Consumer Perception Chapter 5 Answer Key (T or F)

True/false questions 1. Consumers act on the basis of perception, not on the basis of objective reality. Answer: True 2. According to sensory adaptation, when during an event such as the Olympics many brilliantly executed marketing campaigns are run simultaneously, consumers are likely to pay more attention to each advertisement. Answer: False 3. Two individuals may be exposed to the same stimuli under the same apparent conditions, but how each person recognises, selects, organises and interprets these stimuli is a highly individual process based on each person’s own needs, values and expectations. Answer: True 4. Another term for the absolute threshold is the just noticeable difference. Answer: False 5. The minimum difference that can be detected between two stimuli is referred to as the differential threshold. Answer: True 6. According to Weber’s law, the stronger the initial stimulus, the less additional intensity is needed for the second stimulus to be perceived as different. Answer: False 7. The marketing application of the differential threshold is limited to pricing. Answer: False 8. One way to ensure that product changes remain below the point of just noticeable difference (that is, the differential threshold) is for the manufacturer to reduce the product’s quantity rather than the price. Answer: True 9. The subliminal perception process requires stimuli to be above the consumer’s absolute threshold but below their level of conscious awareness. Answer: True 10. There is evidence that subliminal stimuli may influence affective reactions but not consumption actions. Answer: True 11. Research findings indicate that sexually oriented embeds in advertising do not influence consumer preferences. Answer: True 12. Most people are relatively unselective as to the stimuli they recognise. It isn’t until they interpret and organise it in their mind that they eliminate excess stimulation. Answer: False 13. When it comes to selective perception, which stimuli get selected depends on the nature of the stimuli itself, the consumer’s previous experience with the product and the consumer’s mood at time of exposure. Answer: False 14. Mary watches an advertisement for jeans on television. She notices the style and comfort of the jeans but can’t recall the price or terms of sale. Mary is experiencing selective perception. Answer: True 15. Stimuli that conflict sharply with expectations often receive more attention than those that conform to expectations. Answer: True 16. In ads where sexual content was irrelevant to the brand, the ad was remembered but the brand wasn’t. Answer: True 17. Tim decides to purchase a new car and now sees advertisements for automobiles everywhere. This is an example of selective perception driven by motives. Answer: True 18. When smokers pay particular attention to advertisements that warn of the cancerous effects of smoking and how it may kill them, this is an example of selective exposure. Answer: False 19. Gestalt psychology refers to the specific principles underlying perceptual organisation. Answer: True 20. Stimuli that contrast with their environment are more likely to be noticed. A sound must be louder or softer, a colour brighter or paler. Answer: True 21. It is more difficult for consumers to evaluate the quality of services than the quality of products. Answer: True 22. Reliability, assurance, tangibility and price are some of the dimensions used by marketers to measure service quality. Answer: False 22. A study of retail store image based on comparative pricing strategies found that consumers tend to perceive stores that offer a small discount on a large number of items as having lower prices overall than competing stores that offer larger discounts on a smaller number of products. Answer: True 23. Low-risk perceivers are often described as narrow categorisers because they limit their choices (including product choices). Answer: False 24. High-risk perceivers are often described as broad categorisers because they tend to make their choices from a much wider range of alternatives. Answer: False 25. Staying brand loyal is one way in which consumers minimise risk. Answer: True 26. Some consumers handle perceived risk by selecting the most expensive model. Answer: True Essay questions 1 a. Describe what sensation is and how sensory receptors work. Provide examples to explain your answer. Sensation is the immediate and direct response of the sensory organs to simple stimuli (an advertisement, a package, a brand name). Sensory receptors are the human organs (eyes, ears, nose, mouth and skin) that receive sensory inputs. Their sensory functions are to see, hear, smell, taste and feel movement. Sensation itself depends on energy change or differentiation of input. A perfectly bland or unchanging environment, regardless of the strength of the sensory input, provides little or no sensation at all. For example, a person who lives on a busy street in inner Melbourne would probably receive little sensation from the inputs of such noisy stimuli as rumbling trucks, the swoosh of cars and the clatter of passing trains, since such sounds are commonplace in that environment. In situations where there is a great deal of sensory input, the senses do not detect small intensities or differences in input. Thus, one bus more or less would never be noticed on a street with heavy traffic. As sensory input decreases, however, our ability to detect changes in input or intensity increases, to the point that we attain maximum sensitivity under conditions of minimal stimulation. For example; ‘It was so quiet I could hear a pin drop’ shows heightened sensitivity with decreased sensory input. It also accounts for the increased attention given to a commercial that appears alone during a program break, or to a black-and-white advertisement in a magazine full of fourcolour advertisements. 1 b. Describe what the absolute threshold is and provide an example. The lowest level at which we can experience a sensation is called the absolute threshold. The point at which we can detect a difference between ‘something’ and ‘nothing’ is our absolute threshold for that stimulus. For example, the distance at which a driver can first detect a specific advertising hoarding on the highway is based on that individual’s absolute visual threshold. Two people travelling together may become aware of the hoarding at different distances; thus, they appear to have different absolute thresholds. 2 a. Explain Weber’s law and give an example. Weber’s law states that the stronger the initial stimulus, the greater the additional intensity needed for the second stimulus to be perceived as different. This law was first postulated by German scientist, Ernst Weber, in the 19th century when he observed that the just noticeable difference between two stimuli was not an absolute amount, but an amount relative to the intensity of the first stimulus. According to Weber’s law, an additional level of stimulus equivalent to the j.n.d. must be added for the majority of people to perceive a difference between the resulting stimulus and the initial stimulus. Weber’s law holds for all the senses (e.g. sight and sound) and for almost all intensities. An example in pricing is as follows: For a highly priced item, such as a car, a price increase of $100 would probably not be noticed by consumers (i.e. the increment would fall below the just noticeable difference). It may take an increase of $1000 or more before a differential in price would be noticed. In contrast, a $1 increase in the price of a bottle of milk would be noticed very quickly because it is a higher percentage of the initial (i.e. base) cost of the item. 2 b. How do marketers apply the principles of Weber’s law? Give examples. Weber’s law has important applications for marketing. Manufacturers and marketers endeavour to determine the relevant just noticeable difference for their products for two very different reasons:  so that negative changes (e.g. reductions in product size, increases in product price, or reduced quality) are not readily discernible to the public (i.e. they remain below the j.n.d.)  so that product improvements (e.g. improved or updated packaging, a larger size or a lower price) are readily discernible to consumers without being wastefully extravagant (i.e. they are at or just above the j.n.d.). An example would be reducing the product quantity whilst maintaining the original price (e.g. reducing gram weight of chocolate bars or bread whilst keeping the price the same). 3. What is subliminal perception, and is it effective? Subliminal perception is the process by which people are also stimulated below their level of conscious awareness; that is, they can perceive stimuli without being consciously aware of the stimuli in question. The threshold for conscious awareness or conscious recognition appears to be higher than the absolute threshold for effective perception. 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, because the stimulus is beneath the threshold, or ‘limen’, of awareness, though obviously not beneath the absolute threshold of the receptors involved. There is some evidence that subliminal stimuli can influence affective reactions, however there is no evidence that subliminal stimulation can influence consumption motives or actions. Despite the many studies undertaken by academics and researchers since the 1950s, there is no evidence that subliminal advertising persuades people to buy goods or services. A comprehensive review of the literature indicates that subliminal perception has no effect on attitudes towards products and consumption behaviour, and that most of its effects were discovered in highly artificial situations. 4. What is the difference between selective attention and perceptual defence? Selective attention is the process whereby a consumer has a heightened awareness of stimuli that meet their needs or interests and a corresponding minimal awareness for stimuli irrelevant to their needs. Thus, they are likely to note ads for products that would satisfy their needs or for stores with which they are familiar, and disregard those in which they have no interest. People also vary in terms of the kinds of information they are interested in, and the form of message and type of medium they prefer. Some people are most interested in price, some in appearance and some in social acceptability. Some people like complex, sophisticated messages; others like simple graphics. Perceptual defence is the process whereby a consumer may subconsciously screen out stimuli that are important for them not to see, even though exposure has already taken place. Furthermore, people may unconsciously distort information that is not consistent with their needs, values and beliefs. One way to combat perceptual defence is to vary and increase the amount of sensory input. For example, since most smokers no longer pay attention to the written warning labels on cigarette packs, Canada and Brazil now require tobacco firms to feature graphic health warnings on cigarette packaging. One such warning shows a damaged brain and warns about strokes, and another shows a limp cigarette and states that tobacco can cause impotence. Similar graphic imagery has been used for Australian cigarette packaging. 5. Explain the concept of perceived quality. How is perceived quality different for products and services? Provide examples in your answer. Consumers often judge the quality of a product or service on the basis of a variety of informational cues that they associate with the product. Some of these cues are intrinsic to the product (or service); others are extrinsic, such as price, store image, service environment, brand image and promotional message. In the absence of actual experience with a product, consumers often ‘evaluate’ quality on the basis of extrinsic cues, cues that are external to the product itself. Either singly or together, these intrinsic cues and extrinsic cues provide the basis for perceptions of product and service quality. It is more difficult for consumers to evaluate the quality of services than the quality of goods. This is because services have the following characteristics: intangibility, variability, the fact that they are simultaneously produced and consumed, and their perishability. When ‘evaluating’ a service, a consumer is more likely to base their judgment on extrinsic cues such as price, image, service environment and promotional messages as with services, an actual experience with the product is absent. In addition to this, when evaluating a service, a consumer may also rely on surrogate cues which are extrinsic cues that signal quality. Examples of perceiving the quality of a product can include the following: - Consumers might judge the flavour of ice-cream or cake by colour cues or the quality of laundry detergent may be determined by the colour of the product or its packaging. - The size of packaging may influence the perceived quality of a product, for example, popcorn is perceived to be of better quality when packaged in larger packages. Examples of perceiving the quality of a service can include: - When evaluating a doctor’s services, the quality of the reception area and consulting room furnishings, the number of framed degrees on the wall, the pleasantness of the receptionist and the professionalism of the nurse all contribute to the consumer’s overall evaluation of service quality. 6. Identify and describe three strategies consumers use to reduce perceived risk. There are six strategies from which to choose three examples: 1. Consumers seek information about the product and product category through word-of-mouth communication (from friends and family and from other people whose opinions they value), from salespeople, and from the general media. They spend more time thinking about their choice and search for more information about the product alternatives when they associate a high degree of risk with the purchase. This strategy is straightforward and logical because the more information the consumer has about the product and the product category, the more predictable the probable consequences and thus the lower the perceived risk. 2. Consumers avoid risk by remaining loyal to a brand with which they have been satisfied instead of purchasing new or untried brands. High-risk perceivers, for example, are more likely to be loyal to their old brands and less likely to purchase newly introduced products. 3. Consumers select by brand image. When consumers have had no experience with a product, they tend to ‘trust’ a favoured or well-known brand name. Consumers often think well-known brands are better and are worth buying for the implied assurance of quality, dependability, performance and service. Marketers’ promotional efforts supplement the perceived quality of their products by helping to build and sustain a favourable brand image. 4. Consumers rely on store image. If consumers have no other information about a product, they often trust the judgment of the merchandise buyers of a reputable store and depend on them to have made careful decisions in selecting products for resale. Store image also imparts the implication of product testing and the assurance of service, return privileges and adjustment in case of dissatisfaction. 5. Consumers buy the most expensive model. When in doubt, consumers often feel that the most expensive model is probably the best in terms of quality; that is, they equate price with quality. (The price/quality relationship was discussed earlier in the chapter.) 6. Consumers seek reassurance. Consumers who are uncertain about the wisdom of a product choice seek reassurance through money-back guarantees, government and private laboratory test results, warranties and pre-purchase trial. For example, it is unlikely that anyone would buy a new model car without a test drive. Products that do not easily lend themselves to a free or limited trial (such as a refrigerator) present a challenge to marketers. 7. Explain the concept of positioning and its importance in relation to consumer behaviour. Positioning is the image that a product or service has in the mind of the consumer. It is probably more important to its ultimate success than its actual characteristics. Marketers try to differentiate their brands by stressing attributes they claim will fulfil the consumer’s needs better than competing brands. They strive to create a positioning consistent with the relevant self-image of the targeted consumer segment. Marketers of different brands in the same category can effectively differentiate their offerings only if they stress the benefits that their brands provide rather than their products’ physical features. The benefits featured in a product’s positioning must reflect attributes that are important to and congruent with the perceptions of the targeted consumer segment. Positioning conveys the concept, or meaning, of the product or service in terms of how it fulfils a consumer need. Different consumer meanings (i.e. product images) can be assigned to the same product (or service). Thus, it can be positioned differently to different audiences, or it can be repositioned to the same audience, without actually being physically changed. Successful positioning results in a distinctive brand image that consumers can rely on, affecting both consumer beliefs about brand characteristics and the price the consumer is willing to pay. A positive brand image also leads to consumer loyalty, positive beliefs about brand value, and a willingness to search for the brand. A positive brand image promotes consumer interest in future brand promotions and inoculates consumers against competitors’ marketing activities. An advertiser’s positioning strategy forms consumer beliefs about its brand’s attributes and also determines the prices consumers are willing to pay. As markets become more crowded and services become more complex, a distinctive image is most important. At the same time, in today’s highly competitive marketplace, a distinctive product image is very difficult to create and maintain. 8. Describe three positioning strategies and give an example of each. There are seven from which to choose: 1. Umbrella positioning – this strategy entails creating an overall image of the company around which many products can be featured individually. This strategy is appropriate for very large corporations with diversified product lines. For example, Woolworths’ umbrella positioning is ‘Fresh Food People’. 2. Positioning against the competition – as the name implies, comparing your product directly against your rival. For example, Duracell ads state ‘Duracell lasts up to three times longer than Eveready Super Heavy Duty (In AA, AAA, C and D sizes only)’. In Australia, Herron has run a successful campaign against Panadol and most recently Nurofen with its latest campaigns positioning the brand and products as Australian owned and produced. 3. Positioning based on a specific benefit – slogans and campaigns that smartly and precisely depict the key benefit of the brand they promote and have effectively positioned these brands in the minds of consumers. Effective depictions of a core benefit often include memorable imagery. For example, Cadbury Chocolate has an emblematic picture of ‘a glass and a half [of full cream dairy milk]’ on its packaging. 4. Finding an ‘unowned’ position – in highly competitive markets, finding a niche unfilled by other companies. For example, a clever approach in finding an ‘unowned’ position was Palmolive’s claim to ‘soften your hands as you do the dishes’; today, even though many people no longer wash dishes by hand, Palmolive still positions its dishwashing liquid as ‘tough on grease, soft on hands’. 5. Filling several positions – because unfilled gaps or ‘unowned’ perceptual positions present opportunities for competitors, sophisticated marketers create several distinct offerings, often in the form of different brands, to fill several identified niches. For example, Colgate-Palmolive, one of the largest producers of laundry detergents (which are actually commodity-like products, since the physical make-up of almost all detergents is largely identical), offers consumers such brands as Fab (deeply cleans, softly protects fabrics, and whitens and brightens clothes), Dynamo (for front-loading washers), Cuddly (extra softness and freshness), Sard Wondersoap (for pre-treating and shifting tough stains) and several other detergents. It would be difficult for a manufacturer to penetrate the detergent market with a product that offers a benefit that is not already provided by a Colgate-Palmolive brand. 6. Packaging as a positioning element – packaging must convey the image that the brand communicates to buyers. For example, ‘Earth Friendly’ laundry powders are in green or plain recyclable packaging, signifying their environmentally friendly nature. Their packaging is thus consistent with their positioning as products that ‘touch the earth lightly’. 7. Product repositioning – regardless of how well positioned a product appears to be, the marketer may be forced to reposition it in response to market events, such as a competitor cutting into the brand’s market share or too many competitors stressing the same attribute. For example, rather than trying to meet the lower prices of high-quality private-label competition, some premium-brand marketers have repositioned their brands to justify their higher prices, playing up brand attributes that had previously been ignored. For example, David Jones attained exclusive deals with fashion designers (such as Collette Dinnigan) and various suppliers (such as Witchery) to achieve a point of distinction from its closest competitor, Myer. Complementing its service levels, store ambience and range of goods, exclusive offerings allowed David Jones to retain its loyal consumers and avoid price wars in the marketplace. 9. Why is the design of the service environment so important for service providers? Give examples of the variables that consumers find very important when evaluating the service from their bank. The design of the service environment is an important aspect of service positioning strategy and sharply influences consumer impressions and consumer and employee behaviour. The physical environment is particularly important in creating a favourable impression for such services as banks, retail stores and professional offices, because there are so few objective criteria by which consumers can judge the quality of the services they receive. The service environment conveys the image of the service provider, with whom the service is so closely linked. One study of service environments identified the environmental variables of most importance to customers of banks. These included: 1. Privacy (of both a visual and auditory nature), such as enclosed offices, 2. Efficiency and convenience (transaction areas that are easy to find, transaction privacy, and so on. directional signs). 3. Ambient background conditions (temperature, lighting, noise, music). 4. Social conditions (the appearance of other people in the bank environment, 5. Aesthetics (colour, style, use of materials, artworks). such as bank customers and bank personnel).