Chapter 2

1. Chapter 2 Problem Recognition & Information Search

2. Chapter Spotlights • Consumer decision process action options • Problem recognition: actual state versus desired state and motivation arousal • Pre-purchase, post-purchase, and ongoing information search • Internal and external information search • Consideration sets • Sources of marketplace information

3. Consumer Decision Process Action Options • Start through steps and complete them in order • Start, stop, start, stop, etc. and complete steps in order • Start steps and “loop back” as needed based on what happens and complete process • Start into the process then stop somewhere along the way and never finish • Do not start the process

4. Problem Recognition • When consumers realize that they need something! • It is the first step in the decision-making process: • Problemrecognition • Information search • Alternative evaluation • Choice • Outcomes

5. Motivational Arousal • Different people have different benefit motivations for purchasing different products or services. • Types of benefit motives: • To optimize satisfaction • To prevent possible future problems • To escape from a problem • To resolve a conflict • To maintain the status quo or satisfaction

6. Problem Recognition: Actual State versus Desired State • It is the psychological process used to determine the difference between the consumer’s actual benefits state (where you are) and the desired benefits state (where you want to be). • Opportunity (vs. problem) recognition

7. Problem Recognition Influences • Situational influences • Consumer influences • Marketing influences

8. 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)

9. 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

10. Marketing Influences • Marketing mix changes and/or promotion actions may help stimulate problem recognition: • Advertising • Coupons • Free offers • sweepstakes

11. 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

12. 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.”

13. 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 one’s memory. • Personal sources: friends, experts, salespeople • Impersonal sources: advertising, in-store displays, trade reports, the Internet. • Experts vs. novices

14. 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

15. Types of Risk • Functional or performance • Financial • Psychological • Social • Physiological • Time • Linked-decision

16. Costs of External Search • Financial • Time • Decision delay (opportunity cost) • Physical cost • Psychological cost • Information overload

17. 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.

18. 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

19. 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)