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What Is Market Perception?

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  • Written By: Mary McMahon
  • Edited By: Shereen Skola
  • Last Modified Date: 08 November 2016
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Market perception is the consumer response to a company’s products and services. A company with positive perception may be considered to offer products and services with good value, and to be a sound buy for investors. Negative impressions indicate that consumers and investors do not view a firm favorably. Companies can use a variety of tools to research consumer response and develop plans for improving their position in a given market.

Consumer impressions of firms play a key role in their success. A company with products and services considered to be of superior quality and value can earn a higher market share, and may attract interest in new endeavors as it expands. This is particularly important when market mavens, people believed to have an inside track on information, have a positive perception of a company. Early adopters in the tech industry, for example, can determine whether a new product catches on or is ignored by consumers.

Companies can use tools like surveys to gauge market perception. They may ask respondents to discuss their impressions of products and services and to provide information about where they could be improving. Another consideration may be how the company is perceived in comparison with the competition. Ideally, responses should be collected not just from current and past customers, but also members of the general public. People not familiar with a company can provide interesting information about market perception, as they let companies know what is circulating via word of mouth.

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Advertising is one of the key tools used to shape market perception. Companies developing ad campaigns may meet to discuss goals and the kind of image they want to project to create ads that meet their needs. A law firm, for example, may not want to run frivolous, quirky advertisements like those that could work well for an Internet service provider, because it wants to project a reliable and established image. Consultants can help companies tailor ad campaigns and run ads in test markets to see how people respond.

If results suggest that a company has a significant negative image problem, it may need to take a variety of measures. Simple means to address poor market perception can include changing advertising strategies and getting involved in communities through scholarships, grants, and other outreach. Companies could also redesign products and services to respond to consumers. More dramatically, companies might decide to re-brand themselves, which can potentially include choosing new names to start fresh without the baggage associated with an old image.

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candyquilt
Post 3

Advertising and getting involved with the community is important, but the best way to create a positive market perception is to provide good quality, reliable products and services at a good price.

No matter how much you advertise and how many grants you provide, market perception is not going to budge if the products and services don't meet expectations.

This is certainly how I feel. If a product is good and works as it's supposed to, I will think positively about that company even if they don't have the greatest advertisements.

turquoise
Post 2

@ysmina-- That's a great question because more and more companies seem to be doing this, but sometimes it has more to do with advertisement rather than market perception.

It can be a good way to understand how consumers feel about a product, but only if the consumer gives a one hundred percent honest review. I think that's difficult though because when a company gives free merchandise in return for reviews, the consumer is inclined to give a positive review regardless of what he or she truly feels. So that does little to give the company a realistic idea of market perception.

I think the only way that this method would work for understanding market perception would be to get feedback about products from consumers who paid for the items themselves. If they pay money, consumers are going to be very honest about their review.

ysmina
Post 1

Is sponsoring products for customers to review a good method for understanding market perception?

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