RMIT Classification: Trusted

MKTG 1421 -
Consumer Psychology
& Behaviour

Topic 3 - Problem recognition

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Learning Objectives

1. Problem recognition

2. Habitual, limited and extended decisions

3. Factors that affect problem recognition

4. Types of consumer problems

5. Marketing strategy and implications

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Consumer decision making process

Figure 1.6 / Consumer decision process
If consumers do not recognize a
problem to be solved, there is no
consumer decision process.

Note: Dotted lines represent

the potential for a step back
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Step 1: Problem or need recognition

1. Here the consumer is in equilibrium . Does
not recognise a problem.
Actual Ideal
2. Problem recognition occurs when
consumers perceive a gap between their
actual state or desired ideal state.
3. Cause may be actual state declining, or the
ideal state moving upward.
Actual Ideal
4. The magnitude of the gap must be enough
to motivate the consumer to proceed to
Stage 2

Actual Ideal
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What causes problem or need recognition?

Actual State: Where Ideal State: Where We

We Are Now Want To Be

Often determined by Based on our

simple physical expectations, future
factors goals or aspirations

External stimuli can

change how we
Changes in our life
perceive our actual situations
state

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Market polarization across categories

(Kotler et al
2021, p. 41)

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Does the consumer perceive a difference

between their actual or ideal state ?

No Yes

Terminate the Is the discrepancy strong enough to

decision process motivate the consumer ?

Yes.
No. Terminate the
Proceed to
decision process.
Stage 2

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Process of problem recognition

Desired Consumer
Current Situation
Lifestyle
Temporary factors
The way the consumer
affecting the consumer
would like to feel

Actual State
Desired State
The condition the
The condition the
consumer perceives him
consumer would like to be
or herself to be in at this
in at this point in time
point of time

Nature of Discrepancy
Difference between the consumer’s desired and perceived conitions

Desired state Actual state exceeds

No difference exceeds actual desired state
state

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How Viettel Pay leveraged on problem

recognition?

(Viettel
2019)
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The success of ViettelPay campaign

(Dentsu Redder
2020)
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Products are positioned as providing a

potential solution
Damaged

Shine

Stronger

Vibrant

Straight

Hydrated

Source
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Types of consumer decisions

What is purchase involvement ? Level of involvement impacts type of

decision making
1. Consumer’s level of concern,
interest and effort in the decision
Habitual decision making or
making process

2. Influenced by the interaction of

individual, product and situational Limited decision making or

characteristics

Extended decision making

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Purchase involvement and types of

decisions
Low purchase High purchase
involvement involvement

Habitual Limited Extended

decision decision decision
making making making

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Purchase involvement and types of decision

making

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Difference between generic and selective

problem recognition

Generic Problem Selective Problem

Recognition Recognition

Need recognition occurs Need recognition occurs at

at product category level brand level as brands are
as all brands are similar differentiated.

The solution is the The solution is the brand

product category that is perceived as best

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Example - Generic problem recognition

• Selling the product category to

increase demand for the category

• Sometimes the leading brand will do

this

• All brands will benefit

• The lead brands will benefit most due

to high market share

Source
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Example – Selective problem recognition

Source
This ad attempts to activate selective problem
recognition by hoping to increase demand for
the brand

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Types of consumer problems

1. Routine problems
o Expected, require immediate solution

2. Emergency problems
o Not expected, require immediate solution

3. Planning problems
o Expected, don’t require immediate solution

4. Evolving problems
o Not expected, don’t require immediate solution

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Non-marketing factors affecting problem

recognition
Figure 3.3. / Non-marketing factors affecting problem recognition

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Factors influencing the actual state

Source Source

Source Source
2020
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Activity: Problem recognition and

influencing factors
1. Identify the problems that a car can potentially solve for different
segments of customers? List as many as you can.

2. How different factors affect the problem recognition?

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Marketing strategy and

problem recognition
1. Measuring problem recognition

2. Responding to consumer problems

3. Activating problem recognition

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Activating problem recognition (1)

• Generic problem recognition (product category), e.g. dairy foods

• Selective problem recognition (a brand) e.g. Colgate Vitamin C for good

breath, Vinamilk for strong bones

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Activating problem recognition (2)

1. Disrupt perceptions of the existing

state
Actual Ideal
2. Influence the desired state

3. Timing problem recognition

Actual Ideal
4. Suppressing problem recognition

Actual Ideal

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Disrupt the perception of

the current state and desired state

(Samsung
2020)
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WWF alerts people on plastic pandemic

(WWF n.d.)
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Activity: How could you activate problem

recognition and timing for the following?
How could you activate problem recognition for:  

• (a) bathroom scales  

• (b) life insurance  

• (c) laptop computers  

• (d) vitamins  

• (e) electric bicycles 

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Summary

1. What is the nature of problem recognition?

2. How does purchase involvement impact consumer decision making

3. What is the difference between habitual, limited and extended

decision making?

4. What factors affect problem recognition?

5. What are the types of consumer problem?

6. What marketing strategies can be used to activate problem

recognition?

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Step 1: Problem recognition in the

consumer decision making process
Figure 1.6 / The consumer decision process  Changes in actual
or desired state
1st step
 Creates a felt
discrepancy

 Consumer may be
motivated to
Note: Dotted lines
proceed to step two
represent the
potential for a step information search
back
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Reference list (1)

Drews, G and Simms, M 2020, WWF: Your Plastic Diet, WARC An

Ascencial Company, viewed 14 April 2021, link to external site.

Dentsu Redder 2020, ViettelPay: Make Tet easy again – challenge

accepted!, WARC An Ascential Company, viewed 14 April 2021,
link to external site.

Haber, J 2010, Sofitel Official TVC, YouTube, viewed 14 April 2021,

link to external site.

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Reference list (2)

JustaTee Music 2021, Lam Gi Phai Hot, Official Music Video, Vimeo,
viewed 14 April 2021, link to external site.

Phan, T & Tirunagari, A 2020, How brands in Vietnam inspire and connect
with audiences during Tet, Think With Google, Vietnam, viewed 14 April
2021, link to external site.

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Reference list (3)

Samsung 2020, Galaxy Z Flip 5G: Official Film | Samsung, Samsung

YouTube, viewed 14 April 2021, link to external site.

WWF 2020, Your Plastic Diet, WWF, WARC, viewed 14 April 2021,
link to external site.

Quester, P, Neal, C, Pettigrew, S, Grimmer, M R, Davis, T, & Hawkins, D

2014, Consumer behaviour: Implications for marketing strategy. McGraw-
Hill.

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