Consumer Perception

Introduction:

Consumer perception is defined as a process by which consumers sense a marketing stimulus and organize, interpret, and provide meaning to it. The marketing stimulus may be anything related to the product and/or brand and any of the elements of the marketing mix.

Perception is derived from the term “perceive” and refers to our ability to give meaning to whatever stimuli our sense organs detect. The stimuli can come in the form of visual, auditory, olfactory, gustatory, or tactile inputs. A person’s perceptual system chooses a stimulus from many stimuli in the environment, arranges them into a coherent image, and interprets it to extract meaning. Perception is how a person interprets his or her sensory inputs to give them meaning.

Consumer perception is how people perceive marketing stimuli, organise, analyse them, and give them meaning. Marketing stimuli can be anything related to the product and/or brand or any of the marketing mix’s components. They can be divided into two categories: primary or intrinsic stimuli and secondary or extrinsic stimuli.

The primary or intrinsic stimuli are the product and its components, such as the brand name, label, package, contents, and physical features.

Secondary or extrinsic stimuli are the forms in which the good or service offering is conveyed through words, pictures, graphics, and symbolism or through other cues such as pricing, outlet, salespeople, or marketing communication.

Elements and Dynamics of Perception:

According to Schiffman and Kanuk, perception is “the process by which an individual selects, organises and interprets stimuli into a meaningful and coherent picture of the world.” Any input unit to a sensory receptor is referred to as a stimulus. Stimuli in a marketing environment include brand names, commercials, colours, sounds, and packages.

1. Sensation (Exposure to Stimuli):

Sensation is the quick and direct response of sense organs to basic stimuli such as an advertisement, a brand name, or a package. Individual sensitivity to stimuli varies and depends on sensory receptors’ quality. For instance, some people have better hearing or seeing than others.

Differentiation of input determines how a stimulus is perceived. Even when the sensory input is robust, a largely motionless and unchanging environment gives little or no sensation. For example, a person living near a busy railway station is unlikely to be affected by vehicle or train horns or other traffic noises. The addition or subtraction of one or two honking horns would go unnoticed. The senses cannot notice minor variations in sensory inputs when the quantum of sensory stimuli is high.

• Absolute Threshold:

The absolute threshold is the lowest point at which a person can feel a sensation. At this point, a person can tell the difference between “something” and “nothing,” and this is their absolute threshold for that stimulus. For example, one person may perceive sound pitch at 20 cycles per second, whereas another perceives sound pitch at 30 cycles per second. In the case of these two people, their absolute sound thresholds would be different. The ability of many people to discern sensory properties, including taste, smell, hearing, and feeling, is limited.

Under persistent stimulation, the senses will get duller, and the absolute threshold will rise. For example, if someone drives for half an hour along a row of billboards, it’s unlikely that any one of them will leave an impact. This is referred to as ‘adaptation,’ and it relates to the process of “becoming used to” specific experiences.

Because of the commercial clutter, sensory adaptation is an issue for many TV advertisers. For this reason, advertisers are prone to changing their ad campaigns frequently, afraid that target audiences may become so accustomed to the present commercials that they will no longer provide adequate sensory input to be recognised.

• Differential Threshold:

Differential Threshold is a term used to describe the difference between two points. The differential threshold is the slightest detectable difference between two values of the same stimulus. This is also known as JND (Just Noticeable Difference). Ernst Weber, a nineteenth-century German scientist, discovered that the only discernible difference between two stimuli was an amount proportional to the intensity of the first stimulus. To determine a stimulus’s differential threshold, adjusting its intensity in very small increments is typical. When a person notices that the stimulus has altered, they have reached their threshold. The only visible difference between this value and the initial value is the difference between these two values. The stronger the initial stimulus, the more additional intensity is required for the second stimulus to be recognised as different, according to Weber’s Law (named for the scientist). For example, if a manufacturer raises the price of its car by 400 rupees, it is unlikely to be noticed because the rise is below JND. The difference will be evident if the price difference is one thousand rupees or more. An additional level of stimulation equivalent to JND must be introduced to make the difference visible. Similarly, if the price of the same car drops by $400, it is unlikely to be noticed if it falls below the JND level.

Marketers use Weber’s rule to forecast how customers will react to variances in marketing variables or changes in these variables. Sometimes, the marketer’s goal is for consumers to notice differences, such as when a product is improved or the price is dropped. In other circumstances, the goal is to make the variations go unnoticed, such as product size or quality decreases, price hikes, or changes in packaging when package design is vital for consumer awareness.

• Subliminal Perception:

People can also pick up on stimuli below their conscious awareness level. In this case, stimuli that would otherwise be too weak or fleeting to be noticed or heard consciously become strong enough to be perceived. Subliminal perception occurs when a stimulus is perceived while being below the threshold of awareness. This demonstrates that the absolute threshold for adequate perception is higher than the conscious awareness threshold. Embeds are disguised stimuli that customers do not readily recognise. These embeds are thought to have been inserted in print ads to influence customer purchasing decisions. Several studies have found that people’s receptivity to subliminal stimuli varies and that subliminal signals can elicit basic impulses like hunger. Still, that stimulation does not always lead to action.

Embeds are disguised stimuli that customers do not readily recognise. They are thought to have been inserted in print ads to influence customer purchasing decisions. Several studies have found that people’s receptivity to subliminal stimuli varies, that subliminal signals can elicit basic impulses like hunger, and that stimulation does not always lead to action.

In terms of the effects of advertising, subliminal research findings are equivocal.

(1) The effect of frequent repetition of very weak stimuli adds up to build reaction strength, and

(2) subliminal stimuli of a sexual nature arouse unconscious sexual urges, according to research on subliminal perception. So far, research studies have shown that none of these theoretical approaches can be used effectively in advertising to boost sales.

2. Attention:

When a stimulus activates one or more sensory receptor nerves, the sensations are sent to the brain to be processed. Humans are bombarded with a barrage of stimuli every minute of the day. This high stimulation level should be enough to confuse us, but it doesn’t. This is because perception is not solely based on sensory input. ‘Raw sensory data alone does not elicit or explain the coherent picture of the world that most adults hold,’ according to a key fundamental of perception. Perception results from an individual’s expectations, goals, and learning based on previous experiences interacting with physical stimuli from the environment. The interplay of these two types of quite diverse impulses produces each individual’s private and personal image of the world. No two people see the world similarly because each person’s needs, wants, desires, expectations, and experiences are unique.

3. Perceptual Selection: 

Humans are selective in their perceptions, even if they aren’t aware of it. We look at many things every day, disregard many of them, and don’t even notice many of them. We only perceive a small percentage of the stimuli we are exposed to. In a market, a customer is exposed to a variety of marketing-related stimuli, as well as a variety of other stimuli. Consumers visit the market frequently and make desired purchases without becoming disoriented or losing their sanity. This is because we all use selectivity in our perceptions without even realising it. Aside from the stimulus’s nature, the stimulus’s selectivity is determined by the consumer’s prior experience and intentions. Consumers “selective exposure’ and ‘selective attention’ at a given time are affected by one or more elements connected to experience and motivation, which can enhance or decrease the likelihood that a certain stimulus will be perceived.

• Stimulus Factors:

Numerous marketing-related stimuli influence consumer perception, including product kind, physical attributes, packaging, colour, brand name, advertisement, claims, endorser, ad size, placement, and commercial time. Primary or intrinsic stimuli are the product and its components, such as the box, contents, and physical features. Secondary or extrinsic stimuli are marketing messages meant to impact consumer behaviour.

Stimuli that stand out against their background generally attract instant attention. Unique images, forms, sounds, and colours provide novel stimuli. Messages that appear to contradict widely held views also draw attention. The contrast becomes quite noticeable and draws attention to itself.

• Expectations:

People generally see what they anticipate to see, which is based on prior experience and familiarity. Consumers frequently interpret products and qualities to their expectations. If a customer expects a new soft drink to have a bitter aftertaste because his or her friends stated so, it will most likely taste harsh. In many cases, stimuli that are in dramatic contrast to expectations draw greater attention than stimuli that fulfil our expectations. For example, an advertisement featuring a man wearing a hat, tie, and underpants but no shirt or pants is more likely to grab attention than one with a well-clothed man.

• Motives:

Consumers are likelier to notice the items at the top of their wish or need list. They are acutely aware of stimuli relevant to their requirements and interests. As a result, the larger the perceived need, the more likely one is to notice motive-related cues while ignoring irrelevant stimuli in the surroundings. For example, a person considering buying a computer is more likely to notice computer commercials and disregard other ads irrelevant to their requirements or interests. The outcome of the interplay between expectations, motives, and stimulus elements influences a consumer’s choice of stimuli from the environment. In the study of perception, several related topics are crucial.

• Selective Exposure:

This is known as exposure when a stimulus activates a consumer’s senses. Consumers pay attention to relevant, pleasurable stimuli or toward which they may be sympathetic while ignoring unpleasant or painful ones. For example, a consumer considering purchasing a scanner is more inclined to search for scanner marketing. In contrast, tobacco consumers avoid messages that link the product to cancer and pay attention to the ones that deny any link. Similarly, customers frequently expose themselves to advertisements for products they like or admire and advertisements that support their buying decisions. For example, a customer who has just purchased a high-end Mac computer is more likely to see or read advertisements for it to feel more confident about her purchase.

• Selective Attention:

Attention is the temporary concentration of a consumer’s cognitive capability on a certain stimulus. Consumers’ awareness of stimuli relevant to their felt wants or interests has increased, while their awareness of irrelevant stimuli has declined. They immediately notice advertisements for things that they require or desire. Some customers are price-sensitive, while others value quality above all else, so they pay heed to such advertising messages. When paying attention to different stimuli, consumers use a lot of selectivity.

4. Adaptation:

Consumers’ gradual adjustment to stimuli they are exposed to for long periods is called adaptation. Consumers are oblivious to the stimuli to which they have gotten accustomed due to adaptation. An air-conditioned movie theatre, for example, feels relatively calm at first, but after a short time, we adapt to the temperature and become less aware of it. Because of weariness or familiarity, consumers adjust to advertising messages over time. They pay less attention to advertising that are repeated constantly, finally failing to notice them. As a result, advertisers incorporate attention-getting characteristics into their campaigns and alter their advertisements. Consumers’ levels of adaptability differ, and some adapt more quickly than others.

5. Perceptual Vigilance and Defence:

Even when exposed to stimuli they do not want to see or hear, consumers unconsciously disregard them. In anxiety-provoking situations, perceptual defence is more likely. As a result, unpleasant, harmful, or frightening stimuli are less likely to be perceived than neutral stimuli at the same degree of exposure. Any information that does not align with their requirements wants, values, or beliefs will likely be modified or distorted by consumers.

The concept of perceptual defence is useful in advertising. When severe fear appeals are used to promote a product, they can make customers feel threatened to the point that they use perceptual defence to block out the entire message.

• Perceptual Blocking:

On a regular day, consumers are bombarded with numerous stimuli. By eliminating so many inputs from their conscious consciousness, they protect themselves from being overwhelmed and overburdened. Consumers, for example, ‘tune out’ large volumes of television advertising.

• Perceptual Organisation (Interpretation):

The environment’s selected stimuli are not sensed as separate and discrete sensations. Individuals tend to group these experiences into a unified whole and experience them as such. Gestalt psychology refers to the precise principles that underpin perceptual organisation. Gestalt is a word that signifies “pattern” or “configuration” in German. The ‘figure and ground’ interactions, ‘grouping,’ and ‘closure’ are the three most basic principles of perceptual organisation.

• Figure and Ground:

Perceivers use one of the most basic and automatic organisational processes. People have a proclivity for categorising their views into figure-ground relationships. Stimuli must contrast with their surroundings to be detected. When we see black against white, we notice it, but when we see white in white, we don’t. A sound must also be louder or softer to be heard. The figure is typically regarded as more defined, substantial, and distinct than the ground (background), which is typically viewed as fuzzy, indeterminate, and continuous. The common line that divides the figure and the ground is thought to belong to the figure rather than the ground. This gives the figure more definition.

Which stimuli are interpreted as figures and which as ground is influenced by our learning. Motives and expectations based on prior experience influence perceptual organisation. Previous pleasant or painful associations with one or more figure-ground elements might also influence perception. The diagrams below demonstrate how the figure and ground process works. Figure a) depicts a goblet on a black background rather than two faces separated by white space, and Figure b) depicts a reversible image that can be interpreted as a youthful or old woman.

The application of these findings in advertising is crucial. The ads must be meticulously planned to ensure that the figure and ground are perceived as intended by the advertiser. Many print ads, for example, have a white background so that the intended product features can be seen clearly. To create contrast, white letters are frequently used on a black background. Background music in commercials must not distract from the product message or jingle. Advertisers sometimes blur the figure and ground on purpose so that consumers look for the advertised product, which is usually cleverly hidden in the ad.

• Grouping:

Individuals naturally tend to group or chunk various information or items close in time or space to form a unified picture. The tendency to group stimuli can be influenced by proximity, similarity, or consistency. It is due to proximity that an object is associated with another because of its proximity to that object. Due to their close lateral proximity, the 12 dots are seen as three columns of four rather than four rows of three dots. This principle is frequently employed in advertising by associating a product with positive symbols and imagery that are close to the product. In the second case (b), consumers group 8 rectangles and 4 circles into three sets because they appear similar. Consumers also group stimuli to achieve continuity by grouping them into continuous forms rather than a discontinuous pattern (c). In this diagram, the dots are likelier to be seen as arrows pointing downward than as two columns of dots. Individuals’ proclivity for grouping aids memory and recall. Marketers use this tendency in advantaged people to imply a desired meaning for their products or services. Soft drinks are frequently depicted in active and fun-loving settings. A tea, coffee, or other beverage advertisement might show a young woman and man sipping the beverage in a tastefully decorated living room. The overall impression and mood elicited by the grouping of stimuli encourage the consumer to associate beverage consumption with ease of living and romance. Builders frequently use advertisements depicting a family with grandparents enjoying a picnic lunch on their private lawn to sell houses, implying a comfortable and fine lifestyle.

• Closure:

Individuals satisfy their need for closure by organising their observations in a way that leads to the formation of a complete image. When individuals are exposed to an incomplete pattern of stimuli, in their opinion, they tend to see it as a whole by filling in the gaps. This phenomenon could be the outcome of intentional or unintentional efforts. When a section of a circle is left unfinished, it is often regarded as a complete circle rather than an arc. Individuals experience anxiety while work remains unfinished and a sense of satisfaction and relaxation when it is completed due to this need for closure.

According to James T Heimbach and Jacob Jacoby, people recall incomplete tasks better than completed tasks because a person who begins a task develops a desire to complete it, which manifests in improved memory. For example, hearing the beginning of a jingle or message creates a want to hear the rest of it. Because of the conditioning effect and the need for closure, familiar listeners will complete the melody in their minds if the Nirma or Lifebuoy TV commercials leave the song incomplete. Advertisers can capitalise on the urge for closure by repurposing the soundtrack from a regularly broadcast television advert on the radio. Audiences who are accustomed to TV commercials consider the audio track to be insufficient and mentally replay the video information from memory. Yet, there is insufficient data to conclude that all unfinished ad messages or jingles are remembered better than completed ones.

6. Interpretation of Stimuli:

Individuals process stimuli in their unique way. “A person sees what he or she expects to see,” as the adage goes. Individuals interpret inputs depending on previous experiences, plausible explanations they can ascribe, and their goals, beliefs, and interests at the time of perception.

Stimuli can be mild or firm for various reasons and can be highly unclear to people. Consider the following scenario: Short exposure, poor sight, varying lighting levels, low pitch, high noise, or frequent variations might make understanding stimuli challenging. Individuals tend to attribute sensory information to sources they believe are most likely to have produced or caused a given pattern of stimuli. Early learning and experience play an important role in creating particular expectations and explanations people employ to understand stimuli. Individuals identify low-intensity explosions as crackers rather than gunshots during the Diwali holiday, for example. Individuals perceive highly ambiguous inputs in ways that appear to satisfy particular needs, goals, aspirations, interests, or wants, among other things. This idea underpins projective procedures used in motivational research, such as the word association test, sentence completion test, inkblot test, or TAT. Individuals’ interpretations of confusing stimuli reveal a lot about them.

Individuals’ perceptions are influenced by various elements, including physical appearances, stereotype stimuli, irrelevant stimuli, first impressions, leaping to conclusions, and the halo effect.

1. Physical Appearance:

People may or may not be aware of their tendency to attach attributes that they believe are connected with specific individuals to others who appear to resemble those individuals. According to a study by Kathleen Debevec and Jerome B Kernan, handsome men are seen to be more successful in business than average-looking guys. Attractive models in advertisements and commercials are more convincing and have a better impact on customer attitudes and behaviour than models who are average in appearance. This has significant consequences for the models used in advertisements or commercials, as it may be a fundamental component in their persuasion capacity.

2. Stereotyping Stimuli:

People tend to develop mental “pictures” of the meanings of various stimuli. By stereotyping the inputs, they can form expectations about how specific events, persons, or circumstances will turn out. Many people, for example, have a mental image of politicians or police officers acting in a certain way.

3. Irrelevant Stimuli:

Consumers are sometimes presented with tough perceptual decisions. In such situations, people frequently respond to somewhat irrelevant stimuli. For example, while making a final purchasing decision, people may consider the colour of the washing machine. When it comes to luxury cars, the form of the headlamps or the leather upholstery often takes precedence over technical qualities.

4. First Impression:

Even when the perceiver is not exposed to enough relevant or predictive information, first impressions can linger for a long time. For example, only a few years ago, the phrase “imported” was sufficient for many buyers to generate favourable views of a wide range of products, including wristwatches, shoes, clothing, and other items.

5. Jumping to Conclusions:

Certain people seem to have a strong tendency to draw conclusions based on incomplete knowledge. They appear impatient with the process of evaluating all relevant evidence, which may be required to reach a balanced decision. For this reason, strong arguments regarding a product or service are frequently offered first in advertisements.

6. Halo Effect:

The tendency to analyse one feature or facet of stimuli to misrepresent the response to its other qualities or qualities is known as the halo effect. This is common in brand or line extensions, where the marketer takes advantage of the brand’s reputation. Dettol soap, Lux shampoo, and Ponds soap are just a few examples.

Consumer Imagery:

An image is an individual’s overall perception of something they build over time by processing all the information they are exposed to. According to research, consumers form long-term views or pictures of brands, prices, stores, and companies. Consumers’ beliefs about products or services are referred to as inferences. Because of their advertising or word-of-mouth recommendations from friends, consumers may connect an Omega or Rolex watch with quality.

Individuals form a self-image, and certain brands have symbolic significance for them. Some items match an individual’s self-image, while others do not. According to Russell W. Belk, consumers try to improve or maintain their self-images by acquiring things that they believe correlate to or agree with their self-images and avoiding things that do not suit their self-images.

Consumers also like to shop at stores that appear to reflect their self-image. Many significant retail establishments and chains in India have begun to emphasise the need to develop a unique identity to attract specific types of customers and foster store loyalty.

1. Price Perceptions:

The perception of a product’s or service’s pricing as high, cheap, or fair substantially impacts purchasing intentions and post-purchase satisfaction. There is a lot of evidence that the meaning of pricing variables for customers is fairly complicated. For example, in response to the dramatic expansion of low-cost ballpoint pens in the 1980s, Parker Pen repositioned its pens based on price and began offering low-cost pens. The outcomes were terrible because Parker’s image was incompatible with its price. In 1989, the company reverted to its strengths of high-priced pens and regained profitability.

1. Customers have a preconceived notion of a product’s or service’s price.
2. The pricing of the goods or services may or may not match their expectations.
3. Consumers frequently equate a product’s or service’s price with its quality.

Consumers believe that some marketers exploit differential pricing to benefit particular groups of customers, such as club members, senior citizens, women, and others, for whom they are not eligible. We are dismayed to learn that others are paying half the price for our identical service or product. According to Marielza Martins and Kent B. Monroe, price unfairness influences consumer perceptions of product value and buy intents, and eliminating price unfairness raises the product’s perceived value.

Any price a consumer uses as a benchmark for evaluating other prices is referred to as a reference price (also known as a standard price). For example, a Sony 2000 PMPO audio system could set you back Rs. 20,000. This is the consumer’s reference price, which she or he expects to pay and uses to compare prices for competing brands.

Consumers are willing to accept a price range for a product or service, referred to as an “acceptable price range.” The acceptable price range for a music system might be between Rs.12,000 and Rs.22,000 on the low end and Rs.22,000 on the high end. The ‘reservation price’ is the highest allowed price. Above the reservation price, the product would be deemed too expensive, and the consumer might be dubious of the product quality below the lower limit of the permissible price. Consumers’ acceptable price range varies widely and is influenced by their qualities and attitudes toward a particular brand.

According to Abhijit Biswas and Edward A Blair, reference prices might be external or internal. Marketers will occasionally use a higher external reference price (available elsewhere at… or foreign edition…) to persuade customers that the product is truly good value. The customer recalls the internal reference prices or price ranges that are thought to substantially impact his assessments and perceptions of the value of a sales promotion offer, as well as the validity of any advertised reference price.

According to Katherine Fraccastoro, Scot Burton, and Abhijit Biswas’ “acquisition-transaction utility hypothesis,” two sorts of utility are connected with consumer purchases. The first is the ‘acquisition utility,’ which refers to the perceived economic gain or loss connected with a transaction and is based on product utility and price. The second is the ‘transaction utility,’ which refers to the difference between the internal reference price and the actual purchase price and involves the felt pleasure or displeasure related to the monetary portion of the purchase.

Researchers studied three forms of consumer price perceptions expressed through advertising. Plausible low prices are well within the range of acceptable market pricing; plausible high prices are near the range’s outer limits but not beyond the limits of belief; and implausible high prices are clearly beyond the range of acceptable pricing. The external reference price is taken as believable and accepted as long as the communicated reference price is within a defined range of the consumer’s acceptable price.

Tensile pricing claims indicate a range of price savings, such as “save up to 50%,” “save 20 to 40%,” and “save 30% or more.” On the other hand, objective price claims provide a specific discount level, such as “save 20%.” Because tensile and objective pricing claims apply to a wider range of products, they influence customer purchases and store traffic more than ads that provide a specific product discount.

2. Perceived Product and Service Quality:

Consumers frequently evaluate the quality of a product or service based on many forms of information about the product or service. Intrinsic cues (stimuli that direct motives) refer to the physical characteristics of a product, such as its size, colour, or scent, and are sometimes used to assess its quality. The quality of fragrances, for example, is frequently assessed based on the aroma, the container’s physical look, packaging, and colour. Consumers equate “bluing” with brightening and whitening their laundry, hence many detergent powders and cakes are typically coloured blue to impact perceived quality. Consumers prefer to be seen as objective or rational in their product evaluations, and they believe that their product selections are based on inherent cues. It’s a different story when physical characteristics used to assess product quality have no inherent relationship with product quality. For example, consumers who believe one brand of soft drink is tastier than the other frequently fail blind taste tests. According to Michael J Mc Carthy, consumers generally fail to distinguish between different cola drinks and instead rely on extrinsic cues such as advertising, cost, packaging, or even peer pressure.

Consumers without direct experience with the product are more likely to appraise its quality based on extrinsic factors such as brand image, price, or even country of origin. Due to a lack of prior purchasing experiences, consumers may be aware that higher-quality products cost more and high prices may become indicative of higher quality, leading them to doubt the quality of low-priced products. A little over a decade ago, “foreign” denoted greater quality in India.

Kent B Monroe and Susan B. Petroshius have summarised research findings to show how consumers react to price variables:

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 are modified by shopping experiences. Their exposure to prices higher or lower than the reference price is likely to result in an 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 decrease a consumer’s willingness to purchase the product.
5. Factors such as a brand 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 the price is unlikely to influence the choice between these alternatives.

Unlike tangible goods, judging the quality of services is extremely difficult. This problem occurs as a result of the specific properties of services. Intangible, changeable, perishable, generated and consumed concurrently, services are intangible, variable, and perishable.

A tangible object can be viewed, touched, and even tried before purchase, while a service cannot be seen, touched, handled, or experienced by the customer in advance. Consumers use extrinsic cues to help them compare and judge the quality of services. Consumers, for example, consider the quality of the consulting room, furniture, framed degrees and diplomas on the walls, the clothes and mannerisms of the receptionist or nurse, and so on when evaluating the quality of a doctor’s services. All of these elements are considered when determining the service’s overall quality.

Services may also differ from one day to the next. For example, a service provided by one service employee may differ from that provided by another service employee (such as haircuts, domestic help, etc.).

In most cases, services are sold first, then produced and consumed simultaneously. On the other hand, products are physical and are manufactured first, then marketed, and finally consumed. Before it reaches the client, product flaws are likely to be discovered during quality control in the manufacturer. A bad haircut, for example, is tough to fix, and service personnel negligence can lead to customer unhappiness and a decrease in service image, both of which are tough to fix.

According to research, service quality may be divided into two categories. One facet of service outcome is the consistency with which essential services are delivered. On the other hand, the process aspect is concerned with how the core service is delivered. For example, ICICI bank supplied customers with the same fundamental capability (the result) of withdrawing money. Still, it did it through a superior procedure (ATM) that exceeded consumer expectations in those early days and earned the bank the reputation of being a highly efficient and customer-focused institution.

Consumers form impressions of companies and retail stores as well. To develop corporate images, they organise a range of facts based on advertising, the store’s product lines, the opinions of friends and family, displays, sponsorships, and their own experiences with the company’s items. Brand image is frequently influenced by store image. A positive company image helps to perpetuate positive opinions of its products or services, and fresh product releases are more readily accepted than those of organisations with a negative reputation. BPL’s tagline is “Believe in the Best,” and Videocon’s slogan is “Bring home the Leader.” Philips portrays itself as an inventive and forward-thinking firm (let us create things better); General Electric says, “We bring wonderful things to life,” BPL’s tagline is “Believe in the Best,” and Videocon’s slogan is “Bring home the leader.” Because the brand name is intimately identified with the company, these corporations believe that consumers will carry over the link to brands. Because the brands are not intimately tied to the corporate name, such advertising is less crucial for Hindustan Lever Ltd and Procter & Gamble.

Different customer segments purchase there depending on the store’s image since they prefer to spend time in stores where they feel at ease. The consumer’s choice of a retail store is primarily impacted by the product she or he intends to acquire; on the other hand, the consumer’s appraisal of a product is frequently influenced by knowledge of the retail outlet from which it was acquired. A customer seeking beautiful suits motivated by the concept of “the complete man” will most likely visit Raymond’s showroom, where the suit length is regarded as of excellent quality regardless of the price paid.

Brand image is the set of human traits associated with a brand that customers remember (K L Keller). Consumer loyalty is linked to a positive brand image, and they are willing to go out of their way to find their favourite brand.

A brand’s positioning significantly impacts its image among consumers. Advertising is critical in communicating the position and establishing a brand image.

Perceived Risk:

When consumers decide to buy new brands, there is a degree of ambiguity about the repercussions, and most such purchases contain a sense of risk. Risk perception is “consumers’ feelings of uncertainty when they cannot foresee potential outcomes of their buying decisions.” Uncertainty and repercussions are the relevant risk dimensions. It’s worth mentioning that danger has a different impact depending on how people perceive it. This means that the risk may or may not exist, and even if it does, it will not impact consumer behaviour if it is not recognised.

Various circumstances can alter a consumer’s perception of risk or consequences. For example, there may be uncertainty about purchasing intentions, alternatives, or perceived negative repercussions.

When it comes to purchasing decisions, consumers may be exposed to various dangers. The most important are:

1. Financial or monetary risk is the possibility that the product will not be worth the money spent on it. This is especially true for high-priced goods and services.
2. Product performance risk refers to the probability that the product will not perform as expected or fail. The customer loses time trying to get it fixed or replaced. The danger is greatest when the product is technically complex. Consider a high-priced computer.
3. Physical danger refers to bodily harm to oneself or others due to using a product. For example, food and beverages, electrical or mechanical appliances, and medical services can all be dangerous. When cooking gas (LPG) was introduced in India, customers’ perceptions of its physical danger were strong. Similarly, some consumers believe that using a pressure cooker is dangerous.
4. Social risk, which refers to the possibility that a substandard product purchase may fail to satisfy the standards of a key reference group, resulting in social disgrace.Clothing, jewellery, a carpet, or an automobile, for example.
5. Psychological risk: loss of self-esteem or self-image due to a poor decision that makes her/him feel foolish. High-involvement category items or services, for example.

Consumers’ risk perception varies depending on the person, the product, the situation, and the culture. To avoid making a poor choice, some high-risk perceivers or risk avoiders limit their product options to a few safe alternatives. To reduce risk, they frequently stick to a single brand. Consumers who perceive risk as low or who take risks are more likely to examine a more extensive range of available product options. They are willing to risk making a poor decision rather than studying various options from which to choose. They are more likely to purchase new things before they become well-known. Risk takers are more likely to be higher-income consumers with upward social mobility and have psychological qualities, including a desire for accomplishment, dominance, and change.

The product category also influences the perception of danger. Consumers are more prone to perceive risk when it comes to high-involvement product categories. According to Keith B. Murray and John L Schlacter, consumers perceive higher risk in deciding on services than products, especially in terms of social, physical, and psychological danger.

The consumer’s shopping circumstances, such as purchasing by phone or mail, buying from a door-to-door salesman, direct mail, or online purchasing, all contribute to the impression of risk. Except in the instance of a door-to-door salesperson, the consumer has no way of seeing the products before placing an order. Sometimes, it’s difficult to know whether the product will be delivered on time as promised by the marketer.

How Consumers Deal with Risk?

To deal with perceived risk, consumers employ a variety of tactics. This empowers individuals to make more confident purchasing judgments. The tactics are intended to boost product purchase certainty or reduce unfavourable purchase outcomes. Consumers use the following ways to deal with risk:

1. Consumers gain additional knowledge. This permits them to analyse the danger more accurately.
2. Customers are loyal to their favourite brands. Rather of purchasing an untested brand, they remain loyal to a brand that has provided satisfaction.
3. Customers purchase the most popular brand because they feel well-known and well-known brands may be trusted.
4. Customers often purchase the most costly model or brand because they believe money equals quality.
5. Customers rely on a store’s image. They have faith in respected retail stores and use them when selecting products for resale.
6. Customers want money-back guarantees, warranties, and a trial period before purchasing. For example, a marketer may provide a free trial and a money-back guarantee (no questions asked), or there may be guarantees/warranties.
7. Purchase the smallest pack size or the item with the lowest price. Consumers buy the smallest size or the cheapest item to minimise the repercussions.
8. Before making a purchase, lower your expectations to avoid psychological effects.

Consumers’ perception of risk has significant ramifications for marketers. In contrast to risk takers, risk avoiders are less inclined to purchase new or innovative products. In order to generate brand loyalty among consumers, advertising must not only be informed but also aim to construct a brand image and be persuasive. Guarantees, warranties, unbiased test results, free samples, and pre-purchase trials can all assist customers in reducing risk.