)For each of these products – chocolate bars and bottles of expensive perfume – describe how marketers can apply their knowledge of the differential threshold to packaging, pricing, and promotional claims during periods of (a) rising ingredient and materials costs and (b) increasing competition. Differential threshold (aka just noticeable difference “J. N. D. ”) is the minimal difference that can be detected between two stimuli. (a)During times when there is an increase in ingredients and/or material costs, marketers will make small changes to the product.

Changes made under the differential threshold are usually not noticeable by consumers. In the case for expensive perfumes and chocolate bars, marketers can manipulate the marketing mix by decreasing the quantity of perfume in each bottle, or smaller chocolate bar size and keep the prices the same. This way, the price per unit will actually increase through sales. Meaning, decreasing the cost of making one unit of perfume or chocolate bar, and selling them at a higher price.

Marketers may also increase the price per bottle and bar in small increments, also below the differential threshold, therefore consumers will not realize that they are paying more for the same quantity of perfume or chocolate. (b)During increase in competition, in order to stand out from its competitors, changes must be made to the marketing mix that is above the differential threshold. In this case, marketers would most likely make changes to the perfume’s bottle or chocolate packaging.

By making their new packaging or bottle more attractive or enticing, this would catch the consumer’s attention, and make their respective product stand out from its competitors. Another way marketers can stand out is by offering different promotional sales, causing consumers to believe that they are getting more for less. Often, chocolate bars such as Hershey’s Chocolate will have promotional offers like “Buy one and get one free. ” Perfume bottles may offer additional quantity in each bottle for the same price.

The point is to stand out from their competitors and in order to achieve this, which ever way marketers choose to manipulate the marking mix, it must be done above the Differential Threshold, or this will go unnoticed by consumers. 9) Discuss the roles of extrinsic cues and intrinsic cues in the perceived quality of: a. Wines b. Restaurants c. Plasma TV monitors d. Graduate Education Extrinsic cues are cues external to the product (i. e. price, store image, or brand image) that serve to influence the consumer’s perception of a product’s quality.

Intrinsic cues are physical characteristics of the product (i. e. size, color, flavor, or aroma) that serve to influence the consumer’s perception of a product’s quality. It’s important to note that consumers with no experience to the product being considered will likely use extrinsic cues to judge the quality of a product. a. Extrinsic cues consumers will use in order to determine a bottle of wine’s quality will be factors like price and country of origin to mention a few. Consumers often believe that the more expensive the wine, the better quality it must be.

Also, the country of origin is often very influential in wine. European countries like France and Italy are know to produce a high quality of wine. Therefore consumers are more willing pay a higher price for a bottle of wine from those countries, regardless the brand, as supposed to paying for a bottle of wine from Peru. Intrinsic cues consumers will use for wine are size, aroma, and flavor. For wines this is a little tougher for consumers because not many people know how a good wine should taste, look, and smell.

However, regular wine drinkers can often tell the quality just by the aroma and taste of the sip of the wine. b. Extrinsic cues consumers will use in determine the quality of a restaurant can be the image of the restaurant, popularity, peer’s opinions, location, and in some cases the price of its dishes. Often times, people assume that the more expensive sushi, the higher quality it must be. Other times, a restaurant with mediocre food, may be considered of a higher quality because many of its patrons may be celebrities, and also it must carry an expensive menu.

Intrinsic cues in this case would be the food itself and restaurant aesthetics. A restaurant that is furnished in a very modern style may be considered of a higher quality as supposed to a restaurant with plain looking furniture. A restaurant that smells like grease when you walk in would be considered of lower quality than a restaurant that smells like flowers, or a more light feeling aroma. c. Extrinsic cues for Plasma TV monitors are actually much stronger than its intrinsic cues.

Even though the technology behind a plasma TV is very similar between brands, consumers will assume a monitor from Samsung is much better than a monitor from Zenith because of the brand image Samsung carries with its products. Also, price is also an important cue when it comes to plasma TVs. Because of its technology, people often think it should be priced at a high level, and therefore, cheaper plasmas TVs may be perceived as being of lower quality. Intrinsic cues for Plasma TV would be the size.

The larger the monitor, the better quality it must be. The flatter/thinner the TV, the more expensive and higher quality it must also be. d. Extrinsic cues for graduate education will heavily be based on the name of the educational institution in which one attends. In other words, the brand image of the school. Employers will value and believe graduates from Harrvard is of a much higher quality than that of graduates from Pacific States University, regardless of the actual individual who attended each institution and its professors.

An intrinsic cue for this can be the professors themselves. With great professors, the higher quality of students a school would produce and stronger educational program it would have. Intrinsic cues differ from extrinsic cues in a way where often times, consumers have to take the time to examine the product before making the decision of its quality. With extrinsic cues, consumers can make their judgment at a much faster speed on the products quality, and therefore moving the consumer faster down the decision making of purchasing a product.