Believe it to perceive it

Perception is reality.
In marketing, the perception of a product or company is important in a consumer’s mind when making a purchasing decision, as opposed to actual reality.

Perception is making sense out of stimuli one is exposed to.

"We know that people don’t always perceive things accurately, but they respond to what they believe," said Joseph Cote, professor of marketing at Washington State University Vancouver.

No matter how good a product or service actually is, without a perceived need in the marketplace consumers may not be interested.

Coastal residents are likely to be more inclined to purchase tsunami insurance a year after the disaster in Southeast Asia than if it never happened. The chance of a tsunami striking the West Coast of the United States is no greater today than it was a year ago, but the awareness of the possibility has increased.

Richard Waltke created Market Perceptions Inc. in Vancouver a year ago to help businesses determine if their product or service is understood and well received by the marketplace.

"The focus is to define your business in terms of the services and benefits to the marketplace," said Waltke.

As an example, Waltke said a disaster recovery company may be better served by creating the perception of a company that can return a fundamental part of a client’s life rather than simply its ability to repair equipment.

As the U.S. economy becomes more service oriented, market perception is created at the front lines by employees through customer service. Cote said businesses need to empower employees to act on the promises companies make. Computer manufacturer Dell Inc. has suffered declining positive perception when its customer service began to slip after it was outsourced to India.

For companies that supply physical goods, Cote said perception can play a big role, as the competition’s offering is typically not that different. He uses the example of toothpaste. A lot of shelf space is dedicated to the myriad of toothpaste options, but, for the most part, they all do the same thing – clean teeth. Each customer will perceive one brand as better than the others and make their selection accordingly.

Companies first have to know who their target customers are and what their needs are.

Jeff Williams of Jeff Williams Marketing uses the slogan "designing reality" for his Vancouver marketing firm, "which means we are designing perceptions for people," he said.

Waltke focuses on gathering market perception for clients through qualitative research, such as focus groups and one-on-one interviews, and quantitative research, such as questionnaires and surveys.

From these results, companies are able to create their presentations to the marketplace.

Waltke is working with a Clark County homebuilder to gauge perceptions of existing and prospective homebuyers, which includes those who have purchased a home from the company in the past and anyone in the county who may purchase a home in the future. Waltke is developing surveys to give the company an idea of where they have and have not performed well in the past and what the needs and expectations of the market are.

Once a business has identified its market and the needs within it, it can go about developing market perception.

"You create how people see you," said Michelle Fennimore, of Vancouver marketing firm Competitive Insights.
Molding perception

A number of tools are used to mold perception, including advertising, physical business and product appearance, customer service and business communication.

Tracking results is just as important, said Fennimore, and returning to the target market with the same questions allows a company to see how perception of the business has changed.

Cote said smart companies can take advantage of perceptions created by the marketplace, versus altering perceptions themselves. He said clothing companies tend to track what is occurring in opinion-leader groups, such as young urban consumers, and market that. Likewise, motorcycle manufacturer Harley Davidson has benefited from a culture created around its company.

"It built itself, and Harley Davidson jumped on it," said Cote.

Similarly, knowing that consumers equate bulk product offerings with savings, Cote said some companies charge more for larger sizes in relation to smaller options.

Marketing professionals say companies have to be just as careful not to create false perceptions. Initial perception of the product or business may be good enough to draw customers in, but if they are disappointed, they will likely go elsewhere in the future.

"If you fall short, eventually that will bite you," said Fennimore. "Market perception is what drives your business – it is behind word-of-mouth (advertising)."

While there are legal restrictions to making false guarantees or misleading promises, advertisers skirt the line with "puffery," said Cote.

Opinion-loaded statements such as ‘best’ or ‘nothing works better’ are not false, but may not tell the whole truth either.

"Businesses want perceptions to be as close to reality as possible," said Cote.