Consumer Behavior

Consumer Perception
Perception
Defined
The process by which individuals select, organize, and
interpret stimuli into a meaningful and coherent picture of
the world. It can be described as “how we see the world
around us.”
• Subjective understanding rather than objective reality
depending on psycho makeup
• Call for repositioning , brand makeover etc
Example: Visual Identity

Source: The Kraft Heinz Company

Sensation
Defined
The immediate and direct response of the sensory organs
to stimuli (units of input to the senses, as captured by the
sensory receptors).
• Sensation itself depends on energy change, or the
differentiation of input.
• As sensory input decreases, the ability to detect changes
increases.
Sensory Input
• Sight
• Scent
• Touch
• Sound
• Taste
Audio Sensory Input
Table 4.1 Sensory Audio Input and Product Perceptions

Product Sound and Its Consumer Meaning

Snapple Consumers perceive the sound of the “pop” as an indicator of product safety. When the
company came up with the right snap sound, it was able to eliminate the plastic seal around
the bottle’s cap.
VW Jetta The car door’s “thump” is an indication of quality. The company played and mentioned the
door thump in ads for a new model.
Mascara Consumers perceive the sound and duration of the “click” heard when taking the cover off as
indicators of quality.
Eye shadow A more pronounced “click” heard when opening the compact case symbolizes higher quality.

Tip markers Consumers like the “screech” because it represents “boldness.”

Tampons Realizing that women dislike opening tampon packages that omit sound, P & G redesigned
the product’s packaging. The plastic’s “crinkle” was carefully balanced and the new adhesive
strip makes no sound when opened.
Spray bottle Method made the nozzle of its spray bottle almost indistinguishable because consumers
perceive a quiet nozzle as an indicator of quality.
Absolute Threshold
• The lowest level at which an individual can experience a sensation is
called the absolute threshold.
• The point at which a person can detect the difference between “something”
and “nothing” is that person’s absolute threshold for the stimulus.
• For example, the distance at which a driver can note a specific billboard on a
highway is that individual’s absolute threshold.
Sensory adaptation getting used to sensation
• The minimal difference that can be detected between two stimuli is
called the differential threshold or the JND (just noticeable
difference).
• Weber’s law relative to first stimulus
• Eg Jio pricing for smaller packs
• FMCG products sachets
• Positive and negative
Subliminal Perception
• What is subliminal perception?
• Is it effective?
Perceptions Are Affected by…
• Expectations
• Motives
• Selective Perception
• Selective exposure—consumers actively seek out messages they find pleasant or with which
they are sympathetic and actively avoid painful or threatening messages.
• Selective attention—consumers have a heightened awareness of the stimuli that meet their
needs or interests and minimal interest in stimuli irrelevant to their needs.
• Perceptual defense—threatening or otherwise damaging stimuli are less likely to be
perceived than are neutral stimuli. Individuals unconsciously may distort information that is
not consistent with their needs, values, and beliefs.
• Perceptual blocking - Consumers screen out enormous amounts of advertising by simply
“tuning out” or blocking stimuli from conscious awareness.

Contrast
Perceptual Organization
• Gestalt psychology
• Figure and ground
• Grouping
• Closure

Source: Boring, E. (1930). A New Ambiguous Figure. The American Journal of

Psychology, 42(3), 444-445. doi:10.2307/1415447. From American Journal of
Psychology. Copyright 1930 by the Board of Trustees of the University of Illinois. Used
with permission of the University of Illinois Press.
Product Placement
Defined
A form of promotion where marketers “disguise” promotional cues by
integrating products (i.e., “figures”) into TV shows films, or other
entertainment content (i.e., “grounds”) or building entertainment content
around products
Intrinsic and Extrinsic Cues
• Intrinsic – physical
characteristics of the
product
• Extrinsic – not inherent in
the product
Perceptual Interpretation
• Stereotyping
• Triggers
• Physical appearance
• Descriptive terms
• First impressions
• Halo Effect
Consumer Imagery
Consumer imagery is consumers’ perceptions of all the components of products, services and brands and how consumers
evaluate the quality of marketers’ offerings.
a) Products and brands have symbolic value for individuals who evaluate them on the basis of their consistency with their
personal pictures of themselves.
b) Imagery affects perceptions of products, brands, services, prices, product quality, retail stores, and manufacturers.

1. Brand Image

The desired outcome of effective positioning is a distinct “position” (or image) that a brand occupies in consumers’ minds

Need to reposition as the image either is boring or needs to be changed.

2. Package Image

•In addition to the product’s name, appearance, and features, packaging also conveys the brand’s image.

eg Perfume bottles, mamaearth

3. Service Image

Distinct colours, proofs, memorabilia eg Apple Store , Jawed Habib

Consumer Imagery

4. Perceived price

is the customer’s view of the value that he or she receives from the purchase. Eg Food ate fast food vs Gourmet

How a consumer perceives a price—as high, low, or fair—strongly influences both purchase intentions and post-
purchase satisfaction.

• A reference price is any price that a consumer uses as a basis for comparison in judging another price.
– High ref price vs Low to persuade on value
– Internal reference prices are those prices (or price ranges) retrieved by the consumer from memory.
– Internal reference prices - consumers’ evaluations and perceptions of value of an advertised (i.e., external) price deal, as
well as in the believability of any advertised reference price.
– Consumers’ internal reference prices change.
– Consumer contrasts with External vs Internal to decide plausible or superficial
– New product category V existing product category- Expected vs Fair price
– Limited time avaliablity
Perceived Quality
• Experts vs Evaluation by consumers

• If consumers do not perceive offerings as superior products that satisfy their needs and provide value, they will not purchase them,
regardless of objective evidence.

Product Quality
Intrinsic cues are physical characteristics of the product itself, such as size, color, flavor, or aroma.

Extrinsic cues —that is, characteristics that are not inherent in the product—to judge quality. Eg Orange colour, packaging

When lacking actual experience , customers rely on extrinsic, eg Wine from Nashik Vehicle names.

Service Quality
Intangible

Servqual
price/quality relationship forms when consumers rely on price as an indicator of product quality.
Perceived product value ?
• Deliberate high price Vs low price considered inferior quality eg Indian Vaccines, Generic
drugs
• Consumers also use cues such as the brand and the store in which the product is bought to
evaluate quality.
• Avoid bundling
• Eg Medication pills, shirts

Implication: Marketers must understand all the attributes that

customers use to evaluate a given product and include all applicable
information to counter any perceptions of negative quality associated
with a lower price.
 Perceived Quality
7. Store Image and Perceived Quality

Images stem from the merchandise they carry, the brands sold and their prices, the level of service, the store’s physical
environment and ambiance, and its typical clientele

Can counter bad word of mouth

eg Royal Enfield vs Hero Motors

Customers often use brand, store image, and price together as a product quality indicators

A premium product in EDLP eg pricing discounts full year. Assortment vs Depth.

Implication: Avoid keeping high priced product in low priced store. Use sale period scientifically or rationally as customers use
brand, store image and price as product quality indicators

8. Manufacturer’s Image and Perceived Quality

•Manufacturers who enjoy a favorable image generally find that their new products are accepted more readily than those of
manufacturers who have a less favorable or even a “neutral” image.

Institutional advertising is promotion that is designed to promote a company’s overall image without overtly referring to
specific products.
Perceived Risk
Perceived risk is the uncertainty that consumers face when they cannot foresee the consequences
of their purchase decisions. This definition highlights two relevant dimensions of perceived risk:
uncertainty and consequences.

The degree of risk that consumers perceive and their own tolerance for risk taking are factors that
influence their purchase strategies.
-Is it perceived or not
-High risk perceivers vs Low Risk perceivers
-Eg drugs
Implications: To overcome this, a well-known brand name (sometimes through licensing), distribution
through reputable retail outlets, informative advertising, publicity, impartial test results, free samples, and
money-back guarantees. Also,
consumers can reduce perceived risk by using online resources that enable them to generate side-by-side
comparisons depicting detailed charts of the features, prices, and ratings of all the available models within a
given product category.
Elements of Perceived Risk
Table 4.2 The Elements of Perceived Risk
Type of Perceived Risk Definition Example
Functional risk Product will not perform as Can the e-book reader operate a whole day without having
expected. to be recharged?
Will the electric engine perform as promised?

Physical risk Product can harm self and Is organic unpasteurized milk safe to drink?
others; risk to self and (Many states do not permit unpasteurized milk, but many
others. greenmarkets carry it because it is organic.)
The electric car’s breaks are excellent.

Financial risk Product will not be worth its Will a new and cheaper model of an L ED TV monitor
cost. become available six months from now? Will I save money
on gas if I buy an electric car?

Psychological and social risk Poor product choice will bruise Will I be embarrassed when my friends see me with a
the consumer’s ego. mobile phone that is not a smartphone? If I buy an electric
car, I will not be polluting the environment.

Time risk Time spent in product search Will I be forced to compare all the different
may be wasted if the product carriers’ calling plans again if I experience a lot of dropped
does not perform as expected. calls with the one I selected? I will save time by not having
to buy gas if I but the electric car.
How Consumers Handle Risk
• Information
• Brand loyalty
• Store image
• Price-quality relationship