - the gestalt factor’ Read the above case study and discuss the associated questions

27. Copyright  2005 McGraw-Hill Australia Pty Ltd PPTs t/a Consumer Behaviour by Karen Webb Slides prepared by Sarah Fletcher and Morena Dobrowolski 5-27 Semiotics Use of symbols or signs to establish an image and convey a message

28. Copyright  2005 McGraw-Hill Australia Pty Ltd PPTs t/a Consumer Behaviour by Karen Webb Slides prepared by Sarah Fletcher and Morena Dobrowolski 5-28 Perceived value Three types of consumer value: – Extrinsic vs. intrinsic  Extrinsic – consumption satisfies some further goal e.g. mobile phone in order to communicate  Intrinsic – consumption for its own sake e.g. CD for pleasure – Self orientated vs. others oriented – Active vs. reactive  Active – doing something with a product, such as eating a meal  Reactive – responding to a product, such as the pleasure of visiting an art gallery

29. Copyright  2005 McGraw-Hill Australia Pty Ltd PPTs t/a Consumer Behaviour by Karen Webb Slides prepared by Sarah Fletcher and Morena Dobrowolski 5-29 Perceived risk The fear that products or services purchased may result in disappointment or unpleasant consequences For services, perceived risk can be diminished by: – Advertising to make intangible aspects tangible – Demonstrating the service – Encouraging word of mouth communication about the service – Aiming for brand building

30. Copyright  2005 McGraw-Hill Australia Pty Ltd PPTs t/a Consumer Behaviour by Karen Webb Slides prepared by Sarah Fletcher and Morena Dobrowolski 5-30 Types of risk Financial risk Physical risk Social risk Ego risk Opportunity risk

31. Copyright  2005 McGraw-Hill Australia Pty Ltd PPTs t/a Consumer Behaviour by Karen Webb Slides prepared by Sarah Fletcher and Morena Dobrowolski 5-31 Strategies to reduce risk ‘Try before you buy’ techniques Extended warranty and money back guarantee Building a strong brand image Extensive advertising and promotion using respected spokespeople Providing rewards for reinforcement of purchase Providing back up customer service and technical support

32. Copyright  2005 McGraw-Hill Australia Pty Ltd PPTs t/a Consumer Behaviour by Karen Webb Slides prepared by Sarah Fletcher and Morena Dobrowolski 5-32 Reducing risk See EXHIBIT 5.6 Reducing perceived financial risk and EXHIBIT 5.7 Another risk reduction promise, page 145. PowerPoint slides supplied on the Instructor Resource CD to accompany Consumer Behaviour include advertisement images.

33. Copyright  2005 McGraw-Hill Australia Pty Ltd PPTs t/a Consumer Behaviour by Karen Webb Slides prepared by Sarah Fletcher and Morena Dobrowolski 5-33 Positioning How your offering or organisation is perceived in the mind of the consumer

34. Copyright  2005 McGraw-Hill Australia Pty Ltd PPTs t/a Consumer Behaviour by Karen Webb Slides prepared by Sarah Fletcher and Morena Dobrowolski 5-34 Positioning maps A graphical representation of the market according to consumer perceptions

35. Copyright  2005 McGraw-Hill Australia Pty Ltd PPTs t/a Consumer Behaviour by Karen Webb Slides prepared by Sarah Fletcher and Morena Dobrowolski 5-35 Positioning strategies Positioning: – In relation to competitors – On the basis of product attributes and benefits – On the basis of usage occasion (e.g. Emporio biscuits) Repositioning brands See EXHIBIT 5.8 Arnott’s Emporio are positioned for a usage situation, page 149. PowerPoint slides supplied on the Instructor Resource CD to accompany Consumer Behaviour include advertisement images.

36. Copyright  2005 McGraw-Hill Australia Pty Ltd PPTs t/a Consumer Behaviour by Karen Webb Slides prepared by Sarah Fletcher and Morena Dobrowolski 5-36 Brands A brand is a mix of tangible and intangible elements that make up an identifying name, mark or symbol Important to differentiate products that are essentially the same – e.g. to create feelings, emotions, loyalty – Aaker’s brand identity model, a brand is a person A brand is ‘a link between the organisation’s marketing activities and consumer perceptions’ Brand evaluation – Functional and feature orientated, or abstract and intangible Brand equity – The value customers attribute to the brand itself Brand names Line and brand extension

37. Copyright  2005 McGraw-Hill Australia Pty Ltd PPTs t/a Consumer Behaviour by Karen Webb Slides prepared by Sarah Fletcher and Morena Dobrowolski 5-37 The means end chain theory A way of determining consumer behaviour, based on perception of brand attributes, benefits and customer values Links the tangible attributes of a product with the individual and social needs (benefits and values) of customers

38. Copyright  2005 McGraw-Hill Australia Pty Ltd PPTs t/a Consumer Behaviour by Karen Webb Slides prepared by Sarah Fletcher and Morena Dobrowolski 5-38 Positioning and brand building in the pharmaceutical industry Case in point 5.4 – ‘Bringing healthcare brands to life’ Read the above case study and discuss the associated questions

39. Copyright  2005 McGraw-Hill Australia Pty Ltd PPTs t/a Consumer Behaviour by Karen Webb Slides prepared by Sarah Fletcher and Morena Dobrowolski 5-39 Perceptual Map Excellent Product Quality Low Value for Money High Value for Money Low Product Quality

40. Copyright  2005 McGraw-Hill Australia Pty Ltd PPTs t/a Consumer Behaviour by Karen Webb Slides prepared by Sarah Fletcher and Morena Dobrowolski 5-40 Group Activity Discuss the following manufacturers and place them on the perceptual map shown on the previous slide. VWBMW BuickKing Long MercedesAudi