Although a consumer's perception of a product or service is at least partially based on his actual experience with the good, a significant amount of market research suggests that a consumer's view of a product is also conditioned by a variety of other factors. From very concrete factors of price and quality to less tangible factors such a consumer's view of the manufacturer's reputation, experience with service and the quality of packaging and branding, a number of complex and interrelated psychological factors determine a consumer's perception of goods and services.
Price has a complex effect on consumer perception. On the one hand, consumers appreciate a bargain and are often likely to favor an economically-priced item. On the other, consumers often perceive very inexpensive items as cheap and discardable, ultimately damaging a consumer's view of a product even if the product remains the same and the consumer is benefited from a price reduction. Especially sophisticated or skeptical consumers are even prone to distrust a product that is considerably cheaper than the alternatives. As a result, price should be part of a comprehensive marketing plan, where even inexpensive products are depicted as favorable alternatives with similar levels of quality to the competition, with a price that is somewhat lower but still comparable with other possibilities.
Of course, the actual quality of a product is a vital part of a consumer's perception of a good or service. Quality can describe any attribute in a set of characteristics that satisfy or disappoint a consumer, including usability, reliability and durability. Marketing can influence a consumer's perception of quality, but, in the end, and particularly with non-durable goods, a consumer's actual experience with a product will determine his perception of quality. Outside the realm of mass communication, word of mouth regarding quality also travels very quickly.
Even in the case of goods that exhibit numerous flaws, excellent service quality can often overshadow a negative experience with the product itself. If a consumer feels that he receives exceptional attention when encountering a problem with a product, that consumer is somewhat more likely to trust the brand or product knowing that the manufacturer or retailer provides a prompt and effective response to problems. Humans are social animals and their consumer behavior is often determined by the social relationships that surround a product, including interactions with customer service representatives.
Packaging and branding have a huge effect on consumer perceptions, particularly at the point of purchase. Especially when a consumers are purchasing a type of product for the first time, the way the product is presented can wholly determine their perception of the item. Packaging and branding, of course, cover everything from the attractiveness and display quality of an item to the attributes of a product the manufacturer chooses to highlight. Depending on the type of product and market, different branding messages from tough and reliable to fine and luxurious can be appropriate and effective.
A product's reputation is built up over time and is usually a combination of actual experience with the product, word-of-mouth recommendations and marketing campaigns that attempt to establish a status or shared view of the product or brand. A consumer's perception of a product's reputation, moreover, is not only determined by the product's brand identity and manufacturer but by the whole chain of distribution. Even if a consumer trusts a product's manufacturer, for example, that consumer may change his mind about the product upon seeing it available in a retailer he associates with cheap, defective products.