Perceived Quality - Meaning, Importance & Example

Published in Marketing and Strategy Terms by MBA Skool Team, Last Updated: August 16, 2019

What is Perceived Quality?

Perceived quality can be defined as the customer's opinion about the overall quality or image of the product or service or the brand itself with respect to its purpose of use as against its alternatives. Perceived quality might not be linked to the actual product but is more skewed towards the brand image, customer experience with the brand and its other products, peer opinions, etc. Thus perceived quality differs from objective quality, product-based quality and manufacturing quality.

Importance of Perceived Quality

Before understanding the logic of perceived quality, let us understand what perception is. “Perception is a psychological behaviour through which a person identifies, organizes and evaluates the various stimuli into a meaningful and comprehensible layout.”

Perceived quality is intangible. Perceived quality cannot be measured on quantitative grounds, preferably because judgements about what is important to the customers varies widely across different personalities, needs and preferences. If it’s a product, the customers consider the following seven features for evaluation: performance, features, conformity with specifications, reliability, durability, serviceability, fit and finish.

Whereas if it’s a service, customer decision is based on the following five features: tangibles, reliability, competence, responsiveness and empathy.

The basic concept of perceived quality takes into account both the extrinsic and intrinsic features of the product. Customers’ knowledge about the product or the brand and his past experiences with it are important decision variables.

If the customers’ expectations are just met, then he is satisfied. If they are not, the customer is unhappy. If the product/service/brand exceed the customers’ expectations, then he is delighted. This further drives his perception about the product/service/brand.

Advantages of Perceived Quality

1. Helps the product differentiate itself from others

2. Keeps the company on track of continuous improvement as competitors also raise the bar

3. Helps the company to demand premium compared to other brands

4. If the process improvement is at faster pace compared to competitors, the company can enjoy higher profits with the help of perceived quality

Disadvantages of Perceived Quality

1. Any misconception regarding perceived value can lead to improper perception

2. Since it is tangible, even good products might be subject to poor perception, leading to business loss

Examples of Perceived Quality

If we consider a product say, washing machine, then following are the seven dimensions on which the customer would think and judge.

1. Performance: how good the washing machine washes the clothes?

2. Features: Does it have an eco-mode of washing clothes?

3. Conformance with specifications: how frequently the defects happen?

4. Reliability: will its performance vary after 2-3 years of continuous use?

5. Durability: what is its average life span?

6. Serviceability: Is the service system efficient, competent, and convenient?

7. Fit and finish: is the product stylish and has a smart look?

These parameters often help in understanding the perceived quality of a product.

Next, if we consider a service, like banking, then the following five dimensions would drive the customers’ perception about the bank:

1. Tangibles: Do the physical facilities, equipment, and appearance of personnel reflect quality standards?

2. Reliability: Will the accounting work performed would be trustworthy and accurate?

3. Competence: Does the bank have the right skilled personnel employed? Does the convey trust and confidence through the services offered?

4. Responsiveness: Is the sales staff willing to help customers and provide prompt and reliable services?

5. Empathy: Does the bank provide caring and individually focused attention to its customers’?

These parameters help in analyzing perceived quality for service brands.

Hence, this concludes the definition of Perceived Quality along with its overview.

This article has been researched & authored by the Business Concepts Team. It has been reviewed & published by the MBA Skool Team. The content on MBA Skool has been created for educational & academic purpose only.

Browse the definition and meaning of more similar terms. The Management Dictionary covers over 1800 business concepts from 5 categories.

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