Consumer perception is the view or interpretation of consumers about something around them, maybe related to products, services, personal finance, job, or the economy. Consumer views are formed through direct experience, advertising, or influencers around them.
Perception of company products
A positive perception brings benefits to the company, which might be translated into buying the company’s products. Consumers want good quality at a reasonable price. That way, they get good value.
But, perception is also not always related to price and quality. It is also associated with other marketing elements such as availability, access to purchase, corporate image, and supporting services.
Consumer perception and economic growth
Consumers have a significant impact on the economy. In some countries, their expenditure covers the majority of gross domestic product (GDP). In Indonesia, for example, its contribution reached 56.82%.
Indeed, an increase in disposable income is a determinant of consumer spending. The higher the value, the greater the consumer spending.
But, like other economic models, the consumer spending model does not always accurately reflect reality. Among the crucial factors that describe consumer spending are their perceptions and expectations about economic and financial conditions.
Negative perceptions bring negative sentiment for consumer spending. That can lead to less spending, even though they have a lot of money now. They will be more likely to save money to anticipate adverse conditions in the future. Conversely, when they are optimistic that their income will increase in the future due to favorable economic conditions and employment, spending will remain healthy.
To capture this perception, Bank Indonesia releases monthly Consumer Confidence Index statistics. This index indicates consumer pessimism (if less than 100) or optimism (if above 100) regarding the general economic situation, price level, own consumer income, employment, and expenditure.