Chapter 3

Consumer Perception : A Conceptual Framework

CONSUMER PERCEPTION : A CONCEPTUAL FRAMEWORK

3. a Introduction

The chapter “Consumer Perception: A Conceptual Framework” is an attempt to

discuss the various theoretical concepts used in the study. In this chapter the concept of
perception, coding of stimuli, perceptual selectivity, aspects of perceived quality of consumers
have been explained. The intrinsic and extrinsic cues influencing perception have been
explained. This chapter highlights how the process of perception has always assumed
significance in the light of its capability to influence consumer’s choice of brands. Through
this chapter the researcher has tried to emphasise how consumer perception is emerging as one
of the most important factors in shaping the behaviour of consumers and determining consumer
preferences.

3.1 Concept of Perception and its impact on marketing strategies

Perception is the spontaneous association which brands, human beings and companies
trigger when individuals encounter specific images related to them. Perception is unique to
each individual and it is not just objective reality.Different persons may have their own version
of brand description based on their perception (Kumar, 2008).

Perception is a process whereby stimuli are received and interpreted by the individual
and translated into a response (output).Perception begins when stimuli are detected by the five
senses; the result of this detection is referred to as sensation. Perception begins when patterns
of energy known as stimulus inputs reach the sensory receptors. Each receptor then transform
the energy so that it is received by the brain in the form of nerve impulses resulting in sensations
of sight, hearing, smell, touch and taste (Engel,Kollat,Blackwell,1968).

3.2 Coding of stimuli; Adaptation and the Perception of Change

The central nervous system possesses the vast capability to transmit information about
numerous energy variations to the brain. In vision for example the retina of the eye is stimulated
by electromagnetic waves and the result is optic nerve activity. Vibrations of the basic
sensations of hearing result in the sounds we hear (Geldard, 1953).
 Sensation itself depends on the energy change within the environment where the
perception occurs. A perfectly unchanging environment, regardless of the strength of the
sensory input provides little or no sensation at all (Stevens, 1951).

The lowest level at which an individual can experience a sensation is called absolute
threshold. The point at which a person can detect a difference between “something and
nothing” is that person’s absolute threshold for that stimulus e.g. the distance at which a driver
can note a commercial promotional billboard on a highway is that individual’s absolute
threshold (Schiffman & Kanuk 2004).

It appears to be a general principle that continued reception of the same stimulus results
in a diminishing of sensation from that source. This is referred to as adaptation. Sensory
adaptation is a difficulty that concerns many national advertisers, which is why they try to
change their advertising campaign regularly to make sure that their promotional
communication provide adequate sensory input to be noticed and acted upon.

An interesting feature of consumer research that has generated considerable interest

pertains to the minimum amount of additional stimulation needed to produce a sensation of
change once a given adaptation level has become established. The point at which change is
detected is called the differential threshold or the just noticeable difference (j.n.d), and the
following generalisations, referred to as Weber’s Law has emerged. Weber’s law states that the
stronger the initial stimulus, the greater the intensity needed for the second stimulus to be
perceived as different (Engel, Kollat & Blackwell, 1968). Thus, 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.

When it comes to product improvements and modifications marketers very much want
to meet or exceed the consumer’s differential threshold; i.e. they want consumers to readily
perceive any improvements made in the original product. Marketers use the j.n.d to determine
the amount of improvements they should make in their products. Less than the j.n.d is wasted
effort because the improvement will not be perceived, more than the j.n.d is wasteful because
it reduces the level of repeat sales. On the other hand when it comes to price increase less than
the j.n.d is desirable because consumers are unlikely to notice it. Since many routinely
purchased consumer goods are perceived as rather inexpensive, companies are reluctant to raise
prices when the profit margins on these items are declining. Instead many marketers decrease
the product quantity included in the packages while leaving the prices unchanged.

3.3 Pathways for the flow of information; Understanding sensations and

giving meaning to them

External reality envelops the mind of the consumer through the five sense organs. There
are two information super highways between the ‘real’ external world (objective) and the
internal psychological world (subjective). These are the actual pathways for the flow of
information from the external world to the internal world and vice versa. The inbound
information superhighway from external reality to the brain is the ‘bottom-up’ pathway, and,
the outbound super highway, the person’s response, is the ‘top-down’ pathway. Both of these
pathways work in a complementary fashion. The bottom up route comes from the outside
world. Numerous products in the malls try to attract our attention through their packaging
(shape, size, material), the labeling (message, colours) or because they conjure up an
advertising campaign. These stimuli from the outside world reach our senses, then perceptions
and then finally the higher structures of the brain responsible for processing and interpreting
information received for decision making to make our motor system buy the product or service
offer we are thinking of and that will give us most satisfaction(Martinenz,2012).

Correct classification of stimulus is aided by past experience and learning which appear
to be retained in the central nervous system as a neutral trace engaged or activated by sensations
from the sensory receptors. Moreover, as properties of various objects and phenomena are
abstracted and stored, past experience comes to provide a category of meaning (Engel, Kollat,
Blackwell, 1968).The exact form of categories of meaning cannot be known because they are
forever hidden within the black box. Several competing explanation postulate that perception
is a decision process whereby incoming stimuli are compared against stored categories until a
proper fit is discovered.

Perception is the result of two different kinds of inputs that interact to form personal
pictures of the perceptions that each individual experiences. One type of input is physical
stimuli from the outside environment; the other type of input is provided by the individual
themselves in the form of certain predispositions (expectations, motives and learning) based
on previous experience. The combination of these two diverse inputs produces for each of us a
very private, very personal picture of the world. As each person is a unique individual with
unique experiences, needs, wants, desires and expectations, it follows that each individual’s
perceptions are also unique (Schiffman and Kanuk, 2004).

In simple terms, perception is the meaning an individual adds to the information he/she
receives through the sensory organs. The stimuli from the environment interact with the stored
information (memory) to give rise to perception of the individual.

An LG advertisement or a promotional scheme may act as a stimulus which interacts

with information already stored in the minds of the consumer. The stored information may be
linked with consumer durables advertisement, specific brands in the electronic appliance
category or the associations which have been added to the brands in the consumer durable
category. A consumer spontaneously associates LG with electronic appliances, durable,
distinctive product features and so on. A distinctive brand image is created in the minds of the
consumer, which can be manipulated to create a brand personality. Thus, any competitive brand
has to develop unique associations which originate from perception (Kumar, 2008). Thus the
concept of positioning also has its foundation in perception.

3.4 Aspects of perception; Perceptual selectivity

Individuals are very selective as to which stimuli they ‘recognise’; i.e. they
subconsciously organize the stimuli they do recognize according to widely held psychological
principles, and they interpret such stimuli(they give meaning to them) subjectively in
accordance with their personal needs, expectations and
experiences(Schiffman,Kanuk,2004).Perception consists of three major elements-selection,
organization and interpretation of stimuli. These elements are vital to marketers in the
formation of communication strategies.

The top-down pathway states that signals start in the person’s mind, in the higher brain
structures where needs and desires are to be found. Due to these needs and desires embedded
in memory that an individual focuses his or her attention on specific stimuli, i.e. the brain
focuses its attention on that part of external reality it thinks relevant. This pathway begins in
the brain, focusing its attention, perceptions and senses in one direction. In these instances, a
person’s psychological reality is active and chooses between the many options offered by the
external world. This is known as selective attention (Martinez, 2012).
 An incredible amount of stimuli vie for attention at any given moment. The nervous
system ignores much that reaches it, with the result that perception becomes highly selective
when perception becomes focused, it is said that the stimulus has captured attention, and others
have become part of the background. Consumers subconsciously exercise a great deal of
selectivity as to which aspects of the environment (which stimuli) they perceive (Schiffman
and Kanuk, 2004). A customer at a shopping mall may be exposed to over a lakh of products
of varied colours, shapes and sizes, to hundred other co-customers (looking, walking,
talking),to smells(from grocery items, meats, disinfectants, people) to the sounds emanating
from within the mall (cellphones ringing, trolleys being pulled, air conditioners buzzing,
attendants cleaning floors and stocking shelves with new additions ) and to sounds from
outside the store(cars honking, city buses applying brakes, the hustle and bustle of traffic and
people outside). Inspite of all of this occurring all around the consumer manages to purchase
and pay for the items required within a reasonable period of time, without losing his\her
personal orientation to the world around. This shows that all customers exercise selectivity in
perception which makes them focus on what they want.

Consumers selection of stimuli also highlights the concept of selective exposure

whereby consumers seek messages which are pleasant or towards which they are sympathetic.
Through selective attention consumers are likely to note ads for products that would satisfy
their needs and disregard those in which they have no interest. Consumers also vary in terms
of the kinds of information in which they are interested; the form and type of medium they
prefer. Some consumers are interested in price, some in product features, some in brand image
and others in country of origin associations. Through perceptual blocking consumers protect
themselves from being bombarded with stimuli by simply blocking stimuli from their
individual conscious awareness. This a self protection device because of the visually
overwhelming nature of the world in which we live. This device helps us focus and be rational.

3.5 Nature of stimulus pattern influence; Psychological motives

Marketing stimuli includes an enormous number of variables that influence consumer’s

perception such as nature of the product, its physical attributes, the package design, the
advertisements and commercial (including copy claims, choice and sex of model, positioning
of model, size of the print advertisement, position of the advertisements, typography, symbolic
representation), use of colour and the editorial environment (Keachie and Doyle, 1966)
 As constant exposure to stimulus induces a level of adaptation, at times novelty and
contrast finds widespread use in advertising to make a message stand out from those of its
competitors. Research on increasing the size has revealed that doubling the size of the print
advertising or poster does not double the attention attracting power of the commercial or
advertisement (Barton 1964). Dramatic image of the product against a white background with
little copy in print advertisements, the absence of sound in a commercials opening scene, a
sixty second commercial spaced with other commercials of twenty second spots all offer
sufficient contrast from their environments to achieve differentiation and merit consumer’s
attention(Ulin,1962).

Visual impressions can be retained in the memory of consumer and these results in
greater message recall by the individual (Engel, Wales and Warshaw, 1967).Colours can also
be used to create moods and emotions amongst consumers. Package designers are aware that
an average package on the super market shelf has about 1/10 the of a second to make an
impression on the consumer thus every aspect of package ,the name ,shape, colour, label and
copy and material used in packaging provide sufficient sensory stimulation to be noticed and
remembered by the consumer.

Research on the values of the position of advertisements in print and media provide
several reasonably valid generalisations. The greatest readership in magazines is usually
attracted by advertisements on the covers or in the first ten pages; beyond this point location is
a minor factor.

Tentative theories have proved that certain stimulus properties are influential in calling
forth the proper category and assuring a one-to-one correspondence between category and
stimulus cue. Functional influence such as needs and values can render certain categories more
accessible than others, with the result being an interpretation of the stimulus which can differ
from reality. That is the reason why perception is not always objective.

People usually see what they expect to see and what they expect to see is usually based
on familiarity, previous experience or pre conditioned set (expectations) that the individual
possesses. In a marketing context, people tend to perceive product and product attributes
according to their own expectations. On the other hand stimuli that conflict sharply with
expectations often receive more attention than those that conform to expectations. Unexpected
audio/visual effects and highlights in advertisements attract more attention than others. Any
brand of consumer durable which offers innovative and high quality features may start the
advertisement saying “This brand is expensive”, followed by copy which substantiates the
claim. This will catch the customer’s eye, as being used to low price claims, customer’s now
encounter a contrary and unexpected claim.

Motive is a tendency to think and behave so as to attain a favoured or positive generic

goal. Motives influence perception (Atkinson and Walker, 1956). People tend to perceive the
things they need or want. There is a heightened awareness of stimuli that are relevant to one’s
needs and interest. An individual’s perceptual process attunes itself more closely to those
elements in the environment that are important to that person. A person who wants to buy an
air conditioner is more likely to notice and read carefully deals and special offers selling
refrigerators.

The existence of a filter prior to the central control unit means that the thresholds for
valued stimuli would be lower than for others (Broadbent, 1958). The common hypothesis is
that value acts as a sensitizer and hence lowered thresholds for value related words (Postman,
Bruner, Ginnies, 1948). Marketers through marketing research determines what consumers
consider to be ideal attributes of the product category or what consumers perceive their needs
to be in relation to the product category. The marketer can then segment the market on the basis
of those needs and vary the product advertising so that consumers in each segment will perceive
the product as meeting their own special needs, wants and interests.

3.6 Perceived Quality; (Intrinsic and Extrinsic cues); Reasons for selecting
the dimensions brand image, durability, price, country of origin,
product features.

Quality can be defined broadly as superiority or excellence. Olshavsky (1985) views

quality as a form of overall evaluation of a product, similar in some ways to attitude. Holbrook
(1981) and Corfman (1985) suggest that quality is a relatively global value judgment. Perceived
quality can be defined as the consumer’s judgment about a products overall excellence or
superiority. Perceived quality is different from objective or actual quality; a higher level of
abstraction rather than a specific attribute of a product; a global assessment that in some cases
resembles attitude and judgment usually made within a consumer’s evoked set (Zeithaml,
1988). The customer’s perception of the overall quality or superiority of the product or service
with respect to its intended purpose relative to its alternatives is referred to as perceived quality
(Aaker, 1991).Perceived quality may lead to consumer satisfaction which is determined by
perceived performance and expectation (Chaudhuri, 2002).Perceived product quality is the
consumer’s perception of overall components both tangible and intangible. Thus perceived
quality is a global assessment based on customer perceptions of what constitutes a quality
product and how well a brand rates on these dimensions. Achieving a satisfactory level of
perceived quality has become difficult as continual product improvement over the years have
led to heightened consumer expectations regarding the quality of products (Sherman, 1992).

On the other hand objective quality refers to measurable and verifiable superiority on
some predetermined ideal standard or standards. Published quality ratings from varied sources
are used to develop the construct of objective quality in research studies. The selection of
attributes and weights to measure objective quality poses a concern for marketers all over the
world. Maynes (1976) claims that objective quality does not exist and all quality evaluations
are actually subjective. Product based quality refers to amounts of specific attributes or
ingredients of a product. Manufacturing quality involves conformance to manufacturing
specifications or service standards (Garvin, 1983).According to Japanese philosophy quality
means “zero defects- doing it right the first time”

Much research attention has been devoted to understanding how consumers form their
opinions about perceived quality. The specific attributes or benefits that become associated
with favorable evaluations and perceptions of product quality can vary from category to
category. In a research study for General Electric, Morgan (1985) points out striking difference
between consumer, dealer and manager perceptions of appliance quality. When questioned as
to how consumers form perceptions of quality, managers listed workmanship, performance and
form as critical components. Consumers actually keyed in on different components,
appearance, clean-ability and durability. Thus it can be understood that the concept of
perceived quality is different from objective quality, which may not exist at all because all
quality is perceived by someone be it consumers or managers or researchers or marketers.

In the past researchers and philosophers have used the word quality to refer to explicit
features (i.e. properties or characteristics of an object as perceived by a subject).Attributes that
signal quality have been divided into intrinsic and extrinsic cues (Olson 1977).These two
factors influence perceived product quality. Intrinsic cues involve the physical composition of
the product. These concern the physical characteristics of the product itself such as size, colour,
flavour or aroma. In some cases consumers use these physical characteristics to judge product
quality (Schiffman and Kanuk 2004).As intrinsic attributes cannot be changed without altering
the nature of the product itself they are consumed as the product is consumed (Olson 1977,
Olson and Jacoby 1972). Past studies have shown that the perceived product quality varies with
the variations in the nature of consumer perceptions of intrinsic marketing cues associated with
those products .Extrinsic cues are product related but are not a part of the physical product
itself. As consumers cannot always use intrinsic cues in making decisions, hence they often
evaluate quality on the basis of extrinsic cues that are external to the product itself, such as
price, brand image, manufacturer’s image, retail store image, or even the country of origin
associations (Schiffman and Kanuk 2004).

As consumers cannot always evaluate the intrinsic cues, they usually rely on different
extrinsic cues to form perceptions about product quality. This is due to the fact that knowledge
on the technical specifications of branded durables is not possessed by most consumers so they
rely on what is external and can be judged by them. The main feature about extrinsic cue is
that they are product related but not a part of the physical product itself. The dimensions used
to test consumer’s perception of product quality in the thesis viz. price, brand image, country
of origin relate to extrinsic cues. Durability and superior product features used to test
consumer’s perception of product quality in the current research are intrinsic cues. These
extrinsic attributes are non product specific and can usually serve as general parameters of
quality across all types of products. These cues serve as generalized quality indicators across
brands, products and categories (Zeithaml, 1988).

Lin and Kao (2004) said that perceived product quality may be influenced by
distribution channels, brand image, country of origin and price. Thakor and Katsanis(1997)
said that the extrinsic cues that affect perceived quality are price, warranty, advertising, market
share and the country of origin. Dods, Monroe and Grewal (1991) revealed that not only price
but also brand name and store name have positive relationships with perceived product quality

In case of products where intrinsic cues to quality are readily accessible, when brand
names provide evidence of a company’s reputation or when level of advertising communicates
the company’s belief in the brand, the consumer may prefer to use those cues instead of price.
If the consumer does not have sufficient product knowledge (or perhaps even interest) to
understand the variation in quality among products extrinsic cues are used (Lambert 1972). If
the consumer does not have sufficient product knowledge to understand the variation in quality,
price and other extrinsic cues may be used to a greater degree. Thus marketers must determine
the relevant quality dimensions for a product category and the cues that are salient for
consumers in judging perceived product quality.

Several researchers (Brucks1985; Parasuraman, Zeithaml and Berry 1985) have stated
on the basis of exploratory work that six abstract dimensions (ease of use, functionality,
performance, durability, serviceability and prestige) can be generalized across various
categories of durable goods.

Previous research has identified the following general dimensions of product quality
(Garvin 1987). They are performance: Levels at which the primary characteristics of the
product operate (low, medium, high, or very high).

Features: Secondary elements of a product that complement the primary characteristics.

Conformance quality: Degree to which the product meets specifications and is absent
of defects.

Reliability: Consistency of performance over time and from purchase to purchase.

Durability: Expected economic life of the product.

Serviceability: Ease of servicing the product.

Style and Design: Appearance or feel of quality.

Consumer beliefs along these dimensions often underlie perceptions of the quality of
the product that in turn can influence attitudes and behaviour’s towards a brand.

Thus a variety of informational cues which could be both intrinsic or extrinsic to the
product provide the basis for the perceptions of product quality .Intrinsic cues which concerns
physical characteristics of the product itself such as size, colour, flavour, appearance or aroma
make evaluations of product quality (either positive or negative) as being rational or objective
product choices. In the absence of actual experience with a product, consumers evaluate quality
on the basis of cues that are external to the product itself. These include price, brand image,
manufacturer’s image, and retail store image, the country of origin, distribution channels, brand
image, certificates, and warranty, advertising market share, brand name or store name. As past
research has suggested that consumers perceptions of product quality are generally formed on
the basis of an array of extrinsic cues as consumers cannot always evaluate physical
characteristics, marketers should not overlook these cues. Thus both intrinsic and extrinsic cues
considerably influence consumer perception of product quality.

3.7 Perceived Value

Perceived value is the consumer’s overall assessment of the utility of a product (or
service) based on perceptions of what is received and what is given (Zeithaml, 1988).
Customers tend to be value- maximizes within the bounds of search costs and limited
knowledge, mobility and income. Customers estimate which offer will deliver the most
perceived value and act on it. Whether or not the offer lives up to expectations effect customer
satisfaction and the probability that he or she will purchase the product again. To marketers
and marketing scholars perceived value is significant primarily because it has the power to alter
the direction (satisfied/dissatisfied) and the degree or intensity of satisfaction/dissatisfaction
experienced (Spreng, Harell, Mackoy1995) . To have a deeper understanding of value and how
it leads towards brand loyalty, it is imperative to gain an insight into the various dimensions
that constitute value. These value dimensions include :

 Functional value which further incorporates- a) quality/performance aspect and

b) price/value for money aspect.

 Emotional dimension which includes the utility derived from the feelings or
affective states that a product generates and,

 Social value which involves the enhancement of social concept via the usage of
the product. All the value dimensions are inextricably linked to one another.