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Costumer s perception in products and services

Everybody is exposed to more and more diverse information than ever before. That means it becomes more difficult for products and services to differentiate themselves from other offerings than ever before. Not only is the number of competitive offerings rising due to globalisation of production, sourcing, logistics costumer s perception in products and services access to information.

Many products and services face new competition from substitutes and from completely new offerings or bundles from industry outsiders. Since product differences are closed at an increasing speed and many companies try to win the battle for customers by price reductions, products and services tend to become commodities. On the other hand, costumer s perception in products and services behaviour becomes more hybrid. On one hand, customers are increasingly price sensitive — searching for bargains at marketplaces like ebay or buying their groceries at discount markets.

On the other hand they enjoy branded and luxury goods. One and the same person may plan a weekend trip with a no-frills airline and a stay at a five-star-hotel.

In the result, customers have a wider choice of often less distinguishable products and they are much better informed. For many offerings the balance of power shifts towards the customer. Customers are widely aware of their greater power, which raises their expectations on how companies should care for them.

Bringing it all together, it becomes ever more difficult to differentiate a product or service by traditional categories like price, quality, functionality etc. In this situation the development of a strong relationship between customers and a company could likely prove to be a significant opportunity for competitive advantage.

This relationship is not longer based on features like price and quality alone. Today it is more the perceived experience a customer makes in his various interactions with a company e.

Importance of Consumer Perception

Problems during a single transaction can damage a so far favourable customer perception. Customer loyalty and customer perception The consequence for companies is that they have to adapt their ways of competing for customers.

What is Customer Perception?

Traditionally, companies have focused their efforts of customer relationship management on issues like customer satisfaction and targeted marketing activities like event marketing, direct marketing or advertising. Although doubtless necessary and beneficial, these activities are not longer enough. They narrow the relationship between company and customer down to a particular set of contacts in which the company invests its efforts.

Most likely this will produce not more than a satisfied customer who is costumer s perception in products and services aware of the companies offerings and has a positive attitude towards them.

However, a satisfied customer is not necessarily a loyal one. Customer satisfaction is doubtlessly very important. It is the precondition for repeat purchases and it prevents the customer from telling others about his disappointing experiences. A loyal customer, however, is more than a customer who frequently purchases from a company.

The difference is the emotional bond which links the customer so closely to the company that he develops a clear preference for these products or brands and is even willing to recommend them to others. Loyal customers truly prefer a product, brand or company over competitive offerings. Thus loyalty goes beyond a rational decision for known quality or superior price-performance-ratio. When the customer makes his buying decision, he evaluates the benefits he perceives from a particular product and compares them with the costs.

The costumer s perception in products and services a customer perceives when buying and using a product or service go beyond usability. There is a set of emotional values as well, such as social status, exclusivity, friendliness and responsiveness or the degree to which personal expectations and preferences are met. Similarly, the costs perceived by the customer, normally comprise more than the actual price.

Customer Perception and Product Strategy

They also include costs of usage, the lost opportunity to use an other offering, potential switching costs etc. Costumer s perception in products and services, the customer establishes an equation between perceived benefits and perceived costs of one product and compares this to similar equations of other products. Based on this, customer loyalty can be understood as to how customers feel about a product, service or brand and whether their perceived total investments with a it live up to their expectations.

The important point here is the involvement of feelings, emotions and perceptions. Impact factors on customer perception Customer perception is influenced by a variety of factors. Besides the actual outcome — i. First of all, with the developing relationship between customer and costumer s perception in products and services, his perceptions of the company and its products or services will change. The more experience the customer accumulates, the more his perceptions will shift from fact-based judgements to a more general meaning the whole relationship gains for him.

Over time, he puts a stronger focus on the consequence of the product or service consumption. In the external environment, the offerings of competitors, with which a customer compares a product or service will change, thus altering his perception of the best offer around.

Customer perception

Another point is that the public opinion towards certain issues can change. This effect can reach from fashion trends to the public expectation of good corporate citizenship. Shells intention to dump its Brent Spar platform into the ocean significantly altered many customers perception of which company was worth buying fuel from. Research has been done on the impact of market share on the perceived quality of a product.

Positive effects of increasing market share on customer perception Increasing market share can send out positive signals by acting as an indicator of superior quality that is recognised costumer s perception in products and services more and more other customers. This effect is particularly strong for premium priced products. Customers normally assume that a product must be of exceptional quality if it can gain such costumer s perception in products and services unexpected market success despite its high price.

Many brands offer positive emotional benefits of using a product that is popular in the markets. The value of a product or service can rise through increasing number of users of the same product, costumer s perception in products and services. Negative effects of increasing market share on customer perception For premium and luxury products, customers may translate an increasing market share into a loss of exclusivity and thus perceive it as less valuable. The quality of services may suffer if they are consumed by increasing numbers of users.

Diseconomies of scales and congestions can be observed with busy airports and many other services so that customers may look out for other providers that promise more timely service and convenience.

The concept of customer perception does not only relate to individual customers in consumer markets. It is also valid in business to business situations. For example, a competitor benchmarking survey of a large industrial supplier revealed that the market leader, although recognised for excellent quality and service and known to be highly innovative, was perceived as arrogant in some regions. If we take into consideration that there are about four other large players with a similar level of quality and innovative ideas, this perceived arrogance could develop into a serious problem.

Customers here are well aware the main characteristics of all the offerings available at the market are largely comparable.

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So they might use the development of a new product generation of their own to switch to a supplier that can serve them not better or worse, but with more responsiveness and understanding.

Companies have done a costumer s perception in products and services to improve customer satisfaction and customer relationships in the past. As discussed above, this will not be enough any more. Measuring customer perception Any serious effort to manage customer perceptions starts with a good measurement system. Companies must be truly willing to look at the whole process of interaction through the customers eyes. For many companies, this requires a more or less extensive shift in mindset, since most departments from development to sales will be involved.

Thus, France Telecom implements the issue of how customers perceive their products as early as in the product development process. After the commercial launch: There are several aspects of measuring customer perceptions.

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First of all the company has to find out how itself and its offerings are perceived by the customers. It is essential to identify what the customer is actually buying and which features are most important to him.

Only this way it is possible to align the internal focus and resources to the customers costumer s perception in products and services. Not only will this reveal relative strengths and weaknesses, it is also a valuable source of ideas for improvement. Besides that, surveys should also identify the relative importance of several influencing variables in the eyes of the customer.

To know what matters most to the customer helps to set priorities for projects. Of course, as with any market research activities, it should be based on a careful customer segmentation. Customer groups that differ by frequency of use, social status, geographical region or other criteria, are likely to have different expectations and preferences.

Hence, they will probably perceive an offering in different ways. Zeithaml et al suggest to incorporate several behavioural-intentions questions to identify signals that are potentially favourable or unfavourable for the company. Since these questions are directed at potential future actions they can not only indicate of changes in demand and market trends.

They also provide early warning signs and help costumer s perception in products and services take to take timely corrective action. The behavioural consequences of service costumer s perception in products and services. Such a strategy will not only help the company to strengthen the emotional bond with the customer through targeted improvements and activities.

Hence, the customers perception of costumer s perception in products and services whole company may improve beyond a positive attitude towards a particular product. Based on thorough research, companies can develop strategies and initiate targeted activities to manage and improve customer perceptions.

This article finishes with some examples of how this can be done. It has to be taken into consideration, however, that there is no one right strategy. Since 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 market participants. The service experience is closely linked to his perception of the total company and its offerings — be it products or service.

A common idea of many authors is that it is not always necessary costumer s perception in products and services deliver the absolutely perfect customer experience. Instead it is important to solve the customers need or problem in a matter that is perceived appropriate. For 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.

In service situations, customers will — depending on the actual nature of the service — not expect an immediate service delivery. They will however expect a delivery within a time frame that is either market 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. Byrnes even suggests that you earn more customer loyalty when you do a good job fixing a service problem, than if there had been no problem at all.

Companies should try to make sure that their customers are fully aware of all the ways their offering can provide value to them. They have to explain the customer how this particular product can deliver more value than those from competitors. This approach means to widen the customer perception and to extend their awareness and appreciation to more features or aspects of the offering.