Consumer Behavior and Perception

Perceptual Filter We start our examination of the influences on consumer purchase decisions by first looking inside ourselves to see which are the most important internal factors that affect how we make choices. Perceptual Filter

Perception is how we see ourselves and the world we live in. However, what ends up being stored inside us doesn’t always get there in a direct manner. Often our mental makeup results from information that has been consciously or subconsciously filtered as we experience it, a process we refer to as a perceptual filter. To us this is our reality, though it does not mean it is an accurate reflection on what is real. Thus, perception is the way we filter stimuli (e. g. , someone talking to us, reading a newspaper story) and then make sense out of it.

Perception has several steps. • Exposure – sensing a stimuli (e. g. seeing an ad) • Attention – an effort to recognize the nature of a stimuli (e. g. recognizing it is an ad) • Awareness – assigning meaning to a stimuli (e. g. , humorous ad for particular product) • Retention – adding the meaning to one’s internal makeup (i. e. , product has fun ads) How these steps are eventually carried out depends on a person’s approach to learning. By learning we mean how someone changes what they know, which in turn may affect how they act.

There are many theories of learning, a discussion of which is beyond the scope of this tutorial, however, suffice to say that people are likely to learn in different ways. For instance, one person may be able to focus very strongly on a certain advertisement and be able to retain the information after being exposed only one time while another person may need to be exposed to the same advertisement many times before he/she even recognizes what it is. Consumers are also more likely to retain information if a person has a strong interest in the stimuli.

If a person is in need of new car they are more likely to pay attention to a new advertisement for a car while someone who does not need a car may need to see the advertisement many times before they recognize the brand of automobile. Marketing Implications: Marketers spend large sums of money in an attempt to get customers to have a positive impression of their products. But clearly the existence of a perceptual filter suggests that getting to this stage is not easy.

Exposing consumers to a product can be very challenging considering the amount of competing product messages (ads) that are also trying to accomplish the same objective (i. e. , advertising clutter). So marketers must be creative and use various means to deliver their message. Once the message reaches consumer it must be interesting enough to capture their attention (e. g. , talk about the product’s benefits). But attending to the message is not enough. For marketers the most critical step is the one that occurs with awareness.

Here marketers must continually monitor and respond if their message becomes distorted in ways that will negatively shape its meaning. This can often happen due in part to competitive activity (e. g. , comparison advertisements). Finally, getting the consumer to give positive meaning to the message they have retained requires the marketer make sure that consumers accurately interpret the facts about the product. Perception Isn’t Everything to Shoppers Prices affect consumer opinions, but a new study reveals a less predictable correlation than previously believed. Bottom of Form

Slap the right price tag on a Timex, wax a little rubbing alcohol over the first several letters, etch out a few new characters and voila — you’ve got a Rolex. “Perception is everything,” goes one marketing mantra; and according to accumulated economic data, the theory holds true in pricing economics. If consumers are told one apple costs $5 while another costs $2, they will often conclude that the $5 apple must be better than the other apple. Before gouging prices to increase demand, however, economist Ori Heffetz is quick to warn that the higher prices also can decrease demand – maybe even more so in a recession. You have to know how this positive effect of prices on perceptions compares with the possibly large negative effects of higher prices on demand for a specific product,” he says. A recent study that Heffetz, a professor of economics at Cornell University, authored along with Moses Shayo, a professor of economics at the Hebrew University of Jerusalem, found that consumers’ perceptions do indeed sway in accordance with prices, but their buying behavior doesn’t necessarily follow.

In the study, volunteers in a lab proved that higher prices associated with different candies translated into an elevated perception of value. In a second experiment in which prices of entrees on a prix-fixe menu were altered, the researchers found that people pretty much stuck with what they liked. Because the price for the dinner remained constant, the diners (who were unaware of the ongoing, 14-week-long experiment) might have been expected to opt for whichever dish had the highest value on the a-la-carte menu, whether it be artichoke, pork, sausage, shrimp or a mullet fillet.

The results of the experiment found that increasing the prices of any of the options did not result in an increased demand, and the mullet remained most popular throughout the experiment. “It’s one thing to show in a lab setup that I can manipulate you into thinking, feeling, and even doing something by manipulating prices. But it’s quite another thing to think that such price effects will be large enough to matter when compared with other economic consequences of manipulating prices,” Heffetz says.

It is possible that consumers aren’t quite the rubes they were once believed to be, or maybe that placebo effect is finally beginning to wear off – or perhaps palates are just stubborn. Either way, Heffetz says, boosting prices can sink demand as much as it can raise it. “More expensive products might be perceived as more attractive — which could increase demand — but they are also more expensive, which turned out, in our study, to decrease demand by much more. “

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