Importance of Consumer Perception

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The success of a business depends upon its ability to attract and retain customers that are willing to purchase goods and services at prices that are profitable to the company. Consumer perception describes how customers and potential customers view a company and its products and services. Consumer perception is important to businesses since it can influence consumer behavior, which ultimately affects the profitability of a business. Many businesses spend large amounts of resources to influence consumer perceptions.

Consumer Perception Basics

  • Consumer perceptions can determine the success or failure of a business. For example, if a certain restaurant has a reputation as being the best pizza place in town, the general consumer perception in the town might be that you should to go the restaurant if you want a good pizza. This sentiment could strongly influence the pizza shop's ability to make profit. On the other hand, if consumers have negative views about company it could seriously hamper revenue success. For instance, if a hardware store becomes known for cheap, shoddy products, consumers might avoid purchasing its goods unless they cannot afford higher quality goods.

Marketing

  • Marketing describes how a company chooses what types of products and services to offer and how it distributes, prices and promotes those products and services. Consumer perceptions often determine the types of products and services companies offer. For example, if consumers expect to be able to eat for $5 at a fast food restaurant, restaurants might be compelled to offer products that are profitable at a price of $5 or less. Businesses create advertisements to make consumers aware of their products and services and influence how consumers perceive those products and services.

Branding

  • A trademark is a name, phrase, symbol or combination of words and symbols that a company uses to distinguish its identity or brand or its products from others. Businesses spend large amounts of resources to build up brand name recognition and to get consumers to associate certain positive qualities with their brands. Consumers may be more trusting of more recognizable brands, which can influence buying behavior.

Considerations

  • Businesses often conduct market research to gain insight into consumer perceptions and preferences. Understanding how and why consumers make the choices they do is integral to providing products and services that will be in demand and promoting those products and services effectively.

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