The j.n.d. of marketing


By
Pradeep SN
II Semester MBA
Institute of Management in Kerala
Thiruvananthapuram
E-mail:
pradeep_ngneer@yahoo.co.uk
 


"We don't see things as they are; we see things as we are."  - Anais Nin.

There is nothing in this world that we can say is real or even if something is there none is able to find it out, the thing is for an individual what he perceives is the reality- in short perception is reality, and each person has his own perception of a thing and a person arrives at a perception based on his past experience, beliefs, mental conditions, knowledge level etc. and it is just because of that I always recollect the famous quote of Mr. Anais Nin the moment when I hear something about perception. And this was known to us as back as in 19th century onwards but it is only after the recent times the businessmen realized the immense opportunities which can be cunningly derived out of this concept. Infact nowadays all the promotion activities and the ads are all applying this technique to its fullest extent.

A customer chooses a brand or a product not by knowing the exact contents of the product or the way it was produced but simply by the perception he had formed about the product through aesthetics of the product, its ads or because of the association it has with one of his favorite celebrities etc. he believes in his perception, thus it forms the reality and the person decides to buy/reject a product.

The term 'j.n .d.'is widely used and very significant one which a marketer can use appropriately to market his product by influencing the customer's perception about the product and its attributes. The minimal difference that can be detected between two stimuli is called the differential threshold or the just noticeable difference, j.n.d. The j.n.d. between two stimuli is not an absolute amount but an amount relative to the intensity of the first stimulus. For example, if the price of a car is increased by Rs.1000/-/- it would probably not be noticed i.e., the increament would fall below the j.n.d. it may take an increase of Rs.5000/-/- or more before a differential in price would be noticed. However even an one rupee increase in oil price would be noticed very quickly because it is a significant percentage of the initial amount So an additional level of stimuli equivalent to the j.n.d. must be added for the majority of people to perceive a difference between resulting stimulus and the initial stimulus.

The principle of j.n.d. has important applications in marketing, manufacturers and marketers endeavor to determine the relevant j.n.d. for their product because of several reasons like, ..the negative changes (reduced amount, increased price) are not readily noticeable to the consumers ..the positive changes (extra amount, reduced price) are very well noticeable without being wastefully extravagant. For example, in some cases where the manufacturer wants to give an 'extra' to face the ever increasing competition often fall in a dilemma as to how much extra he has to deliver so that the consumers easily detect the positive change and the company wants to put the extra amount which is exactly equal to the j.n.d. amount nothing less or nothing more. If they opt for a less than j.n.d. amount, consumer's will unable to notice the change and there by the whole effort fails, and for the other option of a greater than j.n.d. amount, the company would result in sacrificing a good deal of repeat purchase frequency. Hence both these conditions are harmful and should be avoided.

If a company has determined the j.n.d. (in terms of life of the product) for its present product (say) 'paint' is 2 yrs which now gives a life of 6 yrs, it mean that the life given by the improved variety must last at least one-third longer than that of the existing variety if it is to be perceived by the majority of users as, infact, improved. So by finding the j.n.d. of 2 yrs, the company has isolated the minimum amount of the time necessary to make its claim of 'lasts longer' believable to the majority of consumers.

The 'Jadoo' of j.n.d. is not limited to product sales but it has more or less importance in advertising too. Marketers often want to update existing packaging without losing the ready recognition by consumers who've been exposed to years of cumulative advertising impact or they want to popularize the new brand name, and in such cases they heavily rely on the j.n.d. aspect. They usually make a number of small changes, each carefully designed to fall below j.n.d.

The Lexmark International Inc., which bought the office supplies and equipment line from the IBM Corporation in March 1991, agreed to relinquish the IBM name by 1996. Recognizing the need to build a brand image for Lexmark while they moved away from the well-known IBM name, Lexmark officials conducted a four stage campaign for phasing in the Lexmark name on product. First stage carried only the IBM name. Second stage featured the IBM name and downplayed Lexmark name. Third stage featured Lexmark name and downplayed IBM name. And the fourth stage featured Lexmark name only.

Marketers can use the j.n.d. to determine the amount of improvement they should make in their products. The key thing is that less than j.n.d. is a wasted effort as the improvement will not be perceived; more than j.n.d. may be wasteful by reducing the level of repeat sales.
 


Pradeep SN
II Semester MBA
Institute of Management in Kerala
Thiruvananthapuram
E-mail:
pradeep_ngneer@yahoo.co.uk
 

Source : E-mail March 9, 2005

 
 
 

 

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