Perception

Question 1

Perception

Answer 1

How we select, organize, and interpret (abstract) data, how we make sense of the world

Objective and subjective reality don’t always match,

Question 2

Perception is Crucial in Consumer Behavior Because…

Answer 2

What is perceived is not necessarily what is true.

But what consumers perceive is what is reality for them and affects their actions.

Question 3

Sensory Factor in Perception

Answer 3

Phonetic Symbolism & Brand Names

- Sounds in words convey meaning

Question 4

High front sounds

Answer 4

/i/ /e/

small

Question 5

Low back sounds

Answer 5

/a/ /o/ /u/

large

Question 6

What Influences Perceptual Process?

Answer 6

1. Knowledge and Expectations- perception is based on prior knowledge, leading to constructed reality
2. Actual Stimulus (Perceptual Threshold)
3. Needs and Goals
   (if you’re hungry you want date to weigh more)
4. Contexts
   (Perceptual Biases)

Question 7

Effect of Expectations

Answer 7

Expectations shape our experience, especially subjective and ambiguous experiences (confirmation bias).
Expectations can also transform our physiological responses.
(Airley beer study)

Question 8

Placebo Effect

Answer 8

-Airborne
-Efficacy of full priced vs generic cold medications
-Energy drink and anagram test (Hyped product worked better!)
Control group (9 out of 15)
Full price condition (9 out of 15) (12.3)
Discounted price condition (6.5 out of 15) (7.1)
-

Question 9

Absolute Threshold

Answer 9

The minimum amount of stimulation at which you can detect a difference between “something” and “nothing”

Question 10

Differential Threshold

Answer 10

When do consumers detect a difference?
When that difference exceeds the Just Noticeable Difference (j.n.d. = the minimum difference required to result in detection of a change)–between 2 things
Implications: Sensing changes!
Changes in color, smell, taste, touch, sound
Increases or decreases in product size or package or price

Question 11

Want people to notice difference

Answer 11

Price decrease

Size increase

Question 12

Don’t want people to notice difference

Answer 12

Downsizing: candy bars, chips,
Kraft Mac&Cheese, cigarette length
Price Increase
Brand Names & Spokesperson

Question 13

Weber’s Law

Answer 13

The higher the initial level of an attribute, the greater the amount that attribute must be changed before people will notice the change.
K = s / S
Change in intensity over Base intensity equals k
“K” for weight = .02
What does this mean? Suppose holding 20 lbs…
What is “K” for price?

Question 14

Subliminal Threshold

Answer 14

Subliminal = below absolute threshold

We couldn’t notice it even if we wanted to

Question 15

Bottom Line for Subliminal Exposure

Answer 15

Yes, subliminal exposure can influence people
But there are limits to what it can influence
May affect general liking for or approach/avoid tendencies towards product
For important decisions, careful processing would probably override any subliminal influence

Question 16

Anchoring and Adjusting

Answer 16

Anchors - initial, often irrelevant starting points for estimations

Starting with an initial evaluation and adjusting it with additional information

Affect people’s estimations because they do not adjust enough

Experiment: Happiness

First set (Correlation = .11)
(1) How happy are you?
(2) How often are you dating?
Second set (Correlation = .62)
(1) How often are you dating?
(2) How happy are you?

Question 17

Asch’s personality test

Answer 17

intelligent, industrious, impulsive, critical, stubborn, and envious
A person who knows what he wants and goes after it. He is impatient at people who are less gifted, and ambitious with those who stand in his way.

Envious, stubborn, critical, impulsive, industrious, intelligent
The individual is probably maladjusted because he is envious and impulsive.

Question 18

Anchoring and adjusting- prices

Answer 18

reference prices: Regular price: 89 cents – Sale 79 cents (12%)

No limit: 3.5 per customer
Limit 4 per person: 3.5 per customer
Limit 12 per person: 7 per customer
or 
Snickers bar 
Snicker Bars – Buy them for your freezer! 1.4
 vs. 
Snicker Bars – Buy 18 for your freezer! 2.6

Question 19

Default Options

Answer 19

aka Status Quo Bias
Consumers anchor on the default option

Higher defaults (loaded options) yield higher prices and more options added

Question 20

(2) Loss vs. Gain: Framing Effects

Answer 20

Consider how you would evaluate the following information if you contract cancer:
32% of patients choosing radiation die in Year 1
68% of patients choosing radiation live in Year 1

People act differently when something is framed as a loss vs. a gain

-Losses loom larger than gains!

Credit surcharge vs. Cash discount
Gasoline purchase: Credit card purchases cost $.04 per gallon more than cash purchases. How to frame this to maximize purchases with credit cards?
Youthful surcharge v. senior discount
Graduate surcharge v. student discount

Question 21

Endowment Effect

Answer 21

Consumers generally value something more once they own it (and have aversion to losing it).

“Virtual ownership”
(“Psudo-endowment effect”)

Experiment with chimps: When chimps were presented with a choice, 60% of them preferred peanut butter to a juice bar. However, when they were endowed with peanut butter, 80% of them chose to keep the peanut butter instead of exchanging it for juice (Brosnon et al. 2007).

Question 22

Leveraging Loss Aversion and the Endowment Effect in the marketplace

Answer 22

Free trial period
Trial promotions: you upgrade from a basic cable TV package to a digital gold package by a special ‘trial’ rate (only $59 a month instead of the usual $89) and think that you can always go back to basic cable or downgrade to the ‘silver package.’ 
Money back guarantee
Creating Ownership in General
Sampling
Touch
Catalog
The default option (baseline vs. full-loaded)