Absolute Threshold and the Differential Threshold Essay Example

discernible to the public (ie. remain below j. n. d) and (2) product improvements(eg. , improved or updated packaging, larger size or lower price) are very apparent to consumers without being wastefully extravagant (ie. , they are at or just above the j. n. d). When it comes to product improvements, marketers very much want to meet or exceed the consumer’s differential threshold; that is, they want consumers to readily perceive any improvements made in the original product Comparing these implications for marketing, it is obvious that differential threshold is more important to marketers.

In case (a) , marketers should determine the relevannt differential threshold for their products so that the negative changes- reduction of the size, increase in price or reduced quality- are not readsly discernible to the public. An important difference here chocolate bars and bottles of expensive perfume is the differential threshold volume, that would be required in price increases- because the initial amount differ between those.

This can be explained by Weber’s law, which states that stronger the initial stimulus, the greater additional intensity needed for the second stimulus to be perceived as different. In short, in case a price increase, the differential threshold value of bottle of expensive perfume is higher than the differential threshold of a chocolate bar, but for of them, the price increase should be lower than their respective price increases. In case (b), where competition increases, the company should increase the value it provides to the customers so that they are in a better position than competition.

The value can be increased by improving the product, improve the packaging, increasing promotion and/or reducing the price. Of course, these all

changes need to be at least at differential threshold value so that they get noticed by the consumers. Of course, because of the differences in decision making and absolute price values of chocolate bars and expensive perfumes, their differential thresholds would be different. However the improvement in the product/packaging/promotion or the reduction in price should be at least as the differential threshold.