BBA- V Semester Consumer Behavior

MODULE 2
Consumer Perception and Learning

Introduction

Perception is the process of selecting, organizing and interpreting information inputs to produce
meaning. Perception is a mental process, whereby an individual selects data or information from
the environment, organizes it and then draws significance or meaning from it. Perception being an
intellectual and cognitive process will be subjective in nature.

Factors in Perception
Several sequential factors influence our perception. Exposure involves the extent to which we
encounter a stimulus. For example, we are exposed to numerous commercial messages while
driving on the freeway: bill boards, radio advertisements, bumper-stickers on cars, and signs and
banners placed at shopping malls that we pass. Most of this exposure is random and individuals do
not plan to seek it out. However, if we are shopping for a car, we may deliberately seek out
advertisements and tune in when dealer advertisements come on the radio.
Exposure is not enough to significantly impact the individual, at least not based on a single trial
(certain advertisements, or commercial exposures are based on extensive repetition rather than much
conscious attention). In order for stimuli to be consciously processed, attention is needed.
Attention is actually a matter of degree, it may be quite high when we read directions for getting
an income tax refund, but low when commercials come on during a television program. Note,
however, that even when attention is low, it may be instantly escalated for example, if an
advertisement for a product in which we are interested comes on. Interpretation involves making
sense out of the stimulus. For example, when we see a red can, we may categorize it as a Coke.

Dynamics of Perception
Physical stimuli from the outside environment, and internal stimuli based on expectations,
motives, and learning is based on previous experiences. Because each person is a unique
individual, with unique experiences, needs, wants, desires, and expectations, it follows that each
individual’s perceptions are also unique. There are three aspects to perceptions—selection,
organization, and interpretation of stimuli.
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 Individuals are very selective as to which stimuli they ―recognize

 They subconsciously organize the stimuli they recognize according to widely held
psychological principles.
 And they interpret such stimuli (i.e., they give meaning to them) subjectively in
accordance with their needs, expectations, and experiences.

Perceptual Selection
Consumers subconsciously exercise selectivity as to the stimuli they perceive. Which stimuli get
selected depends on two major factors in addition to the nature of the stimulus itself:
a. Consumers’ previous experience as it affects their expectations.
b. Their motives at the time (their needs, desires, interests, and so on).
Each of these factors can serve to increase or decrease the probability that a stimulus will be
perceived.

Consumer Expectations
People see what they expect to see. What they expect to see is usually based on familiarity,
previous experience, or preconditioned set of expectations. Stimuli that conflict sharply with
expectations often receive more attention than those that conform to expectations.

Consumer Motives
People tend to perceive things they need or want. The stronger the need, the greater the tendency
to ignore unrelated stimuli in the environment. An individual’s perceptual process attunes itself
more closely to those elements of the environment that are important to that person. Marketing
managers recognize the efficiency of targeting their products to the perceived needs of consumers.

The Process of Perception has Three Sub Stages:

1. Sensation– Attending to an object/event with one of five senses
2. Organization – Categorizing by matching sensed stimulus with similar object in memory,
Example color
3. Interpretation– Attaching meaning to stimulus, making judgments as to value and liking,
Example bitter taste.
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Sensation:
Sensation is the immediate and direct response of the sensory organs to the stimuli. A stimulus is
any unit of input to any of the five senses- seeing, hearing, smelling, touching and tasting. Sensory
receptors are the five human organs (the eyes, ears, nose, skin and mouth). A consumer uses all of
these functions, either singly or in combination in the evaluation and use of most consumer
products. Sensitivity refers to the experience of sensation. Sensitivity to stimuli depends on the
quality of the receptive organs of each person and also the intensity of the stimuli to which this
person is exposed. For example, a blind person may have an increased level of hearing sensitivity
and hence can probably hear much more than another average sighted person. Sensation also
depends on the energy change in the environment in which the person receives the stimulus. For
example, the person living near a railway line for a long time may get so much used to the noise of
the train movements that he may not even perceive the train movement although it may produce a
loud noise. Similarly, fishermen used to the smell of fish all the time may not even perceive the fish
smell in the market.

Organization
A person will always categorize the sensed stimulus by categorizing it with similar object
categories in the person’s memory. People do not experience the numerous stimuli they select
from the environment as separate &discrete sensations. They tend to organize them into groups &
perceive them as unified objects. For example, the sensation of eating a pizza will generate
perceptions in the mind of the consumer, who identifies all the ingredients of sensation like taste,
smell, touch, etc., compares these perceptions with his earlier memories & then classifies it as a
specific type similar to or different from the pizzas he has eaten earlier.

Interpretation
This is the final step of attaching meaning to the stimulus forming an impression as to whether it is
an object of liking, and of what value this object could be of. The interpretation of stimuli is also
uniquely individual, since it is based on what individuals will expect in the light of their previous
experience, on the number of alternative explanations they can think of and also the motives and
interest at the time of perception. In the case of the Pizza example as above, at this stage the
consumer judges whether the pizza tastes good and whether it is better or worse than the earlier
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experience.

Selection in Perceptual Process

Each individual in today’s world gets a huge amount of information every day and it is essential
for being selective at each step of the perception process. There are four processes by which the
individual manages this selection, they are:
1. Selective exposure
2. Selective attention
3. Selective interpretation
4. Selective blocking

Selective Exposure
A customer is exposed to a large number of marketing communications every day and only a few
of these communications achieve actual exposure, depending on the needs and interests of the
consumer at that point of time. Consumers look out for some selected advertisements, some
selected shelf displays in a store, listen to some sales people, depending on what they are planning
to purchase. Consumers not interested in a product will totally skip the advertisements of such
products. This selective exposure is also known as gate keeping. Consumers are becoming more
and more selective as the advertising clutter increases. The usage of internet, wherein the
consumer is able to selectively collect the data pertinent to his need and requirement in a more
efficient manner, is becoming more popular in this regard.

Selective Attention
Even when the consumer is forced to look at an advertisement about a product which is of no
interest to him/her the consumer may still ignore it. A person‘s interest may be initially attracted
by the stimulus characteristics; but beyond initial attention the consumer‘s further processing of
this information from the stimulus depends on the personal interest in the featured product or
service. Making use of this principle, some advertisers choose media which are of specialised
nature where the product being advertised will fit in. For example, the computer laptops are
advertised in computer related sections of the newspaper or magazine. Even on the internet
customer specific banner ads are placed in related web sites. Such selective placements of ads

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benefit both the marketers and consumers, since the marketers get better attention and consumers
are saved from all the clutter.

Selective Interpretation
Consumers tend to interpret the information in the stimulus selectively. After an important
purchase the consumers tend to look for ads of the brand bought by them which will reinforce
reassure the wisdom of their decision. Consumers also tend to distort any negative information
that might threaten their ego. This phenomenon is called perceptual distortion or perceptual
defense. Perceptual distortion is the process by which the consumers distort the incoming
information whether it is done intentionally or unintentionally. Individual will see what they want
to see and what they expect to see. Customers use perceptual distortion to make information more
congruent with existing beliefs e.g. Smoker versus non-smoker interpretations of warnings on
cigarette packs.

Selective Blocking
Consumers tend to protect themselves from being bombarded with stimuli by simply tuning out
blocking such stimuli from conscious awareness. People skipping the TV commercials while
watching their favorite programmes by tuning to other channels is an example of such selective
blocking.

Thresholds in the Perceptual Process

Sensations can be experienced by individuals at different levels, depending on the situations. As
sensory input decreases, our ability to detect changes in the input or intensity increases. When the
stimulation is at its lowest level, we attain maximum sensitivity. This ability of the human body to
adjust to the external environment by being more sensitive when needed actually protects us from
damaging, disruptive or irrelevant bombardment when the input level is very high. These different
levels of sensitivity can be classified as under:

Absolute Threshold
The lowest level at which a person can experience a sensation is called absolute threshold. This is
the point at which the person can differentiate between something and nothing for that particular
stimulus. For example, when you feel the cold water in a swimming pool, initially the coldness of
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water is very clearly perceived. But once you get into the pool and swim for some time the
coldness of the water is less noticeable and we often call this as getting used to. In the field of
perception, the term adaptation refers to this getting used to certain sensations, i.e. becoming
accommodated to a certain level of stimulation. Many advertisers face the problem of sensory
adaptation, by which the consumers will get so used to their print ads and TV commercials, that
they will no longer see them; that is these ads no longer provide sufficient sensory input to be
noticed. This is the reason why they change their ad campaigns at regular intervals.
Some marketers try to increase the sensory input in order to get noticed in all the advertising
clutter. Some examples are, the entire page of the newspaper being taken up, an entire bus painted
on all sides with same ad, etc. Some advertisers try the other route of decreasing the input, by
having a whole lot of empty space in a huge ad with very little space occupied by the ad. Some TV
ads use silence, the absence of audio sound to attract attention. Some marketers try unusual media
to gain attention. Fragrance marketers include a small sealed swatch containing the perfume in the
magazine ad or the direct mail. Package designers also try to overcome the absolute threshold
levels of the package of the product to attract attention to their product in the store shelf among all
the competitor brands.

Differential Threshold
This is also called as Just Noticeable Difference. There is a law called as Weber’s Law, which
proposed the concept of Just Noticeable Difference (JND).

The Weber–Fechner law attempts to describe the relationship between the physical magnitudes of
stimuli and the perceived intensity of the stimuli. According to this law, an additional level of
stimulus equivalents the JND must be added for the majority of people to perceive a difference
between the resulting stimulus and the initial stimulus. In simpler words, the magnitude of change
needed for this change to be noticed depends on the base quantity. The larger the base quantity,
larger is the magnitude of change required to be noticed. For example, if a company is marketing
two sizes of ice cream bars of 6 inches and 3 inches length. For cost cutting they reduce the length
by half an inch in case of both the sizes. According to Weber’s Law the consumer is more likely
to notice the difference in the 3‖ bar than in the 6‖ bar. Similarly, any product improvement
programme also has to take this into account. They have to improve the product benefit under
improvement to such a level that, it is above the Just Noticeable Threshold. If it is less than this

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level, the consumer may not notice it and if it is much above this level, the cost increase may be
higher than required. Same is the case of changes, which the firm wishes to make in the size or
contents of packing, price, etc. The marketers have to ensure in such cases that, these changes are
below the perceptible level so that the consumer does not notice either the reduction in the packing
size or the increase in price. Even when marketers want to make any changes in their packing
design (to make it get a contemporary look), which has been in existence for a number of years,
they have to make these changes in several steps - each change being below the JND level so that
the consumer does not notice the change.

Subliminal Perception
When people are stimulated below their level of conscious awareness, such a process is called as
subliminal perception because the stimulus is below the threshold level. Such stimuli are too weak
or too brief to be consciously seen or heard; but nevertheless, strong enough to be perceived by a
few receptor cells. There have been many reports of marketers using subliminal messages to
influence consumption behaviour. Many studies undertaken by academicians and researchers have
found no evidence of subliminal advertising persuading consumers to buy goods and services.
There is however some evidence that, subliminal methods can indirectly influence attitudes and
feelings towards a brand. There is no confirmation that, this has influenced consumption motives
or actions. There is a gap between perception and persuasion. There is a general feeling that,
subliminal messages whether effective or not, are intended to deceive consumers and hence not in
public interest. Hence not many advertisers try this method.

Perceptual Organization
Consumers experience the stimuli they select from the environment after organizing them into
groups & perceive them as unified wholes. This method of organizing simplifies the perception
process for the consumers.

Perceptual Interpretation
People selectively perceive the stimuli and then organize them on the basis of certain psychological
principles. Subsequently the individual will interpret the stimuli and this is also unique to the
person. This interpretation depends on their previous experience, on the possible explanations, and
also their motives and interests at the time of perception. Stimuli are often not very clear. Some
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stimuli are weak, because of several factors like poor visibility, very brief exposure, high
background noise, constant fluctuations, different angles of viewing, changing levels of
illumination, etc. When stimuli are highly ambiguous the consumer is likely to interpret them in
such a way as to serve to fulfill personal needs, wishes, interests, etc.

Perceptual Mapping
Perceptual mapping allows marketers to determine how their products appear to consumers in
relation to competitive brands on one or more relevant characteristics. Perceptual mapping enables
the marketer to see gaps in the positioning of all brands in the product class and to identify areas in
which consumer needs are not being adequately met. People can emerge with different perceptions
of the same object because of three perceptual processes:
1. Selective attention

2. Selective distortion and

3. Selective retention

Selective Attention. People are exposed to a tremendous number of daily stimuli: the average
person may be exposed to over 1500 ads a day. A person cannot possibly attend to all of these;
most stimuli will be screened out. It means that marketers have to work hard to attract consumers
notice. A stimulus is more likely to be attended to if it is linked to an event, satisfies current
needs, intensity of input changes (sharp price drop).

Selective Distortion. Stimuli do not always come across in the way the senders intend. Selective
distortion is the tendency to twist information into personal meanings and interpret information in
a way that will fit our preconceptions. Unfortunately, there is not much that marketers can do
about selective distortion. Advertisers that use comparative advertisements (pitching one product
against another), have to be very careful that consumers do not distort the facts and perceive that
the advertisement was for the competitor.
Selective retention. People will forget much that they learn but will tend to retain information that
supports their attitudes and beliefs. Because of selective retention, we are likely to remember good
points mentioned about competing products. Selective retention explains why marketers use drama
and repetition in sending messages to their target market. We remember inputs that support our
beliefs, forget those that do not.

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SELF-IMAGE
Traits, characteristics, qualities and mannerisms of behaviour, all put together create the self-image
of a person. This self-image arises out of the person’s background, values, lifestyles, experiences,
etc. as well as interactions with parents, family, friends, peers etc. In terms of marketing also, we as
consumers possess a self-image. Similar to relationship between self-concept and brand personality,
there also exists a relationship between self-image and the brand personality. Consumers match the
product and/or brand personalities, with their self-image, and buy those where they find a close or
perfect match. In this manner they attempt to reaffirm and preserve their self-image. In consumer
behaviour, various kinds of self-images have been identified, viz.,
1. Actual self-image (how a consumer perceive himself),
2. Ideal self-image (how he would like to perceive himself),
3. Social self-image (how a consumer feels others perceive him, or how they think of him),
4. Ideal social self-image (how the consumer would like others to perceive him), and
5. Expected self-image (how the consumer expects to see himself in future)

Consumers tend to show a variety of enduring images of themselves (individual self-image or

perceptions of self). These images are associated with individual’s consumption pattern.
Consumers prefer to buy products or services that closely correspond to their own self-image.
They are:
 One or multiple selves: Marketers can target products to match a variety of consumer
personalities and self- images.
 Make-up of the self-image: It contains traits, skills, habit, possession, relationships and
ways of behavior. Developed through background, upbringing, experience and interaction
with others, which are unique.

Marketers can segment their markets and position products as symbols for such self- images.
 Altering the self-image

 Creating new self

 Maintaining the existing self

 Extending the self

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Conforming to and taking on the appearance of a particular type of person E.g. for convenience
goods or day-to-day household goods the consumers would base his purchase on his actual self-
image. On the other hand, for shopping goods or specialty goods, consumers would be guided by
the social self-image or the ideal self-image. Consumer perception is also dependent on product
image, consumer image and retail store image.
1. Product image: Several factors determine the personality or the image of a product such as,
physical appearance, packaging, advertising and price strategy. Stereotypic image of the
product. Eg: Made in Germany to be the most reliable, performing and highly designed.
Gender typed product image, it’s a part of consumer behavior study based on gender role in
purchasing a product. Eg: Most men are into cars. Most women into cosmetics and perfumes.
2. Consumer image: Consumers try to perceive or enhance their personal pictures by buying
products or brands that they believe are consistent and congruent with their self-images. Some
consumers also perceive these brands as their best choice which match with their personal
images.

Perceived price:
Consumer’s perception of price has a strong influence on both purchase intentions and
satisfaction. How a consumer perceives a price (perceived price)—as high, as low, as fair—has a
strong influence on both purchase intentions and purchase satisfaction.
a. A reference price is the price that the customer may use for comparison for judging
another price.

b. Satisfaction-based pricing- service guarantees, flat pricing rate and ensuring specific
benefits.

c. Relationship pricing - encouraging long term relationship with consumer.

d. Efficiency pricing provides value by reducing service cost.

Perceived quality
Consumers perceive quality of products based on intrinsic and extrinsic features. This may include
the product packaging, advertising, pricing and even peer pressure. Many consumers face
uncertainty in deciding what products or services to buy.
Perceived risk

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Perceived risk refers to the degree of uncertainty perceived by the consumer about the
consequences of a specific purchase decision. Types of perceived risk
a. Functional risk
b. Physical risk
c. Financial risk
d. Social risk
e. Psychological risk
f. Time risk

3. Retail Store Image

Retail stores have their own images that influence the perception of the quality of the products
they carry. Studies show consumers perceive stores with small discounts on a large number of
products as having lower priced items than stores that offer large discounts on a small number of
products. The width of product assortment also affects retail store image. The type of product the
consumer wishes to buy influences his or her selection of retail outlet, conversely, the consumer’s
evaluation of a product often is influenced by the knowledge of where it was bought.

Marketing Application of Perception

Compared with manufacturing firms, service marketers face several unique problems in
positioning and promoting their offerings. Services are intangible; image becomes a key factor in
differentiating a service from its competition. The marketing objective is to enable the consumer
to link a specific image with a specific brand name. Many service marketers have developed
strategies to provide customers with visual images and tangible reminders of their service
offerings.

a) Intrinsic cues are physical characteristics of the product itself, such as size, color,
flavor, or aroma.
b) Extrinsic cues are such things as price, store image, service environment, brand image, and
promotional message.

CONSUMER LEARNING
Learning is a change in the content of long-term memory. Learning is the acquisition and

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development of memories and behaviors, including skills knowledge, understanding, values, and
wisdom. It is the goal of education, and the product of experience. Learning ranges from simple
forms such as habituation to more complex forms such as play (activity). The term learning
encompasses the total range from simple- almost reflexive responses to abstract concepts and
complex problem solving. Consumer learning is the process by which individuals acquire
knowledge and experience from different sources. From a marketing perspective, learning is
defined as the process by which individuals acquire the purchase and consumption knowledge and
experience that they apply to future related behavior.

There are four components or elements of learning process:

Motivation: Motivation acts as a spur to learning. Those who are motivated will automatically look
for education and information search in that particular product or service. Those who are not
motivated may completely avoid any information on that product. The level of involvement will
depend upon the extent of consumer motivation in achieving the goal object. A person interested in
playing cricket may learn all about cricket through newspaper reports, telecasting of matches, the
product advertisements for the equipment like bats, balls, pads, gloves etc. A person who is not
interested in cricket will ignore all this information.

Cues: If motives stimulate the learning, the cues are the stimuli, which give direction to these
motives. The person interested in cricket may see the ad for a summer camp for teaching cricket and
he may use this cue or stimulus to learn it in a methodical way. Cues serve to direct consumer
drives when they are consistent with consumer expectations. Marketers should however be cautious
to provide cues that do not upset their expectations. For example, a person buying an up-market
fashion garment would expect it in an elegant store & not in an ordinary shop. Similarly, he/she
would expect such a product ad in an upscale fashion magazine. All the elements of the marketing
mix should be able to reinforce the cues to guide the consumer in taking the final decision of
purchase.

Response: How a consumer reacts to a stimulus or cue is the response. Learning can occur even
when the response is not overt. The marketer may not get any response to his cues immediately or
even for some length of time since the consumer is not yet interested in this product. However, the
continuous exposure to cues may influence the consumer to be favorably inclined when he/she is
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ready to purchase this product at a later date. While cues provide some direction, there will be many
cues vying for the consumer’s attention. Which cue will get the response will heavily depend on
previous learning of the consumer and how there is no relief, the reinforcement does not take place
and the consumer may drop the product usage. This could also be extended to second time purchase
of the same product.

Reinforcement: Reinforcement increases the likelihood of a specific response in future for

particular cues or stimuli. This is especially the case when there are several steps involved. For
example, for preventing hair fall there may be three products to be used one after another. If the first
product provides some relief it provides some reinforcement to go in for the second level.

CHANGING CONSUMER BEHAVIOUR IN INDIA

Consumer behavior in India is complex and fast-changing. The country's recent economic
performance, demographic profile, and exposure to new ideas and technologies have led to a shift
towards consumerism. Indian consumers have become more aware, demanding, and quality-
conscious. Value for money is an important factor in determining consumer behavior in India, and
Indian shoppers are well-informed and want to get a good deal – even for luxury products. he
"Make in India" campaign has gained significant traction, and the Indian government has urged
businesses with Indian roots to be "Vocal for Local." Local products have gained consumer
preference, helping Indian brands become self-sufficient in the future. Consumer behavior in India
is complex and fast-changing, and there are several recent trends that are altering it. Some of the
recent trends in Indian consumer behavior are:
1. Investment in products that provide comfort and convenience.
2. Brands are prioritizing sustainability.
3. Hybrid shopping, which combines online and offline shopping, has become more common.
4. Vocal for Local.
5. The need for integrating wellness features into products.
6. Online shopping has become increasingly popular among Indian consumers.
7. Celebrity influence is growing in India.
8. Freebies are becoming more popular among Indian consumers.
9. Eco-friendliness is becoming a more important factor in purchasing decisions.

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10. Indian consumers are investing in products that provide comfort and convenience.
11. The "Make in India" campaign has gained significant traction, and local products have
gained consumer preference.
12. Indian consumers are increasingly integrating wellness features into their purchasing
decisions.

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