Ch. 6 & ch.7 of consumer behaviour

PRESENTATION ON

CONSUMER PERCEPTIONCh. 6

CHAPTER OUTLINE• Dynamics of Perception– Sensation– The Absolute Threshold– The Differential Threshold– Subliminal Perception

• Elements of Perception– Selection– Organization– Interpretation

• Consumer Imagery

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

DYNAMICS OF PERCEPTION

SensationThe

Absolute Threshold

The Differentia

l Threshold

The Sublimina

l Perception

SENSATION• Sensation – The immediate

and direct response of the sensory organs to stimuli

• Stimulus – A stimulus is any unit of input to any of the senses.

• Sensory receptors – The human organs i.e. Eyes, Ears, Nose, Mouth and Skin

SENSATION AND PERCEPTION• Sensation is the immediate

response of our sensory receptors (eyes, ears, nose, mouth, and fingers) to basic stimuli (light, color, sound, odor, and texture)

• Perception is the process by which sensations are selected, organized, and interpreted

SENSATION• Sensation itself depends on energy change within the

environment where the perception occurs(i.e. on differentiation of input).

• As sensory input decreases, however our ability to detect changes in input or intensity increases, to the point @ maximum sensitivty and minimal stimulation.

• Ex. “It was so quiet I could hear a pin drop.”

THE ABSOLUTE THRESHOLD• The lowest level at which an

individual can experience a sensation. Detecting difference between “something and nothing”

Ex. • People who live by busy

roads typically don't even notice that there is the sound of constant traffic outside their window.

Ex.• People who smoke no

longer notice the odor of cigarette smoke

• Sensory adaptation: is a problem that concerns many national advertisers, which is they try to change their advertising campaigns regularly.

• Ex. Airtel 4g advertise.

THE DIFFERENTIAL THRESHOLD

• The ability of a sensory system to detect changes or differences between two stimuli

–Minimum difference between two stimuli is the j.n.d. (just noticeable difference)

Ex. packaging updates must be subtle enough over time to keep current customers

German Scientist Ernst Weber

Weber’s law:• He discovered that the j.n.d. between

two stimuli was not an absolute amount, but an amount relative to the intensity of the first stimuli.

• Weber’s law states that the stronger the initial stimulus, the greater the additional intensity needed for the second stimulus to be perceived as different.

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(i.e. remain below the j.n.d.)

– so that product improvements are very apparent to consumers(i.e… they are at or just above the j.n.d)

SUBLIMINAL PERCEPTION

• Stimuli that are too weak or too brief to be consciously seen or heard may be strong enough to be perceived by one or more receptor cells.

• Message below the threshold level– Takes place in movies:

• Nokia Lumia Mobile Phone with Shah Rukh Khan in Chennai Express

• John Abhraham using Sony Vaio in Kaal• All Tata cars in Singham returns• Aston Martin in James Bond

All Tata cars in Singham returns

Aston Martin in James Bond

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

ELEMENTS OF PERCEPTION

Perceptual Selection

Perceptual Organization

Perceptual Interpretation

Elements of Perception

• Human Beings stimuli change during every minute and every hour of every day..

The selection, organization, and interpretation of perceptions can differ among different people . Therefore, when people react differently in a situation, part of their behavior can be explained by examining their perceptual process, and how their perceptions are leading to their responses.

PERCEPTUAL SELECTION• Consumers subconsciously are selective as to what

they perceive.• Stimuli selected depends on two major factors– Consumers’ previous experience – Consumers’ motives

• Selection depends on the– Nature of the stimulus– Expectations – Motives

SELECTIVE PERCEPTION• Selective exposure:- – People look for pleasant and sympathetic messages and avoid

painful or threatening ones• Selective attention:- – People look into ads which will satisfy their need

• Perceptual Defense:-– People avoid psychologically threatening ones. Hence constantly

change the ad nature. [ Smoking – warning with words, and now with images ]

• Perceptual Blocking:-– Consumers avoid being bombarded by:

• Tuning out• TiVo

PERCEPTUAL ORGANIZATION

• People see everything as a whole• There are three most basic principles of perceptual

Organization are also referred by the name Gestalt psychology. (Gestalt, in German, means “pattern or configuration.”)– Figure and Ground – Grouping– Closure

Figure and Ground• It is a type of perceptual grouping which is a vital

necessity for recognizing objects through vision. In Gestalt psychology it is known as identifying a figure from the background.

• 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

Grouping• People group stimuli to form a unified impression or

concept.• Grouping helps memory and recall.• Humans naturally perceive objects as organized

patterns and objects. Gestalt psychologists argued that these principles exist because the mind has an innate disposition to perceive patterns in the stimulus based on certain rules.

Closure

• 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

Closure

PERCEPTUAL INTERPRETATION

• Stimulus are often highly ambiguous or weak

Types of Perceptual Interpretations

Stereotypes

Physical Appearances

Descriptive terms

First Impression

Halo Effect

STEREOTYPES• People hold meanings related to stimuli• Stereotypes influence how stimuli are perceived– People carrying biased pictures in their minds of

the meanings of various stimuli.

PHYSICAL APPEARANCES • Positive attributes of people they know to those who

resemble them• Attractive models are more persuasive for some

products – People associate quality with people in the ads– Attractive models have positive influence – Colors of juices– Shape of the package– Average men are not considered as businessman

DESCRIPTIVE TERMS

– McDonald – Happy price (targeting Indians who are price conscious

– KFC – Spicy Chicken

FIRST IMPRESSION

• First impressions, last long

• The perceiver is trying to determine which stimuli are relevant, important, or predictive

Halo Effect• Consumers perceive and evaluate product or service

or even product line based on just one dimension.• For example, a man is trustworthy, fine, and noble

because he looks you in the eye when he speaks.• Important with spokesperson choice• Tampering the halo effect is detrimental to the

organization.

• Toyota – Quality• Ford – Safety• Sony - Music

The halo effect helps Adidas

break into new product

categories

Marketers takes advantages of the halo effect when they extended a brand name associated with one line of products to another.

CONSUMER IMAGERY• Consumers perceived images about product, services,

prices, product quality, retail stores and manufacturers.

• People buy product to enhance their self image (relating themselves to the product).

POSITIONING• Image of the product in the minds of the customer is

called Positioning.

• Image of your product gear up your sales, but the product should also deliver its performance.

• Product BENEFITS should be focused more than it’s physical attributes.

POSITIONING TECHNIQUES• Positioning Based on a Specific Benefit

For example, the activity of washing clothes, where the benefit provided to customer is clean clothes- a straightforward and obvious benefit.

• Product PositioningPositioning is more important to the ultimate success of a product than are its actual characteristics , but products are poorly made will not succeed in the long run and image alone not benefited.

POSITIONING TECHNIQUES• Product Repositioning

The marketer may be forced to reposition it in response to market events, such as competitors cutting into the brand’s market share or too many competitors stressing the same attributes. Another reason to reposition a product or service is to satisfy changing consumer preferences.

• Umbrella positioning suzuki , the maker of many car model, is using the

same slogan to describe the consumer benefits that its products provided. Another example, Amul.

POSITIONING PRODUCTS AND SERVICES

• Model of Strategic Positioning:

Positioning Aim(s)

Positioning Objectives

Positioning Strategy

(ies)

Communications

Consumer Perceptions

Typology of Strategic Positioning• Top of the range – Upper class –

Rolls Royce

• Service – Impressive service – Pizza hut – 30 mins

• Value for money – Affordability –Megamart, The dollar shoppe

• Reliability – Durability – Allwyn Fridge - 7yrs warranty

Typology of Strategic Positioning

• Attractive – Cool, Elegant – Mercedes, Bournville

• Country of Origin – Patriotism- Amul- The Taste of India

• The Brand Name – Leaders in the market – Apple, Sony

• Selectivity – Discriminatory – Nano, Macbook Air

PRODUCT REPOSITIONING

• To face the competitors, who offer new products or services

• Changing lifestyle of people - need to suit the current trend. Eg. Evolution of Tabs and Apple

• When brand need to change their target segment (happens rarely) Eg. Gems

• When motivation to buy the category is low among customers

Why repositioning is required?

ISSUES IN PERCEIVED PRICE• Perceived price – It should reflect the value that the customer

receives from the purchase. For example, low price for fast food meal and high price for restaurant meal.

• Reference price – any price that a consumer uses as a basis for comparison in judging another price

– Internal reference prices are those prices or price ranges retrieved by the consumer from memory.

– External reference prices are in an ad offering a lower sales price, to persuaded the consumer that the product is really good buy.

Three Pricing Strategies Focused on Perceived Value

Pricing Strategy Provides Value By… Implemented As…

Satisfaction-based pricing

Recognizing and reducing customers’ perceptions of uncertainly, which the intangible nature of services magnifies

Service guaranteesBenefit-driven pricingFlat-rate pricing

Relationship pricing Encouraging long-term relationships with the company that customers view as beneficial

Long-term contractsPrice 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.

PERCEIVED QUALITY• Perceived Quality of Products– Intrinsic concerns physical attributes– Extrinsic concerns to judge quality

• Perceived Quality of Services• Price/Quality Relationship

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 delivered.

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.)

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– Psychological Risk– Time Risk

How Consumers Handle Risk

• Seek Information• Stay Brand Loyal• Select by Brand Image• Rely on Store Image• Buy the Most Expensive Model• Seek Reassurance

CONSUMER LEARNINGCH.7

Chapter Outline• The Elements of Consumer Learning• Behavioral Learning Theories• Cognitive Learning Theory• Measures of Consumer Learning

Learning• The process by which individuals acquire the

purchase and consumption knowledge and experience that they apply to future related behavior

• Marketers must teach consumers:– where to buy– how to use– how to maintain– how to dispose of products

ELEMENTS OF LEARNING THEORIES

• Motivation :Uncovering consumer motivates is the prime tasks of marketers, who then try to teach motivated consumer segments why and how their products will fulfill the consumers’ needs. Unfilled needs lead to motivation.

• Cues :The ad is the cue, or stimulus, that suggests a

specific way to satisfy a salient motive.

• Response :

How individuals reacts to a drive or cue- how they behave- constitute their response.

• Reinforcement :Reinforcement increases the likelihood that a

specific response will occur in the future as the result of particular cues or stimuli.

Learning Theories

Behavioral LearningTheory

Cognitive Learning Theory

Theories based on the basis that learning takes place as the result of observable responses to external stimuli. Also know as stimulus response theory.

A theory of learning based on mental information processing. Often in response to problem solving.

BEHAVIORAL LEARNING THEORY

• Classical Conditioning• Instrumental Conditioning• Modeling or Observational Learning

CLASSICAL CONDITIONING

Pavlovian Model of

Classical Conditioning

Analogous Model of

Classical Conditioning

Paviovian Model of Classical Conditioning

AFTER REPEATED PAIRINGS

Unconditioned StimulusMeat Paste

Conditioned StimulusBell

Conditioned StimulusBell

Unconditioned ResponseSalivation

Conditioned ResponseSalivation

Unconditioned StimulusDinner aromas

Conditioned Stimulus6o’clock news

Conditioned Stimulus6o’clock news

Unconditioned ResponseSalivation

Conditioned ResponseSalivation

Analog Model of Classical Conditioning

AFTER REPEATED PAIRINGS

Instrumental Conditioning• A behavioral theory of learning

based on a trial-and-error process, with habits forced as the result of positive experiences (reinforcement) resulting from certain responses or behaviors.

What am Ipurchase

“I’m Hungry”

Types of Reinforcement• Positive• Negative• Forgetting• Extinction

Model of Instrumental Conditioning

StimulusSituational(need good

looking jeans)

Try Brand

A

Try Brand B

Try Brand C

Try Brand D

UnrewardedLegs too loose

UnrewardedTight in seat

UnrewardedBaggy in seat

RewardedPerfect fit

Modeling or Observational Learning• Modeling is the process

through which individuals learn behavior by observing the behavior of other and the consequences of such behavior.

COGNITIVE LEARNING THEORY

• Holds that the kind of learning most characteristic of human beings is problem solving, which enables individuals to gain some control over their environment.

INFORMATION PROCESSING• Relates to cognitive ability and the complexity of the

information• Individuals differ in imagery – their ability to form

mental images which influences recall

INFORMATION PROCESSING AND MEMORY STORES

Issues in Involvement Theory

1. Consumer Relevance2. Central and Peripheral Routes to Persuasion3. Measure of Involvement

1. Consumer Relevance• Involvement depends on degree of personal

relevance.• High involvement is:– Very important to the consumer – Provokes extensive problem solving

2. Central and Peripheral Routes to Persuasion

• Central route to persuasion– For high involvement purchases– Requires cognitive processing

• Peripheral route to persuasion– Low involvement– Consumer less motivated to think– Learning through repetition, visual cues, and

holistic perception

3. Measures of Consumer Learning

Recognition and Recall Measures

Recognition and recall tests are conducted to determine whether consumers remember seeing an ad and extent to which they have read it or seen it and can recall its content.

Brand Loyalty• Function of three groups of influences– Consumer drivers– Brand drivers– Social drivers

• Four types of loyalty– No loyalty– Covetous loyalty– Inertia loyalty– Premium loyalty

Harley-Davidson Has Strong Brand Loyalty

Brand Equity• Refers to the value inherent in a well-known brand

name• Value stems from consumer’s perception of brand

superiority• Brand equity reflects learned brand loyalty• Brand loyalty and brand equity lead to increased

market share and greater profits