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Marketing Principles

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In this report, i am going to explain why the reality of buying a specific product may be quite different from the consumer's perceptions of the product. Using a detailed format, i will clearly explain the major reasons why products and services do not actually reach the expectations of consumers based on their perception of the product before purchasing it.

Firstly, let me tell you a short story which i stumbled upon during my research; "In early 1898, during the America's era of agriculture which preceded the industrial revolution, “the family” was both a producing and consuming unit. Domestic arts furnished the major share of consumption goods, and the limited manufacturing was largely accomplished by local craftsmen.

You see, consumer expectations in the marketplace were not a serious problem when the family itself produced most of the essentials for everyday life. With home produced goods, the consumer of the goods had firsthand knowledge of their quality and workmanship. As for the few items that were purchased, the buyer had a much better understanding of the techniques of production and the tests of quality than do most consumers today.

Businesses today are generally considered to be doing a better job for consumers than ever before. In the words of Otto Kleppner, "...Today's average refrigerator has a far better refrigerant, a better motor, better insulation, and larger storage space than the costliest model of twenty years ago. Canned soups today have better enriched recipes than when you were a youngster, and are offered in greater variety. Today's tires give over four times the mileage per dollar (aside from excise taxes) of those of twenty years ago, in addition to giving you a smoother and safer ride' (Kleppner, 1970).

However, due to the increase in consumer affluence and sophistication, the threshold of acceptable performance is rising. Younger, wealthier, better educated, and more sophisticated consumers seem to be less tolerant of gaps between promotional promise and product performance. That is why in today’s world, buying a product may be quite different from the perceived expectations of the product.

Moreover, more detailed information is been given in the following notes below about how the above said topic affects the expectations of consumer toward a product or service.
2.0 - INTERRELATED VARIABLES
In order to meaningfully discuss interrelationships among expectations, perceived product performance, and consumer satisfaction, the three variables need clarification.
2.1 - Expectations
Expectations have been described as "subjective notions of things to come" (Katona, 1958). Expectancy is a type of hypothesis formulated by the consumer, and his perception of product performance after purchase and use will serve to either confirm or reject this hypothesis (Engel et al, 1968). Expectations are confirmed when a consumer receives what he expects. Negative disconfirmation takes place when the product's actual or objective performance cannot match expectations for it. Positive disconfirmation may occur when objective product performance actually exceeds expectations.

2.2 - Product Perception
Perception can be thought of as the individual's mental impression of a stimulus object, in this case, a product. No two people perceive a product exactly alike because no two people have the same view of their environment. Perception has four major facets.
 First, it is selective. Since an individual cannot possibly be cognizant of all the stimulus objects within his perceptual field, he perceives selectively.
 Secondly, perception is organized in that it has meaning for the individual.
 Third, perception depends upon stimulus factors, e.g., advertising in consumer product evaluations.
 Fourth, perception is influenced by personal factors, i.e., what the individual brings to the situation. The consumer's view of the world, or his cognitive set, is formed over time, and reflects his physiological and psychological characteristics as well as his needs, moods, values, past experiences, and the nature of his environment (Robertson, 1970).
2.3 - Consumer Satisfaction
No satisfactory literal definition has yet been developed for consumer satisfaction. However, inferring from my description of the source of dissatisfaction, one might postulate that satisfaction results when consumer expectations are matched (or exceeded) by perceived product performance. Consumer dissatisfaction, then, might be measured by the degree of disparity between expectations and perceived product performance.
3.0 - Theories of Expectations
Since consumer satisfaction is such a fundamental problem to human behavior, it is only logical that one would turn to psychology to develop a theoretical framework for the present investigation.

3.1 - Assimilation (Cognitive Dissonance)
According to Festinger's theory of cognitive dissonance, an unconfirmed expectancy creates a state or psychological discomfort because the outcome contradicts the consumer's original hypothesis (Festinger, 1957). The theory suggests that any disparity between expectations and actual product performance will be minimized by the customer adjusting his perception of the product to become more consistent with his expectations. Consumers are continually receiving various types of information about products from their own experiences, associates, advertisements, and salesmen.
As applied to marketing, if there is disparity between expectations for a product and the actual performance of that product, the consumer is stimulated to lessen the psychological tension generated by changing his perception of the product so that it comes more into agreement with his expectations.
3.2 - Contrast
Even in the studies supporting assimilation theory, some individuals tend to shift their evaluations away from expectations stimulated by communications if inconsistent with reality (Cardozo, 1964; and Hovland, Harvey & Sherif, 1957). Contrast theory assumes that the consumer will magnify any disparity between the product received and the product expected; i.e., if the performance of the product falls short of his expectations, the customer will evaluate the product less favorably than if he had no prior expectations for it. When expectations are not matched by actual product performance, contrast theory presumes that the surprise effect or contrast between expectations and outcome will cause the consumer to exaggerate the disparity.

Contrast theory would predict consumer product perceptions as shown by the dashed line in Figure l. It implies that slight understatement of the product's qualities ln promotion might lead to higher customer satisfaction with the product. Obviously, the advertisements or other components of the promotional mix would not 90 understate the product's qualities that consumers by-pass it for another brand. Several studies lend support to the possible success of this promotional strategy (Diab, 1965; Freedman, 1964; Hovland, et al., 1957; Sherif & Hovland, 1961; Spector, 1956; and Whittaker, 1965).
3.3 - Assimilation-Contrast
As its name implies, the assimilation-contrast approach combines the theories of assimilation and contrast. It’s of the contention that product performance differing only slightly from one's expectations tends to bring about adjustment of product perceptions toward expectations (assimilation effect), while large variances between one's expectations and actual product performance tend to be magnified or exaggerated (contrast effect)(Hovland, et al., 1957). The theory assumes that individuals have ranges or latitudes of acceptance, rejection, and neutrality. If the disparity between expectations and performance falls into the latitude of acceptance, there is strong probability of an assimilation effect. On the other hand, if the disparity falls into the consumer's latitude of rejection, a contrast effect is likely.

4.0 - A CONSUMER BEHAVIOUR EXPERIMENT TO TEST CONSUMER’S SATISFACTION AFTER BUYING A PRODUCT VS THEIR PREVIOUS PERCEPTION

4.1 - METHODOLOGY
Subjects (Ss) for the empirical investigation consisted of 144 volunteers from undergraduate marketing classes. No reward or incentive was offered for participation. However, after the experiment began, in order to increase involvement or commitment, subjects were told they could keep the product they were going to evaluate. The product selected for the experiment was a ballpoint pen, for several reasons: (a) students constitute a major market for this product;
(b) students have been shown to be more interested in writing instruments than other miscellaneous products priced under two dollars (Cardozo, 1964); and (c) less variability of preference has been found among writing instruments than in most other product categories (Cardozo, 1964). All the pens were identical, unmarked ones selling at retail for about one dollar each.
4.2 - Research Design
Using a 2 X 6 factorial design, the independent variable (expectations) was manipulated by randomly assigning subjects to one of six different conditions or levels of product information. As confirmed in pretesting, condition one (C1) substantially understated the product features, C2 slightly understated the features, C3 depicted the product accurately, C4 slightly overstated the quality of the product's features, and C5 substantially overstated the product's features. Co provided no information about the product, but instead Ss received a communication unrelated to the experiment.

Half the Ss in each experimental condition were asked to complete a questionnaire regarding their expectations after reading the product information, but prior to seeing the product. This questionnaire acted as a "take-measure" to ensure that the different levels of product information were creating expectations in the right direction, with the desired degree of intensity. Remaining Ss were given a task unrelated to the experiment so that the time occupied by the two treatments was about equal. If the take-measure had proved reactive, responses of those Ss would have been discarded and only Ss not receiving the take-measure would have been included in the data analysis. Each S was permitted to inspect and test the product for the same period of time, then record his reactions on a modified logarithmic product rating scale using dollars and cents distributed in small ranges from $0.04 to $64.00. These ratings were subsequently converted to integers by sequentially numbering the rows of the product rating scale. Three dependent measures were obtained. One dependent variable consisted of the mean of individual subject ratings on 15 visual features and performance characteristics of the ballpoint pen. The second variable was an overall rating by Ss on the pen's combined features. This was a weighted mean since each S could assign certain product features more importance than other features in determining the overall evaluation. Finally, Ss estimated the pen's price.

4.3 - RESULTS
As shown in Table 1, mean scores for all three dependent variables are assimilated toward expectations until reaching the "very high" level of expectations, which caused a sharp downturn in product ratings for all three measures.

One-way analysis of variance (treatment variable collapsed since Ss were not sensitized by the take-measure) revealed a main effect of conditions significant at the .01 level for all three dependent variables (product features, F - 10.06; combined characteristics, F = 9.31; and price, F s 11.08). Thus, Ss responded differently in their evaluations or perceptions of the product depending upon their level of expectations. There were no significant treatment main effects nor treatment by condition interaction effects for any of the dependent variables.
4.4 - Relating Results to Theoretical Models
Ratings for each of the dependent variables were plotted by each of the six conditions, as illustrated for product features in Figure 2. Product ratings plotted on the vertical axis are the mean responses for all 24 Ss in each expectational condition. Expectations plotted on the horizontal axis are the mean expectations for the 12 Ss in each condition who were administered the take-measure. Inspection of the plotted data indicated conformity with assimilation theory until reaching C5, the "very high" level of expectations, which marked a decline in product evaluations for all three dependent variables in accord with assimilation-contrast theory. Not only were mean ratings in C5 lower than in C4 but, for both product features and combined characteristics, evaluations were lower in C5 than in C3 where accurate information was provided. C0 was plotted separately (since expectations for these Ss were not manipulated) and proved significantly lower than C3.
CONCLUSIONS
In my assignment, I have demonstrated that consumer expectations can influence consumer perceptions of products. High expectations for product features and performance seem to generate, at least initially, higher ratings for the product up to a certain point, depending upon the product and its importance to the consumer. Beyond this critical threshold, however, exaggerated high expectations may be detrimental to product evaluations.
In conclusion, marketers ought to exercise caution in positioning the level of advertising and other promotional claims. Consumer expectations can profitably be led only so far for certain relatively simple and easily understood products. A tendency toward promotional hyperbole can be contagious among competing companies but can result in lower overall product evaluations and perhaps consumer dissatisfaction which may add other voices to the chorus calling for greater legislative control over the marketplace, especially on advertising and the promotional mix.

REFERENCES
 Business Week. New Products: The Push Is On Marketing. (March 4, 1972), 72-77. Business Week. Why Detroit is Wary of the 1970's. (September 20, 1969), 110-19 . Buskirk, R. H. & Rothe, J. T. Consumerism--An Interpretation. Journal of Marketing, 1970, 34, 61-65. [Accessed 14th April 2014]
 Brehm, J. W. & Cohen, A. R. Explorations in Cognitive Dissonance. New York: John Wiley and Sons, 1962. [Accessed 14th April 2014]
 Cardozo, R. N. An Experimental Study of Customer Effort, Expectations, and Satisfaction. Journal of Marketing Research, 1965, 2, 244-249. [Accessed 14th April 2014]
 Cardozo, R. N. An Experimental Study of Customer Effort, Expectation, and Satisfaction. Unpublished doctoral dissertation, University of Minnesota, 1964. [Accessed 14th April 2014]
 Chapanis, N. P. & Chapanis, A. Cognitive Dissonance: Five Years Later. Psychological Bulletin, 1964, 61, 1-22. [Accessed 14th April 2014]
 Cohen, J. B. and Goldberg, M. E. The Dissonance Model in Post-Decision Product Evaluation. Journal of Marketing Research, 1970, 7, 315-21. [Accessed 14th April 2014]

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