1. 6-1 Chapter 6 Consumer Behavior, Eighth Edition Consumer Behavior, Eighth Edition SCHIFFMAN & KANUK Consumer Perception

2. 6-2 Perception The process by which an individual selects, organizes, and interprets stimuli into a meaningful and coherent picture of the world How we see the world around us

3. 6-3 Elements of Perception Sensation Absolute threshold Differential threshold Subliminal perception

4. 6-4 Sensation The immediate and direct response of the sensory organs to stimuli.

5. 6-5 sensation Stimulus:- any unit of input to any of the senses e.g. products, packages, brand names, Sensory receptors:- human organs 83% of all communications today appeal to sight; also that smell is the second most important sensory input

6. 6-6 The absolute threshold The lowest level at which an individual can experience a sensation The point at which a person can detect the difference between something & nothing E.g. the distance at which a driver can note a specific billboard on a highway As exposure to the stimulus increases it is noticed less (sensory adaptation, getting used to)

7. 6-7 Sensory adaptation Sensory adaptation is a problem concerned by many advertisers Therefore they try to change their ads regularly To cut through ad clutters some try to increase sensory input e.g. buying all the ad space in an issue of a magazine

8. 6-8 The differential threshold The minimal difference that can be detected between two similar stimuli is called the differential threshold or j.n.d Weber`s discovered that j.n.d between two stimuli is not an absolute amount, but an amount relative to the intensity of the first stimulus

9. 6-9 Weber’s Law A theory concerning the perceived differentiation between similar stimuli of varying intensities (i.e., the stronger the initial stimulus, the greater the additional intensity needed for the second stimulus to be perceived as different).

10. 6-10 If you lift up and hold a weight of 2.0 kg, you will notice that it takes some effort. If you add to this weight another 0.05 kg and lift, you may not notice any difference between the apparent or subjective weight between the 2.0 kg and the 2.1 kg weights.

11. 6-11 If you keep adding weight, you may find that you will only notice the difference when the additional weight is equal to 0.2 kg. The increment threshold for detecting the difference from a 2.0 kg weight is 0.2 kg. The just noticeable difference (jnd) is 0.2 kg.

12. 6-12 Now start with a 5.0 kg weight. If you add weight to this, you will find that the just noticeable difference is 0.5 kg. It takes 0.5 kg added to the 5.0 kg weight for you to notice an apparent difference. For the weight of magnitude, I, of 2.0 kg, the increment threshold for detecting a difference was a ∆ I (pronounces, delta I) of 0.2 kg. For the weight of magnitude, I = 5.0 kg, the increment threshold ∆ I = 0.5 kg.

13. 6-13 Weber's Law The ratio of ∆ I /I for both instances (0.2/2=0.5/5=0.1) is the same Weber's Law states that the ratio of the increment threshold to the background intensity is a constant. So when you are in a noisy environment you must shout to be heard while a whisper works in a quiet room.

14. 6-14 Weber's Law And when you measure increment thresholds on various intensity backgrounds, the thresholds increase in proportion to the background.

15. 6-15 Weber's Law Webber's law can be applied to a variety of sensory modalities(brightness, loudness, mass, line length etc)

16. 6-16 Marketing Applications of the JND Need to determine the relevant j.n.d. for their products –so that negative changes are not readily discernible (noticeable) to the public –so that product improvements are very apparent to consumers –J.n.d is used to determine the amount of improvement marketers should make in their products

17. 6-17 Figure 6.3 Gradual Changes in Brand Name Fall Below the J.N.D.

18. 6-18 Subliminal Perception Perception of very weak or rapid stimuli received below the level of conscious awareness.

19. 6-19 Is Subliminal Persuasion Effective? Extensive research has shown no evidence that subliminal advertising can cause behavior changes Some evidence that subliminal stimuli may influence affective reactions

20. 6-20 Aspects of Perception Selection Organization Interpretation

21. 6-21 Perceptual Selection Depends on two major factors –Consumers’ previous experience –Consumers’ motives

22. 6-22 Figure 6.7 The Unexpected Attracts Attention

23. 6-23 Principles of Perceptual Organization Figure and ground Grouping Closure

24. 6-24 Influences of Perceptual Distortion (misrepresentation) Physical Appearances Stereotypes First Impressions Jumping to Conclusions Halo Effect

25. 6-25 Figure 6.10 Ads Depicting Stereotypes

26. 6-26 Issues In Consumer Imagery Product Positioning and Repositioning Positioning of Services Perceived Price Perceived Quality Retail Store Image Manufacturer Image Perceived Risk

27. 6-27 Positioning Establishing a specific image for a brand in relation to competing brands.

28. 6-28 Figure 6.13 Repositioning

29. 6-29 Positioning Techniques Umbrella Positioning Positioning Against Competition Positioning Based on a Specific Benefit Conveying a Product Benefit Taking an Unowned Position Positioning for Several Positions Repositioning

30. 6-30 Perceptual Mapping A research technique that enables marketers to plot graphically consumers’ perceptions concerning product attributes of specific brands.

31. 6-31 Figure 6.14 Perceptual Mapping More Artwork More Copy Fashion Coverage Club Coverage Splash Crash Fashion Splash Bash

32. 6-32 Table 6.2 Pricing Strategies Focused on Perceived Value Satisfaction-based Pricing Relationship Pricing Efficiency Pricing

33. 6-33 Issues in Perceived Price Reference prices –Internal –External Tensile and objective price claims

34. 6-34 Acquisition-Transaction Utility Acquisition utility represents the consumer’s perceived economic gain or loss associated with the purchase Function of product utility and purchase price Transaction utility concerns the perceived pleasure or displeasure associated with the financial aspect of the purchase Determined by the difference between the internal reference price and the purchase price

35. 6-35 Tensile and Objective Price Claims Evaluations least favorable for ads stating the minimum discount level Ads stating maximum discount levels are better than stating a range

36. 6-36 Perceived Quality Perceived Quality of Products –Intrinsic vs. Extrinsic Cues Perceived Quality of Services Price/Quality Relationship

37. 6-37 Characteristics of Services Intangible Variable Perishable Simultaneously Produced and Consumed

38. 6-38 Table 6.3 SERVQUAL Dimensions for Measuring Service Quality DIMENSIONDESCRIPTION TangiblesAppearance of physical facilities, equipment, personnel, and communication materials ReliabilityAbility to perform the promised service dependably and accurately ResponsivenessWillingness to help customers and provide prompt service AssuranceKnowledge and courtesy of employees and their ability to convey trust and confidence EmpathyCaring, individualized attention the firm provides its customers

39. 6-39 Figure 6.15 Ad Emphasizing Tangible Cues

40. 6-40 Figure 6.16 Conceptual Model of the Consequences of Service Quality Superior Inferior Favorable Unfavorable Remain Behavior Defect +$ Ongoing Revenue Increased Spending Price Premium Referred Customers Financial Consequences -$ Decreased Spending Lost Customers Costs to Attract New Customers Service Quality Behavioral Intentions Focus of present study Empirical links demonstrated in macro studies

41. 6-41 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).

42. 6-42 Figure 6.17 Conceptual Model of the Effects of Price, Brand Name, and Store Name on Perceived Value Objectiv e Price Perception of Price Perceived Sacrifice Perceived Quality Perceived Value Willingness to Buy A. Conceptual Relationship of Price Effect + + + + - -

43. 6-43 Figure 6.17 continued B. Extended Conceptualization to Include Brand Name and Store Name Brand Name Perception of Store Perception of Brand + + Objectiv e Price Perception of Price Perceived Sacrifice Perceived Quality Perceived Value Willingness to Buy + + + + - -

44. 6-44 Perceived Risk Types Functional Risk Physical Risk Financial Risk Psychological Risk Time Risk The degree of uncertainty perceived by the consumer as to the consequences (outcome) of a specific purchase decision.

45. 6-45 How Consumers Handle Risk Seek Information Stay Brand Loyal Select by Brand Image Rely on Store Image Buy the Most Expensive Model Seek Reassurance

46. 6-46 Figure 6.2 Betty Crocker Changes Fall Below the J.N.D.

47. 6-47 Figure 6.5 Subliminal Embedding

48. 6-48 Concepts Concerning Selective Perception Selective Exposure Selective Attention Perceptual Defense Perceptual Blocking GestaltPsychology

49. 6-49 Figure 6.12 Using Imagery

50. 6-50 Apple’s 1984 Ad Positions Against the Competition Click icon to reach ad