Consumer Perception

Consumer perception is defined as a process by which consumers sense a marketing stimulus, and organize, interpret, and provide meaning to it. The marketing stimuli may be anything related to the product and/or brand, and any of the elements of the marketing mix.

Learn about: 1. Meaning and Definition of Consumer Perception 2. Nature and Characteristics of Consumer Perception 3. The Perceptual Process 4. Mechanism 5. Concepts 6. Consumer Imagery 7. Perceived Risks 8. Internal and External Factors 9. Difference between Perception and Sensation.

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Consumer Perception: Meaning, Definition, Nature, Characteristics, Process, Elements, Concepts, Factors, Mechanism and More…

Consumer Perception – Meaning and Definition

Derived from the word ‘perceive’, perception refers to the ability to give meaning to whatever stimuli are sensed by our sense organs. The stimuli are inputs to any of our sensory receptors, be it vision, hearing, smell, taste, or touch. An individual uses the perceptual mechanism to select a stimulus from many in the environment, organizes them into a coherent picture, and interprets it to derive meaning out of it. Perception is the process through which an individual interprets his sensory impressions to give meaning to them.

Consumer perception is defined as a process by which consumers sense a marketing stimulus, and organize, interpret, and provide meaning to it. The marketing stimuli may be anything related to the product and/or brand, and any of the elements of the marketing mix. We can classify the marketing stimuli into two types, namely primary or intrinsic and secondary or extrinsic.

The primary or intrinsic stimuli comprise the product and its components, namely brand name, label, package, contents, and physical properties.

The secondary or extrinsic stimuli comprise the form in which the good or service offering is represented through words, visuals, graphics, and the symbolism, or through other cues such as price, outlet, salespeople, or marketing communication.

Definition:

The term ‘perception’ can be defined as the ability to derive meaning. In the context of marketing, it refers to the manner in which a consumer gives meaning to the marketing stimuli. The manner in which a consumer perceives the marketing stimuli (i.e., any or all of the elements of the marketing mix) has a bearing on his entire buying decision process, right from problem recognition or identification of a need to post-purchase behaviour, and affects his overall behaviour. The marketing stimuli could pertain to any and all of the elements of the marketing mix.

The perceptual process comprises three components, namely the perceiver, the target (stimulus), and the situation. The perceptual mechanism depicts a complex and dynamic interplay of three processes, namely selection, organization, and interpretation. Perceptual selection is the process by which people select a particular stimulus or a small portion of the stimuli to attend to, while screening out the rest.

Perceptual organization is a cognitive process, which is responsible for organizing the stimuli and the surrounding cues, to develop a ‘whole picture’, according to one’s physiological, sociocultural, and psychographic backgrounds, so as to give some meaning to it. Perceptual interpretation involves extracting meaning out of the ‘whole picture’. As processes, both perceptual organization and interpretation are intertwined as both have to do with deriving sense and assigning meaning to the stimulus to which a person has been exposed.

Because the characteristics of each of the components, perceiver, stimulus, and situation, are different, the perceptual mechanism is impacted variedly. People perceive things differently because of the perceptual mechanism that differs between people. Perception is unique to each person, and this makes perception a subjective process.

Perception as a topic of study is important for marketers because people generally make purchase decisions on the basis of what they perceive. Consumers perceive the marketing stimuli variedly. They form their opinions and beliefs about products and/or brands, the price, the store, and the retailer, and about the advertisement and promotional messages that they are exposed to. They also form mental images of them, often adding symbolic value to marketing stimuli in the form of imagery. When the marketing stimuli are perceived favourably, chances of purchase and usage are always higher.

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Consumer Perception Explained by its Nature and Characteristics

Perception can be better explained by understanding its nature and characteristics:

1. Perception comprises three components, namely the perceiver, the target (stimulus), and the situation. The characteristics of each of these components influence the perceptual processes of selection, organization, and interpretation. The consumer, actual or prospective, is the perceiver, the 4 Ps are the target, and the buying occasion and the surrounding environment are the situation.

2. Perception is a complex process. After a stimulus is detected by the sense organs, the perceptual process comes into play and involves the interplay of three processes, namely selection, organization, and interpretation. In this way, perception is a dynamic process.

3. Perception is also an intellectual process, as it involves a lot of cognitive effort. Once sensation takes place, the cognitive processes take over and assign meaning to the stimulus. Consumers possess varying cognitive capacities and capabilities; their backgrounds are diverse, and psychological processes (needs, motivation, learning, attitudes, and values) and sociological factors (culture, sub-culture, and social class) are different. The cognitive processes have a bearing on not only the perceptual mechanism, but also on the resultant output and the behavioural response of the perceiver.

4. Perception is broad in nature. It includes a physiological component (through sensation), as well as cognitive, sociological, and psychological components.

5. Perception is a subjective process, as it is unique to each person. Two consumers who are exposed to a particular stimulus may perceive it differently. While they are exposed to the same marketing stimulus, the manner in which they select, organize, and interpret it is different.

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4 Important Elements involved in the Consumer Perceptual Process – Input, Perceptual Mechanism, Output and Behaviour

The perceptual process starts when a person is exposed to a stimulus and the sensory receptors report it to the human body. While the senses may be exposed to various stimuli, they select only some of these at a given point in time. This is because the sense organs have a limited capacity at a particular point in time.

Once the sense organs have reported a stimulus or a few stimuli, the perceptual process takes over. Of the stimuli that have been detected, few are selected, organized, and interpreted for meaning. This is known as the perceptual mechanism.

The dynamics involved in perception include the following:

1. The sensory receptors sense a stimulus (object, person, or situation).

2. The stimulus is either given attention or ignored.

3. In case it is given attention, the selected stimulus is organized and interpreted to result in beliefs, which influence our behaviour in day-to-day life.

People perceive things differently because of their characteristics and backgrounds, and because of the different perceptual mechanisms that take place.

Although we may differ in such processes, universally speaking, the perceptual process comprises four elements, namely:

1. Input,

2. Perceptual mechanism,

3. Output, and

4. Behaviour

Let us have a discussion on these:

1. Input:

The input to the perceptual process refers to the various stimuli that surround an individual and exist in his environment. The perceptual process begins when the sensory receptors detect a stimulus in the environment, which acts as an input to the perceptual mechanism.

2. Perceptual Mechanism:

Once the sense organs detect a stimulus in the environment, the person selects, organizes, and interprets it through a. perceptual selectivity, b. perceptual organization, and c. perceptual interpretation. Put together, this is known as the perceptual mechanism.

a. Perceptual selection or perceptual selectivity refers to a tendency within a person to select one or a few out of the many stimuli present in the environment. Selectivity is based on one’s demographic, sociocultural, and psychographic factors. A person would tend to select those stimuli that appear attractive and relevant to him. Selectivity would also be affected by the characteristics of the stimulus as well as by the situation involved.

b. Perceptual organization occurs after the stimulus has been received and selected for further processing. It is the process of organizing inputs into a definite, coherent, and interpretable structure. In other words, the various stimuli are organized and given a form.

c. Perceptual interpretation refers to the process of drawing inferences from the organized whole (of stimuli), and giving meaning to them.

3. Output:

Once the input has been interpreted, it results in an output. The output towards the stimulus assumes various forms, for example, in the formation of emotions and moods, as well as beliefs, opinions, and attitudes.

4. Behaviour:

The resultant behaviour is an outcome of the output. Based on one’s emotions and moods, as well as beliefs, opinions, and attitudes, a person would enact a behaviour.

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The Perceptual Mechanism – 3 Sub-Processes (With Examples)

The perceptual mechanism requires greater discussion owing to the great deal of complexity and dynamism that go into play.

A detailed discussion on the three sub-processes namely, is as follows:

1. Perceptual selection,

2. Organization, and

3. Interpretation

1. Perceptual Selection:

Human beings are simultaneously exposed to various stimuli in their environments. Due to the fact that various stimuli cannot be treated or processed at the same time, people become selective in their approach and choose some stimuli for further processing and disregard the rest.

The choice of the stimulus would depend on what they feel is relevant to and/ or appropriate for them. In the field of marketing, stimuli could include the product, the brand name, the features and attributes, the packaging, and the advertisement. This is referred to as perceptual selectivity.

Perceptual selectivity is the process by which people select a particular stimulus or a small portion of the stimuli to attend to, while screening out and disregarding the rest. Marketers should manage the sensory and perceptual factors to influence consumers. Keeping perceptual selectivity in mind, marketers should offer different products for different segments and position them accordingly.

Sometimes we are flooded with a lot of stimuli around us. In the marketing context, this happens when we are surrounded by a lot of products and/or brands in a store, and we find it difficult to concentrate on a particular stimulus. At such times, people tend to identify what would be more important to sense and give attention to. This is known as signal detection.

Another perspective to defining the signal detection theory relates to how and when a weak stimulus (signal) would get noticed in spite of a lot of activity around it. While the absolute threshold has a role to play, the signal detection theory proposes that the ability to notice a stimulus (signal) not only depends upon the characteristics of the stimuli but also on the background stimulation, and the detectors (perceiver’s) characteristics’ like alertness, interest, expectation, motivation, involvement, attitudes and beliefs, personality type, etc.

For example, if a lady needs a 2-kg bag of Kohinoor Basmati rice, she will notice the brand despite the clutter of other products and brands, and will be selective to a 2-kg pack although there may be 1-kg and 5-kg Kohinoor Basmati packs in the vicinity.

Further, people also have a tendency to selectively attend to only one voice amidst many others, deal with it, and then move on to ‘tune in’ to the next. This ability to focus on one voice over everything else is known as the cocktail party effect. Because the phenomenon involves the auditory attention on a particular stimulus while filtering out the rest, and is similar to a party person who can focus on a single voice amidst a lot of other noise, the concept is called a cocktail party effect.

In the context of marketing, a consumer who visits a fair or an exhibition is able to pay attention to one message from a loud speaker at a time and ignores the rest. The message may be the one which is the loudest, or the one that relates to his need and want, or the one that is attractive enough as it talks of a sale or a discount. For example, a person would be receptive to a message from a Nescafe coffee vendor if he is in need of a beverage, or would be receptive to a message from an apparel wear brand that announces a 20 per cent off.

Another concept related to perceptual selection is sensory adaptation. Sensory adaptation refers to a reduction in sensory responsiveness when exposed to a stimulus for a substantial period of time. This is because as we are exposed to a stimulus constantly for some amount of time, there is monotony and constancy, and we tend to become less sensitive to it. This explains why marketers face the problem of advertisement wear-out. On repetition of the advertisement and constant exposure to the viewer, the advertisement begins to get unnoticed.

The viewer or the reader no longer gives attention to the promotional message, and the impact once created by the advertisement gets weakened. This is called the wear-out effect. In order to tackle this problem, marketers go about changing their advertisements, and introduce changes either in the content or in the context, or in both.

They go in for substantive or cosmetic variation. Substantive variation in advertisements occurs where the message content changes, while the background or the models or the jingle remains the same. Cosmetic variation occurs where the model changes, but the message remains the same immediately draws our attention.

Consumers are more likely to be selective about stimuli that relate to their current needs, and are personally relevant. Ibis is called perceptual vigilance. For example, if a person is thirsty, a hoarding or a banner showing an advertisement of Pepsi or Coke would immediately catch his attention, and he would be on the lookout for a store where he can buy a cold drink to quench his thirst.

People are also seen to exhibit selectivity when they see what they want to see, and avoid seeing something which they do not want to see. This is called perceptual defence.

Perceptual selectivity depends on two broad sets of factors, namely:

(i) Factors external and related to the stimulus, and

(ii) Factors internal and related to the perceiver.

(i) External and Related to the Stimulus:

These factors may be further classified as sensory elements and structural elements. Sensory elements are characteristics in the stimulus, which are sensed immediately, such as smell and sound, taste and feel, and colours and visuals. The structural elements also pertain to the stimulus and comprise characteristics that make a stimulus stand out and apart from others.

These could take the form of:

a. Size,

b. Intensity (including bright lights and colour, loud sounds, and strong smells),

c. Contrast,

d. . Motion,

e. Position,

f. Isolation,

g. Repetition,

h. Familiarity,

i. Novelty, and

j. Pleasantness.

In the context of marketing and consumer behaviour, the stimuli could include the product, the brand name, the features and attributes of the product, the packaging, the advertisement (message content and context), and the channel (audio-visual or print).

Let us look at them briefly:

a. Size:

The larger the size of the stimulus, the more likely it is to be noticed. For example, headlines in the newspaper are in larger font size and immediately catch our attention. Similarly, the brand name on the packaging of a product is again in a larger font size, and is meant to draw our attention. In addition, a full-page print advertisement is more likely to be noticed than a half-page or a quarter-page advertisement.

Today, most newspapers carry full-page advertisements on the first and the last pages.

b. Intensity:

The larger the force or power of a stimulus, the greater will be the chances of it getting noticed and perceived. For example, strong aromas of food outside a restaurant or the smell of cakes and pastries outside a confectionery store, bright and flashy colours on the packaging of a product, and the use of a loudspeaker on mobile vans for publicity are immediately sensed by our sensory receptors.

c. Contrast:

Any stimulus that stands out from the rest of the environment receives greater attention. For example, capital and bold letters in a print advertisement or on a package are immediately sensed by us. Reversals, that is, white printing on black background or vice versa, catch our attention.

d. Motion:

Anything that moves has greater chances of being noticed than a stimulus that is stationary. For example, the use of mobile vans for promotion and advertising also grabs attention.

e. Position:

Position refers to the placement of an object in a perceptual field. A stimulus that is placed closer to the centre is more likely to be perceived. In addition, stimuli that lie at the eye level are sensed and perceived immediately compared to those that are placed elsewhere.

i. For example, in a store, products and/or brands that are displayed at eye-level shelf space are more likely to be perceived.

ii. The positioning of point-of-purchase stimuli, banners, and hoardings at prominent places (entrance of the store and exit) also catches attention. This is the reason why FMCG companies compete for eye-level spaces as well as prominent places for display of their brands in department stores.

iii. Advertisements on the front cover or on the back cover or on the centre page of a magazine or a brochure draw immediate attention.

iv. Further, stimuli placed at one’s right-hand side tend to receive greater selectivity than those placed at one’s left. For example, advertisements printed on the right-hand side in a newspaper or a magazine receives greater attention than those placed on the left. However, there is another point of view, which says that the left-hand side of the page receives greater attention.

v. Similar is the case of advertisements that appear on the upper half of the page, which are more attention grabbing than those appearing on the lower half of the page. This is particularly so for a language like English, which runs left to right down the page, wherein the upper half of the page receives more attention than the lower half, and the left-hand side receives more attention than the right.

f. Familiarity and Novelty:

A new stimulus in a familiar setting or a familiar stimulus in a new setting increases the chance of perceptual selectivity. Both substantive variations in advertisements, where the message content changes, while the background remains the same and cosmetic variation, where the background changes, but the message remains the same, immediately draw our attention. Apart from familiarity and novelty, the unexpectedness of a stimulus also grabs attention, as it acts as a surprise element and affects perceptual selectivity.

For example, Flipkart made children play adult characters in their advertisements, which was something novel. The entire series of Flipkart advertisements grabbed the attention of the audience.

g. Isolation:

A stimulus (or a few stimuli) that stands alone in isolation immediately draws attention. The use of white spaces in print advertisements, with a few black letters, also comes to our notice immediately (This can also be related to the contrast effect.). For example, a stand-alone kiosk in a marketplace or even in a department store or a mall immediately catches our attention.

h. Repetition:

A repeated stimulus is more likely to be noticed. For example, advertisements that are beamed in the audio­visual media are more likely to be noticed than those in the print media. This is because they are repeated several times. However, this has limitations in the sense that too much of repetition leads to monotony and boredom, and may lead to sensory adaptation. So marketers go in for cosmetic and substantive variations in their advertisements from time to time.

i. Pleasantness:

Stimuli that are pleasant in terms of looks, aesthetics and design, and music receive greater attention than stimuli that are not. For example, attractive visuals and graphics on packaging or in print media as well as beautiful displays and aesthetically designed stores and outlets are immediately sensed by our sensory receptors and perceived by us.

(ii) Internal and Related to the Perceiver:

Apart from the above factors, there are factors internal and related to the perceiver, which also affect perceptual selectivity. These factors are those factors that relate to an individual and would differ from person to person, viz., factors like motivation, learning, personality and self-image, past experience, expectations etc. As per these psychological variables, the perceptual selectivity of a person depends on what he considers relevant and appropriate.

a. Needs and Motivation:

Selection of a stimulus depends on our needs, wants, and motivation, and what we think is relevant to us. For example, if a person wants to buy a flat (safety and security need), and if he is high on the esteem need too, he will be quick to notice advertisements for availability of flats in the posh areas of the city. He will be receptive to such stimuli that support this need.

Similarly, if a person is strong on the need for achievement, he will be receptive to inputs or stimuli that support the need for achievement. Thus, people with different needs select different stimuli (i.e., items) to respond to. The stronger the need is, the greater will be the tendency to select related stimuli and ignore unrelated stimuli in the environment. Interest and involvement with a product category also impact the level of attention that a person would give to the goods and services and/or brands.

b. Learning:

Learning influences the development of perceptual sets within an individual. People have a tendency to perceive things based on their perceptual sets and beliefs.

As individuals, we learn from our experiences and store such learning in our memory bank. The selectivity of stimuli is based on what and how we would like and/or expect things to be. For example, consumers are attracted to a particular brand(s) because they have heard or read good reviews and expect it to be good. A person who has heard something positive about a Dell laptop or who has had pleasant experiences with it in the past will be attracted towards reading and watching anything positive about it, so that it conforms to his attitudes and beliefs.

c. Personality and Self-Image:

Personality traits and characteristics have a bearing on an individual’s nature to perceive or not to perceive. They also affect the dynamics of perception, that is, the manner in which they select (what), organize, and interpret (how) their sensory impressions to give meaning to a stimulus. Further, a person will be attracted to a stimulus that closely relates to his/her personality and self-image.

For example, a person will be attracted to product and/or brand where the product and/or brand personality is in congruence with his own. Thus, while some people prefer plain and simple two- wheelers, others prefer trendy, stylish, and more powerful ones.

Apart from these, other factors that affect selectivity of a stimulus are as follows:

i. Response disposition – Response disposition is the tendency to select a familiar stimulus rather than the one that is unfamiliar.

ii. Expectations – People have a tendency to perceive a stimulus based on their expectations. They exhibit a tendency to have preconceived notions about an input and the resultant tendency to select anything that supports the expectation and vice versa.

iii. Past experiences – Past experiences create expectations, which impact the manner in which people perceive things. As mentioned above, past experiences also lead to the creation of perceptual sets, and we perceive things accordingly.

iv. Emotions and moods – Positive emotional and mood states make people more receptive to stimuli.

Another factor that plays a role in selectivity of a stimulus and pertains both to the stimulus and to the perceiver is overload. In case of an overload or clutter of stimuli, the perceiver would find it difficult and unmanageable to deal with the stimuli. This is also true of information overload, where the consumer would find it difficult to cope up with a lot of information simultaneously.

The ease of processing and one’s ability to comprehend also have an effect on perceptual selectivity. In case the message is unclear and not understandable, or the person lacks the ability to process and comprehend the message, he will ignore the information, and thus the stimulus (information) will go unnoticed.

All these factors affect perceptual selectivity of a marketing stimulus across consumers. Even subsequent processes of organization and interpretation of stimuli would vary from one consumer to another, and that is the reason why people perceive things differently.

These are factors that affect perceptual selectivity; the following discussion focuses on sensory thresholds in general and on absolute threshold and differential threshold in particular:

i. Sensory Threshold:

Any and every stimulus that we are exposed to may not catch our attention. This is because the stimulus lacks strength and intensity. For example, a faint sound may not be heard, or a light smell may go unnoticed. Further, the ability to detect a stimulus or variation in the stimuli is determined by one’s threshold level.

The amount of strength and intensity that a stimulus must possess so as to get noticed by one’s sensory receptors is referred to as sensory threshold. Sensory threshold is further elaborated upon by the two sub-concepts, namely absolute threshold and differential threshold. While absolute threshold is an absolute concept, differential threshold is a relative concept.

ii. Absolute Threshold:

The minimum amount of strength or intensity that a stimulus should possess to get noticed is referred to as absolute threshold. It is the lowest level of stimulation at which an individual can detect a sensory experience, and thus, identify a difference between nothing’ and ‘something’.

At the two opposite ends of the threshold continuum lie the subliminal and terminal thresholds. When a stimulus possesses strength or intensity that falls below one’s absolute threshold for sensory reception and/or conscious awareness, it is known as the subliminal threshold (or subliminal perception or subliminal stimulation). In subliminal threshold, the consumer subconsciously receives information. On the other end, where the stimulus is so strong and intense, and above one’s absolute threshold that it causes discomfort and pain, it is known as the terminal threshold.

Those stimuli that lie at or above the absolute threshold, and which we can easily detect, are called supraliminal. Marketers should aim to project their brand through this threshold. Needless to say that a stimulus should neither be subliminal, as it would go unnoticed, nor be terminal, as it would be shunned and ignored.

Every individual has sensory receptors that have an absolute threshold, which determines the lowest amount of stimulation that can be detected. Thus, the absolute threshold varies from person to person. The absolute threshold also varies with time, place, and environment.

iii. Differential Threshold:

The minimum amount of change that is required to be brought about in a stimulus to produce a noticeable change is referred to as the differential threshold. That is why it is also known as j.n.d. (or just noticeable difference).

The principle of just noticeable difference (j.n.d.) was first proposed by the German psychophysicist Ernst Heinrich Weber in the nineteenth century. Weber proposed that the amount of change that is necessary to be noticed is not an absolute amount but an amount relative to the intensity of the original stimulus.

The greater or stronger the initial level of the characteristic or the first stimulus itself, the greater or stronger the intensity of change needed for the second stimulus so that a change can be identified and perceived in the latter. The principle has also come to be known as Weber’s Law. The relationship proposed by the Weber law can be expressed through the following equation –

K = Δi x i

Where K is a constant, which varies across the senses, Δi is the minimal change in the intensity of the stimulus necessary to produce a j.n.d., and i is the intensity of the stimulus at the point at which the change occurs.

For example, a shirt that is priced at Rs. 500 could be placed on a discount sale and offered at Rs. 480, but in case it is priced at Rs. 2000, it should be placed on a discount sale of Rs. 1750 to have the desired impact. Similarly, if the price of a kilogram of sugar is increased by Rs. 2, the consumer may not notice the change, but if it is increased by Rs. 10, the consumer would immediately notice it.

Thus, j.n.d. is not an absolute but a relative concept. The change between two stimuli is not perceived as absolute, but as an amount relative to the strength and intensity of the original (or the first) stimulus. The stronger the initial stimulus, the greater the intensity needed for the second stimulus to be perceived as different from the first.

This implies that in order to get noticed, the difference between two stimuli must be in constant proportion, rather than in a constant amount. Subsequently, a theoretical explanation was given by Gustav T. Fechner, a German philosopher, physicist, and experimental psychologist, and so the rule has also been come to be known as the Weber-Fechner law.

Marketers should understand that while making changes in their 4 Ps, the differential threshold must be kept in mind. For changes like increased quantity at the same price, like ‘Buy 2 at the price of 1’ or ‘free 50 grams’, the j.n.d. should be kept high again, so as to be immediately noticed and perceived. On the other hand, for changes like reduction in product quantity (or size) at the same price, the j.n.d. should be kept low, so that the consumer does not perceive the reduction in quantity in the product package.

In the case of FMCGs such as shampoo sachets, milk powder pouches, butter chiplets, and coffee pouches, marketers often reduce the content, while keeping the packet size the same. Similarly, in case the marketer has to change the ingredients of a product, either because he wants to lower down the cost of production or due to non-availability of the original ingredient, the j.n.d. should again be kept low, so that consumers are unable to notice the difference.

In such cases, before the ‘changed’ product is launched in the market, market tests are conducted to test whether the consumer can identify a change, and if the change is identifiable, what is the consumer reaction towards it. This is common in the case of ready-to-eat snacks and foods, as well as cold drinks and juices.

Other Principles in Perceptual Selection:

There are certain other principles that relate to perceptual selectivity, namely:

i. Selective perception,

ii. Selective exposure,

iii. Selective attention,

iv. Selective retention,

v. Perceptual defence, and

vi. Perceptual blocking.

Each of these is elaborated upon as follows:

i. Selective Perception:

Regardless of reality, people have a tendency to see, hear, and believe what they actually want to see, hear, and believe. In other words, consumers perceive things in a manner which they are used to or are comfortable with, and in congruence with their needs and motives, learning, attitudes, personality, values and beliefs, interests, experiences, and other background characteristics. This is also called selective comprehension and selective distortion.

ii. Selective Exposure:

While people are exposed to various stimuli at the same time, they pay attention to some, and ignore others. People have a tendency to seek out messages that they find are pleasant and sympathetic, and those which conform to their attitudes, beliefs, and preconceived notions and expectations. Further, people are selective about the stimuli they notice. This is called selective exposure. For example, people often surf channels, and zap and wander or leave the room during play of advertisements or programmes which they find scary, painful, and threatening.

iii. Selective Attention:

Of the many stimuli that people are exposed to, they pay attention to those stimuli that they consider to be relevant in terms of (a) a match with their needs and interests and/or (b) a consistency with their attitudes, opinions, values and beliefs, and expectations. This is also called controlled attention or directed attention. Sometimes, consumers attend to stimuli that are novel and unexpected, surprising, threatening, or even intimidating. This is known as involuntary attention.

iv. Selective Retention:

People fail to remember all that they are exposed to, and would remember and retain what reinforces one’s existing attitudes, opinions, values and beliefs, and expectations. It is believed that an average consumer remembers only 30 per cent of the information that he sees, reads, and hears, and is exposed to. Thus, of all the stimuli that people are exposed to, only some are stored and retained, to be retrieved later on. This is known as selective retention.

v. Perceptual Defence:

Sometimes people may select a stimulus which they later find as psychologically threatening, uncomfortable, and unacceptable, thus leading to uneasiness and anxiety. In such cases, they have a tendency to filter out that stimulus, although initial exposure has taken place. This is called perceptual defence.

vi. Perceptual Blocking:

When exposed to a large number of stimuli simultaneously, people often get stressed out and block the various stimuli from their conscious awareness. This is because the body cannot cope up with so many stimuli at the same time. This is called perceptual blocking.

2. Perceptual Organization:

The second sub-process in the perceptual process is referred to as perceptual organization. After an input has been received and given attention to in the selection stage, it is organized into a coherent form as conceptual schemata so as to extract meaning out of it.

Perceptual organization arranges the stimulus into meaningful, recognizable, and understandable patterns. When exposed to various stimuli, human beings do not select them as separate and unrelated identities, but they group them and perceive them as ‘a unified or meaningful whole’.

Individual parts have no meaning, and are interpreted meaningfully only as an identifiable whole. This organization of the stimulus is based on certain principles, which were first proposed by the Gestalt school of psychology, and hence the name ‘Gestalt principles’.

The Gestalt school originated in Austria and Germany towards the end of the nineteenth century, and grew during the early part of the twentieth century. While the school of thought finds its origins in the work of Max Wertheimer, contributions by Immanuel Kant, Ernst Mach, Johann Wolfgang von Goethe, Wolfgang Kohler, and Kurt Koffka have been significant. Max Wertheimer, Wolfgang Kohler, and Kurt Koffka are credited with the formation of the Gestalt school.

‘Gestalt’ is a German word meaning ‘pattern or configuration’ or ‘form, shape, or figure’, or ‘unified whole’. Human beings tend to view a collection of different or even unrelated elements not as they exist, but as a collection of elements configured as a whole form or patterns.

The Gestalt theory explains how people assemble and organize visually independent stimuli (objects, persons, things, and information) into a group or a ‘unified whole’. It proposes that ‘the perceptual whole is more (or different) than the sum of its parts’, and elaborates on the same through the various laws of grouping.

The fundamental principle or the central law of the Gestalt perception is the Law of Pragnanz (Pragnanz in German means pregnant with meaning, or clarity and conciseness or good figure). The Law of Pragnanz proposes that people perceive objects as a well-organized whole. They tend to perceive things in a manner which is simple, complete, regular, concise, orderly, harmonious, and symmetric.

They like to experience things in ‘as good a Gestalt’ as possible. ‘As good a Gestalt’ is interpreted as regular, orderly, simplistic, and symmetrical. The law also referred to as the Law of Good Figure (form) or the Law of Simplicity envelops all of the various perceptual laws.

In order to explain the Law of Prägnanz, and elaborate on the mechanism that underlies the Gestalt perception, the Gestalt psychologists have proposed certain laws, which are known as the Gestalt laws. The laws help explain the dynamics of perceptual organization, and subsequent perceptual interpretation of the stimulus that has been sensed by our sensory receptors.

While perceiving things as a ‘unified whole’, the Gestalt school of thought views the human mind and behaviour as a whole. While the laws of Gestalt perception influence the mind’s perceptual processes (or the perceptual mechanism), they do not act independently. Rather they influence one another, and together have a bearing on the perceptual process.

Although we have mentioned several Gestalt laws, the six basic laws of perceptual organization are law of similarity, law of simplicity, law of continuation, law of proximity, law of common fate, and law of familiarity. In addition, all these various laws contribute to the overarching central law of perception, which is the law of Pragnanz.

There are certain factors that affect the Gestalt perception or the manner in which the configuration of the stimuli takes place.

These factors are:

i. Stimulus factors, and

ii. Individual factors.

i. Stimulus Factors:

In terms of marketing, stimulus factors refer to the characteristics of the product, brand, packaging, and advertisement.

Such factors would include:

a. Size,

b. Intensity,

c. Motion,

d. Repetition,

e. Familiarity and novelty,

f. Colour and contrast,

g. Position,

h. Isolation and

i. Unity.

Those that have not been discussed are as follows:

a. Colour and Contrast:

Colour always catches greater attention than black and white. A coloured advertisement is more striking than a black- and-white one. However, it has been observed that a coloured advertisement can lose impact when placed with other coloured advertisements. Herein, the contrast effect assumes importance. A coloured advertisement in full- context black-and-white or vice versa is a perfect example of contrast effect. These are also referred to as reversals.

b. Position:

Research has indicated that position also has a role to play in sensory perception.

Position of a stimulus is vital in perceptual selectivity, organization, and interpretation, and these account for price differences for advertisement placement in newspapers and magazines; the price of an advertisement differs according to the position where it is placed.

c. Isolation:

When a stimulus stands apart from other stimuli, the chances of it getting perceived are greater than when it is clustered together with other stimuli.

A stand-alone kiosk is immediately noticed and perceived than when it is placed in a clutter of counters, outlets, and stores.

d. Unity:

Unity as a principle has an important role to play while organizing the various stimuli into a unified group.

Unity can be achieved by applying the Gestalt principles of:

(i) Proximity,

(ii) Similarity, and

(iii) Density.

(i) Proximity:

Those stimuli that are placed close to others form groups. For example, in a department store, groceries are displayed and stocked in one section and toiletries in another. They are perceived as two distinct product categories.

(ii) Similarity:

Those stimuli that are similar to one another form groups. Slice, Maaza, and Frooti look and taste similar, and are perceived as mango drinks.

(iii) Density:

Those stimuli that have common density units form groups. For example, milkshake bottles, cold coffee cans, and fruit juice packs are placed together, and are perceived as beverages.

ii. Individual Factors:

In marketing terms, the individual factors refer to the characteristics of the consumer, such as consumer motivation, learning, personality, and self-image. Such characteristics are unique to the individual and play an important role in selection, organization, and interpretation. They differ from person to person and as such, they are less measurable and quantifiable than stimulus factors.

Motivation, learning, attitudes, beliefs, and personality and self-image.

Those psychological characteristics are as follows, that affect perception:

a. Interest:

The interest level varies from person to person. Some generalizations with respect to interest may be made on the basis of age, gender, social class, and lifestyle. For example, the youth would be interested in aesthetically appealing and high-powered automobiles, while the middle-aged would show interest in well-designed, robust, and safe automobiles.

b. Involvement:

Involvement refers to the degree with which a person approaches a person, object, thing, or stimuli. It is indicative of how important and relevant something is to a person. When the level of involvement for a product is high, the consumer would be more attentive to any kind of information that is provided. In addition, information gathering, retention, and recall would be high. The consumer would perceive the offering differently compared to the one who is not that involved in the good or service category.

c. Values:

People are receptive to such goods or service offerings that are compatible with their culture and sub-culture, and the respective value system. They would exhibit perceptual defence when exposed to stimuli that do not match their values or go against their values. For example, white apparel wear may not be acceptable for a wedding in northern India, but it would be considered sacred in southern India.

Principles of Perceptual Organization:

The Gestalt laws are also referred to as the principles of perceptual organization.

There are four major principles of perceptual organization, namely:

i. Figure and ground,

ii. Grouping,

iii. Closure, and

iv. Simplification.

These are elaborated as follows:

i. Figure and Ground:

According to the figure and ground principle, perception has two parts – the first forms the figure and the second forms the background; the former stands out against the latter, clearly separating the partially merged shapes. In the case of the opposite scenario, where the perceiver perceives the figure to be the ground, and the ground to be the figure, it is referred to as the reversible figure and ground.

ii. Grouping:

As per the grouping principle, people tend to group together the various stimuli so that they are seen as ‘chunks’ rather than discrete bits, and are perceived as recognizable pattern and a unified whole. The grouping of the discrete and distinct pieces of stimuli is done so as to facilitate storage in memory and easy remembrance and recall.

Connection (via lines and curves) and enclosures also assist in elements or objects being viewed as a group. The bases for such grouping are (a) similarity amongst stimuli and (b) proximity of the stimuli. However, this principle of grouping may also lead to a perceptual error, which is termed as stereotyping.

The stimuli or elements that are similar to one another in some way or the other are grouped together and seen as belonging to one another. The similarity might depend on visual characteristics such as form, shape, colour, size, brightness, texture, or any other characteristic of the stimuli. In the context of marketing, people rushing together to a store that announces a discount can be grouped together as price-sensitive and deal-prone.

Products with a similar packaging are perceived to be the same. The similarity may be in the form of size, shape, colour, labelling (sign, logo, and brand name), and packaging. The principle accounts for the success of (a) family branding and (b) me-too (imitation) products.

Objects placed close to one another are seen as related and going together. In marketing terms, display of soaps in a shelf space gives an impression to the consumer that all FMCGs will be placed together, and all the various brands of soaps would be stocked in one place. In this way, people perceive products that are close to one another as forming a single product category. Similarly, when a store offers select products on sale, items that are placed close to one another are perceived to be similarly discounted or on sale.

iii. Closure:

The closure principle of the Gestalt psychology lays emphasis on an individual’s need for completion of a stimulus. The principle states that in cases where an object is identified as incomplete by sensation, our perceptual processes give it a complete form. In other words, in closure, the human mind perceives an object as a ‘complete whole’ although the object is incomplete and some elements are missing.

For example, a consumer watches the Nirma advertisement on TV. As and when he hears the message on the FM radio, and hears the jingle, in his need for completion, he would be able to form mental images and replay the advertisement as shown on TV. This is closure.

iv. Simplification:

As the term implies, the principle of simplification states that human beings have a tendency to simplify things to make it more understandable and easy for remembrance and recall. When people are exposed to too much of stimuli, or information, they subtract or delete the less relevant ones and give importance to the more important ones. This is done so that they can lessen the load on their cognitive processes. In the context of marketing, a person who wants to buy a laptop browses through the brochures of different companies and looks for the keywords, rather than reading the brochure sentence by sentence.

3. Perceptual Interpretation:

The final sub-process in the perceptual process is referred to as perceptual interpretation. After the input has been given attention, and has been organized into a coherent form, a meaning is extracted out of it. As processes, both perceptual organization and interpretation are intertwined, as both have to do with deriving sense and assigning meaning to the stimulus to which a person has been exposed.

The difference between the two lies is the fact that while, in most of the cases, the laws of perceptual organization are applied sub-consciously and perceptual organization is a sub-conscious process, perceptual interpretation is a conscious process.

Perceptual interpretation is a purely cognitive process, which is responsible for extracting meaning out of the organized stimulus (‘whole picture’) that a person is exposed to. There are two different kinds of knowledge structures that facilitate the process of perceptual interpretation. These are the schema and the script; the schema includes the organized body of thoughts, beliefs, and feelings that a person has about the stimuli (be it an object, a person, or a situation); the script comprises the sequence of actions associated with such a stimulus.

Although cognitive in nature and involving the application of learned associations, perceptual interpretation is a subjective process, which is affected by numerous influences. Thus, interpretation is unique to an individual and varies from person to person. People interpret a stimulus variedly across time and situation. Similar to selection and organization, perceptual interpretation is also influenced by the forces external and related to the stimulus, as well as those internal and related to the perceiver. It is also affected by the situation under which perception takes place.

In the context of marketing, when a consumer makes a purchase decision, it is a function of not only how the stimuli (any or all of the elements of the marketing mix) are presented, but also the manner in which such stimuli are organized and interpreted. This has relevance for marketing communication, where decisions with respect to both the message strategy (content and context) and the media strategy have an impact on perceptual selectivity, organization, and interpretation.

Similarly, labelling, packaging, point-of-purchase stimuli, shelf display, window dressing, and store display impact the perceptual mechanism in a consumer.

Human beings have a tendency towards perceptual constancy. Perceptual constancy can be defined as the ability to interpret the stimulus as it was before (although it has undergone a change and is different), without reinterpreting its changed properties. This implies that although the element or the object may undergo a change, people often do not reprocess it. There are different types of constancies, namely size, shape, colour, and brightness (lightness).

The concept of perceptual constancy can be related the j.n.d. Due to their ability and/or tendency to maintain constancy, people interpret a stimulus as before although the stimulus may have undergone a change. That is why the j.n.d. must be kept high enough so that it is noticeable by the consumer, especially when a marketer has a new or improved version to offer, which he wants the consumers to notice.

At this stage of the perceptual process, a perceiver may make mistakes, and this could lead to misinterpretation of the stimuli. Such mistakes are referred to as perceptual errors and perceptual distortions. Perceptual errors occur due to a number of distorting influences. When perceptions are inaccurate and faulty, and the resulting behavioural responses are inappropriate and unbalanced, there occurs what is referred to as a perceptual distortion.

In perceptual distortion, people interpret a stimulus in a manner that supports their values, thoughts, and beliefs, and misinterpret what the marketer actually wants to say. People often distort the stimulus (or the information) to make it more congruent with existing values and beliefs. This is known as selective interpretation. Perceptual errors and distortions may occur due to various reasons.

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Concepts Underlying Consumer Perception

Perception is defined as the process by which an individual selects, organises and interprets stimuli into a meaningful and coherent picture of the world. No two individuals are alike. Although two persons may be exposed to the same stimuli, and under the same environmental conditions, how each one of them recognises, selects, organises, and interprets the stimuli will be a highly individualised process.

Often the perceptual process is based on each one’s own needs, values and expectations. Marketers are interested in knowing how each of these variables will influence the perception process.

We start with discussing the basic concepts underlying the perception process.

Sensation:

Sensation may be described as an immediate direct response of a physical sensory organ. The physical senses are vision, hearing, touch, smell and taste. These physical senses are continuously exposed to internal and external stimuli and human sensation occurs because of them. The sensation may be in the form of reaction of the eye to colour or mouth to taste and so on.

Thus, sensation is related to a very elementary or basic behaviour which is based on physiological functioning. And sensitivity of the person to the stimuli will vary depending on the individual’s sensory receptors and the intensity of the stimuli to which he or she is exposed.

Perception is something more than sensation. It co-relates, integrates and comprehends the various sensations and information received from the different organs of the body by means of which a person develops his sensitivity to various things and objects. Perception is determined by both physiological and psychological factors.

This is because perception is developed based on previous experience (learning), feeling and motives. Whereas, sensation only activates the sensory organs of the body. Simply stated, activation of the ears to hear what another person is saying is sensation and the inference of what is heard is perception.

An individual’s sensitivity will depend on the sensory inputs.

Absolute Threshold:

The point at which an individual senses a difference between ‘something’ and ‘nothing’ is referred to as the “absolute threshold’ for a particular stimulus. For instance, two friends after a long ride on the motor bike are hungry. When these two friends first spot a restaurant, it is said to be their absolute threshold. If both of them spot the restaurant at different times, they are said to have different absolute thresholds.

Under conditions of constant stimulation, i.e., the individual gets continuous exposure to certain objects or events, then inspire of the absolute threshold increasing, due to the ‘adoption’ process, the stimuli will cease to make a positive impression.

This sensory adoption is a problem, which most of the advertisers try to avoid. If viewers are continuously exposed to the same ad for a long and continuous period, after some time they will no longer see the ad as it is. That is, they will no longer ‘See’ the ad such as to provide sufficient sensory input.

It is due to this sensory adoption problem that many of the television advertisers change their advertising campaigns after some time. If the advertisement whether shown on T.V or in print media, loses its initial impact on the consumers mind and will cease to provide sufficient sensory input to be noted, it will be preferable to change the ad campaign.

For instance the advertisement showing the evil cackle of the horned spokes Saitan (Devil) of Onida TV had been changed to a more humorous and synthetic announcement by an airhostess and now Onida T.V has after a gap of sometime re-introduced the ‘devil’ in its ad.

With the emergence of new media, advertisers have realized the necessity of developing new advertisements, which will help to strengthen their brand building efforts.

For example, Magicbricks, Dainik Jagran (India’s largest selling Hindi Newspaper), SOTC Travels have been buying a lot of advertising space in leading newspapers such as The Times of India to ensure that readers note their ads.

Big Bazaar uses the rear side of public transport city buses to advertise their products, ensuring that people on the road will be exposed to the ad. At times, advertisers try to draw attention by decreasing sensory input, such as include a lot of space so as to accentuate the brand name or product illustration. Sometimes the T.V may use silence (no voice over or audio music) to generate interest among the viewers.

Marketers are seeking innovative ways in an effort to catch the attention of the consumers. Through usage of such non-conventional sensory inputs, marketers want to ensure that consumers notice their products and induce product trails, brand preference and create a high set of positive perception and experience with it. For instance, Tata-AIG Insurance uses SMS and ring tones (like to Zandu Balm, Maggi etc.,) apart from regular telesales in order to reach out to its audiences faster and at lesser cost.

Some marketers use specifically engineered fragrance product offerings. Tide detergent powder advertises about its Rose plus Jasmine fragrance associated with their product. Such attempts are made to determine the target customers absolute threshold and woo them to purchase the particular brand.

Differential Threshold:

The minimal difference that can be noticeable between two similar stimuli is known as the differential threshold or the just noticeable difference (j.n.d).

This concept was developed by a German scientist named Ernst Weber in the 19th century. He observed that the just noticeable difference between two stimuli was not an absolute amount but was relative and dependent on the intensity of the first stimuli or stimulus.

According to this Weber’s law, if the initial stimulus is strong, more or additional intensity will be required for the second stimulus to be perceived as different. For instance, if the price of a colour T.V increases by Rs. 100/- This increase in price may not be noticed (because the increment was below the just noticeable difference).

But if the domestic cooking gas price increases even by Re one, this will easily be noticed by consumers. This is because in case of cooking gas, this price increase is a significant percentage of the basic cost of the cooking gas and thus the consumers attention will be drawn to the price hike.

As per the Weber’s law, an additional level of stimulus (equivalent to the just noticeable difference) is required for most of the people to perceive a difference between the resulting stimulus and the initial stimulus. Further, it is also said that Weber’s law holds true for all the senses and for almost all intensities also.

Weber’s law has very good marketing applications. Marketers are using Weber’s law to determine the relevant just noticeable difference for various reasons. In case of reduction made in product size, increase in product price or reduced quality, the firm would not want the public to notice the difference or when the firm has updated its existing products, or lowered the price, they would want the consumers to just notice the difference, without being wastefully extravagant.

For instance, because of increasing costs, firms have to choose between increasing prices or reduce the quantity offered at the existing price. There are some marketers who have preferred to keep themselves in the consideration set of the consumers mind by making a change in quantity.

For instance, Brooke Bond’s Red Label Tea which used to be available in the sizes of 250 gms and 500 gms is now available at the retail outlets in the 245 gms, 490 gms quantity size packs. This attempt by Brooke Bond is to make consumers just not notice the difference in the quantity size.

In product categories like soap, toothpastes, tea, fast foods etc., marketers have realised that consumers are in a position to try out and choose a number of brands based on price, symbolic appeal or the ‘value for money’ proposition offered by the manufacturers. And consumer loyalty in this segment is not very strong because even a small change in price may upset the brand.

That is why for such product categories, the firms are announcing various promotional schemes like free toothbrush with Pepsodent toothpaste or one plus one free offer of Close-up Gel. Even in the consumer durables category such as the colour T.V., exchange offers (or exchange value proportion) are being offered in order to motivate consumers to buy. Since the market is filled with brands glutter, marketers are working out planned attempts to gain a share of the consumers’ mind.

In a period, when the market is crowded with many (consumer) products (especially in consumer non-durables) marketers try to adjust the price of their products so that the consumers may not become aware of the just noticeable difference.

For instance when the price of tea goes up, the retailers offering loose tea, will downgrade quality (by making a blend consisting of inferior quality of tea leaves mixed with many other ingredients), while not including the ‘just noticeable difference’.

Some companies are either decreasing the package but maintaining the earlier pack size and get charging the same price. But such tactics will not reveal the Invisible price rise’ to the consumers. For instance, Procter & Gamble reduced the number of sanitary napkins in its ‘ Whisper Ultra size’ pack and Kimberley-Clark have reduced the number of diapers ‘Huggies’ in their packages.

At times, marketers realising the impact of cumulative advertising built up over the years, for a particular brand, may only go for updating the existing packaging so as to not lose the recognition of the product by the consumers.

For instance ‘Grasim Gwalior advertising has always been associated with the royal, Nawab of Pataudi. This trend was continued only with the emphasis, shifting to fall below the just noticeable difference with the inclusion of Saif Ali Khan, the son of the Nawab of Pataudi.

Medimix herbal soap has differentiated itself on the herbal plant more than two decades ago when there were only synthetic soaps available in the market. Inspite of many other brands having entered this product category, Medimix continued to communicate the benefit of the ‘herbal’ proposition through appropriate imagery.

A few decades ago Horlicks was positioned to appeal to convalescing people and other segments of consumers who need nutrition-professionals, dancers and children. The brand has not been able to maintain its consistency with regard to its user imagery but has been able to successfully sustain its ‘nutrition’ association.

This brand has been re-launched a few times over the past few decades with an improved version of its offerings. Horlicks through its advertising imagery has continued to reinforce its nutritive association by focusing on its ‘Junior’ variant (aimed at children), introduction of its cold shake (Targeting teenagers) — all in an attempt to match the changing needs of its consumers.

When Whirlpool bought the TVS washing machine, they entered into an agreement, whereby they were entitled to use the brand name of TVS washing machine, initially for a short period. This was felt necessary because, Whirlpool realised that during the transition period, they would build up a brand name for ‘Whirlpool washing machine and this gradual change in the brand name will fall below the just noticeable difference threshold.

Another popular soap in the sandalwood fragrance category is the Mysore Sandal Soap from Karnataka Soaps Detergents limited (KSDL). Over the years whenever the change in packaging of this soap was made, it was a very small one, so as to call in the just noticeable difference threshold level and also to retain its ‘Originality’.

So, marketers are continuously engaged in trying to identify the consumers’ differential threshold so as to determine the right amount of improvements to be made in the product which would be readily perceived by the consumers’ also.

Subliminal Perceptions:

There is a major controversy regarding consumer perception i.e., whether consumers can actually perceive marketing stimuli below their absolute threshold. The process whereby stimuli which are too weak or too brief to be consciously seen or heard, although they may be strong enough be perceived to by one or more receptor cells and thus be below the threshold is known as the subliminal perception.

Simply put, subliminal perception refers to the perception of a stimulus below their absolute threshold. Thus perception below the absolute threshold is referred to as subliminal perception. It is reported that in an experiment conducted by Vicary in 1957 had indicated that exposure may occur without attention or comprehension.

That is, even though consumers may not see the message, they may register it. In Vicary’s text, two messages were shown “Eat popcorn” and “Drink Coca cola” in movie theatre for a very short time (much below the absolute threshold) at five-second intervals. Subsequently, the sales of popcorn increased by 58 per cent and coca cola by 18 per cent when compared to the time period when there was no subliminal advertising. Of course, later on there were controversies regarding the influence of subliminal advertising on consumer actions.

Nevertheless, evidence suggests that it will be very difficult to exert influence through subliminal stimuli. Further, due to variations among consumers in terms of their perceptual ability, the difficulty in implementing advertising themes at low threshold level and the lack of evidence to any effect of subliminal advertising on the purchasing behaviour of consumers, it is not often used as an effective marketing tool.

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Consumer Imagery

Consumers formulate mental images or descriptions of the marketing stimuli that they are faced with. This is known as imagery. The perceived images that get formed may relate to the goods and service offerings and the marketing mix.

I. Goods and Service Offerings and Imagery:

In today’s era, when the market is competitive and not much difference exists within brands, the product and its image have an important bearing on the success of a brand. While making purchase decisions, consumers are faced with numerous alternatives, and purchase decisions are often made on the basis of the image that the goods and service offerings and/or the brand hold. Suitable consumer imagery must be developed in the minds of the consumers.

Through positioning, marketers make conscious attempts to create imagery about the good and service offering and/ or brand in the mind of a consumer. Consumer imagery is the mental picture that the marketer creates about his good and service offering. The image could relate to the good and service attributes and features, the price, or the overall brand persona. Due to the inherent characteristics of services, such as intangibility, variability, perishability, and simultaneous production and consumption, marketers find it much more difficult to position services than to position products.

Marketers often rely on perceptual mappings a technique, which helps them assess how a particular product and/or brand is positioned in the consumer’s mind with respect to competitor brands on one or few product features, attributes, or characteristics. It helps study consumer perception about product attributes and features of various competitive brands.

Perceptual mapping also helps assess gaps in a product class so as to identify areas where the consumer needs are not met, thereby identifying areas for improvement, and often providing a boost to new product development. Marketers undertake efforts to innovate and develop new products with the objective of meeting such unfulfilled needs and expectations, even if they only have to offer such products to small segments or niches.

With a change in market likes and dislikes, consumer demands and preferences, entry of competitor brands, and the desire to add or change to newer segments, the marketer may have to change consumer imagery about the good and service offering and/or brand. This is known as repositioning. Repositioning occurs when the marketer wants to bring about a change in the consumer’s perception of a product and/or brand. In order to reposition, the marketer could bring about a change in any of ill of the elements of the marketing mix.

Changes could be brought into the features, the attributes and benefits, the price, the place of sale (and in the manner the selling occurs), and the advertisement (message content and context, appeals, and celebrities). Any attempt at repositioning should be preceded by market research and a study of consumer behaviour. Needless to say that repositioning is an expensive exercise both in terms of time and money.

II. Perceived Price and Imagery:

The manner in which a marketer prices a product and creates an image also has an impact on consumer decision-making. The price of a good or service offering must be reflective of the value that it provides. Prices may be perceived as (i) fair/unfair or (ii) high, medium (fairly priced), or low, and this has an influence on the purchase intention, action, as well as satisfaction/dissatisfaction of the consumers. Price imagery often gets related to the quality of the good and service, the brand name, the store name, and the manufacturer’s (corporate) name.

Price-and imagery-related issues are detailed as follows:

1. Fairness of Price:

Consumers consciously or sub-consciously give a lot of importance to fairness of price. Differential pricing strategies used by marketers in the case of economically poor people or senior citizens are looked upon by other customers as unfair practices, but they often reconcile to it as being justified because of the group or the category of customers to whom it has been offered. However, any other kind of discrimination with respect to prices is treated as unfair. Any kind of unfairness leads to discontinuation of the brand usage and a switch over to other brands or stores.

2. Reference Price:

Perception of price as high, medium (fair priced), or low – The reference price is defined as the base price that a consumer uses to compare with another price. Reference prices may be internal and external. Internal reference prices are prices that are internal to the consumer, stored in his memory and retrieved from the memory bank as and when required. These are generally prices that a person has paid in the past and as such, they are based on his experience.

External reference prices are used by the marketer who communicates with the customer and tries to influence the consumer’s price expectations to his advantage by telling how that it was expensive earlier. Marketers often show how a product and/or brand are being sold at a higher rate in other places (e.g., ‘sold at other places as…., we sell much lower at 20 per cent discount’).

This type of communication portrays a price advantage, and is persuasive in nature to influence the consumer that the product and/ or brand offer is a good buy and that the deal is a good one. Reference prices are not constant and keep changing with market trends and consumer experience in the marketplace.

Prices are also perceived as high, medium, or low on the basis of a comparison with a reference price. When studied in terms of internal and external, as well as high, medium, or low, price is defined as plausibly low, plausibly high, and implausibly high.

When prices fall well within the range of market prices, they are referred to as plausibly low; when prices are such that they are near the outer limits of the range, but within rational reasonable limits, that is, within believability, they are referred to as plausibly high; and when prices are such that they lie much above the realm of reasonableness, and the consumer’s perceived range of acceptability, they are referred to as implausibly high. For example, for a loaf of milk bread, a consumer may perceive the price to lie anywhere between Rs. 18 and Rs. 30 per loaf.

If a loaf of bread is priced at Rs. 20 or Rs. 22, it would be perceived as plausibly low; if priced at Rs. 28 or Rs. 30, it would be perceived as plausibly high, but if priced at Rs. 42, it would be perceived as implausibly high. As long as the marketer’s advertised price falls within a consumer’s acceptable range, that is, it is plausibly low or plausibly high, it would be assimilated; else, it would be contrasted and negated and would not qualify as a reference point.

3. Price Discount Slogans:

Various kinds of slogans in various formats can be used by a marketer to his/her advantage.

i. Odd pricing or prices on the product assortment that end in 99 (e.g., 299 only or 9999 only) are used to portray how cheap and reasonable a store is. This is because a product assortment priced at a value that ends in 99 is perceived as being cheaper. Research has revealed that odd pricing helps develop a price affordability perception in the minds of the consumer. Odd pricing is commonly used in most retail stores across product categories ranging from grocery to electronic goods.

ii. The wording and the semantics used to denote price or any information related to prices can also affect a consumer’s perception about price.

a. 20 per cent off at store ABC. Sold elsewhere at Rs. 500. Such slogans tend to communicate ‘value’ to the customer through perceptions of increased savings and low price. The consumer then decides to patronize store ABC.

b. Discounts may be communicated either objectively or specifically, as precise (e.g., 50 per cent off), or non-specifically in a range, as tensile (e.g., 20-50 per cent off).

c. Further, discounts may be offered on the entire product range (e.g., sale on all items) or on select products and/ or brands (e.g., sale on select items or limited stock).

iii. Objective versus tensile price cues – Objective price claims are indicative of a single discount (e.g., save 40 per cent), generally for a specific good or service offering. Tensile price claims are spread over a range (e.g., ‘save 30-40 per cent’, ‘save up to 40 per cent’, and ‘save 40 per cent or more’). Such claims are generally spread over a wide assortment (an entire product line or various product lines) or even across a store. They have a greater impact on the consumer psyche than objective price claims, which are indicative of a single discount and help build store traffic, and subsequently larger sales and revenue.

4. Discount Levels:

Advertisements indicating discount levels can be framed variously, and their effectiveness varies across formats.

i. Consumers’ shopping intentions are less favourable when advertisements are framed as stating the minimum discount level (e.g., save 5 per cent or more) than when they state the maximum discount level (save up to 30 per cent).

ii. The effectiveness of advertisements that specify the maximum discount level (save up to 30 per cent) either equals or exceeds the effectiveness of advertisements stating a tensile discount range (save 5—30 per cent).

iii. Further, when across a product line, say, soaps, varying levels of savings are advertised, (5 per cent off on Lux, 10 per cent off on Liril, and 15 per cent off on Dove), the maximum discount level would be most effective as a store traffic builder because it would influence the consumers’ perceptions of savings.

iv. In addition, sales promotional schemes like ‘buy one, get one free’ are often used to attract consumers towards a product purchase. Consumers perceive such offers to be of value, and they get attracted towards such offers. They fail to realize that in most of such cases, the price of the item has been increased beforehand. Sometimes while keeping the prices intact, the content of the pack is reduced. As the j.n.d. is kept low, consumers fail to realize that they are buying a decreased quantity for the same price.

v. Last, when a store offers small, but frequent, discounts across a large product assortment, the store loses its high price-quality-value image, and is perceived as an ‘economy store’ or a ‘discount store.’ On the other hand, when a store offers higher discounts, it does not lose its premier image.

5. Bundle Pricing:

When a marketer sells together two or more goods and/or service offerings as a single pack at a special discounted price, it is known as bundle pricing or price bundling. The goods are sold as a bundle at a single price, which is much lower than the price that would be charged if the goods were sold separately. There are two kinds of price bundling, namely pure bundling and mixed bundling.

In pure bundling, the marketer does not provide to the buyers the option of buying the goods and service offerings separately, and so the consumer is forced to buy either the entire bundle or nothing, for example, a shampoo and a conditioner. Pure bundling can be further sub-divided into two categories, namely joint bundling and leader bundling.

Joint bundling Is a type of pure bundling where two or more goods and service offerings are sold at one bundled price, for example a baby kit containing a soap, shampoo, powder, creme, and comb. Leader bundling is another type of pure bundling, where a leader product and/or brand is given at a discounted price only if it is bought along with a non-leader product and/or brand; for example, a TV may be sold at a discounted rate only when the customer also buys the DVD player.

In mixed bundling, the option to buy the offerings separately at higher prices is available, and the consumers can choose to buy either the entire bundle or one or few items from the bundle, for example, software packages. Because of the concept of reference price, mixed bundling has been found to be more attractive to customers.

Bundle pricing enhances the value of the offerings through decreased prices and increased savings. In bundle pricing, which is also called product bundle pricing or package deal pricing, the various product items are sold as a combined unit at a price which is much less compared to the sum of the separate purchase prices of the product items.

III. Perceived Quality and Imagery:

Consumers judge the quality of the product offering on the basis of internal and external cues. Internal cues refer to the physical characteristics internal to the good or service, such as size and colour, while extrinsic cues refer to cues that are external to the good or service, such as price of the product, brand image, retail store image, or the country of origin.

For some product offerings, quality can be assessed using intrinsic cues or physical characteristics. For example, flavour and aroma are used to assess the quality of bakery products and ice creams and colour is used to assess the quality of mouthwashes and detergent soaps.

For other product offerings, quality cannot be wholly and accurately assessed using such intrinsic cues or by experience alone, and the consumer depends on extrinsic cues to assess quality, for example, (i) price – the higher the price, the better the quality – Dell and Sony; (ii) brand image – Samsung and Apple Inc.; (iii) manufacturer’s image – BMW and Mercedes; (iv) retail store image – Spencer and Shopper’s Stop; and (v) country of origin – electronics – Japan, rubies – Myanmar, gold – Dubai, coffee – Columbia, and stainless steel – Sheffield.

When consumers use information about something to form beliefs about another, it is known as an inferential belief. Both internal and external cues provide information about the good or service quality. However, in the absence of information and/or experience, consumers rely on the price-quality relationship; price is looked upon as a surrogate cue, and it is perceived as an indicator of quality.

It is difficult to judge quality in the case of services due to the characteristics that differentiate services from products, namely intangibility, heterogeneity, perishability, inseparability of production and consumption, and irreversible or irrevocable action. Comparisons are made between expectation (before) and perception (after), so as to determine the gaps and assess quality. However, with respect to consumer perception of quality of services and imagery, consumers rely on extrinsic cues like surrogate cues to evaluate quality.

Consumers also pay attention to the general atmosphere and ambience. Unlike products, the quality of services may be inconsistent and vary across the day or across months. For example, during peak hours or during certain months of the year, due to excess demand, the overall quality may get affected. Thus, service marketers provide off-season discounts and rebates, and also run promotion schemes in non-peak demand periods so as to streamline and distribute consumer traffic.

Very often, the country of origin plays an important role in consumer decision-making. People’s perception about the country-of-origin effects can be both cognitive and affective. People also have their own perceptions regarding ‘country of origin, or ‘made in…’, or ‘manufactured in…’. In other words, the country of origin of the products has a bearing on how people perceive them.

In fact, some product categories such as wine, cheese, chocolates, and rubies are traced back to the country where they first originated, for example, French wine, Scottish cheese, Swiss chocolates, Italian furniture, Burmese rubies, Japanese electronics, and German cars. Today, although most of these product categories are manufactured and sold worldwide, the place of origin still affects people’s perception about the product and/or brand. The country-of-origin effects also have an impact on the manner in which people evaluate products and/or brands.

The country of origin may affect a marketer both positively and negatively. For example, while a good or service category which has its origin in a particular country and becomes famous worldwide may find an easy entry and acceptance in a particular culture (country), it may not be acceptable in another culture (country) because people have ill-feelings and hostility towards that particular country.

IV. Price/Quality Relationship and Imagery:

Consumers relate a high price to the good or service features, attributes and benefits, and the overall quality that the offering provides. Price is seen as an indicator of quality; the general perception is that the higher the price, the better is the quality. However, when a consumer has knowledge and prior experience with the brand or is familiar with the brand name and the brand image, price would become a less important factor in the assessment of quality. So price is regarded as a surrogate indicator of quality, and consumers prefer buying the most expensive brand.

Further, an increase in price is perceived as an improvement in the good or service, especially in terms of features and attributes, and overall quality, while a decrease in price is looked upon as deterioration in the good or service quality. In fact, when prices are decreased, consumers become sceptical about the purchase and use of the good or service.

While this perception of the price-quality relationship is considered for most product categories, the relationship is more important for high-involvement products or complex products that are difficult to test, and experiential goods and services that cannot be tested until purchased and used.

The higher the perceived risk associated with a good or service offering, the greater the probability that consumers would believe in this price-quality relationship, and prefer buying the most expensive brand.

V. Retail Store and Image:

Just as goods and service offerings are positioned and clearly indicate the segment(s) for which they are aimed, retail stores are also positioned. They are not only indicative of the goods or service offerings, their quality, and the price at which they sell, but also reflective of the layout, design, ambience, and the price of the offerings, which clearly demonstrate the segment(s) for which they exist. A good store image increases people’s confidence about its product quality, leading to the intention to buy.

Layout, Design, Merchandise Presentation, and Ambience:

The store layout and design, aesthetic, and appealing presentation of merchandise, as well as the ambience (colour, light, sound, scent, visual designs, and general atmosphere) of a retail store, reflect the kinds of product lines it carries. In fact, the mannequins that it keeps and displays also reflect the stores image. The store could be a specialty store catering to clothing and apparel, or a department store catering to edibles, clothing, and even durables. The design and ambience would vary considerably across the two kinds of stores.

Labelling:

Retail stores often create an identity for themselves, and introduce private label brands. The effects of the store image translate into the products as well, and vice versa. This accounts for the success of private label brands. Retail stores such as Westside or Pantaloons go in for putting their own labels on the creations of others. Big Bazaar packs and labels its edibles and staple food grains as Food Bazaar.

Pricing:

The retail store and its image are greatly impacted by the price of the offerings and the discounts that it offers. Specialty and super specialty stores price their offerings high and offer hardly any discounts, except during festive seasons or clearance sales. On the other hand, department stores and general stores offer discounts; such stores have the option to offer a small discount on a large number of items or larger discounts on a smaller number of products.

While the former provides frequency of price advantage, the latter provides magnitude of price advantage. Stores that offer a small discount on a large number of items are perceived to be having lower prices overall than stores that offer large discounts on a smaller number of products.

VI. Manufacturer Name and Image:

People also form perceptions about companies, and manufacturers have their own distinct images. People are more receptive to goods and service offerings that emanate from a respectable, credible, and reputed manufacturer, rather than from one who is less favourable, or neutral, or totally unknown. All these increase consumers’ confidence about the product quality, and the overall value proposition that the company provides. Consumers also prefer old traditional business houses.

VII. Brand Image:

Consumers tend to form images of a brand. The brand image is defined as the manner in which a consumer forms perception about a brand. It is an impression of the brand’s personality that a consumer creates in his memory. It also denotes the set of associations related to the brand, which a consumer retains in his memory.

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Perceived Risk – Meaning, Types and Handling

While making a purchase decision and immediately after having made a purchase, consumers experience a state of uneasiness and tension. In fact, the purchase process results in a state of anxiety and tension with respect to the undesirable outcome or the negative consequences that could result from product purchase and usage. This state is known as ‘perceived risk’.

Perceived risk is the feeling of uncertainty that arises within an individual when he fails to predict the consequences of product choice, usage, and the resultant experience. The concept of perceived risk was introduced by Raymond A. Bauer in the 1960s. Bauer defined perceived risk in terms of the uncertainty and consequences associated with a purchase decision and consumer action, the results of which may or may not always be pleasant.

Perceived risk is a function of two structural dimensions, namely the dimension of chance (uncertainty) and negative consequence (consequences).

The element of uncertainty arises because there are many product and/or brand alternatives, each of which is unique, distinct, and heterogeneous. This leads to a feeling of dissonance as to which of the alternative(s) would be the right choice in terms of overall value. Uncertainty also relates to a subjective probability that something unpleasant would occur after product purchase and usage.

The element of consequences exists because the consequence of a wrong choice is not the same for all kinds of products. Consequences also relate to the probability that if something unpleasant occurs, what would be its magnitude or level of severity. Bauer also proposed that perceived risk is subjective in nature and pertains to how a consumer subjectively perceives it to be.

Some products and purchase situations are regarded as high on risk, while others may be low on risk or perhaps no risk at all. The level of risk that a consumer perceives arises because the consumer cannot judge with certainty the consequences of his purchase decision. The circumstance that leads to such a state is the newness of the good or service offering, or lack of information, or lack of experience in purchase and usage of a product or service category, or complexity of the product or service offering, its visibility in social settings, and high price.

Situations of uncertainty about purchase outcomes, and the unpleasantness of such outcomes, give rise to a feeling of perceived risk within a consumer, and the person begins to experience feelings of anxiety and tension.

Some of these situations of uncertainty are as follows:

1. Buyer’s uncertainty regarding buying goals – The buyer is often unclear and confused about the goal of purchase, that is, the purpose for which he is making the purchase.

Question – Does he want to buy a cell phone for its basic functionalities (making and receiving calls and SMSes) or does he want to buy it as a status symbol?

2. Uncertainty regarding which product, brand, and/or model alternative would best satisfy the buying goal.

Question – If he wants to buy a cell phone as a status symbol, which brand and model should he buy?

3. Uncertainty about the attributes to be used as evaluative criteria.

Question – What should be the features and attributes on which he should make a comparison amongst different brands and/or models?

4. Uncertainty about brand evaluation.

Question – Should he buy a Nokia, Samsung, or Sony?

5. Uncertainty in the difference between the expected and actual performance of the outcome.

Question – How does he compare product expectation across brands and what does he think would be the performance?

6. Undesirable consequences if the purchase or non-purchase of the product and/or brand is made, and it fails to satisfy the buying goal(s).

Question – What will he do if the product fails to satisfy his expectations?

Types of Perceived Risk:

Perceived risk is subjective in nature with a multidimensional construct. Further, its existence and magnitude are also something which is gauged by the consumer himself who may perceive the risk to be present or absent and/or high or low.

Perceived risk also varies across people, product, and situation.

Perceived risk is also a multidimensional construct, with varying types, namely:

1. Functional risk,

2. Physical risk,

3. Financial risk,

4. Social risk,

5. Psychological risk, and

6. Time risk.

The type of risk(s) that a consumer faces would vary from the one(s) that other consumers face.

For example, a person wants to buy a microwave; the types of risks that he would perceive are explained as follows:

1. Functional Risk:

Functional risk refers to the risk which a consumer perceives when he is uncertain about the product’s features, attributes, performance, and overall benefit. It is high for products that are technically complex or high priced, for example, laptops, tablets, and dishwashers. Functional risk is also known as performance or quality risk.

In the case of a product like a microwave, the question that would bother the consumer is as follows –

Will the microwave oven function well once I take it home?

2. Physical Risk:

Physical risk refers to a risk that is perceived when a consumer has doubts about his own and his family’s safety and physical well-being with respect to the usage of a product. It is high for product categories such as electrical appliances and gadgets, medicines, and foods and beverages.

The questions that would bother the consumer are as follows:

a. Will the microwave oven emit harmful radiation and kill food nutrients, or will consumption of food cooked in a microwave lead to cancer?

b. Will it lead to shocks and short circuit at times of voltage fluctuation?

3. Financial Risk:

Financial risk is a risk that is perceived when a consumer doubts whether the product is worth its price and whether he would lose his money on the purchase. It is a risk associated with the loss of money. Issues pertain to whether a product is overpriced or would it depreciate too quickly and not have a good resale value, or the money he would lose if the product does not work well, or the money he would have to spend to keep it in a good workable condition.

Financial risk is high for products which are highly priced and require substantial operating and maintenance expenditure. Financial risk is also called monetary risk.

The question that would bother the consumer is as follows:

a. Is the microwave at Rs. 20,000 worth its cost (keeping in mind the benefits)? Will it serve me for 5 years?

b. Will it have a resale value?

4. Social Risk:

Social risk is the kind of risk that a consumer faces when he doubts the product purchase and usage due to opinions, sanctions, and approval by the social group or class to which he belongs. Social risk also relates to the consumer’s ego, status, self-image, and self-esteem. It is high for goods that are socially visible, and especially related to one’s ego, status, and self-esteem, for example, clothes, cars, expensive jewellery, and watches. Other directed people and insecure buyers who have a desire for social acceptance and approval are more prone to this kind of risk.

The question that would bother the consumer is as follows –

Will my old mother approve of a product like a microwave? And at this high price, will she consider it a wasteful expenditure?

5. Psychological Risk:

Psychological risk is a type of risk that is perceived when a consumer fears social embarrassment and feelings of worry, nervousness, frustration, and disappointment at the purchase of a product and/or brand as it could fail to reflect his personality or self-image, self-concept, or even his self-esteem. It is high for goods that relate to one’s personality and self-image, for example, product categories such as clothes, fashion accessories, shoes, and household items (e.g., furniture, upholstery, and carpets).

The question that would bother the consumer is as follows –

Is the microwave aesthetically appealing enough not to cause ridicule?

6. Time Risk:

Time risk refers to the risk that the consumer perceives when he doubts whether his time has been wasted by making a wrong choice. It also relates to a consumer’s feeling that the purchase process would take long resulting in wastage of time and resources.

The question that would bother the consumer is as follows –

Will the microwave oven function well or will I have to replace it soon?

In the age of the Internet, consumers face another kind of risk, which is known as the privacy risk. Privacy risk is defined as the kind of risk consumers feel when they fear that buying products online would lead to loss of privy information about themselves, their demographics, as well as their financial details (bank account details and credit card number).

This could lead to loss of privacy and may also lead to theft and fraud. In order to reduce this kind of risk, and to assure the consumers, websites illustrate promises and assurances from the marketer that the information that is entered during transaction would be kept confidential, and that the accounts are protected from hackers.

Perception of Risk Varies:

Perceived risk is subjective in nature, and it varies across people, product, and situation. In other words, the degree and intensity of perceived risk would be different for different people; it would be different for different products, and it would also change with situation. It is noteworthy that consumers’ perception of risk is affected by personal characteristics. In addition, risk per se is irrelevant for a marketer as it does not affect consumer behaviour. What is of importance is the risk that the consumer perceives, in the form of what we know as ‘perceived risk’.

i. Risk Varies across People:

Based on age, gender, educational level, income level, and financial status, as well as various psychological and sociological influences that consumers are exposed to, people also possess propensities to higher or lower levels of risk. High-risk perceivers (also referred to as narrow categorizers of risk) are conservative in their approach, and prefer buying old and familiar brands rather than the new and unfamiliar.

They restrict their product choices to a few safe alternatives, and prefer excluding the new and unfamiliar alternatives to the old and familiar ones (as they fear making a wrong decision). Low-risk perceivers (also referred to as broad categorizers of risk) are risk takers and buy the new and unfamiliar with ease. They make choices out of a wider range of brand alternatives (lest they make a wrong decision).

ii. Risk Varies across Products:

Perception of risk also varies across product categories. The more significant the purchase for a customer, the greater would be the perceived risk. For high-involvement products, such as premium products or specialty or technologically complex products, the perceived risk is much higher than that for low-involvement products such as convenience goods or shopping goods.

In cases where the product and/or brand is new, or the product is unbranded, the perceived risk is higher. The price of a product is also related to the perceived risk; the higher the price, the higher would be the perceived risk. For product categories which reflect one’s self-image and self-concept, the risk is higher.

iii. Risk Varies across Situation:

Risk also varies across situation. It varies across the channels of marketing (direct or indirect marketing) and the kind of stores (i.e., purchasing from the traditional physical store format, or shopping by phone or TV, door-to-door salesmen, or the more modern means which is through online).

The lesser the amount of physical interaction between the buyer and the seller, the higher would be the amount of perceived risk. Perceived risk also varies with time available for shopping. Further, the more significant a purchase for a customer, especially in terms of the occasion for purchase and usage, the greater would be the perceived risk.

How can Perceived Risk be handled?

Perceived risk can be lessened or even removed, thereby ending the state of tension and anxiety. There are various kinds of risk-reduction strategies, all of which are aimed at either increasing the certainty associated with a purchase and usage, or reducing unfavourable purchase consequences.

Some of the risk-reduction measures that can be taken by the consumer and the marketer are as follows:

i. Information:

Consumers can reduce the degree of perceived risk by acquiring more information. They can communicate informally with their family, friends, and peers, or an opinion leader, or with experienced users, as word-of-mouth (WOM) communication and e-WOM help reduce the level of risk considerably. The marketer can also play an important role by providing formal communication through the company website, as well as through their salespeople and channel members (dealers) and through print and audio-visual media.

Direct marketing and personal selling also help reduce the level of risk. Labels on the package also contain information regarding the contents, price, date of manufacture and expiry, as well as the name of the brand and the manufacturer. The marketer must provide information so as to reassure the buyers that they have made the right choice with respect to the good or service offering. Seals of approval by accreditation agencies also help reduce the level of risk.

ii. Brand Loyalty:

Brand loyalty may be defined as a consistent purchase of a particular brand over a period of time. Consumers often decide to be brand loyal so as to escape feelings of uncertainty. Purchasing the same brand reduces or even eliminates any kind of negative consequences. In any case, switching to other or newer brands is regarded as risky. So such consumers decide to restrict themselves to well-tested and trusted brand(s) rather than to venture out into buying the new.

iii. Store Loyalty:

Similar to being brand loyal, some consumers are loyal to the store. They believe in going to stores where they have been before and have built successful relationships with the dealers or the retailers and the salespeople. Buying from such stores reduces their cognitive dissonance and related fears, as they can rely on after-sales service, return privileges, warranty, as well as other adjustments in cases of any dissatisfaction with the purchase.

iv. Brand Image:

Building a strong brand image and creating favourable brand associations can also help in reducing the discomfort with which a consumer approaches a purchase decision. Consumers may also decide to go by the brand name and make choices based on product reputation, that is, its quality, credibility, and dependability. They may decide to go in for a popular, trusted, and well-known brand, rather than going in for lesser known or unknown brands. They may buy brands whose advertisements have testimonials from typical consumers (slice-of-life commercials), celebrities, and experts.

v. Store Image:

Consumers often decide to go by the store image and make choices based on store’s credibility and dependability. This is particularly seen when consumers have no information or less information about the good or service offering. People adhere to the good or service choice recommended by the salesperson from a reputable store. A reputable store also provides the customer with the reassurance that any complaints that arise would be addressed and adjustments made if the purchase results in any dissatisfaction.

vi. Price:

High price is seen as an indicator of good quality. Consumers often use price as a surrogate cue and decide to buy the most expensive and elaborate variant (or model) as they feel that the most expensive offering would probably be the best in quality.

vii. Product Trials, Demonstrations, and Usage Instructions:

Consumers feel much comfortable when they are able to try out a product and/or brand before actual purchase. The experiential handling helps them reduce the level of uncertainty with respect to product usage and its consequences. Products and/or brands tested, approved, and certified by private testing companies, government bodies, and accreditation agencies also help build confidence with respect to the product choice.

Similarly, demonstrations related to product functionality and usage also helps reduce the perceived risk and lessen the cognitive dissonance associated with product purchase. Instructions with respect to usage also make consumers feel comfortable about how the product works and direct them as to what needs to be done for its effective functioning and usage.

viii. Warranties, Guarantees, and After-Sales Service:

Extended warranty schemes and money-back guarantees can also reduce the level of perceived risk. Marketers provide trials, money-back offers, warranties, and guarantees for their products, and all of these help reassure the customer that he is making the right choice, thereby reducing the perceived risk, particularly the functional risk associated with the product. After-sales support and customer service can also enhance the credibility of the brand and reduce the level of risk associated with the purchase.

ix. Membership to Owner’s Clubs and Associations:

Many companies invite a new customer to join the owner’s clubs and associations. The slogan ‘welcome to the proud family….’ is intended to support the customer and boost his confidence with the purchase decision. The very fact that he is not the only one to decide on a particular brand, and that there are also others who have decided on the same product and/or brand, also helps reduce the customer’s level of perceived risk, particularly the social and psychological risks. The customer feels reassured that he has made the right choice because others are also making the same choice.

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External and Internal Factors related to Consumer Perception (With Examples)

The manner in which either a product or service is perceived will depend upon both internal and external factors. This is to say that both external reality and internal reality are intertwined. As human beings, we carry all of our experiences in our mind and have our own selfish interests, needs, motives and expectations in the way in which we would like ‘reality’ to exist in the world.

Nowadays, no firm can make a strong claim about having brand loyal customers because researches conducted have revealed that for a number of products where there is strong brand loyalty and where taste would appear to have a strong influence on the buying decisions, there is little sensory difference between products.

This is illustrated in the following case. A blind test was conducted (i.e., a test where the identity of the brand is cancelled) to determine the power of the sensory differences, values between ‘Pepsi’ and ‘Coke’ by a panel of consumers.

The results of the above test are given here under:

a. Prefer Pepsi 51%

b. Prefer coke 44%

c. Equal/can’t say 5%

Then, the two brands were once again given to a matched sample, now with the true identity being revealed to the consumers.

The results of this open test were as follows:

a. Prefer Pepsi 23%

b. Prefer coke 65%

c. Equal/can’t say 12%

From the above illustration it can be concluded that the value added appeal of a brand lies in terms of that which is aroused in the minds of the consumers when they see a familiar brand name or logo.

So, external factors can be said to be related to the physical character of the stimulus, while internal factors include our motives and expectations. Both the internal and external factors influence the way in which an individual perceives a product or brand.

External Factors: 

Physical properties of the stimulus include intensity, size, position, contrast, novelty, repetition and movement.

i. Intensity and Size:

The brighter the sound (intensity) or more louder the sound, more likely that the person’s attention is drawn to it. For instance, advertisers use this characteristic to draw the attention of the readers or viewers. Large sized advertisement in a newspaper or magazine will be noticed and also read more often than a small insertion given although the increase in size may not be linear.

Prior to the launch of KINGFISHER AIRLINES, big advertisements were released in all leading newspapers to this effect in order to draw public attention. It is more likely that persons or readers notice an advertisement appearing on other pages of the newspapers than if it were to be given under the classified ads columns.

The various down line activities, organised as a part of the sales promotion campaign by various leading organisations are also used as a stimulant to attract the attention of potential customers. Marketers are using festivals to familiarize customers with their product or brand offerings. (For instance, Chateau Indage has tried to increase the mass popularity of its wine brand Vino by sponsoring festivals such as Ganesh Chathurthi pandals, put up banners and signals in high traffic areas of Mumbai.)

World Space are advertising at festivals (it sponsored onam festival) venues via hoardings and occasionally even opting for ground promotions. Loud sound, bright colour and big banner especially when the atmosphere is otherwise serene will draw the attention of potential customers.

ii. Position:

The position of display of the product or advertisement also is a determining factor of attracting attention. An advertisement placed next to a compatible editorial column of magazines, and newspapers is thought to attract more readership response.

The even number pages in the newspaper or magazine is assumed to be likely to attract more readers than the odd number pages. In magazines more readership is obtained when advertisements are put on the cover pages or within the first 10% of the pages.

Similarly, positioning of point-of-purchase, placement of the products (i.e., brands) at prominent places on the shelves at the retail outlet, rotating bill boards, hoardings at certain important points is more easily perceived by consumers and people.

For instance, the advertisements of organisations offering services such as Banks, Hotels, Airlines and Restaurants are prominently placed at airports.

iii. Contrast:

Human beings have the ability to adapt to sounds, odours, pain, bright lights, neon signs and movements. That is, human beings are able to use sensory organs to adapt themselves to various stimuli. This is where contrast will help in the perception process.

In the context of marketing, media planners also plan their advertisements keeping in mind the impact of contrast on perception.

For instance-

(1) A black and white advertisement with a small spot is likely to attract attention because of the contrast (ICICI Bank uses the principle of contrast for its advertisements in magazines and newspapers).

(2) Advertisers consider colour advertisements to be more effective than black and white advertisement. (People have got a preference to seeing the ‘colour films of the 60’s and 70’s rather than the black & white films of the pre-colour film’s period).

(3) Some advertisers, alternatively make use of large and small sizes, loud and soft tones or primary and pester shades to attract more attention rather than using only one stimulus.

(4) A quiet commercial after a loud programme can attract attention. Say the advertisement of ‘De Beers’ diamond after listening to a frantic rock music show shown on the television.

(5) Showing an object or product out of its normal setting will also attract attention, such as a car travelling across and dunes or along a beach. The print advertisement shows the luxury Scorpio car against the backdrop of a beach.

iv. Novelty:

It has been observed by marketers that anything which is different from what are normally expected tend to attract attention like an unusual bottle shape or a perfume strip in a magazine and so on. For instance, Frooti’ was the first to introduce the novel idea of soft drink being offered in a tetra pack or when ‘Coca Cola and Pepsi’ were launched in small ‘cans’ during the World Cup.

Likewise, Baron International was one of the first to start with the novel idea of exchange offers. Videocon, Onida and Philips are some of the brands which have created the perception among consumers that a second T.V means a smaller T.V.

v. Repetition:

Advertisements are repeated more often to enable consumers for brand recall as well as stimulate them and create a strong desire for interest in the purchase of the product.

In the crowded category of consumer non-durables, consumers may not be interested to search for specific information about the product and brand before taking a decision to purchase the product. This is where constant exposure through repetition of the ads, will help in linking the brand wise ‘top of the mind’ recall.

Thus marketers must work towards ensuring that, while there are several brands in the same product category, their brand will convey a different value felt proposition and he or she will be geared up to make purchase choice accordingly.

For instance, in the tooth paste category, some of the leading brands such as ‘Colgate’, ‘Close- up’ Dabur ‘Anchor’ and ‘Pepsodent, have used repetition through mass media to ensure that the brand’s proposition will make a significant impact on the consumer’s purchase decision.

vi. Movement:

Advertisers have also started using billboards or hoardings with movement, mobile vans etc., so as to inject a feeling of movement into it. Many marketers are finding out smarter ways to reach out to the consumer by organising some movementful activities like holding free trials, demonstrations, exhibitions, mobile vans etc. Such exercises could also result in creating excitement and reinforce top of mind recall.

L.G Electronics had organised a summer strategy. L.G. hired vans and drove through select cities taking its refrigerators and washing machine to the consumer door-step. Similarly, ‘Honda City had also taken its car through the city, answered queries, allowed prospective customers to test ride the car and so on.

It is assumed that such activities will not only help in easy recall of the brand but also stimulate the purchase decision and then go a long way in building long term relationship with their customers.

However, it is left to the respective marketer’s to make efforts and find out the extent to which such tactics have really helped the brand in attracting customers.

Internal Factors:

Customers, may not receive the messages passively. Marketers are interested in knowing what is the impact of their usage of marketing mix elements on the minds of the consumers. The marketer has to constantly understand “What is going on in the consumers’ mind there”. Whereas, customers have the tendency to use the messages exhibited by the marketers and make their own meaningful interpretation of it and determine the brand’s capability.

Consumer will typically associate his or her idea of the product or service with the brand name. It is not the organisation nor marketer but the brand which becomes the consumer’s idea of the product or service. The consumer has got his or her own way of perceiving, interpreting and developing beliefs on the value of the brand.

Because it is what customers perceive, interpret and believe the value of the brand to be, which plays a significant role at the market place. That is why organisations are working at developing a ‘Brand Personality’.

When a brand acquires a personality that is well recognised, even products with very little functional differences are seen as being different. Marketers are using marketing mix to develop differentiation strategy. Either of the marketing mixes can be used as a differentiating factor.

A few of the more success examples in the Indian market on the basis of selected superbrand India 2006-07 are:

(1) Nirma- Economically priced, one of the largest selling single detergent brands in the world.

(2) HSBC- Bank to give India its first ATM in 1987

(3) Faber World Class kitchen appliances- First Company to introduce a life time warranty on electric chimneys.

(4) The Bournvita quiz contest- India’s longest running national school quiz.

(5) Airtel- India’s largest mobile service provider and with 18,000 songs, 20 languages, retailing across 1,00,000 outlets, it is the world’s largest vendor of music.

(6) Oriental Insurance Company- An impressive record of 91.13% of settling customers grievances satisfactorily.

(7) Dainik Jagran (newspaper)- Believes in reflecting, ‘the free voice of the people’ – as per the National Readership Survey (NRS) 2005, it is the largest read daily in the world with readership of 21.2 million readers.

Thus marketers are always involved in a search for a proposition that is unique and also sells. A good advertisement helps in the creation of a “Personality difference”. And a brand personality can be linked to positioning also.

So marketers are trying to assess the impact of the use of the marketing mix elements on the “inner” minds of the consumers. They are constantly involved in seeking answers to the internal factors which may affect the consumer’s perception about the product or service (brands).

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