CB Perception

PERCEPTION
2014
CONSUMER BEHAVIOUR PGDM

PROF. MOHAN B.RAO
FOR RESTRICTED CIRCULATION ONLY
BEAUTY
2014

PROF. MOHAN B.RAO
2014

PROF. MOHAN B.RAO
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PROF. MOHAN B.RAO
?
2014

PROF. MOHAN B.RAO
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PROF. MOHAN B.RAO
Sheila
Sheila
Sheila
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PROF. MOHAN B.RAO
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PROF. MOHAN B.RAO
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PROF. MOHAN B.RAO
PERCEPTION
Our senses ( vision, hearing and smelling,touch)
are more wide ranging, complex, delicate and
sensitive.
Process of perception: Sense organs provide
our brain with a steady flow of information about
our environment and the brains task is to take
this raw material and use it to help us make
sense of the environment.
Perception is a mechanism by which an individual
receives, selects, organizes, and interprets
stimuli into meaningful coherent picture of the
world
2014

PROF. MOHAN B.RAO
Sensory Thresholds
So the lowest Intensity of a Stimulus that
Consumers are capable of perceiving are:
Absolute Threshold
refers to the
minimum amount
of stimulation that
can be detected on
a sensory channel.
Marketing Stimuli
2014
Differential Threshold
refers to the ability
of a sensory system
to detect changes or
differences between
two stimuli. (j.n.d.Just Noticeable
Difference &
Webers Law)

PROF. MOHAN B.RAO
Marketing Applications
of the JND
Need to determine the relevant j.n.d. for their
products
so that negative changes are not readily
discernible to the public
so that product improvements are very apparent
to consumers
2014

PROF. MOHAN B.RAO
Gradual Changes in Brand Name

Fall Below the J.N.D.
2014

PROF. MOHAN B.RAO
Subliminal Perception
There are wide individual differences in threshold
levels
Advertisers lack control over consumers distance
and position from a screen
The consumer must be paying absolute attention
to the stimulus
Even if the desired effect is induced, it operates
only at a very general level
2014

PROF. MOHAN B.RAO
Marketing Variables Influencing

Consumer Perception
2014
Nature of Product
Physical Attributes of Product
Package Design
Brand Name
Advertisements & Commercials
Editorial Environment
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PROF. MOHAN B.RAO
Marketing Variables Influencing

Consumer Perception
2014
Nature of Product
Physical Attributes of Product
Package Design
Brand Name
Advertisements & Commercials
Editorial Environment
Price.
Logistics & distribution.
Sales outlets & sales personnel..
PROF. MOHAN B.RAO
ELEMENTS OF PERCEPTION
Sensation
The human organs (eyes, ears, nose, mouth, skin) that receive
sensory inputs.
The absolute threshold

The lowest level at which an individual can experience a sensation.
Sensory adaptation
Getting used to certain sensations; becoming accommodated to a
certain level of stimulation.
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The minimal difference that can be detected between two stimuli.
Also known as the j.n.d. (just noticeable difference).
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Perception of very weak or rapid stimuli received below the level of
conscious awareness
2014

PROF. MOHAN B.RAO
ELEMENTS OF PERCEPTION
Sensation
The human organs (eyes, ears, nose, mouth, skin) that receive
sensory inputs.
The absolute threshold

The lowest level at which an individual can experience a sensation.
Sensory adaptation
Getting used to certain sensations; becoming accommodated to a
certain level of stimulation.
The differential threshold

The minimal difference that can be detected between two stimuli.
Also known as the j.n.d. (just noticeable difference).
Subliminal perception
Perception of very weak or rapid stimuli received below the level of
conscious awareness
2014

PROF. MOHAN B.RAO
PERCEPTION CONTD
External Factors of Stimuli: * Intensity & Size *
Position * Contrast * Novelty * Repetition *
Movement.
Internal Factors of Stimuli: *selective attention *
selective exposure* selective reception* selective
comprehension* selective retention
Stimulus can be assortment of sensory inputs like
products; packaging; adverts; impact of visuals.
Result is: All of us have a tendency to view the
same phenomenon or situation differently.
2014

PROF. MOHAN B.RAO
Various references to Perception

I. Perceptual Blocking:
Blocking out stimuli consciously when too much information
is Bombarded.
II. Perceptual Organization:

The way the stimuli are organized around principles of
Figure & Ground; Grouping; Closure.
III.Perceptual Interpretation:
Dependent on individual expectations in the light of
previous experience or intuition or motives or interest at the
time of perception.
2014

PROF. MOHAN B.RAO
Various references to Perception

IV. Perceptual Distortions:
Due to Personality or physical experience; stereotypes;
Halo effect; Irrelevant cues; First impression; hasty conclusions.
V. Perceptual Mapping:
A technique to help understand and estimate how products
& services appear to the consumer in relation to competition.
2014

PROF. MOHAN B.RAO
Stimulus Organization
Closure Principle
People Tend to Perceive an
Incomplete Picture as
Whole.
Principle of Similarity
Consumers Tend to Group
Objects That Share Similar
Physical characteristics.
Figure-Ground Principle
One Part of the Stimulus Will
Dominate (the Figure) While
Other Parts Recede Into
the Backdrop
(the Ground)
2014

PROF. MOHAN B.RAO
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PROF. MOHAN B.RAO
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PROF. MOHAN B.RAO
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PROF. MOHAN B.RAO
Perceptual Organization
Grouping & closure
2014

PROF. MOHAN B.RAO
Model of the Effects of Price, Brand Name, and

Store Name on Perceived Value
Brand
Name
Store
Name
Perception
of Brand
Perception
of Store
Objectiv
e Price
+
+
Perception
of Price
Perceived
Quality
Perceived
Sacrifice
Perceived
Value
Willingness
to Buy
2014

PROF. MOHAN B.RAO
Price Perception
Consumers perceive a price as either
high or low on the basis of a
comparison with an internal price (or
referent price).
Price perceptions and the social
judgment theory regions
Assimilation (acceptable)
and contrast (too high or low)
2014

PROF. MOHAN B.RAO
Perceived Value
The trade-off between product benefits
and product costs.
Perceived value = perceived benefits / perceived costs
2014

PROF. MOHAN B.RAO
Understanding Consumers
2014

PROF. MOHAN B.RAO
Information Processing Model of CB

Individual
Consumer:
Personality (intro/extro)
information
Stimuli
Selection
Environmental
Characteristics:
Culture (color)
beliefs
Interpretation
Memory/Prior Knowledge
2014

PROF. MOHAN B.RAO
Attitudes:
Like/Dislike
Choice
2014

PROF. MOHAN B.RAO
Usually, you cant get voluntary

attention (hard to make ads
personally relevant for all
consumers)
Then you have to rely on
involuntary attention-getting
techniques
2014

PROF. MOHAN B.RAO
Information Processing at Work

Select certain stimuli which stand out in the ad
Plane
Brand names: Forbes, Economist
Interpret: advertiser is trying to compare the brands

(you know Economy class is cheaper; Business is more
expensive; First class is most expensive MEMORY)
Belief: Forbes is for the most up-market passengers

Attitude: Favorable attitude towards Forbes
May buy the magazine (Choice)
Individual differences: Expensive = good?

Environment: comparative ad: good?
2014

PROF. MOHAN B.RAO
Interpretation (Perception)
Interpretation = next stage
after selection
Reaching subjective conclusions based on

the information
i.e., forming beliefs
The key process that we use for interpretation:

Inferencing
2014

PROF. MOHAN B.RAO
Involuntary attention-getting
techniques
Contrast.
Big difference between two adjacent
stimuli
Novelty
Color
Size
Humor
Sex
2014

PROF. MOHAN B.RAO
Inference: Forming Beliefs Through

Simple Association
Some concepts are naturally associated
together in consumers minds
Example: high price = quality/status
Marketers create inferences about brand

image by using these associations
Color of product or package
Blue: ?? (detergent)
Green: ?? (toothpaste)
Drink and Detergent (colorless vs. yellow).
2014

PROF. MOHAN B.RAO
Inference: Forming Beliefs Through

Simple Association
Brand name
Alphanumeric (ASCENT XYS)
Country of origin (where the product is made often

has associations)
Clothing: which country = status associations?
Brand extensions also use inferencing principles

Surf excel = what associations?
2014

PROF. MOHAN B.RAO
Explain
A famous Harvard professor of decision sciences was once retained
by a retailer to suggest ways to improve sales efficiency in its store.
When he arrived, he became especially concerned with the women's
blouse sub department in the "bargain basement." This area seemed
to be extremely inefficient. Blouses were strewn about in a jumble
and shoppers wasted many minutes attempting to find their correct
size. Upon mentioning this to the management, the professor was
invited to return the next morning to observe the entire process from
scratch. He noted that prior to the store opening hour, employees
neatly arranged also the blouses by size. Then, however, they threw
them on the encounter and thoroughly mixed them up! WHY?
2014

PROF. MOHAN B.RAO
Explain
A famous Harvard professor of decision sciences was once retained
by a retailer to suggest ways to improve sales efficiency in its store.
When he arrived, he became especially concerned with the women's
blouse sub department in the "bargain basement." This area seemed
to be extremely inefficient. Blouses were strewn about in a jumble
and shoppers wasted many minutes attempting to find their correct
size. Upon mentioning this to the management, the professor was
invited to return the next morning to observe the entire process from
scratch. He noted that prior to the store opening hour, employees
neatly arranged also the blouses by size. Then, however, they threw
them on the encounter and thoroughly mixed them up! For some
reason, this technique seemed to increase total sales of the blouses.
2014

PROF. MOHAN B.RAO
Leads us to Perceptual Positioning

Positioning Strategy Uses Elements of the Marketing Mix to
Influence the Consumers Interpretation of Its Meaning.
Quality
Lifestyle
Users
Price Leadership
Positioning
Dimensions
Occasions
Competitors
2014
Attributes
Product Class
PROF. MOHAN B.RAO
Positioning: Create a Perception

Two aspects of successful positioning
The belief/perception you create must be about an
attribute that matters
Coke and taste
You should be perceived differently from

competition!
Pepsi vs. Coke
Cars: again, helps to have a distinctive position
Which brand has the cute car position?
Which brand has the safe car position?
2014

PROF. MOHAN B.RAO
General Takeaway for Consumer Behavior

Consumer Perceptions are very important!
The objective product (diamonds) may not really have value; but
people can perceive it as having value. This is where your
positioning strategy comes in.
Positioning = make consumers perceive the product

in a certain way (e.g., gift of love)
Positioning strategies have to be designed with
regard to what perceptions will sell.
E.g., romantic love is important in West
Not so much in East: Success / harmony / prosperity much
more important
So position accordingly (and be ready to change

positioning once values change)
2014

PROF. MOHAN B.RAO
LETS REFRESH..
POSITIONING
Establishing a defined image for a brand in

relation to competing brands.
REPOSITIONING
Changing the way a product is perceived by

consumers in relation to other brands or product
uses
REFERENCE PRICE
Any price that a consumer uses as a basis for

comparison in judging another price.
2014

PROF. MOHAN B.RAO
How Businesses Shape Consumers

Opinions
Product name
Product packaging
Colors
Price perceptions
Free product samples
Advertising
Product endorsers
2014

PROF. MOHAN B.RAO
The Products Name Influences

Opinion Formation
The meaning derived from the name may influence
the opinion formed about the product
When it conveys the wrong meaning, sales can suffer
Research on composite branding shows the brand
name appearing first has the strongest influence on
attributes associated with that name
Descriptive names and labels have also been seen to
influence consumers opinions and behaviors
2014

PROF. MOHAN B.RAO
Product Packaging Influences Opinion

Formation
Product packaging creates expectations of the product and
its capabilities including impressions of how much product is
inside the package
Packages are effective at drawing attention particularly when
they have an unusual shape or are taller and thinner as
opposed to shorter but wider packaging
Me-too product packaging, which imitates packaging of a

leading brand, tries to create favorable opinions with
consumers
Stimulus generation occurs when, for an existing stimulusresponse relationship, the more similar a new stimulus is to
the existing one, the more likely it will evoke the same
response
2014

PROF. MOHAN B.RAO
Color Influences Opinion Formation

Consumer opinions are often tied to the products color (which
conveys meaning)
Color granules in detergents and cold capsules serve as a
visual cue for products effectiveness
Pastel colored vacuum cleaners are perceived to be lighter in
weight rather than dark colored tones
Colors of foods may change expectations of flavor and also
change perceived flavor (vanilla pudding that is colored
chocolate)
Websites that use blue screens are seen as more relaxing
with faster download times than those with yellow screens
2014

PROF. MOHAN B.RAO
Price Perceptions
Nine-ending prices: when the last digit of the price is the
number 9, it signals a lower price or is mentally rounded
down ..Given a price of Rs 49.99, it can be viewed as Rs
49.00 instead of Rs 50.00
Reference pricing: information about a price other than that
actually charged for the product is provided
Price tag may carry actual price and manufacturer
recommended price or price previously charged
Designed to encourage consumers to form a favorable
opinion about the reasonableness of the price
Free samples (gifting) can be effective when introducing a

new product
They encourage trial and help foster positive opinions
2014

PROF. MOHAN B.RAO
Advertising Influences Opinion

Formation- Advertising Appeals
Informational advertising appeals attempt to influence consumers
beliefs about the advertised product
Emotional advertising appeals try to influence consumers feelings
about the advertised product
Utilitarian advertising appeals aim to influence consumers opinions
about the advertised products ability to perform its intended function
Value-expressive advertising appeals attempt to influence consumers
opinions about the advertised products ability to communicate
something about the use of the product.
The appropriateness of using a particular type of appeal depends on whats
important to consumers as they form their product opinions
Products can be valued for both their utilitarian and value-expressive
properties
2014

PROF. MOHAN B.RAO
Advertising Influences Opinion

Formation- Claims
Stronger claims create more favorable product opinions
Relevancy makes claims stronger
Strength also depends on what the ad conveys about the

products characteristics and benefits
Ad claim substantiation is important in opinion formation
Search claims: claims that can be validated before purchase
by examining information readily available in the marketplace
Testimonials and product demonstrations are effective ways
to substantiate claims
Advertising execution elements, pictures, camera angles etc.

2014

PROF. MOHAN B.RAO
Product Endorsers Influence Opinion

Formation
Endorsers can help shape product opinions in several ways:
Association with brand may be reason enough to buy it
Endorsers may embody meanings that companies want attached to

their brands
Match-up hypothesis: endorsers are more effective when perceived
as appropriate for the product
Endorsers may give testimonials and provide evidence of products
attributes (make-up on a model)
Endorsers may serve as a peripheral cue
Endorsers trustworthiness is critical in increasing the

believability of the ad claim
2014

PROF. MOHAN B.RAO

CB Perception

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PERCEPTION

CONSUMER BEHAVIOUR PGDM

CONSUMER BEHAVIOUR PGDM

CONSUMER BEHAVIOUR PGDM

CONSUMER BEHAVIOUR PGDM

CONSUMER BEHAVIOUR PGDM

CONSUMER BEHAVIOUR PGDM

CONSUMER BEHAVIOUR PGDM

CONSUMER BEHAVIOUR PGDM

CONSUMER BEHAVIOUR PGDM

CONSUMER BEHAVIOUR PGDM

CONSUMER BEHAVIOUR PGDM

CONSUMER BEHAVIOUR PGDM

Gradual Changes in Brand Name

CONSUMER BEHAVIOUR PGDM

CONSUMER BEHAVIOUR PGDM

Marketing Variables Influencing

Marketing Variables Influencing

The absolute threshold

CONSUMER BEHAVIOUR PGDM

The absolute threshold

The differential threshold

CONSUMER BEHAVIOUR PGDM

CONSUMER BEHAVIOUR PGDM

Various references to Perception

II. Perceptual Organization:

CONSUMER BEHAVIOUR PGDM

Various references to Perception

CONSUMER BEHAVIOUR PGDM

CONSUMER BEHAVIOUR PGDM

CONSUMER BEHAVIOUR PGDM

CONSUMER BEHAVIOUR PGDM

CONSUMER BEHAVIOUR PGDM

CONSUMER BEHAVIOUR PGDM

Model of the Effects of Price, Brand Name, and

CONSUMER BEHAVIOUR PGDM

CONSUMER BEHAVIOUR PGDM

CONSUMER BEHAVIOUR PGDM

CONSUMER BEHAVIOUR PGDM

Information Processing Model of CB

CONSUMER BEHAVIOUR PGDM

CONSUMER BEHAVIOUR PGDM

Usually, you cant get voluntary

CONSUMER BEHAVIOUR PGDM

Information Processing at Work

Interpret: advertiser is trying to compare the brands

Belief: Forbes is for the most up-market passengers

Individual differences: Expensive = good?

CONSUMER BEHAVIOUR PGDM

Reaching subjective conclusions based on

The key process that we use for interpretation:

CONSUMER BEHAVIOUR PGDM

CONSUMER BEHAVIOUR PGDM

Inference: Forming Beliefs Through

Marketers create inferences about brand

CONSUMER BEHAVIOUR PGDM

Inference: Forming Beliefs Through

Country of origin (where the product is made often

Brand extensions also use inferencing principles

CONSUMER BEHAVIOUR PGDM

CONSUMER BEHAVIOUR PGDM

CONSUMER BEHAVIOUR PGDM

Leads us to Perceptual Positioning