Chapter 2

Problem Recognition & Information Search

Copyright Atomic Dog Publishing, 2002

Consumer Purchase Decision Process

Postpurchase Evaluation

Purchase Decision
Evaluation of Alternatives Information Search Problem Recognition
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Consumer Purchase Decision Process

Problem Recognition
Copyright Atomic Dog Publishing, 2002

Consumer Purchase Decision Process

Information Search
Problem Recognition
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Consumer Purchase Decision Process

External Information Sources Personal information sources, e.g., friends & family. Public information sources, e.g., Consumer Reports.

Marketer-dominated information sources, e.g., advertising, company websites, salespeople.

Information Search
Problem Recognition
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Consumer Purchase Decision Process

Evaluation of Alternatives

Information Search
Problem Recognition
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Consumer Purchase Decision Process

Evaluative

Criteria

Evoked Set

Evaluation of Alternatives

Information Search
Problem Recognition
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Consumer Purchase Decision Process

Purchase Decision Evaluation of Alternatives

Information Search
Problem Recognition
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Consumer Purchase Decision Process

Postpurchase Evaluation

Purchase Decision
Evaluation of Alternatives

Information Search
Problem Recognition
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Consumer Purchase Decision Process

Cognitive Dissonance

Postpurchase Evaluation

Purchase Decision
Evaluation of Alternatives

Information Search
Problem Recognition
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CONSUMER DECISION PROCESS

14-11 Copyright Atomic Dog Publishing, 2002

Buying Decision Process

Consumers May Use Careful Calculations & Logical Thinking Consumers May Buy on Impulse and Rely on Intuition Consumers May Make Buying Decisions on Their Own

Consumer May Make Decisions After Talking With Others

Depends on Purchase Experience/Knowledge, Ease of Obtaining Information, Purchase Risk, Level of Purchase Involvement, and other Cultural, Social, Personal, & Personality Factors
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Problem Recognition

When consumers realize that they need something! It is the first step in the decision-making process:

Problem recognition Information search Alternative evaluation Choice Outcomes

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Types of Consumer Decisions

Purchase involvement is the level of concern for, or interest in, the purchase process. Triggered by need to consider a particular purchase. A temporary state influenced by the interaction of individual, product, and situational characteristics.

14-14 Copyright Atomic Dog Publishing, 2002

Types of Decision Making

1. Nominal Decision Making

2. 3.

Brand Loyal Purchases Repeat Purchases

Limited Decision Making Extended Decision Making

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Types of Consumer Decisions

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Types of Decision Making

Nominal Decision Making

Nominal decision making, a.k.a., habitual decision making, in effect involves no decision per se.

Nominal decisions occur when there is very low involvement with the purchase. A completely nominal decision does not even include consideration of the do not purchase alternative.

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Consumer buys Campbells without considering other brands, its price, etc.
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Nominal Decision Making

Nominal decision can be broken into two categories:
1. Brand Loyal Purchases High commitment to brand

2.

Repeat Purchases
Low commitment to brand

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Types of Decision Making

Limited Decision Making

Limited decision making involves internal and limited external search, few alternatives, simple decision rules on a few attributes, and little postpurchase evaluation.

Middle ground between nominal and extended decision making. Involves recognizing a problem for which there are several possible solutions.

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Decision based only on buying the cheapest rolls. Copyright Atomic Dog Publishing, 2002

Types of Decision Making

Extended Decision Making

Extended decision making involves extensive internal and external search followed by a complex evaluation of multiple alternatives.

It is a response to the high level of purchase involvement.

During post-purchase evaluation, doubts are likely and a thorough evaluation takes place.

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Emotional decisions may involve substantial cognitive effort. Publishing, 2002 Copyright Atomic Dog

The Process of Problem Recognition

The Nature of Problem Recognition Problem recognition is the result of a gap between a desired state and an actual state sufficient to arouse and activate the decision process. An actual state is the way an individual perceives his/her feelings and situation to be at the present time. A desired state is the way an individual wants to feel or be at the present time.

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The Process of Problem Recognition

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The Process of Problem Recognition

The Nature of Problem Recognition

Desire to resolve a particular problem depends on:

1. The magnitude of the discrepancy between the desired and actual states, and

2.

The relative importance of the problem

In general, importance is determined by how critical the problem is to maintenance of desired lifestyle.

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The Process of Problem Recognition

Types of Consumer Problems

Active Problem
An active problem is one the consumer is aware of or will become aware of in normal course of events.

Inactive Problem An inactive problem is one of which the consumer is not aware.
Marketing strategy: Marketer must convince consumers that they have the problem AND that their brand is a superior solution.
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Marketing strategy:
Only require marketer to convince consumers that its brand is the superior solution.
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Problem Recognition: Actual State versus Desired State

It is the psychological process used to determine the difference between the consumers actual benefits state (where you are) and the desired benefits state (where you want to be).

Opportunity (vs. problem) recognition

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Problem Recognition Influences

Situational influences Consumer influences Marketing influences

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Situational Influences

Product consumption (e.g., running out of gas) Product acquisition (e.g., purchasing a new home may stimulate other purchases) Changed circumstances (e.g., moving away from home to college)

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Consumer Influences

Actual state consumers: those who look to existing products to solve their problems. Desired state consumers: those who shop for new products to address their problems.

They enjoy the shopping experience

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Marketing Influences

Marketing mix changes and/or promotion actions may help stimulate problem recognition:

Advertising Coupons Free offers sweepstakes

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Information Search

Information collected by consumers is the basis for evaluation and choice behavior. It is important for marketers to know:

Why consumers are searching for information Where will they look What information consumers seek How extensively they are willing to search
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Types of Information Search

Prepurchase search:

Directed searches: consumer searches for information that will help solve a specific problem. Browsing: consumer is just looking with no immediate intent to buy. Accidental search: consumer is not actively looking for information, but takes note of information that is formally presented or inadvertently encountered.

Post-purchase search: gathering information on choice made after the purchase. Ongoing search: continuous information gathering to stay marketplace-current.
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Internal and External Information Search

Internal search: search based on existing information in memory.

Information quantity, quality, relevance, currency Experts vs. novices

External search: the search of information beyond ones memory.

Personal sources: friends, experts, salespeople Impersonal sources: advertising, in-store displays, trade reports, the Internet. Experts vs. novices
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Why Do Consumers Engage in External Information Search?

High perceived value versus perceived cost of search Need to acquire information Ease of acquiring and using information Confidence in decision-making ability Locus of control (internals vs. externals) Actual or perceived risk Costs of external search Types of products sought Characteristics of the purchase decision
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Types of Risk

Functional or performance Financial Psychological Social Physiological Time Linked-decision

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Costs of External Search

Financial Time Decision delay (opportunity cost) Physical cost Psychological cost Information overload
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Type of Product Sought

Specialty goods: search willingness is high when consumer has developed strong preferences Shopping goods: less search willingness for products that the consumer must devote time and effort to compare and contrast. Convenience goods: consumer is reluctant to spend any time and effort in search and evaluation before purchase.
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Characteristics of Purchase Decision

If number of possible solutions is limited extensive search is acceptable If need for trial is high more likely to search Difficulty of trial high search is for quality supplier
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External Search Strategy

Consideration set: those brands, outlets, etc. that have front-of-mind presence and from among which there is intention to choose.

Which brands of computers would you consider purchasing? Also called evoked set or relevant set

Marketplace information sources:

General (face-to-face or mass media) Marketer-controlled (face-to-face or mass media)

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