Learning Outcomes
Understand and apply theoretical approaches that explain human sensation and perception.
Describe the three-stage perception process that translates raw stimuli into meaning.
Explain the conscious and unconscious aspects of perception.
SENSATION AND PERCEPTION
• Sensation: Immediate response of our sensory receptors (eyes, ears, nose, mouth, fingers) to basic stimuli such as light, colour, sound, odours and textures
• Perception: Process by which sensations are selected, organised and interpreted

SENSORY SYSTEM AND MARKETING
Sights: visual elements in advertising, store design, packaging (Size, colour and style).
Smells: scented clothes, stores, cars and planes, household products, advertisements.
Sounds: jingles and other music in advertising, music in retail settings.
Touch: textures of fabrics and other surfaces with product quality.
Tastes: products promoted on their taste (creamier, smoother, richer, indulgent).
http://www.youtube.com/watch?v=-TSjbVdiTa4
THE STAGES OF PERCEPTION

EXPOSURE
• Exposure occurs when a stimulus comes within the range of someone’s sensory receptors
• Consumers concentrate on some stimuli, are unaware of others, and even go out of their way to ignore some messages
Sensory threshold
The point at which a stimuli is strong enough to make a conscious impact in a person’s awareness.
o Absolute Threshold:
The minimum amount of stimulation that can be detected on a given sensory channel.
• Known as sensory adaptation and is a problem for TV advertisers as viewers get used to stimulus.
• Techniques to combat adaptation include changing the ad, using silence, loud noises and contrasting colours, use of stimuli that conflicts with expectations.
http://www.youtube.com/watch?v=HGhyyKddovY
Sensory threshold (cont.)
o The Differential Threshold - Weber’s Law:
The minimal difference that can be detected between the two stimuli is called the differential threshold, or the just noticeable difference (j.n.d.).
The process of JND is important to marketers as it allows them to work out what level of changes or improvements to products or services are likely to be noticed by consumers.
Experiential Marketing https://youtu.be/qZhbmlbfG5U
ATTENTION
PERSONAL SELECTION FACTORS
The extent to which processing activity is devoted to a particular stimulus.
Stimulus selection factors – How to get attention
IMPORTANT SELECTIVE PERCEPTION
CONCEPTS
Selective exposure • Consumers and avoid painful or threatening ones.seek out messages they find pleasant
Selective attention • Consumers exercise a great deal of selectivity in the amount of attention they give to stimuli.
• Consumers screen out stimuli that are important
Perceptual defence for them not to see, even though exposure has taken place.
Perceptual blocking • Consumers protect themselves from being bombarded with stimuli by simply ‘tuning out’.
INTERPRETATION
• The meaning that we assign sensory stimuli
• Stimulus organisation/perceptual organisation:
One factor that determines how a stimulus will be interpreted is its assumed relationship with other events, sensations or images
• Gestalt perceptual principles ensure that the perceiver organises a lot of separate images into a familiar image o It is best described as the whole is greater than the sum of its parts
STIMULUS ORGANISATION: GESTALT PRINCIPLES

STIMULUS ORGANISATION: GESTALT PRINCIPLES
PERCEPTUAL DISTORTION
Physical appearance Physical appearance of products affects consumer judgements.
Descriptive terms Description of product influences consumer judgements.
Stereotypes Expectations of what specific situations or people might be like.
Irrelevant cues When required to form a difficult judgement, consumers respond to irrelevant stimuli.
First impressions Tend to be lasting but the perceiver doesn’t yet know which stimuli are important.
An evaluation based on only one of many dimensions
Halo effect available.
• https://youtu.be/RS3iB47nQ6E
MARKETING APPLICATIONS OF
PERCEPTION - BRAND POSITIONING
• Positioning strategy is a fundamental part of a company’s marketing efforts as it uses elements of the marketing mix to influence the consumer’s interpretation of its meaning.
? Many dimensions can establish a brand’s position in the marketplace:
Lifestyle Competitors
Price Leadership Occasions
Attributes Users
Product Class Quality

Major positioning Strategies
Umbrella positioning Positioning against the competition Positioning based on a specific benefit
Finding an ‘unowned’ position Filling several positions Packaging as a positioning element
Product repositioning Strategies

OLD SPICE - https://youtu.be/owGykVbfgUE
Blog with brief summary of execution: http://www.rohitbhargava.com/2010/07/why-the-old-spice-guy-might-be-the-perfect-branding-campaign.html http://www.brandengineers.com/storage/positioning_tips/Quirks_28Mar2011_Brand_Engineers.pdf
Perceptual mapping, or multidimensional scaling (MDS)

PACKAGING (CONT.)
• Packaging is often one of the first cues a consumer encounters.
• Marketers must make sure that improvements in changed packaging size are likely to be noticed and downgrades likely to be missed.
• JND and Weber’s Law
PERCEIVED PRICE
Price should reflect the value that the customer receives from the purchase.
When consumers encounter prices significantly different to their expectations, they engage in dissonance reduction (i.e. they seek additional information to justify the high price).
External reference price Internal reference price
Normal price Those learnt or perceived by consumer
PERCEIVED QUALITY
Quality: Intrinsic cues versus extrinsic cue
Consumers judge the quality of a product or service from a variety of informational cues that they associate with the product
Intrinsic cues Extrinsic cues
• Physical characteristics • External to the product of product (includes (includes price, store
size, flavour, colour, image, brand, country of aroma) origin)
http://www.youtube.com/watch?v=p8N83Ex_bN0 http://www.youtube.com/watch?v=h7y6iE0aB5s
PRICE-QUALITY RELATIONSHIPS
Research suggests consumers rely on price as an indicator of product quality.
o Consumers attribute different qualities to identical products that carry different prices.
o Perception of value differs according to segment, such as age and income.
o Consumers use price as a surrogate indicator of quality if they have little other information.
o The form in which products are sold may alter perceived value (e.g. selling in bundles may reduce quality perception).
http://www.youtube.com/watch?v=IbWOQWw1wkM
STORE IMAGE AND THE SERVICESCAPE
What are store image affected by?
Frequency of price advantage Magnitude of price advantage Width of
product assortment
Service levels Physical appearance Location
STORE IMAGE AND THE SERVICESCAPE (CONT.)
The servicescape: The effect of the physical surroundings on the quality perceptions of the service encounter.
Services are more difficult to evaluate because of their:

MANUFACTURER’S IMAGE
Manufacturers who enjoy a favourable image generally find new products accepted more readily.
Pioneer brands (first in product category) tend to have favourable images.
Advertising plays an important role in establishing favourable brand image.
Manufacturers use exhibits and sponsorship of community events to enhance their image.
PERCEIVED RISK
Functional
Risk the product won’t work as expected Physical
Risk to self and others the product may pose Financial
Risk the product isn’t worth the cost
Social
Risk the product may be socially embarrassing Psychological
Risk the product will hurt the consumer’s
ego Time
Risk of the time wasted if the product doesn’t perform
PERCEIVED RISK (CONT.)
How consumers handle risks:
Seek information Brand loyal Select by brand image
Rely on store image Buy the most expensive
model Seek reassurance
CASE STUDY ANALYSIS REPORT
• Individual assessment task
• Select 1 case out of 14 cases
• Answer only those questions of the case chosen that are uploaded on iLearn
• Identify at least TWO (2) consumer behaviour theories/concepts which directly relate to the issues
• Strict maximum of 1500 ± 10% (excluding references)
• Mention the case name
• Mention the case questions (questions are excluded from word limit)
• Due: Week 8, Friday 11.55pm
QUESTIONS?