CH-4 Consumer Perception – Consumer Behaviour : Chapter Notes

Chapter 4 Consumer Perception LEARNING OBJECTIVES After reading, studying and analyzing this chapter, students should be able to understand: 4.1The elements of perception and their role in consumer behavior. 4.2Why consumers process only a small amount of the information they receive. 4.3How consumers organize consumption-related information. 4.4Why and how consumers “add” biases to stimuli and the implications of this tendency for marketing. 4.5The elements of consumers’ imagery. 4.6How consumers determine the quality of products and services. 4.7Consumers’ perceived risks and how they handle and reduce those risks. CHAPTER SUMMARY Learning Objective 4.1: To understand the elements of perception and their role in consumer behavior. Perception is the process by which individuals select, organize, and interpret stimuli into a meaningful and coherent picture of the world. Perception has strategy implications for marketers because consumers make decisions based on what they perceive rather than on the basis of objective reality. The lowest level at which an individual can perceive a specific stimulus is that person’s absolute threshold. The minimal difference that can be perceived between two stimuli is called the differential threshold or just noticeable difference (JND). Consumers perceive most sensory stimuli above the level of their conscious awareness; however, weak stimuli can be perceived below the level of conscious awareness (i.e., subliminally). Research refutes the notion that subliminal stimuli influence consumers’ buying decisions. Learning Objective 4.2: To understand why consumers process only a small amount of the information they receive. Consumers’ selections of stimuli from the environment are based on the interaction of their expectations and motives with the stimulus itself. People usually perceive things they need or want, and block the perception of unnecessary, unfavorable, or painful stimuli. The principles of selective perception include the concepts of selective exposure, selective attention, and perceptual defense. Which stimuli get selected depends on two major factors, in addition to the nature of the stimulus itself: (1) consumers’ previous experience as it affects their expectations (what they are prepared, or “set,” to see), and (2) their motives at the time (their needs, desires, interests, and so on). Each of these factors can increase or decrease the probability that a stimulus will be perceived. Learning Objective 4.3: To understand how consumers organize consumption-related information. Consumers organize their perceptions into unified wholes according to the principles of Gestalt psychology: figure and ground, grouping, and closure. Each of these concepts has important implications for understanding consumer behavior. The term “figure” refers to the promotional message and “ground” represents the environment or context within which the figure appears. Because consumers are bombarded with stimuli, they often actively seek to avoid promotional messages. Marketers try to obscure the difference between figure and ground so that their ads do not “stand out” from the contents of entertainment, such as movies and TV shows. They often use product placements, which occur when an advertised product (i.e., the figure) is deliberately integrated into a TV show or film (i.e., the ground). The perception of stimuli as groups or chunks of information, rather than as discrete bits of information, facilitates memory and recall. People instinctively try to organize pieces of sensory input into a complete image or feeling (i.e., they seek closure). Thus, if they perceive that a stimulus is incomplete, they feel compelled to figure out its complete meaning. Learning Objective 4.4: To understand why and how consumers “add” biases to stimuli and the implications of this tendency for marketing. The interpretation of stimuli is highly subjective and is based on what the consumer expects to see in light of previous experience, on motives and interests at the time of perception, and on the clarity of the stimulus itself. Individuals carry biased pictures in their minds of the meanings of various stimuli, which are termed stereotypes. Sometimes, when presented with sensory stimuli, people “add” these biases to what they see or hear and form distorted impressions. Stereotypes that distort objective interpretation stem from physical appearances, descriptive terms, first impressions, and the halo effect. Learning Objective 4.5: To understand the elements of consumers’ imagery. Consumers perceive images of products and brands. The perceived image of a product or service (how it is positioned) is more important to its ultimate success than are its actual physical characteristics. Products and services that are perceived distinctly and favorably have a much better chance of being purchased than products or services with unclear or unfavorable images. The main elements of consumer imagery are consumers’ perceptions of brands, packages, services, and prices. Learning Objective 4.6: To understand how consumers determine the quality of products and services. Consumers often judge the quality of a product or service on the basis of a variety of informational cues; some are intrinsic to the product (such as color, size, flavor, and aroma), whereas others are extrinsic (e.g., price, store image, brand image, and service environment). In the absence of direct experience or other information, consumers often rely on price as an indicator of quality. How a consumer perceives a price—as high, low, or fair—has a strong influence on purchase intentions and satisfaction. Consumers rely on both internal and external reference prices when assessing the fairness of a price. Products and services can deliver high quality factually, as determined, say, by experts’ judgments of scientific tests. However, 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. Consumers’ perceived quality of products and services is based on a variety of informational cues that they associate with the offerings. Some of these cues are intrinsic to the product or service; others are extrinsic. Either singly or together, such cues provide the basis for perceptions of product and service quality. Learning Objective 4.7: To understand consumers’ perceived risks and how they handle and reduce those risks. Consumers often perceive risk in making product selections because of uncertainty as to the consequences of their product decisions. In most situations, consumers’ perceived risk is a function of multiple factors. The elements of perceived risk are functional risk, physical risk, financial risk, social risk, psychological risk, and time risk. Consumer strategies for reducing perceived risk include increased information search, brand loyalty, buying a well-known brand, buying from a reputable retailer, buying the most expensive brand, and seeking reassurance in the form of money-back guarantees, warranties, and pre-purchase trials. The concept of perceived risk has important implications for marketers, who can facilitate the acceptance of new products by incorporating risk-reduction strategies into their new-product promotional campaigns. CHAPTER OUTLINE Introduction 1.Perception is the process by which individuals select, organize and interpret stimuli into a meaningful and coherent picture of the world. 2.Two individuals may be exposed to the same stimuli, but each person recognizes, selects, organizes and interprets the stimuli based on their own needs, values and expectations. 3.Individuals act and react on the basis of their perceptions, not on the basis of objective reality. a)Reality is a totally personal phenomenon, based on that person’s needs, wants, values, and personal experiences. b)Therefore, consumers’ perceptions are more important to a marketer than their knowledge of objective reality because people make decisions based on their perceptions. *****Use Key Term perception Here; Use Figures #4.1 and 4.2 Here ***** The Elements of Perception 1.Perception is all about consumers’ subjective understandings and not objective realities. 2.Changing a brand’s image, or repositioning, is sometimes necessary when consumers’ subjective understandings, or perceptions, do not match objective realities or indicate the products meet the consumers’ needs. *****Use Key Term repositioning Here; Use Learning Objective #4.1 Here***** 3.Raw sensory input does not produce or explain the coherent picture of the world that most adults possess. a)We subconsciously add to or subtract from sensory inputs to produce our own private picture of the world. b)Intensive stimulation bounces off most individuals. c)Physical stimuli from the outside environment are one type of input into perceptions. d)People’s motives, expectations, and what they learned from previous experiences are the other type of input. 4.Sensation is the immediate and direct response of the sensory organs to stimuli. a)A stimulus is any unit of input to any of the senses (e.g. products, packaging, brand names, advertisements, commercials). b)Sensory receptors are human organs that receive sensory inputs. c)Human sensory sensitivity refers to the experience of sensation. d)Sensation itself depends on energy change, or the differentiation of input. e)As sensory input decreases, the ability to detect changes increases. *****Use Key Terms sensation, stimulus and sensory receptors Here; Use Table #4.1 Here***** 5.The lowest level at which an individual can experience a sensation is called the absolute threshold. a)The point at which a person can detect the difference between “something” and “nothing” is that person’s absolute threshold for the stimulus. b)For example, the distance at which a driver can note a specific billboard on a highway is that individual’s absolute threshold. c)Under conditions of constant stimulation, such as driving through a “corridor” of billboards, the absolute threshold increases (that is, the senses tend to become increasingly dulled). 6.Sensory adaptation refers specifically to “getting used to” certain sensations, or becoming accustomed to a certain level of stimulation. Sensory adaptation is a problem that causes many advertisers to change their advertising campaigns regularly. *****Use Key Terms absolute threshold and sensory adaptation Here; Use Review and Discussion Question #4.1 Here ***** 7.Ambush marketing consists of placing ads in places where consumers do not expect to see them and cannot readily avoid them. 8.Experiential marketing allows customers to engage and interact with brands, products and services in sensory ways to create emotional bonds between consumers and marketing offerings. *****Use Key Terms ambush marketing and experiential marketing Here; Use Hands-on Assignment #4.10 Here ***** 9.The minimal difference that can be detected between two stimuli is called the differential threshold or the JND (just noticeable difference). a)A nineteenth-century German scientist named Ernst Weber discovered that the JND between two stimuli was not an absolute amount, but an amount relative to the intensity of the first stimulus. b)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. *****Use Key Terms differential threshold, JND (just noticeable difference), and Weber’s law Here; Use Review and Discussion Question #4.2 Here***** c)Manufacturers and marketers endeavor to determine the relevant JND for their products so that negative changes—reductions or increases in product size, or reduced quality—are not readily discernible to the public, so that product improvements are readily discernible to the consumer without being wastefully extravagant. d)Marketers use the JND to determine the amount of change or updating they should make in their products to avoid losing the readily recognized aspects of their products. e)Marketers want to meet or exceed the consumers’ differential threshold so that they readily perceive the improvements made in the original product. i)Less than the JND is wasted effort because the improvement will not be perceived. ii)More than the JND is wasteful because it reduces the level of repeat sales. ***** Use Review and Discussion Question #4.2 Here; Use Figure #4.4 and #4.5 Here***** 10.People are also stimulated below their level of conscious awareness—they can perceive stimuli without being consciously aware of it via a process called subliminal perception (because the stimulus is beneath the threshold, or “limen,” of conscious awareness, though obviously not beneath the absolute threshold of the receptors involved). a)Over the years, there have been sporadic reports of marketers using subliminal messages in their efforts to influence consumption behavior. b)There is no evidence that subliminal advertising persuades people to buy goods or services. c)As for sexual embeds, most researchers are of the opinion that “What you see is what you get.” *****Use Key Term subliminal perception Here; Use Review and Discussion Question #4.4 Here ***** Perceptual Selection 1.Consumers subconsciously exercise selectivity as to the stimuli they perceive. 2.Which stimuli get selected depends on two major factors in addition to the nature of the stimulus itself: a)Consumers’ previous experience as it affects their expectations. b)Their motives at the time (their needs, desires, interests, and so on). 3.Marketing stimuli that affect perceptions include: a)Nature of the product b)Its physical attributes c)The package design d)The brand name e)The advertisements and commercials f)The position of a print ad or commercial g)The editorial environment 2.Contrast is one of the most attention-compelling attributes of a stimulus. a)Advertisers use extreme attention-getting devices to get maximum contrast and penetrate the consumer’s perceptual screen. b)Advertisers use color contrasts, size, unexpected and unrealistic images to create stopping power and gain attention. *****Use Learning Objective 4.2 Here; Use Figures #4.6 and 4.7 Here; Use Review and Discussion Question #4.5 Here ***** 3.People see what they expect to see based on familiarity, previous experience, or preconditioned set expectations. a)Stimuli that conflict sharply with expectations often receive more attention than those that conform to expectations. b)For years, certain advertisers have used blatant sexuality in advertisements for products to which sex was not relevant in the belief that such advertisements would attract a high degree of attention. c)Ads with irrelevant sexuality often defeat the marketer’s objectives, because readers tend to remember the sexual aspects of the ad, not the product or brand advertised. *****Use Key Term expectations Here***** 4.People tend to perceive things they need or want; the stronger the need, the greater the tendency to ignore unrelated stimuli in the environment. a)An individual’s perceptual process attunes itself more closely to those elements of the environment that are important to that person. b)Marketing managers recognize the efficiency of targeting their products to the perceived needs of consumers. 5.The consumer’s “selection” of stimuli (selective perception) from the environment is based on the interaction of expectations and motives with the stimulus itself. These factors give rise to four important concepts concerning perception. a)Selective exposure—consumers actively seek out messages they find pleasant or with which they are sympathetic and actively avoid painful or threatening messages. b)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. c)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. d)Perceptual blocking—consumers screen out enormous amounts of advertising by simply “tuning out.” *****Use Key Terms selective perception, perceptual defense, and perceptual blocking Here; Use Hands-on Assignment #4.11 Here***** Perceptual Organization 1.People do not experience the numerous stimuli they select from the environment as separate and discrete sensations; they tend to organize stimuli into groups and perceive them as unified wholes. 2.Gestalt psychology (Gestalt, in German, means pattern or configuration) is the name of the school of psychology that first developed the basic principles of perceptual organization. 3.Three of the most basic principles of perceptual organization are figure and ground, grouping, and closure. a)Stimuli that contrast with their environment are more likely to be noticed; an example is the contrast between a figure and the ground on which it is placed. i)The figure is usually perceived clearly. ii)The ground is usually perceived as indefinite, hazy, and continuous. iii)The figure is more clearly perceived because it appears to be dominant—the ground appears to be subordinate and less important. iv)Advertisers have to plan their advertisements carefully to make sure that the stimulus they want noted is seen as figure and not as ground. v)A marketing technique experience growth and stems from the figure-and-ground concepts is product placement (or “branded entertainment”). b)Grouping, or a tendency to group stimuli into chunks, can be used advantageously by marketers to imply certain desired meanings in connection with their products. i)Consumers naturally chunk social security numbers, phone numbers and zip codes ii)Grouping has implications for product placement within retailers c)Closure is people’s instinct to organize pieces of sensory input into a complete image or feeling. i)Promotional messages that require consumers to fill in information gain higher involvement from consumers. ii)Consumers who hear the soundtrack from a television commercial on the radio play back the visual content from memory to “complete” the ad. *****Use Learning Objective 4.3 Here; Use Key Terms Gestalt psychology, figure and ground, product placement, closure, and grouping Here; Use Figures 4.9, 4.10 and 4.11 Here***** Perceptual Interpretation: Stereotyping 1.Stimuli are often highly ambiguous. a)When stimuli are highly ambiguous, individuals usually interpret them in such a way that they serve to fulfill personal needs, wishes, and interests. b)How close a person’s interpretations are to reality depends on the clarity of the stimulus, the past experiences of the perceiver, and his or her motives and interests at the time of perception. *****Use Learning Objective 4.4 Here ***** 2.Stereotypes are the biased “pictures” consumers carry in their minds of the meaning of various kinds of stimuli. a)Sometimes, when presented with sensory stimuli, people “add” these biases to what they see or hear and form distorted impressions. b)Marketers must be aware of possible stereotypes because these images reflect people’s expectations and influence how stimuli are subsequently perceived. c)The main factors that can trigger stereotypes are: i)Physical Appearances—people tend to attribute the qualities they associate with certain people to others who may resemble them. Culturally attractive models are likely to be more persuasive and have a more positive influence on consumer attitudes and behavior than do average-looking models. ii)Descriptive Terms—stereotypes are often reflected in verbal messages. Distinct brand names are important to all products or services, associations that consumers make with certain names are particularly crucial in marketing services due to the abstract and intangible nature of many services. iii)First Impressions—these tend to be lasting. iv)Halo Effect—describes situations where the evaluation of a single object or person on a multitude of dimensions is based on the evaluation of just one or a few dimensions. Consumers often evaluate an entire product line on the basis of the one product within the product line. Licensing also is based on the halo effect—associating products with a well-known celebrity or designer name. *****Use Key Term halo effect here; Use Figure #4.13 Here***** Consumer Imagery 1.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. *****Use Key Term consumer imagery Here; Use Learning Objective #4.5 Here***** 2.Positioning is the distinct image that a product has in the mind of the consumer. a)How a product is positioned in the mind of the consumer is more important to the product’s success than are the product’s actual characteristics. b)Marketers try to differentiate their products by stressing benefits that their brand provides rather than their products’ physical features. c)Brand images may be updated to create emotional bonds between brands and consumers or to help differentiate the product in an increasingly competitive market. *****Use Key Term positioning Here; Use Figure #4.15 Here; Use Tables 4.2 and 4.3 Here ***** 3.Packaging must convey the image that the brand communicates to buyers. *****Use Figure #4.16 Here***** 4.Compared with manufacturing firms, service marketers face several unique problems in positioning and promoting their offerings. a)Services are intangible, so image becomes a key factor in differentiating a service from its competition. b)The marketing objective is to enable the consumer to link a specific image with a specific brand name (using painted delivery vehicles, restaurant matchbooks, packaged hotel soaps and shampoos, and a variety of other specialty items). c)Sometimes companies market several versions of their service to different market segments by using a differentiated positioning strategy. d)The design of the service environment is an important aspect of service positioning strategy and sharply influences consumer impressions. e)The arousal level within the store environment must match the expectations of the shopppers in order to avoid perceived over- or understimulation. *****Use Review and Discussion Question #4.8 Here ***** 5.Perceived price is the customer’s view of the value that the customer receives from the purchase. a)How a consumer perceives a price —as high, as low, as fair—has a strong influence on both purchase intentions and purchase satisfaction. b)Perception of price unfairness—customers pay attention to the prices paid by other customers (e.g., senior citizens, frequent fliers, affinity club members) – affect customer satisfaction, perceptions of product value and willingness to patronize a store or service. *****Use Key Term perceived price Here ***** c.A reference price is any price that a consumer uses as a basis for comparison in judging another price. a.An advertiser generally uses a higher external reference price (“sold elsewhere at...”) in an ad in which a lower sales price is being offered to persuade the consumer that the product advertised is a really good buy. b.Internal reference prices are those prices (or price ranges) retrieved by the consumer from memory. c.Internal reference prices are thought to play a major role in 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. d.Consumers’ internal reference prices change. e.When an advertised reference price is within a given consumer’s acceptable price range, it is considered plausible and credible. f.If the advertised reference point is outside the range of acceptable prices (i.e., implausible), it will be contrasted and thus will not be perceived as a valid reference point. *****Use Key Term reference price Here; Use Table #4.4 Here ***** 6.Consumers often judge the quality of a product (perceived quality) on the basis of a variety of intrinsic and extrinsic informational cues. a)Intrinsic cues are concerned with physical characteristics of the product itself: size, color, flavor or aroma. i)Consumers like to think they base quality evaluations on intrinsic cues because that enables them to justify their product decisions as being “rational” or “objective.” ii)More often than not, however, they use extrinsic characteristics to judge quality. iii)In the absence of actual experience with a product, consumers often evaluate quality on the basis of extrinsic cues, price, brand image, store image, etc. b)Extrinsic cues are characteristics that are not inherent to the product. *****Use Review and Discussion Exercise 4.9 Here; Use Key Terms perceived quality, intrinsic cues, and extrinsic cues Here; Use Figure 4.17 Here***** 7.It is more difficult for consumers to evaluate the quality of services than the quality of products. a)Service characteristics include—intangibility, variability, perishability, simultaneously produced and consumed. b)Consumers are unable to compare services side-by-side as they do products, so consumers rely on surrogate or extrinsic cues when purchasing services. c)Marketers try to standardize their services in order to provide consistency of quality. d)Researchers have concluded that the service quality that a customer perceives is a function of the magnitude and direction of the gap between expected service and the customer’s assessment of the service actually delivered. e)The expectations of a given service vary widely among different consumers of the same service. f)SERVQUAL, measures the gap between customers’ expectations of services and their perceptions of the actual service. i)These perceptions are based on the dimensions of tangibles, reliability, responsiveness, assurance, and empathy and tangibility. ii)Two dimensions used to measure service quality are outcome dimensions—the reliable delivery of the core service—and process dimensions—how the core service is delivered. *****Use Hands-on Assignment 4.13 Here; Use Key Term SERVQUAL scale Here***** 8.A price/quality relationship forms when consumers rely on price as an indicator of product quality. a)Because price is so often considered to be an indicator of quality, some products deliberately emphasize a high price to underscore their claims of quality. b)Consumers also use cues such as the brand and the store in which the product is bought to evaluate quality. c)Consumers rely on the price and brand name when evaluating the product’s prestige and symbolic value and use more concrete attributes of a product, such as performance and durability, to judge its overall performance. d)Marketers must understand all the attributes that customers use to evaluate a given product and include all applicable information in order to counter any perceptions of negative quality associated with a lower price. e)Consumers use price as a surrogate indicator of quality if they have little information or little confidence in their ability to make a choice. *****Use Key Term price/quality relationship Here***** 9.Retail stores have images of their own that serve to influence the perceived quality of products they carry and the decisions of consumers as to where to shop. a)These 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. b)The width and type of product assortment affects retail store image. c)The unique benefit that a store provides is more important than the number of items it carries in forming a favorable store image in consumers’ minds. d)Customers often use brand, store image, and price together as a product’s quality indicators. e)When brand and retailer images become associated, the less favorable image becomes enhanced at the expense of the more favorable image. f)Pricing discounts impact retail store image.Stores that offer frequent, small discounts on large numbers of items are more likely to be perceived as “discount stores” and less prestigious than stores offering larger discounts on a smaller number of products. 10.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. a)Consumers generally have favorable perceptions of brands that are the first in a product category and are more likely to purchase. b)Today, companies are using institutional advertising, exhibits, and sponsorship of community events to enhance their images. *****Use Key Term institutional advertising Here***** Perceived Risk 1.Perceived risk is the uncertainty that consumers face when they cannot foresee the consequences of their purchase decision. a)The degree of risk that consumers perceive and their own tolerance for risk taking are factors that influence their purchase strategies. b)Consumers are influenced by risks that they perceive, whether or not such risks actually exist. Risk that is not perceived will not influence consumer behavior. c)Types of risk include: functional risk, physical risk, financial risk, social risk, psychological risk, and time risk. *****Use Learning Objective 4.7 Here; Use Key Term perceived risk Here; Use Table 4.5 Here***** 2.The amount of risk perceived depends on the specific consumer, the product, the situation, and the culture. a)High-risk perceivers are narrow categorizers because they limit their choices. b)Low-risk perceivers are broad categorizers because they make their choice from a wide range of alternatives. *****Use Key Terms narrow categorizers and broad categorizers Here***** 3.Consumers characteristically develop their own strategies for reducing perceived risk. a)These risk-reduction strategies enable them to act with increased confidence when making product decisions, even though the consequences of such decisions remain somewhat uncertain. i)Seek information ii)Remain brand loyal iii)Rely on brand image iv)Rely on store image v)Buy the most expensive model or brand b)Marketers need to provide consumers with persuasive risk-reduction strategies such as: i)A well-known brand name ii)Distribution through reputable retail outlets iii)Informative advertising iv)Publicity v)Impartial test results vi)Free samples vii)Money-back guarantees *****Use Table #4.6 Here***** Instructor Manual for Consumer Behaviour Leon G. Schiffman, Leslie Lozor Konuk, S. Ramesh Kumar 9789332555099, 9780134734828