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...