CONSUMER BEHAVIOR - PERCEPTION Presentation by Annaji Sarma.

WHAT IS PERCEPTION?
Perception is How we see the world around us Two people may be subjected to same stimuli, under same conditions but how they recognize, select, organize and interpret them is highly an individual process based on each persons own needs, values and expectations. Now we will shortly see its relevance to marketing.

PERCEPTION
DEFINITION The process by which an individual selects, organizes and interprets a stimuli into a meaningful and coherent picture of the world. STIMULUS : It is any unit of input to any of the senses. E.g. product, packages, brand names, advertisements and commercials. SENSORY RECEPTORS: They are the human organs that receive sensory inputs. These sensory organs functions, play either singly or in combination in the evaluation and use of most consumer products.

SENSATION DEFINITION - The immediate and direct response of the sensory organs to simple stimuli. e.g. advertisement, brand name It depends on energy change (differentiation of input). A unchanging environment provides little or no sensation at all. In situations where there is great deal of sensory input, the senses do not detect small intensities or differences in input. As sensory input decreases, however our ability to detect changes in input or intensity increases, to the point that we attain maximum sensitivity under conditions of minimal stimulation.

THE ABSOLUTE THRESHOLD

DEFINITION: The lowest level at which an individual can experience a sensation. Under constant simulation absolute threshold increases , and the senses tend to become increasingly dull. ADAPTATION: Getting used to certain sensations, becoming accommodated to a certain level of simulation.

In an effort to cut through the advertising clutter and ensure that consumers note their ads

Some marketers try to increase sensory inputs. E.g. giving many ads within a weeks time.
Other advertisers try to attract attention by decreasing sensory input. E.g. use of silence to generate interest, attention. Some marketers also use unusual media in which they place their ads in an attempt to gain the attention. E.g. bus shelters.

THE DIFFERENTIAL THRESHOLD

DEFINITION: The minimal difference that can be detected between two similar stimuli. Its also referred to as J.N.D = Just Noticeable Difference. WEBERS LAW: The stronger the initial stimulus the greater the additional intensity needed for the second stimulus to be perceived as different. As the stimuli is not an absolute amount, but an amount relative to the intensity of the first stimulus.

According to this law an additional level of stimulus equivalent to the J.N.D. must be added for the majority of the people to perceive a difference between the resulting stimulus and the initial stimulus.

Weber's law holds for all the senses and for almost all intensities. Retailers have made a general rule of thumb that markdown of merchandise must amount to at least 20% of the old price, since smaller amount often goes unnoticed.

MARKETING APPLICATIONS OF J.N.D.

Manufacturers and marketers endeavor to determine the relevant J.N.D for their products for 2 very different reasons. 1) Negative changes should not be readily discernable to the public. e.g. maintaining the package size but decreasing the contents in smallest units. e.g. a box of 90 tissues to a box of 85 tissues. Despite this being mentioned on the package many customers dont read it (packaging to price).

2) To make the product improvements very apparent to the consumer without being wastefully extravagant.

Less than the J.N.D. is a wasted effort because the improvement will not be perceived; More than the J.N.D may be wasteful by not improving the level of sales.

SUBLIMINAL PERCEPTION
Subliminal perception is a process that happens when the threshold for conscious awareness or conscious recognition appears to be higher than the absolute threshold for effective perception (but below the threshold of awareness). The stimuli received here are too weak or too brief to be consciously seen or heard may nevertheless be strong enough to be perceived by one or more receptors cells.

TYPES OF SUBLIMINAL PERCEPTION

1) Briefly presented visual stimuli. 2) Accelerated speech in low volume auditory messages. 3) Embedded or hidden imagery or words in print ads or on product labels.

DYNAMICS OF PERCEPTION
Raw sensory input by itself does not produce the coherent picture of the world that most individual possess rather it is the result of two different kind of inputs. Physical stimuli Previous experience

Aspects of perception
Perceptual selection Perceptual organization Perceptual Interpretation

Perceptual selection
DEFINITION: Consumers sub-consciously selects the stimuli from the environment & perceive it. Selection of stimuli depends on the following factors: a. Nature of stimulus e.g. Contrast b. Expectations c. Motives

IMPORTANT SELECTIVE PERCEPTION CONCEPTS

SELECTIVE EXPOSURE: Heavy smokers tend to avoid ads linking smoking to cancer SELECTIVE ATTENTION: Consumers notice the ads for stores in which they shop & disregard those in which they dont have a interest PERCEPTUAL DEFENSE: Screen out stimuli that they find psychologically threatening even though exposure has already taken place. PERCEPTUAL BLOCKING: Protect themselves from being bombarded with stimuli by blocking such from conscious awareness

Perceptual organization
Principle underlying this is based on Gestalt Psychology Three of the most basic principles are: 1. Figure and ground: 2. Grouping: Individuals tend to group stimuli to form a unified picture rather than having discrete bits of information. 3. Closure: Individuals always organize their perceptions so that they forma complete picture.

Perceptual Interpretation
The interpretation of stimuli is based on what individuals expect to see on the basis of their previous experience, on the number of possible explanations they can envision and on their motives & interest at the time of perception

Perceptual Distortion
Physical appearance Stereotypes First impression Jumping to conclusion Halo effect

APPLICATION OF PERCEPTION IN STUDYING CONSUMER BEHAVIOR

Consumer Imagery
Consumers have a number of enduring perceptions or images about product and services, prices, product quality, retail stores, brands etc that are relevant to the study of consumer behavior. E.g.: Consumers tend to shop in stores that have images consistent with their own self images

Product and Service Image

The image that a product or a service has in the mind of the consumers Positioning of product or a service hence is more important than the product characteristics. Consumers attempt to preserve or enhance their self-image by buying products that they believe are congruent with their self images and avoiding those that are not.

Positioning Strategy
a. Perceptual Mapping: helps marketers to determine how their products and services appear in relation to competitive brands on one or more relevant characteristics. b. Positioning of services: services are intangible, image becomes a key factor in differentiating a service from competition. The marketing objective is to link a specific image with a specific brand name.

Perceived Price
Consumer perceive price as high, as low, as fair and this highly influence both purchase intentions and purchase satisfaction. Consumers pay attention to the price paid by the other customers and perceive the differentiating price strategies used by marketers as unfair since they are not eligible for the special prices.

Perceived quality
Consumers judge the quality of a product or service on the variety of informational cues, intrinsic or extrinsic that they associate with the product.

 Perceived quality of products intrinsic cues concerns the physical characteristics of the product such as the color, size , flavor or aroma. Extrinsic cues are external to the product itself, such as price ,brand image ,store image and country of origin. Perceived quality of services.

Retail Store Image

Retail stores have an image of their own that serve to influence the perceived quality of the products they carry and the decisions of consumers as to where to shop.

Brand Image
It is defined as a set of associations linked to the brand that consumers hold in memory. Positive brand image is associated with consumers loyalty. Advertising plays an important role in establishing a favorable brand image. Try to avoid price promotion strategies which create a discount image for the brand.

Perceived Risk
Definition: It is the uncertainty the consumers face when they cannot foresee the consequences of their purchase decisions. Types of perceived risk: Functional Physical Financial Social Psychological Time

Perception of Risk Values

Definition: Consumer perception of risk varies, depending on the person, the situation and the culture. High Risk Perceivers: People who limit their choices to few safe alternatives. Low Risk Perceivers: People who tend to make their choices from wider range of alternatives.

How Consumers Handle Risk

1. 2. 3. 4. 5. Consumers seek information. Consumers are brand loyal. Consumers select by brand image. Consumers rely on store image Consumers buy the most expensive model. 6. Consumers seek reassurance.

Thank You