customer perception Definition A marketing concept that concept that encompasses a customer's impression, awareness awareness and/or and/or consciousness about a company or its offerings. Customer perception is typically affected by advertising advertising,, reviews reviews,, public relations, relations, social media, media, personal experiences experiences and and other channels channels.. Read more http//www http//www.businessdictionar .businessdictionary.co y.com/definition/customer m/definition/customer!perception.html"ix !perception.html"ix##$%&()xvp ##$%&()xvp
Merchants aim to increase their sales by determining what drives their customers' purchase decisions. Consumer perception theory attempts to explain consumer behavior by analyzing motivations for buying -or not buying -- particular items. Three areas of consumer perception theory relate to consumer perception theory: theory: self perception price perception perception and perception of a bene!t to "uality of life.
Consumer perception applies the concept of sensory perception to mar#eting and advertising. $ust as sensory perception relates to how humans perceive and process sensory stimuli through their !ve senses consumer perception pertains to how individuals form opinions about companies and the merchandise they o%er through the purchases they ma#e. Merchants apply consumer perception theory to determine how their customers perceive them. They also use consumer perception theory to develop mar#eting and advertising strategies intended to retain current customers -- and attract new ones. &elf perception theory attempts to explain how individuals develop an understanding of the motivations behind their own behavior. &elf perception by customers relates to values and motivations that drive buying behavior -- which is also an important aspect of consumer perception theory. theory. or instance a study by researchers researchers at the (niversity of Massachusetts at )mherst addressed how self perception shaped consumers' buying behavior. behavior. The study considered the "uestion of whether consumers believed their buying decisions had a real e%ect on issues such as environmental impact. The researchers researchers concluded that consumers' self perception was a driving factor in whether or not they placed a priority on socially conscious purchase and consumption practices. Consumers who viewed themselves as socially conscious tended to place more weight on issues such as environmental environmental impact when ma#ing buying decisions than consumers who did not hold similar views of themselves.
The products and services that an industrial company has to offer are generally organized around its customers’ needs in addition to the level of expertise and production capabilities of the firm. Creating a strategy for product development is an important and often multifaceted segment of running a successful enterprise, and it brings together a range of different principles, such as research and development, marketing, engineering, design, materials, and manufacturing. In most cases, an industrial product development strategy development strategy will depend on two main goals keeping the new product
or product line within the company’s overall ob!ectives and marketing philosophy, and developing a system for assessing the performance of an existing product. "or evaluating the success of an existing product, factors such as sales, customer response, profits, competition, and market acceptance are usually involved. #roduct development is usually based upon these criteria, and putting together a strategy helps to determine which products need to be modified, continued, or discontinued. In addition, development analysis can set guidelines for new products to be introduced. $hen working on product development, it can be helpful to remember that an industrial product is often more than !ust a tangible good, but also a set of technical, economic, legal, and personal relations between the consumer and the seller. %lements such as price, product specifications, purchasing contracts, and a customer’s personal interpretation of a company’s brand and reputation are all significant influences on a product’s overall performance. Customer Perception Consumers can evaluate a product along several levels. Its basic characteristics are inherent to the generic version of the product and are defined as the fundamental advantages it can offer to a customer. &eneric products can be made distinct by adding value through extra features, such as 'uality or performance enhancements. The final level of consumer perception involves augmented properties, which offer less tangible benefits, such as customer assistance, maintenance services, training, or appealing payment options. In terms of competition with other products and companies, consumers greatly value these added benefits when making a purchasing decision, making it important for manufacturers to understand the notion of a (total package) when marketing to their customers. "or example, when manufacturing automotive parts, a high*performing product will provide the customer base with basic benefits, while adding spare parts, technical assistance, and skill training will offer enhanced properties to create a total package with increased appeal to consumers. Changing Product Strategies In industrial product development, a marketing strategy that is flexible and adaptive to changing market circumstances stands a greater chance of being effective in the long*term. #roducts and consumer perceptions are variable, so changes in strategy may be re'uired to better address customer needs, technological developments, new laws and regulations, and the overall
product life*cycle. +y monitoring external conditions and shifting product development accordingly, a company can better target its consumers and learn to react to their needs. The ma!or factors that can necessitate a change in product strategy include • Customer Preferences: "luctuations in the cost of materials, new application re'uirements, and changing brand awareness are !ust a few of things that can cause consumer needs to change. eeping close track of customer response to a product and taking their demands into consideration are important for maintaining market share. • Technological Advances: - new technological development can engender a change in a product line, causing products to need modification in order to remain competitive or rendering some products obsolete. "or example, fiber optic cables have replaced older cables in certain applications and many businesses have switched from main frame computers to personal computers. +eing aware of these advances can help a business stay ahead of the curve. • Laws and Regulations: The implementation of new governmental regulations can cause certain products or manufacturing methods to be restricted, limiting their consumer appeal. Conversely, new laws can also lend an advantage to certain business and deregulation can sometimes benefit production standards. #roduct development strategies must shift according to the legal landscape. • Product Life-Cycles: To preserve the rate of growth in profit and sales, many industrial companies decide to alter, discontinue, or replace older products with newer models or more recent upgrades. These changes are usually made periodically, allowing existing products that reach maturity or decline to be phased out or modified, thus retaining their appeal.
Understanding and Managing Customer Perception *y +agmar Recklies
This article first appeared in Effective Executive, ICFAI University Press, July 2006
“It has never been more difficult to win – and keep – business through product and
price distinction.” [1]
n today-s globalising economy competition is getting more and more fierce. hat means it becomes more differentiate themselves from other offerings than ever before. ot only is the number of competitive offeri production, sourcing, logistics and access to information. 0any products and services face new competition new offerings or bundles from industry outsiders. 1ince product differences are closed at an increasing spe battle for customers by price reductions, products and services tend to become C2002+31 .
2n the other hand, customer behaviour becomes more hybrid. 2n one hand, customers are increasingly pr marketplaces like ebay or buying their groceries at discount 0AR531 . 2n the other hand they en6oy bra same person may plan a weekend trip with a no!frills airline and a stay at a five!star!hotel. n the result, customers have a wider choice of often less distinguishable products and they are much bett balance of power shifts towards the customer. Customers are widely aware of their greater power, which ra companies should care for them. *ringing it all together, it becomes ever more difficult to differentiate a product or service by traditional cat etc. n this situation the development of a strong relationship between customers and a company could likely p competitive advantage. his relationship is not longer based on features like price and 8uality alone. oday customer makes in his various interactions with a company 9e.g. how fast, easy, efficient and reliable the p relationship. ;roblems during a single transaction can damage a so far favourable customer attitude. he conse8uence for companies is that they have to adapt their ways of competing for customers. raditio efforts of customer relationship management on issues li ke customer satisfaction and targeted 0AR53 direct marketing or advertising. Although doubtless necessary and beneficial, these activities are not longe between company and customer down to a particular set of contacts in which the company invests its effor than a satisfied customer who is well aware of the companies offerings and has a positive attitude towards not necessarily a loyal one. =>? f a customer is satisfied that means that a product of service has met his expectations and that he was no is doubtlessly very important. t is the precondition for repeat purchases and it prevents the customer fro experiences. A loyal customer, however, is more than a customer who fre8uently purchases from a compan he difference is the emotional bond which links the customer so closely to the company that he develops brands and is even willing to recommend them to others. @oyal customers truly prefer a product, brand or hus loyalty goes beyond a rational decision for known 8uality or superior price!performance!ratio. t is ab perceptions about the brand or product. hen the customer makes his buying decision, he evaluates the benefits he perceives from a particular pr he value a customer perceives when buying and using a product or service go beyond usability. here is a social status, exclusivity, friendliness and responsiveness or the degree to which personal expectations and perceived by the customer, normally comprise more than the actual price. hey also include costs of usage offering, potential switching costs etc. %ence, the customer establishes an e8uation between perceived ben
and compares this to similar e8uations of other products. *ased on this, customer loyalty can be understood as to how customers feel about a product, service or br total B31031 with a it live up to their expectations. he important point here is the involvement of feelings, emotions and perceptions. n today-s competitive becoming much more important for gaining sustainable competitive advantage. Customer perceptions are influenced by a variety of factors. *esides the actual outcome 4 i.e. did the prod function and did it fulfil the customers need 4 the whole process of consumption and all interactions involv globalised information driven economy this can also comprise issues like %ow other customers or influencing groups perceive the product or brand he degree to which the customer feels the actual marketing campaign addresses the most important i Responsiveness and service 8uality of any affiliates, e.g. distribution partners Customer perceptions are dynamic. 7irst of all, with the developing relationship between customer and co and its products or services will change. he more experience the customer accumulates, the more his perceptions will shift from fact!based 6udge whole relationship gains for him. 2ver time, he puts a stronger focus on the conse8uence of the product or 0oreover, if the customers- circumstances change, their needs and preferences often change too. n the ex competitors, with which a customer compares a product or service will change, thus altering his perception is that the public opinion towards certain issues can change. his effect can reach from fashion trends to th citi#enship. 1hells intention to dump its *rent 1par platform into the ocean significantly altered many custo worth buying fuel from. Research has been don on the impact of 0AR53 1%AR3 on the perceived 8uality of a product.=$?+epen customers- preferences, increasing 0AR53 share can have positive or negative effects on how the custo
Positive effects of increasing MARKET share on customer perception
ncreasing 0AR53 share can send out positive signals by acting as an indicator of superior 8uality that is recognised by more and more other customers. his effect is particularly strong for premium priced products. Customers normally assume that a product must be of exceptional 8uality if it can gain such an unexpected market success despite its high price. 0any brands offer positive emotional benefits of using a product that is popular in the 0AR531 . he value of a product or service can rise through increasing number of users of the same product, e.g. number of members of an online community, better availability of software for popular computer systems.
0AR53 research and surveys. here are several aspects of measuring customer perceptions. 7irst of all the company has to find out how itself and its offerings are perceived by the customers. t is essential to identify what the customer is actually buying and which features are most important to him. 2nly this way it is possible to align the internal focus and resources to the customers expectation. his information is of greater value if it can be compared to the customers- perception of competitive offerings. ot only will this reveal relative strengths and weaknesses, it is also a valuable source of ideas for improvement. *esides that, surveys should also identify the relative importance of several influencing variables in the eyes of the customer. o know what matters most to the customer helps to set priorities for pro6ects.
2f course, as with any 0AR53 research activities, it should be based on a careful customer segmentation. Customer groups that differ by fre8uency of use, social status, geographical region or other criteria, are likely to have different expectations and preferences. %ence, they will probably perceive an offering in different ways. )eithaml et al=? suggest to incorporate several behavioural!intentions 8uestions to identify signals that are potentially favourable or unfavourable for the company. &uestions for behaviour intentions are potentially of higher validity and richer diagnostic value than the Doverall service 8ualityE or Dcustomer satisfactionE variables. 1ince these 8uestions are directed at potential future actions they can not only indicate of changes in demand and 0AR53 trends. hey also provide early warning signs and help to take to take timely corrective action. 2nly if a company knows which features of its products and services or which other points of contact with the customer are considered most important by the customers, it can develop appropriate strategies. 1uch a strategy will not only help the company to strengthen the emotional bond with the customer through targeted improvements and activities. t may also have the positive side effect that the customers- whole experience leads him to the conclusion that this company really understands his distinctive needs and really takes him seriously. %ence, the customers perception of the whole company may improve beyond a positive attitude towards a particular product.
*ased on thorough research, companies can develop strategies and initiate targeted activities to manage and improve customer perceptions. his article finishes with some examples of how this can be done. t has to be taken into consideration, however, that there is no one right strategy. 1ince these measures shall provide a distinctive competitive advantage, they should be based on the particular competencies and resources of a company and they should aim at setting the company apart from the other 0AR53 participants. he service experience is closely linked to his perception of the total company and its offerings 4 be it products or service. A common idea of many authors is that it is not always necessary to deliver the absolutely perfect customer experience. nstead it is important to solve the customers need or problem in a matter that is perceived appropriate. 7or many retail products, for example, it will be sufficient in most cases to offer an appropriate group of substitute products, but not all particular products. n service situations, customers will ! depending on the actual nature of the service ! not expect an immediate service delivery. hey will however expect a delivery within a time frame that is either 0AR53 standard or meets the service promise of the actual service provider. As long as the company keeps this promise, the customer will perceive this as satisfying. *yrnes even suggests that you earn more customer loyalty when you do a good 6ob fixing a service problem, than if there had been no problem at all. =F? he point is to meet or excel the customers- expectations, not to achieve some ideal level of product or service delivery. Companies should try to make sure that their customers are fully aware of all the ways their offering can provide value to them. hey have to explain the customer how this particular product can deliver more value than those from competitors. =G? his approach means to widen the customer perception and to extend their awareness and appreciation to more features or aspects of the offering. %owever, this point has to be considered very carefully in order not to produce an diametrical effect.
Customer perception refers to how customers view a certain product based on their own conclusions. These conclusions are derived from a number of factors, such as price and overall experience.
When it comes to influencing consumers to purchase a product, their perception of the brand must be taken into account. This perception may vary based on the customer or a certain demographic of customer. Customer perception can be developed from a vari ety of factors, such as their own personal experience or how they have heard other people experienced the product. The Internet has transformed how people experience brands and build their perceptions. Social media and review websites provide access to reviews and details that help customers form their o wn perceptions about brands and their products.
