What is perception?

In marketing, perception is referred to as the meaningful information, awareness, impressions, and opinions that the consumers have for the products, services, reputation, and values of a firm. In simple terms, perception is the way the firm is viewed and understood by the consumers from the information gathered and available to them.

Perception in marketing

In marketing terms, it is referred to as consumer information processing. When a consumer views the advertisements, promotions, customer feedback, and reviews relating to the firm and its products, on social media, online shopping platforms, product review websites, and company websites, they gather information and then interpret it to develop their impression of the firm. Every activity of an enterprise affects consumer perception. The design and colors of the logo, the discounts offered by the firm, how the product is positioned and kept in the retail stores, and all the activities which a firm undertakes have an impact on the consumer perception.

Importance of consumer perception

Perception is a fundamental topic in marketing because a business’s consumer perception can have a significant impact on how the consumers interact with the firm, and influences the buying behavior of the consumers. If a firm can build and strengthen positive consumer perceptions, it can help the firm establish a sustainable, loyal, and expanding customer base. 

Consumers should have a positive experience with the firm to generate positive perceptions about the firm. A company that aims to maximize profits should be willing to spend time and effort to build positive consumers perception. The consumers’ perceptions and their experiences are as important as the price and quality of the product. 

Factors that affect consumer perception

Factors affecting the perception of consumers can be sub-divided into two categories:

• Tangible factors
• Intangible factors

Tangible factors

1. Price and quality of the product.

The product quality should be such that it is worth the price paid for it. Consumers will have a positive perception of the value or the true worth of the products only if the price is right. The firm should be well aware of the quality, features that distinguish the firm's products and services from similar products, and what are the most desirable features in the targeted markets. This will increase consumers' positive perceptions. 

2. Branding

Logos, design, artwork, and packaging of the products should exceed the consumers' expectations to build positive perceptions. Branding is important as people tend to gain knowledge about the products through branding. The more attractive the branding is, the more customers the product can gain. Hence, it is important that the branding should be innovative, widespread, and attractive.

3. Services and customers reviews 

If the product is superior but the service is poor, there is a high probability that the customers will only share bad reviews with the market which can lead to negative perceptions. Therefore, good after-sales services should be present such as refunds, replacements, proactive customer support, and so on. Customers' reviews and feedback can be posted on the firm’s website, shopping websites like Amazon, product review websites like Yelp, Angie‘s list, and social media platforms such as Instagram. Potential customers often consult the consumer reviews and feedback before they purchase the product. 72% of consumers won’t take any action until they read reviews. Hence, if a product has negative reviews, negative perceptions could be created.

Intangible factors

1. Advertisements

It is generally regarded as the initial contact a firm makes with the consumers. Customers often get to know about the products and services of a business via advertisements, promotions, and campaigns. The firms should use this tool optimally to generate positive perceptions. The message the firm delivers via advertisements and the medium of advertisement chosen influences perception. The firms should use social media platforms to advertise products. The company should post content regularly on social media such as pictures, videos, and so on.

2. Influencers

People tend to buy things when another person (influencer) has bought, tried, and tested them first. Influencers are fast becoming a community that affects consumer perception largely. If influencers give positive feedback about a product, it influences other people to buy and test the product themselves.

3. Personal experience

Personal experience is the experience created when the consumers themselves buy and consume the products of the firm. If the customers are happy with the discounts offered, price, packaging, design, quality, and customer service related to the products, then they will have a good impression of the company. This impression will influence them to perceive the company positively. They will recommend the company and its products to people around them. If a consumer has a bad personal experience with the product/service of the firm, then negative perceptions will be generated.

How to measure consumer perception? 

1. Analyze the traffic

One can analyze the traffic with the help of the questions like what is the number of the consumers who have opened the email that the firm has sent, or what is the number of consumers who have searched your company’s name on search engines like Google and Yahoo. Tools like Google Analytics can be employed to answer these questions.

2. Reading reviews and feedback of customers

The firm should use tools like Google Alerts to receive notifications whenever reviews are posted. A firm should use online methods for receiving feedback from customers. It is an easy and efficient method of obtaining feedback. The feedback received from customers will help the firm to measure the consumer perception, know about the quality of the product and improve the things they lack at.

3. Evaluating social media conversations

For instance, to prepare a report on what factors influence the customers before they book a hotel room, Clootrack analyzes the social media conversations of travelers and guests of US hotels. People tend to talk about their experiences about a certain firm on social media. Hence, the conversations on social media about the brands should be analyzed by the firm to know the consumer perceptions.

Stages of consumer perception

1. Sensing

Consumers make use of this stage to gather information about a product, service, or firm, through the sensory receptors. For instance, in a clothes store, the clothes may include information about the smells, tastes, and touches of the fabric along with the sizes. For firms selling eatables, background music, unique store design, and decorative surroundings usually tend to attract customers. Sensing acts as a vital and primary part of perceiving the product.

2. Organizing

During this stage, customers make use of the information they’ve accumulated, in the first stage. They interpret the information gathered to estimate the worth of the product. This estimation is done based on personal and subjective beliefs and factors. Henceforth, the consumer will compare the products with other similar products and proceed to rank the different products.  

For instance, a person wants to buy a winter coat. They will look for coats keeping in mind the various factors such as the coat price, discount offered, color, length, and thickness, compare coats of different brands, and then rank them.

3. Reacting

Customers will behave based on the previous two stages, as well as based on the internal and external factors which can range from personal experience to online reviews and feedback. Based on the experience the customers obtained, the customers tend to review the products. Mostly the reviews are done online and by using the social media discussion. The customers can react by sharing their experiences, likes, queries, and thoughts.

Context and Applications

Perception is one of the most fundamental topics in marketing and business studies. It is taught rigorously in undergraduate and postgraduate courses in business schools and colleges. In reality, it is quite difficult for entrepreneurs to understand consumers' behavior and perception because it is influenced by factors much more than logic. Therefore, knowledge and understanding of consumer perceptions are required by firms.

Practice Problems

1. Which of the following is the tangible factor that influences perception?

1. Price 
2. Quality 
3. Branding 
4. All of the above

Answer: Option d

Explanation: Price, quality, and branding are tangible determinants of perception. 

2. Which of the following is the intangible factor that influences perception?

1. Advertisement 
2. Price 
3. Branding
4. None of the above 

Answer: Option a

Explanation: Advertisement is an intangible determinant. Price and branding are tangible determinants.

3. Which of the following is one of the factors affecting the perception of consumers?

1. Objectionable factor
2. Improvisable factor
3. Reversible factor
4. Tangible factor 

Answer: Option d

Explanation: Tangible factor is one of the factors affecting the perception of consumers.

4. Which of the following factors usually doesn't attract customers to a shop selling eatables?

1. Decorative surrounding
2. Rude waiters
3. Unique store design
4. Background music

Answer: Option b 

Explanation: Rude waiters don't attract customers to a shop selling eatables.

5. Which is the first stage of consumer perception? 

1. Sensing
2. Organizing 
3. Reacting 
4. None of the above. 

Answer: Option a 

Explanation: Sensing is the first stage of consumer perception. Organizing and Reacting are the second and third stages respectively.