Perception

• Information processing involves a series activities

by which stimuli are perceived, transformed into
meaningful information and stored
• As shown in the following figure, the first three
steps constitute perception and the fourth represents
storage of information (memory)
• Reality to an individual is that individual’s
perception, a personal phenomenon, on the basis of
which the individual acts or reacts and not on the basis
of objective reality
• For this reason, marketers are particularly interested
in consumers’ perceptions than their knowledge of
objective reality
• Simply put, perception is “how we see the world
around us”
• Different individuals may be exposed to the same
stimuli under the same conditions but how each
individual recognizes the stimuli, selects them,
organizes them and interprets them is unique in case of
each person and depends on his needs, wants,
values, beliefs, personal experiences, moods and
expectations
• Perception is also influenced by the characteristics
of the stimuli, such as size, colour and intensity etc.
and the context in which it is seen or heard.
• Perception is defined as “the process by which an
individual selects, organizes and interprets stimuli into
a meaningful and coherent picture of the world”
• A stimulus is any unit of input to a sensory receptor
• In a marketing context, the stimuli include brand
names, advertisements, colours, sounds and packages
etc.
• Sensory receptors are human sense organs (eyes,
ears, nose, mouth and skin) involved in receiving
sensory inputs.
Information Processing
Exposure to stimuli
Deliberate or Random

Attention to stimuli
Perception Low-involvement or High-involvement

Interpretation of stimuli
Low-involvement or High-involvement

Storage (memory)
Short-term Long-term
Active problem solving Stored experiences,
values, decisions,
rules, feelings

Decision making
 Sensation (Exposure to Stimuli)

• Sensation is the immediate and direct response of

sense organs to simple stimuli such as an
advertisement, a brand name, or a package etc.
• Sensitivity to stimuli varies among individuals and
depends on the quality of sensory receptors
• For example, some people have more acute
hearing or sharper eyesight
• Sensation for a stimuli depends on differentiation
of input
• A relatively static and unchanging environment
provides little or no sensation even though the
sensory input is strong
• For example, a person living near a busy railway
station would probably receive no sensation from car
or train horns or other traffic noises
• Increase or decrease of one or two honking horns
would never be noticed
• When the quantum of sensory inputs is high, the
sense fail to detect small differences in sensory inputs.
 Absolute Threshold

• Absolute threshold refers to the lowest level at

which an individual can experience sensation
• At this point an individual can detect a difference
between “something” and “nothing” and this point
would be that individual’s absolute threshold for that
stimulus
• For instance, one individual may sense the sound
pitch at 20 cycles per second and the second individual
may sense the sound pitch at 30 cycles per second
• Absolute threshold for sound in case of these two
individuals would be different
• Many individuals’ ability to discriminate sensory
characteristics such as taste, smell, hearing, or feel is
small
• The sense are likely to become increasingly dull
under conditions of constant stimulation and the
absolute threshold increases
• For example, if someone drives for half an hour
through a corridor of billboards, it is doubtful that any
particular billboard will register any impression
• This is known as ‘adaptation’ and refers to “getting
used to” certain sensations
• Sensory adaptation is a problem for many TV
advertisers because of advertising clutter
• It is because of this reason that advertisers are
 inclined to change their ad campaign frequently
fearing that target audiences will get so adapted to the
current ads that these will no longer provide sufficient
sensory input to be noticed.
 Differential Threshold

• Differential threshold is the smallest detectable

difference between two values of the same stimulus
• This is also referred as J.N.D (just noticeable
difference)
• A German scientist of nineteenth century, Ernst
Weber discovered that the just noticeable difference
between two stimuli was an amount relative to the
intensity of the initial stimulus
• To measure the differential threshold for a stimulus,
one commonly changes its intensity in very small
amounts
• An individuals’ threshold exists when she/he first
notices that the stimulus has changed
• The difference between this value and the starting
value is the just noticeable difference
• Weber’s Law (after the name of the scientist) states
that stronger the initial stimulus, greater the additional
intensity needed for the second stimulus to be
perceived as different
• For example, if a producer raises the price of its car
by four hundred rupees, probably it would not be noticed
because the increase would fall below J.N.D
• The difference in price may become noticeable if the
increase were to be one thousand rupees or more
• To be noticed, an additional level of stimulus
equivalent to J.N.D must be added to make the
difference perceptible
• Likewise, if the reduction in price of the same car is
Rs. 400, it again is unlikely to be noticed falling below
the level of J.N.D
• Marketers use Weber’s law to predict how
consumers will respond to differences between
marketing variables or changes in these variables
• In certain situations the marketer’s objective is to
have consumers detect differences such as when
product improvements are made or price is reduced
• In other cases the objective is to have the
differences escape attention such as reductions
 in product size or quality, increases in product price,
or changes in packing when package design is
important for ready recognition by consumers.
 Attention

• Attention occurs when the stimulus activates one or

more sensory receptor nerves and the resulting
sensations reach the brain for processing
• Human beings are constantly exposed to numerous
stimuli every minute of the day
• This heavy intensity of stimulation to which we are
exposed should serve to confuse us to tally but it does not
• The reason is that perception is not a function of
sensory input alone
• An important principle of perception is that ‘ raw
sensory input alone does not elicit or explain the coherent
picture of the world that most adults possess
• Perception is the outcome of interaction of physical
stimuli from external of physical stimuli from external
environment and an individual’s expectations, motives
and learning based on earlier experiences
• The interaction of these two types of very different
stimuli creates, for an individual, a very private and
personal picture of the world
• Since every individual is unique because of needs
wants, desires, expectations and experiences, no two
people perceive the world precisely the same ` way.
 Perceptual Selection

• Human beings, subconsciously, are quite selective

in their perception
• Everyday we look at so many things, ignore others
and do not even notice many others
• We really perceive only a very small fraction of
stimuli to which we are exposed
• In a market place a consumer is exposed to
numerous marketing related stimuli besides numerous
others
• Even then, on a regular basis, consumers visit the
market and make desired purchases without any
disorientation or losing sanity
• The reason is that we all unconsciously exercise
selectivity in perception
• The selectivity of stimuli depends on consumer’s
previous experience and motives, besides the nature
of stimulus itself
• One or more factors related to experience and
motives affect consumer’s ‘selective exposure’ and
‘selective attention’ at a give time and can increase or
decrease the probability that certain stimulus will be
perceived.
 Stimulus Factors

• There are numerous marketing related stimuli that

affect consumer’s perception, such as type of product,
physical characteristics, packaging, colour, brand
name, advertisement, claims, endorser, size of ad,
position of ad or time of commercial etc.
• The product and its components such as package,
contents and physical properties etc. are primary or
intrinsic stimuli
• While marketing communications developed to
influence consumer behaviour are secondary or
extrinsic stimuli
• In general, stimuli that stand out against their
background capture immediate attention
• Novel stimuli achieve this through unique images,
shapes, sounds and colours
• Messages that seem at odds with commonly held
beliefs also attracts attention
• For example, in many print ads there is lots of white
space and just few words, or the opening scene of a
commercial is without a sound
• These are attempts at differentiation and often
merit the attention of consumers.
 Expectations

• People generally see what they expect to see and this

expectation is based on familiarity and previous
experience
• Consumers often perceive products and product attributes
as per their expectations
• If a consumer has been expecting a new soft drink to
have bitter aftertaste because the friends said so, probably
it would taste bitter
• It is also true that in many instances stimuli that are in
sharp contrast to expectations attract more attention than
those that meet our expectation
• For instance, an ad showing a man wearing a hat, tie and
an underwear but no shirt and pants is more likely to attract
attention than a properly dressed man
 Motives

• Consumers tend to perceive those things that are

top most in their need or want list
• They are highly perceptive of stimuli that are
relevant to their needs and interests
• Thus, stronger the felt need, greater is the tendency
to notice motive-related things and ignore unrelated
stimuli in the environment
• For example, a person who is contemplating buying
a computer is more likely to notice ads of computers
and ignore other ads irrelevant to felt needs or interests
• A consumer’s selection of stimuli from the
environment depends on the outcome of interaction
between expectations, motives and stimulus factors
• A number of related concepts are important in the
study of perception.
 Selective Exposure

• Exposure occurs when consumers’ senses are

activated by stimulus
• Consumers are attentive to stimuli which are relevant,
pleasant, or towards which they may be sympathetic
and ignore unpleasant and painful ones
• For instance, a consumer who is contemplating the
purchase of a scanner is more likely to look for
scanner ads and tobacco users avoid messages that
link it with cancer and take note of those few that deny
any relationship
• Similarly, consumers readily expose themselves to ads
of products they prefer or admire, or ads that reinforce
their purchase decisions
• For example, a consumer who has bought an
expensive Mac computer is more likely to see or read its
advertisements to reassure her/his purchase decision.
• People can emerge with different perceptions of the
same object because of three perceptual processes:
1. Selective Attention
2. Selective Distortion
3. Selective Retention
1. Selective Attention

• People are exposed to a tremendous amount of daily

stimuli
• Looking at commercial stimuli alone, the average
person may be exposed to over fifteen-hundred ads
a day
• A person cannot possibly attend to all of these stimuli
• Most stimuli will be screened out
• The real challenge is to explain which stimuli people
will notice
• Here are some findings:
 • People are more likely to notice stimuli that relate
to a current need
• People are more likely to notice stimuli that they
anticipate
• People are more likely to notice stimuli whose
deviations are large in relation to the normal size of
the stimuli
• Selective attention means that marketers have to
work hard to attract consumer attention
• Their message will be lost on most people who are
not in the market for the product
• Even people who are in the market may not notice a
message unless it stands out from the surrounding
sea of stimuli
• Ads that are larger in size or that use four colours
or are novel and provide contrast are more likely to be
noticed.
2. Selective Distortion

• Each person attempts to fit incoming information into

his or her existing mind-set
• Selective distortion describes the tendency of people
to twist information into personal meanings
• People interpret information in a way that will support
rather than challenge their preconceptions.
3. Selective Retention

• People will forget much that they learn

• They will tend to retain information that supports their
attitudes and beliefs for chosen alternatives
• These perceptual factors – selective exposure,
distortion, and retention – mean that marketers have
to work hard to get their message across
• That explains why marketers use drama and
repetition in sending messages to their market.
 Adaptation

• Adaptation refers to gradual adjustment to stimuli

to which consumers are exposed for prolonged periods
• Because of adaptation, consumers do not notice the
stimuli to which they have become adjusted
• For instance, an air-conditioned picture theatre
feels quite cool in the beginning but after a short while
we adapt to the temperature and become less aware of
it
• Consumers become adapted to advertising
messages over time due to boredom or familiarity
• They reduce their attention level to frequently
repeated advertisements and eventually fail to notice
them
• Because of this reason marketers introduce
attention-getting features in their ad campaigns and
change their advertising
• The level of adaptation varies among consumers
and some get adapted more quickly than others.
 Perceptual Vigilance and Defence

• Even when consumers are exposed to stimuli they

do not want to see or hear, they unconsciously ignore
such undesirable stimuli
• Perception defence is more likely in anxiety-
producing situations
• Because of this reason, unpleasant, damaging, or
threatening stimuli have less of a chance to be
perceived compared to neutral stimuli at the same
level of exposure
• Consumers are also likely to modify or distort any
information that is not consistent with their needs,
wants, values, or beliefs
• The concept of perceptual defence has relevance
in advertising
• When intense fear appeals are used tin selling any
product they may become threatening to a point that
consumers use perceptual defence for the entire
message.
 Perceptual Blocking

• Consumers are exposed to innumerable stimuli in a

typical day
• They protect themselves from being overwhelmed
and overburdened by blocking such numerous stimuli
from their conscious awareness
• For instance, consumers screen out enormous
amounts of TV advertising by ‘tuning out’.
 Perceptual Organization (Interpretation)

• All the selected stimuli from the environment are not

experienced as separate and discrete sensations
• Individuals tend to organize these sensations into a
coherent pattern and perceive them as unified wholes
• The specific principles underlying perceptual
organization are sometimes referred as Gestalt
psychology
• Gestalt is a German word and means “pattern” or
“configuration”
• There most basic principles of perceptual
organization focus on ‘figure and ground’ relationships,
‘grouping and closure’.
 Figure and Ground

• This is one of the most basic and automatic

organizational process that perceivers use
• People have a tendency to organize their
perceptions into figure and ground relationship
• In order to be noticed, stimuli must contrast with their
environment
• We notice black against white and do not notice
white in white
• Similarly, a sound must be louder or softer to be
noticed
• The figure usually appears well-defined, solid and
perceived more clearly than the ground
 (background) which is usually perceived as hazy,
indefinite and continuous
• The common line separating the figure and the
ground is perceived as belonging to the figure and not
to the ground
• This gives greater definition to the figure.
 Grouping

• Individuals have an inherent tendency to grouping

or chunking a variety of information or items close to
each other in time or space and from a unified picture
• The tendency to group stimuli may result as a
consequence of proximity, similarity, or continuity.
 Closure

• Individuals have a need for closure and fulfill it by

organizing their perceptions in a manner that leads to
forming a complete picture
• In the event that they are exposed to a pattern o
stimuli, which in their view is incomplete, they tend to
perceive it as complete by filling in the missing pieces
• This phenomenon may be the result of conscious
or subconscious efforts
• For example, if a portion of a circle is left
incomplete, it is mostly perceived as a complete circle
and not an arc.
• Because of this need for closure, individuals
experience tension when some task is incomplete and
a feeling of satisfaction and relief develops with its
completion.
• People remember incomplete tasks better than
completed tasks because a person who begins a task
develops the need to complete it and this gets
manifested in improved memory
• For instance, hearing the beginning of a jingle or
message develops a need to hear the remaining part of
it
• If the TV commercials of Nirma or Lifeboy leave the
jingle incomplete, familiar listeners complete it in their
memory because of the conditioning effect and need for
closure
• Advertisers can take advantage of need for closure
by using the sound track of a frequently shown TV
commercial on radio
• Audiences who are familiar with TV commercial
perceive the audio track alone as incomplete and
mentally play back the video content from memory
• So far, the evidence is inconclusive to say that all
incomplete ad messages or jingles are better
remembered than the completed ones.
 Interpretation of Stimuli

• Individuals, in their own unique manner, interpret the

stimuli
• As the old saying goes, “a person sees what he/she
expects to see,”
• Interpretation of stimuli by individuals is based on
their earlier experiences, plausible explanations they
can assign, their motives, beliefs and interests at the
time of perception
• For example, during Diwali festival individuals
attribute low intensity explosions to crackers and not to
gunfire
• Individuals usually interpret highly ambiguous stimuli
in a way that seem to fulfill personal needs, desires,
aspirations, interests, or whishes etc.
• Projective techniques used in motivational research,
such as word association test, sentence completion test,
inkblot test, or TAT etc. are based on this theory
• The interpretation of ambiguous stimuli by
individuals reveals quite a lot about them
• A number of factors influence individuals that may
distort their perceptions, such as physical
appearances, stereotyping stimuli, irrelevant stimuli,
first impressions, jumping to conclusions and halo
effect etc.
Physical Appearances

• People may or may not consciously recognize that they

tend to attribute the qualities, which in their opinion are
associated with certain individuals, to others who may
resemble those persons
• Research indicates that attractive looking men are
perceived as more successful in business than average
looking men
• Attractive models in ads and commercials prove more
persuasive and have a more positive impact on consumer
attitudes and behaviour than average looking models
• This has important implications in selecting models for
ads or commercials, as it may be the key factor in their
ability to be persuasive.
Stereotyping Stimuli

• People tend to form “pictures” in their minds of the

meanings of different types of stimuli
• This stereotyping the stimuli helps them develop
expectations about how specific events, people, or
situations will turn out to be
• For example, many people carry the “picture” of
politicians or police behaviour in their minds.
Irrelevant Stimuli

• In certain situations consumers are faced with

difficult perceptual judgments
• In such circumstances they often respond to
somewhat irrelevant stimuli
• For instance, they may consider the colour of
washing machine in making the final purchase
decision
• In case of expensive cars, consumers often give
importance to the shape of headlamps, or leather
upholstery rather than technical features.
First Impression

• First impressions are often lasting even when the

perceiver is not exposed to sufficient relevant or
predictive information
• For instance, just a few years ago, the word
“imported” was enough for a number of consumers to
form favourable impressions about many products
such as wristwatches, shoes, clothes and many other
different products.
Jumping to Conclusions

• Some people seem to have a strong tendency to

draw conclusions based on insufficient information
• They seem to be impatient about examining all the
relevant evidence, which may be necessary to draw a
balanced conclusion
• This is often the reason that strong arguments
about a product or service are presented first in ads.
Halo Effect

• This refers to a tendency to evaluate one attribute

or aspect of stimulus to distort reactions to its other
attributes or properties
• This is frequently seen in case of brand or line
extensions where the marketer takes advantage of a
brand’s reputation
• For example, Dettol soap, Lux shampoo and Ponds
soap etc.
 Images are Important to Consumers

• An image is a total perception of something that

individuals form by processing all the information they
are exposed to over time
• Research indicates that consumers develop
enduring perceptions or images about brands, prices,
stores and companies
• These inferences are consumers’ beliefs about
products or services
• Consumers may associate an Omega or Rolex
watch with quality because of their advertising or word-
of-mouth communications from friends
• individuals develop a self-image of themselves and
certain brands carry a symbolic value for them
• Some products seem to match this self-image of an
individual while others do not
• consumers attempt to enhance or preserve their self-
images by purchasing products that they believe
correspond to or agree with their self- images and avoid
buying products that do not fit their self-images
• Consumers also tend to buy from those outlets that
seem to be consistent with their self-image
• Many large retail stores and chains in India have
started focusing on the need to build their identity to
attract certain classes of consumers and create store
by loyalty among them.
 Price Perceptions

• Whether a consumer perceives the price of a

product or service as high, low, or fair has significant
influence of buying intentions and post- purchase
satisfaction
• There is considerable evidence to suggest that the
meaning of price variable for consumers is quite
complex
• For example, seeing the explosive growth of cheap
ballpoint pens, Parker Pen repositioned its pens based
on price during 1980s and offered low- priced pens
• The results were nothing but disastrous because the
Parker’s image was inconsistent with its price
• The company in 1989 reverted back to its strength
of high-priced pens and became profitable again
1. Consumers have certain expectation of what
the price is or should be of a product or service
2. Their expectations may or may not reflect the
actual price of the product or service
3. Consumers often associate the price of a
product or service with quality.
 Perceived Product and Service Quality

• Consumers often tend to assess the quality of a

product or service on the basis of different types of
information they relate with the product or service
• Intrinsic cues (cues are stimuli that direct motives)
relate to the physical attributes of the product such as
the size, colour, or smell etc., which are sometimes
used to judge the quality of a product
• For example, quality of perfumes is often judged on
the basis of fragrance, physical appearance of the
container, packaging and its colour.
• Many detergent powders and cakes are traditionally
coloured blue to influence the
 perceived quality because consumers associate “
bluing” with brightening and whitening their laundry
• Consumers like to be thought of as objective or
rational in their assessment of products and believe
that their product choices are based on intrinsic cues
• It is a different matter that quite often the physical
attributes considered to judge the quality have no
intrinsic relationship with product quality
• For example, consumers who claim that one brand
of soft drink is tastier than the other often fail in blind
taste tests
• Consumers often fail to differentiate among
different cola drinks and actually base their preference
on extrinsic cues such as advertising, pricing,
packaging or even group pressure
• Consumers lacking actual experience with the
product tend to judge the quality on the basis of
extrinsic cues such as brand image, price, or even the
country of origin etc.
• Lacking previous purchase experiences may lead
to an awareness that higher-quality products tend to
cost more and high-price may become an indicator of
higher-quality and suspect the quality of low-priced
products
• In India a little over a decade ago “foreign” make
meant superior quality
• This tendency is still prevalent among a large
number of middle and lower middle class consumers
• Many consumers use country-of-origin stereotypes
to judge the product quality
• For example, ‘Japanese cars are reliable,’ or
‘German engineering is excellent’
• It is really interesting to recall that prior to second
world war, anything “made in Japan” was stereotyped
as “junk”
• Currently, many Indian consumers believe that
Chinese products (which have very low prices
compared to other alternatives from known companies)
are low in quality.
Researchers finding to show how consumers react to
price variable:

1. Consumers seemingly use price as an indicator of

product quality as well as an indicator of purchase
cost
2. Consumers appear to develop reference prices as
standards for evaluating prices they see in the
marketplace
3. Consumers’ reference prices are not constant and
get modified by shopping experiences
Their exposure to price higher or lower than
reference price is likely to result in upward or
downward movement of the reference price
4. Consumers tend to develop a range of acceptable
prices around the reference or standard price
Prices above or below the reference price are likely
to be judged as unsuitable and may lead to
decreased willingness to purchase the product
5. Factors, such as brand image or store image, can
soften the strength of the perceived price-quality
relationship
6. If the prices for different alternatives are perceived as
similar, then price is unlikely to influence the choice
between these alternatives.
• Unlike tangible products, it is really very difficult to
judge the quality of services
• This difficulty arises because of certain unique
characteristics of services
• Services are intangible, variable, perishable and are
produced and consumed simultaneously
• A tangible product can be seen, touched, or even
tried before purchase, but a service cannot be seen,
touched, handled, or experienced in advance by the
consumer
• To overcome the difficulty of comparing and judging
the quality of services, consumers use extrinsic cues
• For example, to evaluate the quality of a doctor’s
 services, consumers look at the quality of consulting
chamber, furnishings, framed degrees and diplomas
on the walls, the attire and mannerisms of the
receptionist or nurse etc.
• All these factors are considered in the overall
evaluation of the service quality
• Services can also vary from day to day
• There can be a difference between a service
delivered by one service employee and the other
service employee (such as haircuts, domestic help etc.)
• Services are generally first sold and then produced
and consumed simultaneously
• In sharp contrast, products are tangible and are first
produced, then sold and lastly consumed
• Product defects are likely to be detected during
quality control in the factory before it reaches the
customer
• A defective haircut, for example, is very difficult to
correct, or service employee carelessness can cause
consumer dissatisfaction, leading to decline in service
image and is hard to correct
• Consumers evaluate service quality on the basis of
magnitude and direction of the gap between the
expectations of service and the consumer’s perceived
value of the service actually delivered
• For example, an airlines passenger has certain
expectations about the quality of cabin services and
behaviour of the stewardesses during the 10- hour flight
time
• The consumer’s assessment of the airlines services
is based on expectations of her/his background and
experiences
• If the airlines services fall below her/his expectations,
then the consumer will consider the airlines as a
provider of poor service
• In case the expectations of the consumer are
exceeded, then she/he will view the airlines as high-
quality service provider.
Some researchers believe that there are five dimensions
of service quality:

1. The appearance of physical facilities, equipment,

personnel and communication materials
2. Ability to perform the promised service dependably
and accurately
3. Willingness to help customers and provide prompt
service
4. Knowledge and courtesy of employees and their
ability to convey trust and confidence
5. Caring, individualized attention that the firm provides
to the customers.
• Further research divides the service quality along
two dimensions
• One, the outcome aspect of service focuses on the
reliability of delivery of core service
• Two, the process aspect focuses on how the core
service is delivered
• For example, ICICI bank provided customers the
same core facility (the outcome) of withdrawing money
but it used a superior process (ATM) that exceeded
customer expectations in those early days and acquired
the image of a really efficient and customer-focused
bank
• Relationship between service-quality, consumer
satisfaction and purchase intentions
• The findings reveal that high service quality and high
service satisfaction result in very high level of
consumers’ purchase intentions
• Service being intangible, image becomes an
important factor in service differentiation
• The design of physical environment is extremely
important in creating an image of such services as
banks, chartered accountant’s offices, lawyer’s office,
doctor clinic, beauty parlour, banks and retail stores etc.
• The service environment communicates the image
of service provider
• For example, some successful lawyers’ and
chartered accountants’ offices exude an image of
confidence and efficiency because of the physical
 environment that has been created with the help of
furnishing and placing of certificates and books etc.
• Likewise beauty parlours and other personal care
service providers, such as weight reduction centres,
psychiatric counseling etc. create an environment by
manipulating physical objects and behaviour of service
personnel that communicate an image of expertise,
care, efficiency, aesthetic taste and successfully boost
consumer confidence.