Chapter 4 : Consumer perception

and Positioning
Section B : Group 3

Mrunal Limaye 18P087

Kshipra 18P086
Mridul Gupta 18P088
Mudit 18P089
Prakhar Gupta 18P094
Shreya Shyamsukha 18P111
PERCEPTION ?

● Reality is a personal phenomenon

which drives the actions and buying
habits of individuals, which is why
companies take it seriously

● Perception is driven by an individual's

needs, value, personal experiences and
expectations among other things

● Hence, on receiving the same stimuli

two individuals might recognize,
select, organize and interpret it
differently
Sensory Information
Sensation is an immediate and direct response of the sensory organs.

Sensory receptor Example

Sight Color used in packaging of food products provides clues for freshness

Scent Abercrombie and fitch use strong fragrances throughout their facility

Touch Apple keep the range of products in store as touching and using it leads to
more purchases

Sound Hotels use different music for different spaces (lobby, bar, fitness etc) to set a
particular mood for the guests

Taste Heinz ketchup hits all five fundamental tastes (salty, sweet, sour, bitter and
umami)
The Absolute and Differential thresholds

Absolute threshold Sensory adaptation Differential threshold

It is the lowest level at

It happens when a person Minimal difference between
which an individual can
gets used to certain 2 similar stimuli. Its is also
experience a sensation. The
sensations, that is, called Just noticeable
point at which a person can
becomes accommodated to difference (JND)
detect a difference between
certain level of stimulation
something and nothing is
and becoming less able to It is relative to the intensity
that person’s absolute
notice a particular stimulus of the first stimulus
threshold for that stimulus
Logos and Packaging

INSTAGRAM STARBUCKS

The new logo of Instagram was above On 40th Anniversary, Starbucks name
JND level, in that consumers quickly was removed from its logo. In spite of
saw the change. Old logo invoked the initial complaints from customers,
feeling of nostalgia for old time the company did not bring the old
cameras, the new logo represents logo back. Although change was
brand new current characterization of above JND, management believed
features and filters that, as time passed, consumers
would accept it
Subliminal Perception
People can be stimulated below their level of conscious awareness as well. That is, they can perceive
stimuli without being consciously aware that they are doing so. Stimuli that are too weak or too brief to
be consciously seen or heard may nevertheless be strong enough to be perceived by one or more
receptor cells. This process is called Subliminal Perception.

Example

❖ DRINK COKE and EAT POPCORN : This message was flashed on the screen during the movie. Exposure
were so short that viewers were unaware of seeing any message. However it was reported that Popcorn
sales increased 58% and Coca-cola increased by 18%
❖ Brands can make you perform better : If you wear a swimsuit worn and endorsed by champion swimmer,
you will swim faster
Perceptual Selection
Selective Exposure occurs when consumers tune into messages that they find pleasant or
with which they are sympathetic, and they actively avoid painful or threatening ones
Ex- lady purchasing food items from food market

Selective Attention
It is consumer heightened awareness of stimuli that meet their needs and interests and
minimal awareness of stimuli irrelevant to their need
Ex- Consumers are likely to note ads for products that satisfy their needs and disregard
those in which they have no interest

Perceptual Defense
It takes place when consumers subconsciously screen out stimuli that they find psychologically
threatening, even though exposure has already taken place.
Ex- Surveys showed smokers no longer pay attention to written warning labels, some laws now
require graphic health warnings
 Interpretation:
• Cues
People are selective as to which stimuli they perceive, and they organize stimuli on the basis of certain
psychological principle.
• Also, the way they interpret a particular stimulus is unique because it is always based on what individuals expect to
see from their previous experiences, number of plausible explanation of stimulus they envision and their motives
and interests at the time of purchase.
Consumers divide marketers’ offering into 2 categories using two types of their features-
Integral Indicators External indicators
• Intrinsic cues are physical characteristic of the
• More often than not, consumers use extrinsic
product itself
cues that are not inherent in the product to take
• It includes size, colour, flavour, or aroma of
product decision
product
• In cases, where actual experience of product is
• In some cases, consumers use physical
not present, consumers evaluate quality on the
characteristics to judge product quality
basis of cues that are external to product itself,
• Consumer uses intrinsic characteristic to judge
such as price, brand image, manufacturer’s
product quality because it enables them to justify
image, retail store image etc.
product decisions as being “rational” and
• E.g.- Success of Smirnoff vodka in Connecticut,
“objective”
Haagen-Dazs success owing to its Scandinavian-
• E.g.- P&G’s luxury treatment of paper towels and
sounding name
dishwater soaps.
• Stimuli are often highly ambiguous. The reasons can be poor visibility, brief exposure, high level noise, and
constant fluctuation.
• In such cases, an individual will interpret them in such a way that it serve to fulfil personal needs, wishes,
interests etc.
• Hence, marketing and label innovation becomes important , more so in cases of highly competitive markets. E.g.-
beer industry
 Stereotyping
• Stereotypes are biased notions that people carry in their minds about the meanings of various stimuli.
• While responding to stimuli, people add these biases to what they hear or see and thus forms an distorted impression
of the stimuli
• E.g.- Benetton’s ad campaign of “United colors of Benetton” promoting racial harmony caused outcry because people
perceived it as stereotype of black man being harassed by white man.
• Hence marketers should be aware of possible stereotype because it reflects
people’s expectation and influences how stimuli are perceived.

Reasons for stereotyping

• It makes processing of sensory input quicker and easier
• Simplification of image of brand/product
Triggers of stereotyping
• Physical appearance
• Descriptive terms
• Halo effect
 Physical Appearance
• People tend to attribute the qualities they associate with certain types of people to others who resemble them,
consciously or subconsciously
• Due to this, selection of personality is heavily influenced in print advertisements and television ads.
• For example, attractive men are perceived as more successful businessman than average-looking men. In general,
highly attractive models are likely to be perceived as having more expertise regarding enhancement products such as
jewellery, lipstick, perfume etc.
• Similarly, average-looking portraits are generally used as problem-solving products such as acne or dandruff
• Therefore, advertisers must ensure that there is a rational match between the product advertised and physical
attributes of the model used to promote it.
• In general, product’s physical appearances heavily influences consumer judgements.
 Descriptive Terms
• Stereotypes are often reflected in verbal messages.
• E.g.- Italian food, MADD( Mothers against drunk driving ad campaigns

• Consumer make associations with certain brand names, especially in marketing services because services
are abstract and intangible.
• E.g.- Federal Express and Humana expresses their brand image clearly with their names.
• Advertiser must be careful about using stereotypes and “common wisdom” in their persuasive messages as
there are chances of stereotypes having negative perception among people
 Halo Effect
• The Halo effect refers to the overall evaluation of an object that is based on the evaluation of just one or a few
dimensions.
• In marketing, halo effect refers to a prestigious image of a product “rubbing off on” other products marketed under the
same brand name.
• E.g.- A person who buys Porsche car is likely to spend a lot of money on accessories of same brand name.

• In broader terms, halo effect include evaluation of multiple objects o basis of just one or few dimension. E.g.- Product
line being judged only on the brand name.
• Marketers use this advantage of halo effect when they extend a brand name associated with one line of products to
another line.
• Licensing is also based on halo effect.
• Halo effect helps manufacturers and retailers to get instant recognition by associating their products with well-known
brands
 Interpretation : Consumer Imagery
• Consumer Imagery refers to consumers’ perceptions of all the components of products, services and brands, as well as
how consumer evaluate the quality of marketing offerings.
• Products and brands have images and symbolic values for consumers based on the unique benefits that these products
claim to provide
• Perceived value and price are two major determinant of consumer imagery.

Perceived value
• Customer views’ of value that they receive for their money is generally relative.
• E.g.- perception of low price for a meal at a fast-food outlet and high price for a meal at a gourmet restaurant
• The perception of consumer about price of a product as high, low or fair- strongly influences both purchase intentions
and post-purchase satisfaction.
• For example, customers often consider price paid by other customers. In case of airlines, due to differential pricing, some
customer pay more than others. They perceive it as price unfairness and it affects their perceptions of product’s value
and subsequently their willingness to patronize it
• It is found that perception of price fairness affects customer satisfaction. Hence, marketers are cautious about using
differential pricing.
• Similarly, advertisement like “on-sale”, “discounted” create a positive perception of saving and value among consumers.
This is based on reference price.
• Reference price is a price that a consumer uses as a basis for comparison in judging another price. Reference price are of
two types- Internal and External
• External reference price- External reference price means price of product at other references. For example, an
advertiser generally use a higher external reference price in its offering the product at lower price, creating strong
perception among consumers about saving and thereby convincing them that the product is a good buy
• Internal reference price- Internal reference prices are those prices retrieved by the consumer from memory. Internal
reference prices play an important role in consumers’ evaluation and perceptions of value of an advertised price
deals, and in believability of any advertised price reference
• However, internal price reference may change. E.g.- Smartphone’s pricing now-a-days have rendered the idea of
smartphones as luxury product obsolete.
• Various studies regarding reference price presents a complex view like- for a new product category fair price is
dominant determinant while for existing products, expected price is found to be more dominant factor. Similarly
discounts, limited-time offering are found to increase buying intentions.
• Hence, marketers are cautious when raising prices and consider consumer reference point while making decision.

Perceived quality

• There are various scientific tests and expert opinions to test the quality of a product. But if the perception of
consumers about the quality is not positive, they will not purchase it, regardless of how high the quality of product is.
• The perceived quality of products and services is based on a variety of informational cues that customer associate
with the offering. These cues can be either intrinsic or extrinsic
• These cues provide the basis for perceptions of product and service quality.
Price-Quality Relationship
It is a situation occurring when consumers rely on prices as indicators of product quality
..
and view more expensive products as having higher quality and value. It is seen that when
a customer has less familiarity with a brand, price becomes the major determinant to
evaluate its quality. Although as a customer becomes familiar to the brand or has
experience with the product, price declines as a determining factor in product evaluation
and purchase.
Brand Image
The process by which a company creates a distinct image and identity for its products, services
and brands in consumer minds. The image differentiates the company offering from competition
by communicating to the target audience that the product, service or brand fulfils the target
consumer needs better than alternatives

The power of Sustainable core Proposition

Dell computers: “More you” focussed on personalizing technology and getting consumers to think
about how they can use product features rather than focussing on products technical specifications
Lays potato chips: “Happiness is simple” featured actual farmers who grow potatoes used to make the
chips. They appeared genuine, simple and plain spoken. The idea was to get consumers to think of Lays
as a food rather than a snack and website featured a happiness exhibit
Fair & Lovely’s: “Confidence based aspiration proposition is another proposition that has been used for
years
Interpretation: Consumer Imagery
Service Quality Retail Store Image Company Image

● Difficult to measure due to ● Retail store image influences ● Consumer perceptions extend
intangible, variable, perishable perceived quality of product it beyond product image, price to
nature and simultaneous carries & consumers’ decision on company's image itself
production and consumption of where to shop ● Consumers’ associate certain
Service ● Influencing factors: attributes with manufacturers
● ‘Image’ is a key factor in ● Institutional Advertising: Designed to
differentiating a service 1. Merchandise carried promote Company’s overall image
● SERVQUAL Scale 2. Brand sold without overtly referring to overall
Measures gaps between customers 3. Prices, discounts products
expectation of services and 4. Level of service
perceptions of actual service 5. Physical environment/Ambience
delivered 6. Clientele
1. Outcomes: Reliability 7. Width of product assortment
2. Processes: Responsiveness,
assurance, empathy, Tangibility

Example Example
Example
Risk Perception
Perceived Risk
● Consumers are influenced by risk they perceive, whether such risks exist or not
Uncertainty that consumer faces when ● The perception of risk is a function of how the risk is presented
he cannot foresee the consequences of ● Risk perception varies according to person, product, category, situation and culture
their purchase decisions

Elements of Perceived Risks Types of Risk Perceivers

Functional Product will not perform as expected Narrow Categorizers
High risk perceivers, limit their choices to few safe
Physical Product will harm self or others alternatives rather than facing consequences of a
wrong decision
Financial Product will not be worth it cost

Psychological Poor product choice will bruise consumers’ ego Broad Categorizers
Low risk perceivers, choose from a wide range of
Time Time in product search would be wasted if it does alternatives, ready to face consequence of wrong
not perform well decision than limit

Reducing Perceived Risks

● Information ● Store Image
● Brand Loyalty ● Price-Quality Relationship
Positioning
Meaning How Positioning Strategy is Developed
● Process by which a company 1. Define Market, relevant buyers and competition of the product
creates a distinct image and
identity for its product/brand in 2. Identify the key attributes of the product and research consumer perception
consumers mind regarding each of these attributes
● The ‘Position’ is intangible and
exists only in consumers’ mind 3. Research how consumers perceive the competing offerings in these parameters
and reflects how company 4. Define target markets’ preferred combination of attributes
wants consumer to perceive
brand 5. Develop a distinctive, differentiating and value based positioning concept that
● Effective positioning- Unique communicates the applicable attributes as benefits
perception relative to
competition 6. Create a positioning statement focused on benefits and values that product provides
● Moving away from ‘me-too’
Essential Characteristic Positioning Example: Tesla

● Relevant
● Clear
● Unique “The only stylish car that can go from 0 to 100 mph in
● Desirable 3 seconds without a drop of oil”
● Deliverable
● Points of difference
 Positioning Strategies
Umbrella Premier Positioning against Key The Un-owned
Positioning Positioning Competition Attribute position
● Statement/slogan ● Focuses on the ● Positioning ● Positioning ● Perception that
that describes the Brand’s statements based on is not clearly
universal benefits exclusivity acknowledging relevant associated with a
of company’s ● Price is often competition attributes which brand or product
offerings the parameter brand expresses ● Finding a niche
● Creating overall used to express ● Contrasting one’s Brands’ unfilled by other
image of the exclusivity brand with superiority companies is
company around ● ‘Only select few competition is ● Depict key challenging but
which many are worth’ very effective in benefits of the not impossible
products positioning and brands ● Unowned
featured Example differentiation position must be
individually in consumers’
Example Example mind & not
Example Marketers’

Example
Changing Perceptions
Repositioning Repositioning: Examples

Process by which a company

strategically changes the distinct image
and identity that its products occupies in Selling in America Primarily Selling Globally
consumers’ minds
‘See the USA in your Chevrolet’, ‘Find new roads’
Repositioning: Need ‘Heartbeat of America’

● No longer able to stand out

● Increased competition
● Changing consumer behavior
and perceptions- old positioning Targeting Kids Primarily Targeting Adults
seen as dull
● Appeal to a new segment, Ads revolved around kids. Eg. ‘Kid in all of us’, 'Real Taste of
changing target market Parents trying to bribe/ reward Life', ‘Khaane Waalon Ko
● New players, new products, new their children with chocolates for Khaane Ka Bahana Chahiye’
positionings getting them to do things
● Low motivation among
consumers to buy
Perceptual Mapping
Cutting edge technology

Meaning

Constructing a map like diagram

representing consumers’ perceptions of Contemporary
Classic
competing brand along relevant styling styling
product attributes

Benefits Legacy technology

● Shows Marketers how

consumers perceive their brands
in relation to competition High

● Shows how to determine the

Racing Character
direction for altering undesirable
consumer perception of their
brand
● Gaps, in terms of un-owned
Low
perceptual positions that present
opportunities for developing
new brands/products Low High
Touring Character
Thank you